American Airlines CEO Doug Parker is prepared to tell a United States Senate committee on Wednesday that the $54 billion airlines received in COVID-19 aid from the federal government were spent correctly and helped save the fate of U.S. carriers.
The three sets of grants and loans "saved the airline industry," Parker will tell the committee according to prepared remarks seen by Reuters News Service.
Parker, United Airlines CEO Scott Kirby, Southwest CEO Gary Kelly and Delta's Chief Operating Officer are also scheduled to appear before the Senate on December 15.
Airlines have been under scrutiny from both sides of Congress after a series of massive delays and cancellations this year, in large part due to staffing shortages.
Congress is asking where the money went since the $54 billion was earmarked for payroll support to keep employees and keep the airlines going during the pandemic. At one point in April of 2020, the airlines had a day in which capacity on planes dropped to just five percent of what it was on the same day in 2019. There were numerous reports of flights carrying less than 10 passengers at a time.
Most airlines enhanced the grants and loans by also offering buyouts and early retirement to employees. But that left carriers caught short-handed when pent-up demand for travel exploded earlier this year, and staffing became an issue.
According to Reuters' review of Parker's testimony, the American CEO will tell committee members that unless the government had not stepped in, the industry only "would have survived by shutting down flying in April 2020, furloughing almost all of our teams, and waiting for demand to return to levels strong enough to justify restoring flying. As it turns out, that would have been some time in 2021."
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