Full text
September 8, 2022
Mr. Richard K. Delmar
Deputy Inspector General
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Dear Mr. Delmar:
We are concerned that some airlines have used federal funds obtained during the
pandemic to provide buyouts and early retirement packages for pilots, which may be
exacerbating a shortage of commercial pilots. As a result of pilot shortages, thousands of flights
have been delayed or canceled, wreaking havoc on travel plans for millions of American
taxpayers.
The Treasury Department allocated more than $60 billion of taxpayer funds to
commercial airlines through the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) of 2020 and the American Rescue Plan Act of 2021. 1 Under the CARES Act Payroll
Support Program, Congress intended the funding allocated to airlines to “preserve aviation jobs
and compensate air carrier industry workers.” 2 As a condition of accepting federal funding, air
carriers were prohibited from conducting involuntary furloughs or reducing pay rates and
employee benefits. 3
After receiving significant federal funding through these relief efforts, three of the
leading U.S. airlines each cut a substantial share of their workforce and urged employees to take
early retirement, contrary to the intent of the CARES Act and American Rescue Plan Act. 4
1
H.R. 748, 116th Cong. (2020); H.R. 1319.
2
H.R. 748, 116th Cong. (2020).
3
Id.; H.R. 1319.
4
Memorandum from Assistant Inspector General for Audit Deborah L. Harker to General Counsel Brian
Callanan, Engagement Memorandum – Audit of the Department of the Treasury’s Implementation of “Air Carrier
Worker Support” Under Title IV, Subtitle B, of the CARES Act (A-FA-20-040) (Mar. 30, 2020) (online at
www.pandemicoversight.gov/sites/default/files/2020-04/OIG%20Engagement%20Memorandum%20-
%20Audit%20of%20Financial%20Assistance%20to%20Air%20Carrriers%20Under%20Title%20IV%20of%20CA
RES%20Act.pdf) (the CARES Act requires Treasury to provide financial assistance “that must exclusively be used
for the continuation of payments of employees’ wages, salaries, and benefits”); Department of Transportation,
Federal Aviation Administration U.S. Civil Airmen Statistics (online at
www.faa.gov/data_research/aviation_data_statistics/civil_airmen_statistics) (accessed Sept. 6, 2022); Delta Offers
Employees Buyouts, Retirement as Coronavirus Hurts Travel Demand, While United Readies Similar Plans, CNBC
(May 28, 2020) (online at www.cnbc.com/2020/05/28/delta-offers-employees-buyouts-early-retirement-amid-weak-
travel-demand.html); Select Subcommittee on the Coronavirus Crisis, “Unnecessary Costs”: How the Trump
Administration Allowed Thousands of Aviation Workers to Lose Their Jobs, 116th Cong. (Oct. 9, 2020) (online at
Mr. Richard K. Delmar
Page 2
These early retirement programs exacerbated an existing pilot shortage within the airline
industry, since by law pilots must retire at age 65. 5 Approximately one third of airline pilots are
between 51 and 59 years old, and 13% of pilots will turn 65 in the next five years. 6 One industry
research firm estimated that by 2026 about 42% of current airline pilots will retire. 7 The Bureau
of Labor Statistics projects about 14,500 openings for airline and commercial pilots each year
over the next decade. 8 The shortage of pilots cannot be easily addressed. Pilots are required to
complete extensive training—which can cost between $80,000 and $100,000 or more, and is
often not covered by financial aid. Pilots are also required to log 1,500 hours of flight time
before receiving their pilot’s license. 9
Millions of travelers have been impacted by widespread flight delays and cancellations,
with the pilot shortage being a major contributing factor. According to FlightAware, on
September 5, 2022, there were 4,075 delays and 108 cancellations of flights within, into, or out
of the United States. 10 Some airlines have even dropped certain cities from their travel routes
due to the pilot shortage. 11 Delays and cancellations have forced travelers to miss weddings,
funerals, family gatherings, and other events. While travelers are suffering the consequences of
the pilot shortage, airline companies have benefitted from record high revenues. Airline stocks
rose to nearly 200% above pandemic levels this spring and have maintained an upward
trajectory. 12 In 2021, airline companies enjoyed revenue growth of 8% to 12%, while passengers
were forced to pay record-high prices for flights. 13
https://coronavirus.house.gov/sites/democrats.coronavirus.house.gov/files/PSP%20Report%20Final.pdf) (noting that
air carriers and contractors were required to maintain pre-pandemic employment levels as a condition of accepting
funding through the CARES Act).
5
A Pilot Shortage that’s Been Brewing for Years Adds to the Summer Travel Chaos, National Public Radio
(July 1, 2022) (online at www.npr.org/2022/07/01/1108995925/pilot-shortage-chaos-travel-years).
6
A Severe Pilot Shortage in the U.S. Leaves Airlines Scrambling for Solutions, CNBC (May 15, 2022)
(online at www.cnbc.com/2022/05/15/us-pilot-shortage-forces-airlines-to-cut-flights-scramble-for-solutions.html).
7
Cowen and Company, Pilot Retirements Accelerate Beginning in 2021 & Peak in 2025 (July 5, 2017)
(online at
https://static01.nyt.com/files/2018/business/Pilot_Retirements_Accelerate_Beginning_In_2021_Peak_In_2025_Cow
en_and_Company.pdf).
Bureau of Labor Statistics, Airline and Commercial Pilots (online at www.bls.gov/ooh/transportation-
8
and-material-moving/airline-and-commercial-pilots.htm#tab-6) (accessed Sept. 6, 2022).
9
A Pilot Shortage that’s Been Brewing for Years Adds to the Summer Travel Chaos, National Public Radio
(July 1, 2022) (online at www.npr.org/2022/07/01/1108995925/pilot-shortage-chaos-travel-years).
10
FlightAware, Live Flight Delay and Cancellation Statistics for Yesterday (online at
https://flightaware.com/live/cancelled/yesterday) (accessed Sept. 6, 2022).
11
American Airlines Dropping Three Cities Due to Pilot Shortage, NBC 5 Dallas Forth Worth (June 20,
2022) (online at www.nbcdfw.com/news/business/american-airlines-will-stop-flying-to-three-cities-due-to-pilot-
shortage/2996384); Airlines Forced to Drop Service at These US Airports Due to the Pilot Shortage, CNN Business
(July 12, 2022) (online at www.cnn.com/2022/07/12/business/pilot-shortage-cities-lose-air-service/index.html).
12
The High Costs of the Airline Bailouts, New York Times (Mar. 17, 2021) (online at
www.nytimes.com/2021/03/17/business/dealbook/airline-bailouts-pandemic.html); Travel Stocks: United,
American Airlines Rise as Flight Restrictions Remain in Focus, Yahoo Finance (Aug. 24, 2022) (online at
https://finance.yahoo.com/video/travel-stocks-united-american-airlines-143823890.html).
13
Southwest Airlines Keeps 2022 Profit Forecast as Bookings and Fares Outpace Higher Costs, CNBC
Mr. Richard K. Delmar
Page 3
American taxpayers supported the airline industry during its darkest days at the start of
the coronavirus pandemic, when nearly 75% of commercial flights were grounded. 14 Americans
deserve transparency into how airlines have used the federal funds they have received.
Treasury’s Office of Inspector General (OIG) has a responsibility to monitor and oversee
the disbursement and use of federal funds, including funding from the CARES Act and the
American Rescue Plan Act. 15 In March 2021, an audit conducted by your office found that
multiple airlines had “pervasive issues” with payroll calculations submitted to Treasury, which
“impacted the accuracy of recipient award amounts” they received under the CARES Act. 16
Since 2020, OIG has required all funding recipients to submit documentation and self-reports,
which are used for audits and to establish each recipient’s compliance with federal funding
stipulations.17
The Select Subcommittee on the Coronavirus Crisis issued a staff report in October 2020
finding that under the Trump Administration, Treasury allowed aviation contractors to layoff
thousands of workers while still receiving full payroll support based on pre-pandemic workforce
numbers. 18 This, coupled with the glaring issues in airlines’ payroll calculations that Treasury
OIG discovered, warrants an evaluation of the Treasury’s disbursement of funding to airlines.
The Committees request that you complete a thorough review of the federal funding Treasury
has disbursed to airlines to sustain their operations during the coronavirus pandemic, including
an accounting for how the funds were disbursed and used by each airline recipient, and whether
any funds were used for buyouts or staff reductions. We request that you provide a staff briefing
of the preliminary findings by September 22, 2022.
The Committee on Oversight and Reform is the principal oversight committee of the
House of Representatives and has broad authority to investigate “any matter” at “any time” under
House Rule X. The Select Subcommittee is authorized by the House of Representatives “to
(Apr. 28, 2022) (online at www.cnbc.com/2022/04/28/southwest-airlines-2022-profit-forecast-sees-bookings-fares-
outpacing-costs.html); MacroTrends, Delta Air Lines Revenue 2010-2022 (online at
www.macrotrends.net/stocks/charts/DAL/delta-air-lines/revenue) (accessed Sept. 6, 2022).
14
Two-Thirds of the World’s Passengers Jets Are Grounded Amid COVID-19 Pandemic. Here’s What that
Means, Time (Apr. 17, 2020) (online at https://time.com/5823395/grounded-planes-coronavirus-storage/).
15
Department of the Treasury, Office of Inspector General, CARES Act (online at
https://oig.treasury.gov/cares-act) (accessed Sept. 6, 2022).
16
Memorandum from Assistant Inspector General for Audit Deborah L. Harker to Acting Assistant
Secretary for Management John Trevor Norris, Interim Audit Update – Air Carrier and Contractor Certifications
for Payroll Support Program (Mar. 31, 2021) (online at https://oig.treasury.gov/sites/oig/files/2021-04/OIG-21-
025.pdf).
17
Memorandum from Deputy Inspector General Richard K. Delmar to Coronavirus Relief Fund Recipients,
Coronavirus Relief Fund Reporting and Record Retention Requirements (July 2, 2020) (online at
https://oig.treasury.gov/sites/oig/files/2021-01/OIG-CA-20-021.pdf); Department of the Treasury, Office of
Inspector General, Coronavirus Relief Fund Frequently Asked Questions Related to Reporting and Recordkeeping
(Revised) (Mar. 2, 2021) (online at https://oig.treasury.gov/sites/oig/files/2021-03/OIG-CA-20-028R.pdf).
18
Select Subcommittee on the Coronavirus Crisis, “Unnecessary Costs”: How the Trump Administration
Allowed Thousands of Aviation Workers to Lose Their Jobs, 116th Cong. (Oct. 9, 2020) (online at
https://coronavirus.house.gov/sites/democrats.coronavirus.house.gov/files/PSP%20Report%20Final.pdf).
Mr. Richard K. Delmar
Page 4
conduct a full and complete investigation” of “issues related to the coronavirus crisis,” including
the “efficiency, effectiveness, equity, and transparency of the use of taxpayer funds and relief
programs to address the coronavirus crisis” and “reports of waste, fraud, abuse, price gouging,
profiteering, or other abusive practices related to the coronavirus crisis.” 19
If you have any questions regarding this request, please contact Oversight Committee
staff at (202) 225-5051 or Select Subcommittee staff at (202) 225-4400.
Sincerely,
______________________________ ______________________________
Carolyn B. Maloney James E. Clyburn
Chairwoman Chairman
Committee on Oversight and Reform Select Subcommittee on the
Coronavirus Crisis
cc: The Honorable James Comer, Ranking Member
Committee on Oversight and Reform
The Honorable Steve Scalise, Ranking Member
Select Subcommittee on the Coronavirus Crisis
19
H.Res. 8, sec. 4(f); H.Res. 935, 116th Cong. (2020).