Washington, D.C. — Today, the House Committee on Transportation and Infrastructure Chair Peter DeFazio (D-OR) and 69 other House Members sent a letter to Nicholas Calio, President and CEO, Airlines for America; Faye Malarkey Black, President and CEO, Regional Airlines Association; and George Novak, President, National Air Carrier Association; urging their members to refrain from initiating stock buybacks as the Payroll Support Program’s (PSP) ban on them expires on September 30, 2022. In the letter, the lawmakers stress that airline carriers must continue to address operational challenges, such as flight delays and disruptions that affect millions of passengers, before pursuing stock buybacks.
“The PSP, which provided approximately $50 billion in aid to the U.S. aviation sector, safeguarded the livelihoods of the 750,000 plus workers employed by U.S. airlines as well as those in manufacturing and maintenance,” the Members wrote. “In doing so, it not only protected those jobs, but it ensured the airlines’ ability to return to service by precluding a crippling attrition of talent during this temporary crisis.”
Yet, the Members pointed out in the letter, “the PSP also included clear limitations on the use of funds. Specifically, it mandated a prohibition on involuntary furloughs, forbid cuts to hourly rates of pay, required continued service to all communities, banned stock buybacks and dividends through September 30, 2022, and capped executive compensation through April 1, 2023.”
“Unfortunately, [the aviation system] is now having trouble meeting the increasing and pleasantly unexpected public demand for air travel,” the Members continued. “We stand united with the entire U.S. airline industry and applaud them for weathering the pandemic… That said, given the cracks in the system which the pandemic exposed and the number of displaced passengers due to chaotic operations, we urge your member carriers to refrain from initiating stock buybacks when the prohibition ends on September 30, 2022, at least until air carriers are able to publish and fulfill schedules that meet demand; staff flights and key personnel positions appropriately; and return service to every community—big or small.”
The full letter can be found here.
Background:
As the pandemic struck in 2020, Congress passed the Payroll Support Program (PSP), as a part of the CARES Act and subsequent pandemic relief bills, to provide approximately $50 billion in aid to airlines for employee wages, salaries, and benefits, which protected the U.S. aviation industry from collapsing. Airlines that took these funds agreed to refrain from issuing involuntary terminations or furloughs as well as engaging in stock buybacks and dividends, and capped executive compensation for a specified amount of time.
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