Did you save the airline industry?
The CEOs and both sides of the political divide say, yes!
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There was a remarkable scene on Capitol Hill last week. Republicans and Democrats agreed (that doesn’t happen often these days) and they were applauded by the CEOs of the country’s leading airlines. It was close to a lovefest over the financial help the airlines received from you, the taxpayer, to survive the COVID pandemic.
Airline Executives testify before the US Senate Commerce Committee. (Credit: PBS Newshour)
It was a lot of money. About $54 billion was handed out to airlines in what was called the Payroll Support Program (PSP). During an oversight hearing by the Senate Commerce Committee, the chairwoman and ranking Republican heaped praise on each other and their efforts. Democrat Maria Cantwell called PSP an, “historic investment.” Republican Roger Wicker of Mississippi called it, “a resounding bipartisan success.”
(Credit: US Senate Commerce Committee/PBS Newshour)
"THANK YOU"
The airline CEOs, sitting at the witness table, said thank you. Gary Kelly, who runs Southwest Airlines, which employs 54,000 workers, was succinct when he said, “I can sum up the PSP in two words: it worked.” American Airlines CEO Doug Parker said the airline was deeply grateful, adding PSP, “has been an overwhelming success.” Parker suggested without PSP the pandemic would have been “cataclysmic” for the airlines.
Outgoing Southwest Airlines CEO, Gary Kelly speaking to the US Senate Commerce Committee. (Credit: CSPAN)
Cantwell provided the latest numbers on PSP. Of the $54 billion, $14 billion is loans that are being paid back to the Treasury Department. The money allowed the airlines to “save” 386,000 direct, full-time jobs. There was a multiplier effect as well, with many jobs in the supply chain being saved as well, according to the Washington Senator. Cantwell, who represents a state where Boeing builds jets and Alaska Airlines is headquartered, pointed out that the industry accounts for 5% of the country’s economic activity and is essential to keep healthy. Economist Mike Tretheway told the Senators that the program’s success was felt in the broader economy by, “retaining the airline industry work force and ensuring the continuity of economic and social connectivity.”
Chart of US and European air transport systems during the pandemic. (Credit: US Senate Commerce Committee)
WHAT ABOUT THOSE DELAYS?
There were problems. As airlines started to return to service early this year there were a series of delays and cancellations, mostly by Southwest and American. Sen. Wicker said some airlines were “overly ambitious and passengers paid the price.” But he said that should not detract from PSP which was, “meant to save the air transportation system, not be a guarantee of smooth flying for everyone everywhere.”
So pat yourself on the back, fellow taxpayer. They say your money worked to save not only the airlines, but much of our economy.
Three other airline issues we’ve explored here at Full Throttle came up at the hearing.
VAX MANDATES
United Airlines was the only airline to mandate vaccines. Two Republican Senators (Cruz and Blackburn) asked CEO Scott Kirby why he took the action and whether he had violated some of his employees religious rights. Kirby countered that he enacted the mandate for the safety of his employees and his customers and offered no regrets.
United CEO Scott Kirby responds to questions about his mask mandate at the airline. (Credit: C-SPAN)
The deployment of 5G cellular towers near airports and whether the signals could endanger the accuracy of an instrument that tells pilots how high they are as they are landing prompted questions and calls for cooperation from some Senators. The FCC and the FAA are on different sides of the issue and the roll out of the new frequency band of 5G is set for early January. The FAA has issued an Airworthiness Directive, warning it may demand diversions from certain airports if it fears signal interference. Airlines told the Senators they are worried that could disrupt their service.
Gary Kelly tells the Senate Commerce Committee airlines are worried about the roll-out of 5G in light of FAA Airworthiness Directive. (Credit: PBS Newshour)
There was talk about mask mandates in aircraft. Two CEOs suggested the air circulation is so good on modern jetliners, masks “don’t add much if anything.” After the hearing, Kelly and Parker quickly changed course with the companies saying they didn’t mean to “suggest” mandates for masks should be lifted. By the way. Kelly tested positive for COVID after the hearing.
This hearing lasted three hours. The CEOS and Senators appeared to walk away pleased that during a couple years of difficult news, they did some good with a lot of taxpayer money.