Senate Hearing on U.S. Airline Industry Sees Talk of Pilot Shortage

The American airline industry faced down Capitol Hill during a U.S. Senate hearing regarding their immense pandemic bailout of $54 billion.

The money came with strings attached, being issued in order to preserve airline employees. Airlines were to place limits on executive compensation, eliminate stock buybacks and dividends, and ban involuntary furloughs that were expected to mirror the post 9/11 slump. The money has complicated the relationship, with some wondering whether or not airline execs find themselves beholden to lawmakers in return for the money.

Mandatory lockdowns throughout the states saw airline demand crater in 2020, and in traditional "just in time" economic tradition, many carriers offered their most expensive pilots early retirement, buyouts, and even paid leave deals in an effort to stem the financial bleeding through the slow months. Concerns that the COVID-19 pandemic was a redux of September 11th may have led to premature termination of many employees that left many companies shorthanded when travel demand returned to near 2019 levels month after month. Airline CEOs told congress they had no choice but to shrink to stay afloat even with the government support.

The return to normal still managed to surprise many, with American CEO Doug Parker saying "the return of demand for air travel has been intense. Like other airlines, we have experienced some operational challenges in recent months, which we have worked to manage as deftly as possible." He said that the common idea that American suffered hundreds, if not thousands of cancellations throughout 2021 as a result of pilot shortages was incorrect. "We end up with airplanes in the wrong place, people in the wrong place," Parker said regarding the airline's mass flight cancellations in October. "So that was the driver of the vast majority of cancellations, but ... it gets unfortunately mischaracterized as we don't have enough people."

Parker said his airline has even more employees and flight crew than pre-pandemic, but they now are less interested in picking up extra trips. Southwest CEO Gary Kelly admitted to scheduling mistakes of the past year, while United revealed their shortage of regional pilots. "All of us, particularly our regional partners, simply don't have enough airplanes to fly," said United CEO Scott Kirby. "We have almost 100 airplanes effectively grounded right now, regional aircraft, because there's not enough pilots flying, which means we just can't at the moment fly to all the small communities that we would like to."

FMI: www.commerce.senate.gov