Democrats want to probe airline Covid bailouts for employee buybacks

Airline pilots walk through Ronald Reagan Washington National Airport on December 27, 2021 in Arlington, Virginia.

Anna Moneymaker | beautiful pictures

Two House Democrats have asked a Treasury watchdog to investigate whether airlines are using part of the federal coronavirus relief package to pay employees. repurchase during the pandemic.

Airlines are barred from laying off employees on condition of accepting $54 billion in taxpayer aid to combat the Covid-19 pandemic. Travel demand collapsed in the early days of the crisis. However, service providers were able to urge workers to join early retirement or extended leave packages. Thousands of people have accepted them on offer, including hundreds of pilots.

Representatives Carolyn Maloney, DN.Y., chair of the House Oversight and Reform Committee, and James Clyburn, DS.C., chair of the Select Committee on the Coronavirus Crisis, on Thursday requested the request. The Treasury Department’s watchdog looks at how airlines have used Covid-19 aid and whether it was used to buy back or cut staff, according to a letter reviewed by CNBC.

Airlines for America, a commercial corporation representing American, Delta, United, Southwest and other major U.S. carriers, said funds from the Airline Payroll Assistance Program “are directed only to employee wages, as required by law and the airlines paid back government loans.”

“Without the PSP, our airline system would be like Europe, Canada or other regions without any similar programs,” the group said in a statement. “Or even worse, without the PSP, we might not be able to fly at all.”

As travel demand surges this year, airlines find themselves understaffed, including in the cockpit. As a result, some airlines, including American and United, flight cut or land dozens of planes, especially to small cities. Shorter routes are often flown by regional airlines, and airlines have hired hundreds of new pilots from those smaller carriers to fill their own ranks.

This year’s labor shortage has made it difficult for airlines to recover from routine problems like bad weather.

The lawmakers wrote in a letter to Treasury Deputy Inspector General Richard Delmar: “As a result of pilot shortages, thousands of flights have been delayed or canceled, affecting our travel plans. millions of American taxpayers.

Delmar confirmed he received the letter and said his office plans to respond to lawmakers in the coming days.

The Treasury Department declined to comment.

Maloney and Clyburn have asked the watchdog for preliminary results by September 22.

U.S. carriers began operations in 2020 with 456,398 full-time employees, down to 363,354 in November of that year, according to the Department of Transportation. Airlines have been on recruit for over a year, and by June had 455,642 equivalent full-time employees.

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