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Top executives of three airlines will tell Congress On Wednesday, he talked about how airlines spent $54 billion in COVID-19 government assistance and why they are still grappling with thousands of canceled flights, staff shortages and frustrated customers not getting refunds.
American Airlines CEO Doug Parker He will tell the Senate Commerce, Science and Transportation Committee that taxpayer aid “saved the airline industry” at the start of the pandemic. her Advanced testimony seen by Reuters.
heI’ll tell you if Congress Had it structured the aid as a government loan, the airlines “could have survived by shutting down flights in April 2020, putting nearly all of our crew on leave, and waiting for demand to return to levels strong enough to justify flight resumption.”
“Looks like that would take some time in 2021,” said Mr. Parker will tell the legislators.
Southwest Airlines CEO Gary Kelly and United Airlines CEO Scott Kirby are also scheduled to testify.
Of three rounds of taxpayer-funded payroll grants to 10 airlines in 2020 and this year, the Treasury Department has asked larger carriers to repay 30% and sign government stock deals. These stock options are reportedly worth a tiny fraction of what taxpayers provide as benefits.
The airlines also agreed to pay promissory notes to eventually repay a total of $14 billion.
Despite all that help, airlines “repeatedly canceled and delayed flights, refused refunds, and failed in customer service,” according to a report by the Arizona PIRG Education fund that analyzed 200,000 complaints to the Department of Transportation this month.
“Taxpayer money has been given to the airline industry to stabilize its finances; however, airlines’ profits are flying high at the expense of not getting too many passengers off the ground,” said Diane Brown, the group’s executive director.
The report found that passengers “requested refunds for flights canceled during the pandemic and were upset by many other issues, particularly staff shortages”.
“Fewer workers and fewer flights means that each of the routes changed, delayed or canceled affects a higher rate of flights and flyers,” the report said. “While these issues are a direct result of airlines’ actions, companies often refuse to issue refunds to most of their customers.”
Rather than offering full refunds, the group said airlines often opt for coupons and credits for future flights.
Southwest and Allegiant are the airlines with the fewest complaints per 100,000 passengers since May 2020, while Frontier, United and Hawaiian have the most complaints.
The group said Delta, Hawaiian and Alaska Airlines were the most punctual since June 2020, while Allegiant and JetBlue were the least punctual.
The report found that timely performance “decreased significantly among seven of the top 10 airlines in the summer of 2021.”
As part of the recovery conditions, the airlines agreed not to lay off employees or lower wages. But airlines have collectively reduced their workforces by tens of thousands of employees over the past two years.
Airlines still face major problems, from flight disruptions to the increasingly aggressive behavior of passengers. In August, Spirit Airlines canceled more than 3,000 flights in less than two weeks. In October, American Airlines canceled more than 1,400 flights over the weekend due to staff shortages and bad weather.
Last month, American canceled more than 2,000 flights.
Complaints about airlines have more than doubled during the pandemic.
U.S. airlines lost nearly $35 billion in 2020, with passenger bookings down nearly 60% from 2019. But the four largest airlines – American, Delta, United and Southwest – had a total of $31.5 billion in cash on their balance sheets as of December 31. It rose from $13 billion at the end of 2019 to 2020.
According to Reuters, Mr. Parker will state that American Airlines “has developed incentive payout programs for peak travel periods to strengthen our efforts to make each flight on our schedule.”
It will also say that the airline has “set a target of hiring 18,000 more crew members by 2022.”
The hearing also came after a federal appeals court this week dismissed an urgent appeal from United workers who opposed the company’s vaccine mandate.
Last summer, Senator Maria Cantwell, Washington Democrat and chair of the trade committee, in a letter urged the heads of six airlines to explain workforce shortages, flight cancellations and delays, in light of the billions they have received in payroll aid.
Ms Cantwell wrote at the time: “I am deeply concerned by recent reports highlighting workforce shortages causing flight cancellations and delays for passengers.” “These shortfalls follow the unprecedented federal funds that Congress has earmarked to support the airline industry during the COVID-19 pandemic, at the request of airlines.”
He said that as passenger travel increased during the summer months, airlines were “unprepared to meet the increased demand they had planned and resorted to delaying or canceling flights.”
“This reported shortage of workforce goes against the purpose and spirit of the organisation. [payroll support program]“This was to keep employees on the payroll so that airlines can withstand the pandemic and position the industry to see a recovery in demand,” he wrote.
The MPs’ mood is also reflected in a new proposal by Democrats that could cut airline fees for extra bags.
According to Massachusetts Democratic Senator Edward Markey, airlines worldwide took in fees of approximately $110 billion in 2019, up 400% from $22 billion in fare revenue in 2010.
“If a passenger has to check a bag, it’s a fare. If a traveler wants real legroom, it’s a fare. If a parent wants to change their seat just to sit next to their child, it’s a fee. “As they often do, if a traveler’s plan changes, it’s a fee,” Mr Markey said in a statement.
“We can no longer allow these fees to remain as high as the planes passengers are traveling on,” he said.
The Law Prohibiting Airlines from Charged Absurd (FAIR) Fares would empower the Department of Transportation to regulate airline fares and “prohibit air carriers from imposing charges that are reasonable and disproportionate to the costs incurred by air carriers”.
Passenger airlines received $25 billion in the CARES Act 2020, $15 billion in payroll support in December 2020, and $14 billion in the American Recovery Plan Act last March.
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