In Light of Pilot Shortage, Chairs Maloney and Clyburn Request Treasury Inspector General Review Airlines’ Use of Pandemic Relief Funds | House Select Subcommittee on the Coronavirus Crisis

Summary

This is a press release dated September 9, 2022, from the House Select Subcommittee on the Coronavirus Crisis. It states that Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, and Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent a letter to Richard K. Delmar, Deputy Inspector General of the Department of the Treasury, requesting a review of federal funding Treasury disbursed to airlines, including whether any funds were used for buyouts or staff reductions. The release says Treasury allocated more than $60 billion to commercial airlines through the CARES Act and the American Rescue Plan Act of 2021, and that early retirement programs exacerbated a pilot shortage. It says the Chairs asked Treasury OIG for a staff briefing on preliminary findings by September 22, 2022.

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In Light of Pilot Shortage, Chairs Maloney and Clyburn Request Treasury Inspector General Review Airlines’ Use of Pandemic Relief Funds

September 9, 2022

Press Release

Contrary to intent of relief programs, airlines cut their workforce through buyouts and retirement packages, worsening pilot shortage and flight delays

Washington, D.C. (Sept . 9, 2022) — Rep. Carolyn B. Maloney, Chairwoman of the Committee on Oversight and Reform, and Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent a letter to Mr. Richard K. Delmar, Deputy Inspector General of the Department of the Treasury, requesting a thorough review of the federal funding Treasury disbursed to airlines to sustain their operations during the coronavirus pandemic, including whether any funds were used for buyouts or staff reductions.

"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," the Chairs wrote. "Americans deserve transparency into how airlines have used the federal funds they have received."

The Treasury Department allocated more than $60 billion of taxpayer funds to commercial airlines through the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 and the American Rescue Plan Act of 2021. 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 .

These early retirement programs exacerbated an existing pilot shortage within the airline industry, since by law pilots must retire at age 65. Approximately one-third of airline pilots are between 51 and 59 years old, and one industry research firm estimated that by 2026 about 42% of current airline pilots will retire.

The pilot shortage has been a major contributing factor in widespread flight delays and cancellations, which has impacted millions of travelers. 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.

While travelers are suffering the consequences of the pilot shortage, airline stocks rose to nearly 200% above pandemic levels this spring and have continued to rise. In 2021, airline companies enjoyed revenue growth of 8% to 12% , while passengers paid record-high prices for flights.

In October 2020, the Select Subcommittee on the Coronavirus Crisis issued a staff report finding that under the Trump Administrat ion, the Treasury Department allowed aviation contractors to layoff thousands of workers while still receiving full payroll support based on pre-pandemic workforce numbers.

In March 2021, an audit conducted by Treasury's Office of Inspector General (OIG) 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.

The Chairs requested that Treasury OIG provide a staff briefing on the preliminary findings of the requested evaluation of Treasury's disbursement of funding to airlines by September 22, 2022.

Click here to read the letter.

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