[Senate Hearing 116-585]
[From the U.S. Government Publishing Office]
S. Hrg. 116-585
THE STATE OF THE AVIATION INDUSTRY:
EXAMINING THE IMPACT OF THE
COVID-19 PANDEMIC
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
__________
MAY 6, 2020
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
52-671 PDF WASHINGTON : 2023
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
ROGER WICKER, Mississippi, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington,
ROY BLUNT, Missouri Ranking
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD MARKEY, Massachusetts
CORY GARDNER, Colorado TOM UDALL, New Mexico
MARSHA BLACKBURN, Tennessee GARY PETERS, Michigan
SHELLEY MOORE CAPITO, West Virginia TAMMY BALDWIN, Wisconsin
MIKE LEE, Utah TAMMY DUCKWORTH, Illinois
RON JOHNSON, Wisconsin JON TESTER, Montana
TODD YOUNG, Indiana KYRSTEN SINEMA, Arizona
RICK SCOTT, Florida JACKY ROSEN, Nevada
John Keast, Staff Director
Crystal Tully, Deputy Staff Director
Steven Wall, General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Renae Black, Senior Counsel
C O N T E N T S
----------
Page
Hearing held on May 6, 2020...................................... 1
Statement of Senator Wicker...................................... 1
Statement of Senator Cantwell.................................... 3
Letter dated May 6, 2020 to Hon. Roger Wicker and Hon. Maria
Cantwell from Sara Nelson, International President,
Association of Flight Attendants--CWA, AFL-CIO............. 5
Statement of Senator Moran....................................... 44
Statement of Senator Klobuchar................................... 46
Statement of Senator Blumenthal.................................. 48
Article dated April 29, 2020 from the Wall Street Journal
entitled, ``The 19 Airlines Making Refunds a Headache'' by
Scott McCartney............................................ 48
Article dated April 21, 2020 from NPR entitled, ``Alines
Offer Vouchers, Credit for Canceled Flights, Customers Want
Cash'' by David Schaper.................................... 48
Article dated April 15, 2020 from Politico entitled,
``Frustrated with airline refusals to issue coronavirus
refunds, customers take to the courts'' by Tanya Snyder.... 48
Letter dated May 5, 2020 to Hon. Roger Wicker and Hon. Maria
Cantwell from Capt. Joseph G. DePete, President, Air Line
Pilots Association International........................... 49
Statement of Senator Lee......................................... 52
Statement of Senator Udall....................................... 55
Statement of Senator Tester...................................... 56
Statement of Senator Duckworth................................... 59
Statement of Senator Cruz........................................ 60
Statement of Senator Markey...................................... 63
Statement of Senator Fischer..................................... 64
Statement of Senator Rosen....................................... 67
Statement of Senator Sinema...................................... 69
Witnesses
Hon. Eric Fanning, President and Chief Executive Officer,
Aerospace Industries Association............................... 8
Prepared statement........................................... 9
Nicholas Calio, President and Chief Executive Officer, Airlines
for America.................................................... 12
Prepared statement........................................... 14
Todd Hauptli, President and Chief Executive Officer, American
Association of Airport Executives.............................. 28
Prepared statement........................................... 29
Dr. Hilary Godwin, Dean, UW School of Public Health; and
Professor, Department of Environmental and Occupational Health
Sciences, University of Washington............................. 37
Prepared statement........................................... 38
Appendix
Timothy R. Obitts, President and Chief Executive Officer,
National Air Transportation Association, prepared statement.... 77
Ed Bolen, President and CEO, National Business Aviation
Association, prepared statement................................ 81
Faye Malarkey Black, President and CEO, Regional Airline
Association, prepared statement................................ 83
Airport Restaurant and Retail Association (ARRA) and Airport
Minority Advisory Council (AMAC), prepared statement........... 87
America's Community Airline Coalition, prepared statement........ 89
Letter dated May 6, 2020 to Hon. Roger Wicker and Hon. Maria
Cantwell from Christian Klein, Executive Vice President,
Aeronautical Repair Station Association........................ 91
Response to written questions submitted to Hon. Eric Fanning by:
Hon. John Thune.............................................. 96
Hon. Dan Sullivan............................................ 97
Hon. Shelley Moore Capito.................................... 97
Hon. Tom Udall............................................... 98
Response to written questions submitted to Nicholas Calio by:
Hon. John Thune.............................................. 99
Hon. Dan Sullivan............................................ 100
Hon. Marsha Blackburn........................................ 101
Hon. Shelley Moore Capito.................................... 102
Hon. Todd Young.............................................. 105
Hon. Rick Scott.............................................. 105
Hon. Maria Cantwell.......................................... 107
Hon. Amy Klobuchar........................................... 114
Hon. Edward Markey........................................... 114
Hon. Tom Udall............................................... 116
Response to written questions submitted to Todd Hauptli by:
Hon. John Thune.............................................. 122
Hon. Dan Sullivan............................................ 123
Hon. Marsha Blackburn........................................ 125
Hon. Shelley Moore Capito.................................... 126
Hon. Todd Young.............................................. 127
Hon. Rick Scott.............................................. 128
Response to written questions submitted to Dr. Hilary Godwin by:
Hon. Dan Sullivan............................................ 129
Hon. Shelley Moore Capito.................................... 129
Hon. Amy Klobuchar........................................... 130
Hon Tom Udall................................................ 130
THE STATE OF THE AVIATION INDUSTRY:
EXAMINING THE IMPACT OF THE
COVID-19 PANDEMIC
----------
WEDNESDAY, MAY 6, 2020
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
SD-106, Dirksen Senate Office Building, Hon. Roger Wicker,
Chairman of the Committee, presiding.
Present: Senators Wicker [presiding], Cruz, Fischer, Moran,
Lee, Cantwell, Klobuchar, Blumenthal, Markey, Udall, Tester,
Duckworth, Sinema, and Rosen.
OPENING STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM MISSISSIPPI
The Chairman. We appreciate people working with us on this
partially remote and partially in-person hearing on a very
important topic.
The COVID-19 pandemic has affected the normal operation of
every public institution in our country, including, as you can
see, the legislative branch.
I thank my colleagues and the witnesses for participating
in today's hearing, which is the first of many COVID-19-related
oversight hearings that this committee will conduct.
We will accomplish the Committee's business in accordance
with the guidelines established by the Rules Committee and in
consultation with the Office of the Attending Physician and I
want to thank my colleague, Ranking Member Senator Cantwell,
for her cooperation in this regard, too, and for all of our
staff.
The Committee today convenes to discuss the state of the
aviation industry. Our witnesses, which are limited in number
by the guidance we received from the Senate, include Nick
Calio, President and Chief Executive Officer of Airlines for
America; Todd Hauptli, President and Chief Executive Officer of
the American Association of Airport Executives; Eric Fanning,
President and Chief Executive Officer of the Aerospace
Industries Association; and remotely Dr. Hilary Godwin, Dean,
School of Public Health, University of Washington.
No part of the American economy has escaped the impact of
the COVID-19 pandemic. The air transportation sector has
suffered a particularly painful blow, one intensified by global
travel restrictions and stay-at-home orders. Domestic travel
has declined over 95 percent compared to last year. Planes are
flying with 12 passengers on average. Half of the U.S.
passenger aircraft fleet is sitting idle.
The air cargo sector is marginally better but still
struggling. Just last month, demand for air cargo plunged 15
percent and transport capacity declined by one-fifth compared
to last year's figures.
Even as the global economy recovers, the future remains
troubling for aviation. Demand for future U.S. air travel
measured by new booking is down 97 percent year over year.
A recent International Air Travel Association, IATA, survey
shows that 40 percent of passengers plan to wait at least 6
months before booking a ticket. I certainly hope they will
rethink that.
The situation is dire not only for airlines and for their
workers but also for the air transportation sector, which
relies upon a vast ecosystem in order to function. This sector
includes airports and their concessionaires, maintenance and
repair stations, ticket agents, fixed base operators and other
ground support contractors and the entire aerospace industrial
base. A lot of these businesses are mom and pop operations.
Many of their workers are hourly, living paycheck to paycheck.
I would welcome our witnesses' comments on the current
state of aviation and thoughts on the future.
Congress has recognized the importance of preserving the
air transportation sector, which is critical for so many other
industries in our society generally. The CARES Act included $32
billion in payroll support assistance for air carriers and
contractors. Administered by the Treasury, the Payroll Support
Program has prevented mass layoffs across the industry. All 13
major airlines and hundreds of regional and small carriers have
signed up to participate. Billions of dollars in assistance has
already been provided.
Recognizing the great need for liquidity, the CARES Act
also included $29 billion in loans within the Treasury's
Economic Stabilization Fund, ESF, for air carriers, aviation
repair stations, and ticket agents.
Let me stress that in doing so, Congress provided much
needed liquidity, not a bail-out. There are strong taxpayer
protection measures in the Payroll Support Program, and ESF
loans must be paid back with interest.
Beyond direct payroll support and loans, the CARES Act
provided further relief with a tax holiday for commercial
flights and passengers through the end of the calendar year.
The CARES Act also required the Secretary of Transportation
to impose reasonable continuation of service obligations on
airlines receiving assistance.
Americans living in rural areas and small communities
deserve continued access to air travel and cargo delivery.
Finally, the CARES Act injected $10 billion into the
Nation's airports to help them maintain operations and to
service debts.
The Committee is interested in hearing the witnesses' views
on the CARES Act. We would also welcome perspectives on
priorities for future potential legislation. No act of Congress
can help the industry if it is unsafe for passengers and crew
members to fly and for other aviation workers to do their jobs.
To that end, the Committee is interested in the steps being
taken to protect workers and the flying public.
The air transportation sector bears a special
responsibility to prepare for and to actively mitigate
communicable disease outbreaks. COVID-19 is the latest pandemic
but it will not be the last. Air travel is the crucial element
that can turn a local outbreak affecting a few into a global
pandemic affecting billions of human beings.
The Committee would welcome the witnesses' views on the
need for new regulations or standards at both the national and
international levels to harden the air transportation sector
against the possibility of future pandemics.
I want to thank our distinguished panel for participating
today and express our sincere gratitude for everything the
industry is doing to help our Nation weather this crisis.
I now turn to my friend, Ranking Member Cantwell, for her
comments.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman, and thank you
for holding this important hearing.
I want to note that while my colleague, Senator Blumenthal,
is here along with me, that we have six or seven of our
colleagues who are joining us remotely and we thank them for
being part of this hearing today.
The impact of the COVID-19 pandemic is fundamentally a
public health crisis but its impact on the economy is global
without parallel. The coronovarus has heightened the importance
and also the vulnerability of our aviation ecosystem. We need
to connect America, its communities, and we need to keep
employing people around the globe.
We have learned, just as with the Spanish flu, that this
virus, travels through people and transportation routes and
sectors. So we know we're here today to talk about what are the
impacts of the virus on aviation and what do we need to do for
the future to better prepare.
On March 27, the CARES Act was signed into law and a
historic part of the $2 trillion rescue package was
specifically dedicating $32 billion in payroll assistance for
workers and $46 billion in loans to stabilize America's
aviation sector.
We're going to hear today from some of the witnesses to
talk about that, but particularly I want to emphasize the fact
that we want to hear from the Treasury Office about the Payroll
Support Program in ensuring that the CARES Act was used
specifically to support payroll protection.
I also want to hear from the aviation manufacturing sector
and what this legislation has done to help us keep essential
aviation workers that are so critical for America's
competitiveness in a manufacturing economy.
In particular, we want to see how the aviation sector is
responding post this COVID CARES Act legislation, but we are
very concerned that when hours are being reduced of aviation
airline workers, this is counter to what the legislation
entailed.
I will be sending a letter along with Senators Brown and
Schumer to the Treasury Secretary to clarify that mandatory or
forced reductions in payroll hours is not what the CARES Act
intended.
We recognize the challenges facing the industry and we
recognize the challenges in facing this disease. We know the
demand has plummeted and that airplanes are grounded and that
airports have been empty. So we're going to hear today about
those challenges and how we can keep moving forward to protect
the flying public as they return.
We're going to hear from a witness, Eric Fanning, who's
going to talk about how this business was critical to national
security of the aviation sector and what we can do to continue
to move forward with getting manufacturing in a safe
environment.
We're also going to hear from Mr. Hauptli about the
implementation to our airports and airport systems. Clearly,
they have been hard hit and impacted by the loss of revenue and
the CARES Act helped deliver some resources to sustain them
through this crisis.
But I especially want to welcome and hear from Dr. Hilary
Godwin, the Dean of the University of Washington School of
Public Health and Professor in the Department of Environmental
and Occupational Health Sciences.
While we're focusing on the impacts of industry, we need to
think about this disease and what we need to do to prepare and
make our workers safe in the aviation environment.
We need to listen to our scientists, like Dr. Godwin. They
will tell us how best to protect workers. They will tell us how
to best protect the public and particularly in the case of
resurgence.
Dr. Godwin's expertise has played a strong and active role
in Washington's response to the coronavirus and right now, I
believe we need multiple Federal agencies, like CDC, NIH, DHS,
and DOT, to better coordinate information to the traveling
public about the phases of reopening.
We have states and public health authorities across the
country looking for leadership to tell our aviation traveling
public what are the most necessary procedures and how to follow
them.
I do not want to see a vulcanization of safety issues where
everybody has somewhat of an opinion or, I should say, even of
the industry. I want to see a uniform standard that this is
what safety in aviation requires on the manufacturing side, in
our airports, and on our airplanes.
So I look forward to hearing from our witnesses today. We
need to show the traveling public that we can make aviation
safe for the future. We need to discuss what those solutions
look like today and make sure that we're enforcing public
health standards in reaching those goals.
So thank you, Mr. Chairman, for having the hearing. I
would, if I could, also enter into the record a letter from the
Association of Flight Attendants on their testimony as it
relates to the COVID package and the Payroll Support Program,
making sure that workers are not forcefully reduced in hours.
Thank you very much, Mr. Chairman.
The Chairman. And without objection, that letter will be
admitted into the record at this point.
[The information referred to follows:]
Association of Flight Attendants--CWA, AFL-CIO
Washington, DC, May 6, 2020
Hon. Roger Wicker,
Chairman,
Senate Commerce, Science, and Transportation,
Washington, DC.
Hon. Maria Cantwell,
Ranking Member,
Senate Commerce, Science, and Transportation,
Washington, DC.
Dear Chairman Wicker, Ranking Member Cantwell and Members of the
Committee:
The Association of Flight Attendants-CWA, AFL-CIO (AFA),
representing 50,000 Flight Attendants at 20 airlines, submits these
comments on the ongoing impact of the COVID-19 pandemic on our sector
and more than two million aviation workers.
Seven Flight Attendants have already lost their lives as a result
of COVID-19 and many more have had to battle severe symptoms of the
virus. Hundreds have tested positive for the virus, but Flight
Attendants still are not recognized as essential workers with respect
to prioritizing testing for our profession. As a result of the
pandemic, nearly 1,000 U.S. Flight Attendants have lost jobs
permanently or in the near term without current plans to reinstate
operations. Trans States Airlines and Compass Airlines have both
shuttered since the onset of COVID-19, while Norwegian closed U.S.
Flight Attendant bases at the end of March (Flight Attendants have
contractual recall rights for 2 years if operations resume) and Cathay
Pacific announced it will end U.S. based operations as of June 20,
2020. Longtime charter carrier Miami Air, serving the U.S. military and
profession sports teams among other clients, filed for bankruptcy on
March 24, 2020, solely as a result of the pandemic. The carrier is
still waiting for Treasury to respond to its application for payroll
grants to support 350 jobs in the Miami area.
Payroll Support Program
The dedicated, highly-trained and credentialed workforce that run
our airports and our airlines are central to our country's efforts to
contain the coronavirus and facilitate economic recovery. To that end,
this Committee played a central role in providing carriers and aviation
contractors with billions of dollars exclusively to maintain payroll
and benefits of aviation workers, and ensure that our sector is ready
to fly. Your review of and attention to implementation of aviation
support programs in the Coronavirus Aid, Relief, and Economic Security
(CARES) Act is important to ensure that this money is used as Congress
intended.
The aviation industry is in free-fall. The most recent reports
suggest that air travel is down by 95 percent year over year. It is a
disruption without precedent or comparison in the history of the
industry. It is why in early March, when the pandemic had just started
to take hold in the United States, AFA worked closely with members of
this committee to put together a proposal for an historic workers'
first relief package to save our jobs. This workers' first package
ensures aviation workers continue collecting a paycheck, stay connected
to our health care, and remain ready to take off again as soon as the
threat of the pandemic is contained.
The final bill includes $25 billion in payroll grants to be used
exclusively for the wages, salaries, and benefits of 750,000 airline
workers, and the requirement that any airline receiving the payroll
grants must refrain from involuntary furloughs or reduction of pay
rates or benefits through September 30, 2020. Congress also required
any carrier that receives payroll grants refrain from share repurchases
and dividend payments through September of 2021 and placed limits on
executive compensation. Finally, to ensure that the aviation industry
continues to provide essential service to all communities, carriers who
receive payroll grants must maintain scheduled levels of air
transportation deemed necessary by the Secretary of Transportation. AFA
and other aviation unions strongly supported these critical provisions
to ensure accountability and protect American taxpayers.
Two issues undercut the value of the payroll support program for
workers. First, the act defined the carrier eligibility for payroll
grant apportionment by pay and benefit data from April 2019 through
September 2019. This data equals a total of $31 Billion to cover these
costs. Treasury determined the fair approach was to prorate each
airline's payroll grant allocation to 76 percent of the requested
amount. Treasury also exercised the option to under the Act to attach
financial instruments to the grants and require 30 percent of the
payroll grant over $100 million be treated instead as a loan. Together
these actions by Treasury resulted in a $12 billion shortfall of for
worker pay and benefits. Approximately 40,000 Flight Attendants across
the industry, nearly 35 percent of the entire U.S. Flight Attendant
workforce, have taken voluntary leaves to help ensure that payroll
grants are able to support those who remain on active status. We
encourage Congress to address this shortfall in order to ensure workers
do not shoulder the debt created by Treasury with lost jobs in October
2020.
Involuntary Reduction in Hours Side-Steps Congressional Intent for
CARES
We appreciate the overwhelmingly positive partnership with carriers
of all sizes that have worked to closely follow the statutory
obligations of the Act and meet their ongoing obligations to workers.
Despite the clear statutory language in the CARES Act requiring
carriers who receive payroll grants to maintain pay levels and
benefits, a small number of carriers are attempting to flout the Act
and cheat workers. These outliers have accepted Federal payroll grant
dollars while slashing hours and pay, in clear violation of
Congressional intent and the express language of the CARES Act. Delta
Air Lines was the first out of the gate with cuts to hours and worker
take home pay. The carrier made the decision to cut ground crew hours
by as much as 40 percent \1\ without consulting with workers and set in
motion a vicious and escalating pattern of cuts considered by other
airlines. Delta Air Lines Flight Attendants have asked their management
to commit to a minimum number of monthly hours equivalent to the amount
delineated in the Flight Attendant contract of Delta's closest industry
comparator, but to date Delta management has refused to do so, making
clear its plans to slash Flight Attendant hours and benefits below
established industry minimum standards as well.
---------------------------------------------------------------------------
\1\ https://www.businessinsider.com/airline-workers-hours-pay-cut-
coronavirus-2020-3.
---------------------------------------------------------------------------
The goal of these illegal payroll cuts is clearly to hoard grant
dollars until after September 30, when the prohibition against
involuntary furloughs and layoffs of workers ends. Slash hours now,
fire workers in September, and stockpile billions of dollars that was
intended for workers in order to subsidize ongoing airline operations
and gain a competitive advantage over any carrier that used the funds
as intended to maintain jobs, paychecks and benefits. If left unchecked
by Congress, the Treasury Department, and other oversight bodies, the
result will be a race to the bottom, penalizing companies that do right
by their workers in disbursing payroll grants to workers as Congress
intended.
Forcing workers to take unpaid time off or involuntary reductions
in hours is a violation of the Act, which forbids any involuntary
furloughs or reduction in worker pay and benefits. If carriers want
workers to consider taking time off, they must create voluntary
programs that are not in violation of the CARES Act.
Treasury's Response
Despite Congress's clear intent to use the payroll grant program to
maintain jobs, pay levels and benefits for airline workers through
September 30th, Treasury has not responded to requests for guidance to
carriers to advise that slashing hours is a violation of the grant
program. Their silence on this issue, which guts the core of the
program, is deafening. Absent pressure and vigorous oversight from
Congress, and from members of this committee in particular, Treasury
will continue to stand by while workers receive 25 percent pay cuts or
greater, and a few carriers set off this dangerous race to the bottom.
The members of this committee should press officials at Treasury to
enforce provisions of the CARES Act as Congress intended. Ten days ago,
AFA-CWA sent Treasury sample guidance to aid in its enforcement of this
provision and to help Treasury clarify the terms of program
participation for all carriers:
May a carrier or contractor reduce hours prior to September 30,
2020? The Treasury interprets the requirement not to reduce pay rates
prior to September 30, 2020 to mean that a full-time employee must be
paid for the number of hours routinely assigned to full-time employees
prior to March 1, 2020, excluding hours for overtime. A part-time
employee must be paid the average number of hours routinely assigned to
that employee prior to March 1, 2020.
What benefits are carriers and contractors required to provide?
Carriers and contractors must maintain all benefits paid prior to March
1, 2020, including health care, contributions to retirement accounts,
and any other benefits.
Treasury's failure to post guidance on this issue, and their
failure to question carriers' recent public decisions to cut hours and
force workers to take unpaid time off is jeopardizing the work Congress
did to save jobs, maintain pay and benefits, and sustain the ability of
these workers to pay their bills and contribute to the economy.
Congress should bring any airline CEOs who cut hours before the
committee to ask why they have slashed hours, despite taking taxpayer
dollars intended to keep workers fully paid through the end of
September.
We also urge Congress to continue to exercise its oversight
authority to ensure that Treasury makes timely payments to
participating carriers to get workers paid. In recent weeks, several
airlines have struggled to connect with Treasury and faced confusion
and delay as they work to participate in the program. With financial
pressures mounting, it is vital that Treasury maintain clear lines of
communication and commit to timely distribution of payroll grants.
Safety
In addition to the payroll grants, the AFA has also worked to
ensure that our workforce and our passengers are safe on the job and in
the air. Although flights are significantly reduced, new procedures are
necessary to minimize risk of spreading the virus in aviation. We are
happy to report that many carriers, including Frontier, jetblue, Delta,
American, United, and Alaska have announced that all passengers and
crew will be required to wear masks in-flight.
However, the safety of passengers and crew should not depend solely
on the judgment of individual airlines. The Administration should put
in place an emergency rule to mandate masks for crew, employees and
passengers; require personal protective equipment provisions for crew;
ensure safe cleaning and disinfecting between all flights; require
social distancing policies in airports and airplane cabins; and
communicate guidance from healthcare authorities from ticket purchase
to check-in, security check points, and throughout airplane boarding.
Aviation workers, who have already been hit hard by the virus, should
not have to choose between their health and their paychecks. Members of
the public must also feel safe for air travel to resume.
We encourage this committee to work with the Secretaries of the
Department of Transportation and the Health and Human Services to
quickly promulgate an emergency pandemic safety standard for air
travel, similar to the process used to put in place new security
procedures after September 11, 2001.
After September 30th
When the AFA worked to include payroll support grants in the CARES
Act in early March, our goal was to stop the immediate financial harm
to airline workers as a result of the cliff drop in air travel demand.
It is now clear that the impact of the pandemic on air travel will
stretch far longer than September 30th, the expiration date of the
payroll support program. Between now and then, our union looks forward
to working with members of this committee and the other industry
stakeholders to put in place the second phase of a workers' first
relief package. All options should be on the table for this phase two
package, including fully restoring phase one of $25 billion in payroll
grants and extending the program if air travel demand remains weak.
Conclusion
We thank the Chairman, the Ranking Member and the Members of this
Subcommittee for your efforts to maintain our jobs and secure our
industry in the face of this crisis. We are proud to serve as
aviation's first responders, doing the essential work that keeps our
country connected during this emergency and ready to lift our economy
again with the confidence of the traveling public. We appreciate your
efforts to ensure our jobs remain in place as we work together to keep
U.S. aviation safe and secure.
Respectfully submitted,
Sara Nelson,
International President,
Association of Flight Attendants-CWA, AFL-CIO.
cc: Members of the Senate Commerce, Science and Transportation
Committee
The Chairman. I wish the viewing public could see how
scrupulously we are honoring the distancing requirements. I can
barely see our witnesses down at the other end, but we have
monitors.
Also, we appreciate you being here. I know it has come at
some inconvenience. So thank you all, and we will begin with
the Honorable Eric Fanning.
Mr. Fanning, you are recognized for five minutes to
summarize your testimony. Your entire statement will be
included in the record, of course.
STATEMENT OF HON. ERIC FANNING, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AEROSPACE INDUSTRIES ASSOCIATION
Mr. Fanning. Chairman Wicker, Ranking Member Cantwell, and
Members of the Committee, thank you for inviting me today to
discuss this important topic.
The COVID-19 pandemic touches every person, family,
business, industry, and economy. It's a global threat that we
must all do our part to overcome.
With that goal in mind, the aerospace and defense industry
has been focused on three critical lines of effort.
First, protecting the health and economic wellness of our
workforce, which is vital to our industry and nation; second,
supporting our industry partners and shared aerospace defense
supply chain; and, third, helping our communities and country
with the COVID-19 response.
The aerospace industry has been hit hard by this pandemic,
especially with the decline in air travel worldwide. Air travel
in 2020 is estimated to drop at least 50 percent from 2019.
As a result, a substantial number of orders have been
canceled over the past few weeks on top of cancelations
experienced over the past year, and due to this decrease in
demand, our members have already announced layoffs and
furloughs, including one company that had to lay off 50 percent
of its engine manufacturing staff. Unfortunately, we may see
more in the future.
Unlike others, our companies must also weigh the impact on
our Nation's security as many cross over the civil and defense
sectors. Even a company with only 10 percent of its business on
national security can affect critical defense projects if their
work is placed on hold or they have to close, and while some
industries see business return quickly, the nature of our
industry and customers involves the long term, not weeks but
years.
There are many reasons for that. Even once orders for new
aircraft are made again, it takes longer to build and deliver a
plane than it does a pizza. Our workers are also some of the
most skilled in the world. If we don't keep them employed, we
could see workforce shortages when orders for products and
maintenance start again.
The industry's recovery will also be affected by the
success of other nations battling the epidemic and how quickly
passengers around the world return to the skies. This is a
shared responsibility of the companies represented before you
today.
On the manufacturers' side, for example, we are confident
that the air exchange and filtration systems used in our
airplanes can help mitigate the risk of the spread of the virus
and we are working to share this safety information with our
customers and the public.
Our airline partners already have strong disinfection
standards in place, and we are coming together to enhance them
through partnerships at this table and in our international
organization, the International Coordinating Council of
Aerospace Industries Associations.
We are also working with the International Civil Aviation
Organization to ensure use of the best disinfection methods and
products consistently in air travel around the world.
Ultimately how people feel about flying is what will give
lift to our interconnected industries.
Thankfully, Congress and the Administration have taken
action. The Federal effort to designate several manufacturing
efforts as essential is helping many of our members both
protect jobs and stabilize the defense industrial base and the
DoD's assistance with progress payment adjustments also helps
our companies advance millions of dollars in vital liquidity to
small businesses in our shared supply chain.
The CARES Act also provided important tools to navigate
this crisis, like the Paycheck Protection Plan, which our
companies describe as a lifeline.
In a recent survey of our members, over 60 percent of those
who responded applied for PPP. When you remove companies that
did not qualify, the number jumps to 80 percent, but we do
believe there can be improvements. Two of the most critical
tools businesses need in the crisis are cash-flow and
flexibility.
Unfortunately, some of the aid programs have conditions
that prevent companies from accessing the aid with the speed
and the flexibility required.
Moving forward, the safety of our employees remains our top
priority. That's why we are developing safety recommendations
for companies returning to facilities. These will be based on
lessons learned from our essential businesses who are still
safely operating.
We also look to Congress to both build on the aid already
provided and help shape policies to jumpstart the recovery.
One potential step is analyzing aid criteria and conditions
and determining the best way to make it easier for companies to
access help.
We also respectfully request temporary and targeted
assistance for the ailing aviation manufacturing sector. There
is strong support in our industry for a public/private
partnership to protect jobs and keep at-risk employees on the
payroll through the pandemic.
This would help with what's most important to us, keeping
our workers employed while also helping to unburden state
unemployment programs.
Finally, we must continue to prioritize research and
development because investing in the future is vital to
maintaining our global leadership.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Fanning follows:]
Prepared Statement of Hon. Eric Fanning, President and Chief Executive
Officer, Aerospace Industries Association
Introduction
Chairman Wicker, Ranking Member Cantwell, and members of the
committee, thank you for inviting me to appear before the committee
today. My name is Eric Fanning, and I serve as the President and CEO of
the Aerospace Industries Association (AIA). For over 100 years, AIA has
advocated for America's aerospace and defense (A&D) industry and served
as a bipartisan convener, where people can come together to get things
done on important topics, like our response to this unprecedented
crisis.
The COVID-19 pandemic touches every person, family, business,
industry, and economy. One just needs to look up at the skies above
Washington, DC, for evidence of this fact. Like many people in the
metro area, I live and work along the flight path for Reagan National
Airport. My office windows provide a birds-eye view for the hundreds of
daily take offs and landings at DCA. I never tire of watching the
aircraft--most of which are made by members of AIA--serve as the
workhorse for America's airlines. Sadly, this daily activity is no
longer visible. The flights that link people, products, and businesses
to our economy and the world have virtually stopped.
This pandemic is a global threat that we not only must all endure,
but also in which we must all do our part to overcome. With that goal
in mind, over the past weeks, the aerospace and defense industry has
been focused on three critical lines of effort.
The first is protecting the health and economic wellness of our
workforce, who are vital to our industry and nation. Our companies are
supporting employees and their families in several inspiring ways, from
taking steps to protect jobs to enhancing employee benefits and support
programs. Our companies are also taking extraordinary steps to ensure
the health and safety of every employee at open facilities by ramping
up the frequency of cleaning, sanitizing, and decontamination efforts,
as well as implementing physical distancing procedures, providing
personal protective equipment (PPE), and conducting temperature testing
at facilities.
Another major focus for AIA is the continued health of our industry
partners and the shared aerospace and defense supply chain. Our
companies are advancing millions of dollars to supply chain partners on
their own. Others are using adjustments to progress payments and aid
Congress has passed to help provide smaller companies with the
liquidity they need during this pandemic. This has been an essential
part of our work, as 71 percent of our members who responded to a
recent survey said accelerated payments from customers--be it the
Department of Defense or another aerospace company--is one of the most
helpful tools in mitigating the negative impacts of this crisis.
Finally, we are focusing on helping our communities and country.
Using our unique skills and expertise, companies are producing face
shields, designing and building portable ventilators, and taking other
actions to help our Nation overcome its challenges.
Through this work, we have been reminded of some critical lessons
about A&D and our government partnerships:
The importance of clear and consistent contract guidance,
which allows us to continue to work closely with our government
customers to continue to meet the mission;
How critical regular legislative order and predictable
budgets are--imagine what this pandemic would be like if
Congress was also debating a CR or budget deal;
The vital role that cash flow and liquidity play for
businesses--especially vulnerable small businesses--and their
ability to add new mitigations and procedures during a crisis;
And how essential a healthy, interconnected A&D supply chain
and industrial base are for America's safety and security.
Impact on the Industry
While we have learned from and are proud of our work during this
crisis, we cannot avoid the fact that the aerospace industry, which was
already facing challenges on the commercial side, has also been hit
hard by this pandemic.
Commercial aviation is a uniquely global enterprise, and U.S.
manufacturing leads the world. In a global pandemic like this one, our
workers are affected not only by the virus' impact in the U.S., but
also the decline in air travel worldwide. Those declines have been
staggering: The International Air Transportation Association estimates
that global, full-year passenger demand in 2020 will end 48 percent
below the 2019 level. On April 8th of this year, the Transportation
Security Administration screened a record low 97,000 air travelers at
our Nation's airports. That's 95 percent below the number on the same
day in 2019--an average of only 220 passengers per airport across the
country.
We appreciate this committee recognizing that aircraft
manufacturers and their suppliers are as affected by these massive
declines as our airport and airline partners. Substantial orders for
aircraft, engines, and supporting systems have been canceled over the
past few weeks, and this has come on top of cancellations experienced
over the past year. This not only hits the direct company involved with
the sale, but also every other company--small, medium, and large--that
plays a vital part in the manufacturing and maintenance effort.
As a result, companies of all sizes are making the difficult choice
to furlough or lay off employees. One company had to lay off 50 percent
of its engine manufacturing staff. Another furloughed most of their
7,000 employees. And because this crisis has continued, a third was
pushed to let 1,500 employees go. These are just a few examples of the
thousands of jobs lost or put in jeopardy because of this crisis.
Unfortunately, we may see more of this trend in the future.
The continued health and resiliency of our global supply chain,
which is the lifeblood of our industry, is also a concern. Right now,
disruptions to our supply chain are a growing challenge. Illness,
business closures, and reduced operations are leading to transportation
and logistics issues, parts shortages, and other significant problems.
And our companies must also weigh the impact their work--or halting
of that work--will have on our Nation's safety and security. The A&D
industry is unique in that many of our companies cross over the civil
and defense sectors at various degrees. Even a company that only does
10 percent of its business focused on national security can affect
critical defense projects if their civil work is placed on hold or they
have to close.
In addition, there is a large difference between the A&D industry--
especially commercial aviation--and other industries hit by this
pandemic, as we learned after 9/11. While some may see business return
quickly, the nature of our industry and customers involves the long-
term--not days, but months or even years.
There are many reasons for that. Even once orders for new aircrafts
are made again, it takes longer to build and deliver a plane than a
pizza. That's just the nature of the world-class systems we build.
In addition, our workforce is one of the most skilled in the world.
If we don't keep them employed, we could see shortages of specialized
workers when orders for products and maintenance start again.
The industry's recovery will also be affected by the success of
other nations in battling the epidemic--from how severe they have been
hit by COVID-19 to how severe their restrictions are as a result.
How quickly our industry can recover is also dependent on how
quickly passengers return to the skies. AIA is ready, willing, and able
to play a role in rebuilding confidence in air travel by demonstrating
that industry is collectively putting safety first. Already, we are
working with the International Civil Aviation Organization to establish
standards that will help improve safety. I know our partners at the
airlines and airports agree that, until we can show that air travel is
safe and regain the trust of the flying public, this crisis will
continue to hit aviation particularly hard.
Under the best of circumstances, it is likely we will feel the
impact of this disruption for several years.
Efforts by Government Leaders
Thankfully, Congress and the Administration have taken swift action
over the last two months to help provide our citizens and country with
the help we need.
The Federal effort to designate several manufacturing efforts as
essential has been a source of much relief. The DOD and agencies like
the FAA and NASA have been critical and responsive partners in this
area. Not only has their work helped many of our members protect their
employees' jobs, but it has also helped ensured that the skilled
workers continue to meet the national security needs of our country and
stabilize the defense industrial base. This is also critical for our
industry as a whole--including commercial aviation--because of the
shared supply chain.
The CARES Act also provided our members with important tools and
resources to help them navigate the crisis. For small businesses, the
Paycheck Protection Program has been vital for our members, who have
described it as a ``lifeline.'' In a recent survey of our members, over
60 percent of those who responded applied for PPP. When you remove
companies that did not qualify, the number jumps to over 80 percent.
The creation and expansion of the program has been an important tool to
help our companies protect employees and their jobs.
The proposed Mainstreet Lending Program also has a lot of potential
for some of our mid-sized companies that didn't meet the criteria for
small business support.
But we do believe there can be improvements. Two of the most
critical tools businesses need in a crisis are cash flow and
flexibility, and they need both quickly. While the CARES Act includes a
number of tools to assist with cash flow, some of the programs have
conditions that prevent companies from accessing this aid with the
speed and flexibility required.
The Paycheck Protection Program, for example, does not allow some
companies to be eligible for assistance due to the Treasury's
definition of ``affiliated'' companies.
There are also discussions within the government related to the $17
billion fund for ``national security businesses'' and whether the
criteria for that assistance is too narrow. A number of our members
would agree that Treasury's criteria are preventing them from accessing
this aid.
For example, the requirement that recipients have a current ``DX-
rated'' contract and a top-secret facility clearance renders ineligible
any companies that perform national security work on an unclassified
basis. In addition, the one-week deadline to apply could have limited
the pool of applicants.
We've also heard concerns that the structure of the Main Street
Lending Program might restrict company access--not because businesses
do not want the aid, but because banks are potentially hesitant to
engage with this program.
Recommendations for Recovery
Moving forward, we look to Congress to not only build on the
foundation of aid already provided--aid that has been essential to our
industry and others--but also help shape policies that will jumpstart
the recovery.
A&D is already thinking through the new norm and what it means for
our businesses, employees, and customers. We're working to identify
impacts on the supply chain and learn what investments will help
support our industrial base and the overall economy as the country
rebounds and recovers.
Overall, when we think of a roadmap for recovery, the safety of our
employees remains our top priority. AIA is leading an effort to develop
recommendations for our companies based on lessons learned from safe
operations as essential businesses. These will account for PPE,
testing, monitoring, enhanced sanitization, and other safety measures.
As one of our members said, these companies are not returning to work--
they have been working. But their best practices will help others
return to work as well.
Congressional action is another key element in our Nation's
recovery. One potential step is analyzing aid criteria and conditions
and determining the best way to make it easier for companies to access
help.
Temporary and targeted assistance for the ailing aviation
manufacturing sector is also something we respectfully request Congress
to consider. There is strong support in our industry for a private-
public partnership to protect jobs and keep at-risk employees on the
payroll through the pandemic. This proposal will require eligible
companies to provide significant investment to sustain payroll--with
government supplementing a portion of the cost as well. This would help
with what's most important to us, keeping our workers employed, while
also helping to unburden state unemployment programs. This crisis is
unprecedented, so we need to think outside the box.
Finally, we must continue to prioritize research and development.
America leads the world in this industry, and we must continue to
invest in the future to maintain that global leadership. One example of
action we can take today to bolster the industry's long-term global
competitiveness is expanding FAA's Continuous Lower Energy, Emissions
and Noise (CLEEN) program.
As always, we look forward to working with Congress on the details
of any plan, but the broad effort should focus on filling the gaps of
the CARES ACT and other aid programs, while also maximizing the ability
for companies to access any further aid.
Conclusion
We recognize that there are no simple solutions and additional
relief is no small ask. But our country--and our industry--is known for
overcoming large challenges.
On a level playing field, the A&D industry is one of the biggest
drivers of American innovation and economic growth, so we know we are
in a unique position to help lead our country's recovery.
Our industry has always defined the art-of-the-possible. And with
the support of government partners, we know we can continue to live up
to that standard and help our country through this crisis.
Thank you.
The Chairman. Thank you very much.
Mr. Calio, you are recognized.
STATEMENT OF NICHOLAS CALIO, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AIRLINES FOR AMERICA
Mr. Calio. Thank you, Chairman Wicker and Ranking Member
Cantwell, for holding this hearing.
The Chairman. Mr. Calio, I see you sent your grandfather
to----
Mr. Calio. Yes, sir, I did. Either that or Papa Smurf's
multiple personalities.
The Chairman. Reset, Mr. Calio's timer.
Mr. Calio. Thank you, sir.
Sincerely, on behalf of the 750,000 U.S. airline employees
and our Nation's airlines, we want to thank this committee and
the Administration for passing the CARES Act.
In particular, Chairman Wicker, thank you and your staff
for your unwavering leadership during the legislative debate.
Ranking Member Cantwell, to you and your staff, as well,
thank you.
U.S. airlines were among the first industries to feel the
economic impacts of the pandemic and without the passage of the
CARES Act, the near-term impacts of COVID-19 would have been
even more devastating than they have been.
We are thankful to many, but this Committee in particular,
sent the industry a lifeline during its most humbling moment
and it's something that we really did need.
In preparing these remarks, I thought back just a few short
weeks ago, and it was just a few short weeks ago. It's a very
different world now. At that time, U.S. airlines were
experiencing what was called by some ``The Golden Age of
Aviation.''
Americans were flying and shipping in record numbers. That
was driven by two main factors: affordability and
accessibility. Fares were at an all-time low and air travel was
more accessible than ever.
Just weeks ago, U.S. airlines were flying an average of two
and a half million passengers each day, shipping 58,000 tons of
cargo every day all over the world. Amid record travel and
shipping, U.S. airlines reinvested in their workforce.
Collectively, they spent $424 billion on their employees in the
last decade. They boosted wages and benefits per worker by 56
percent and hired 186,000 new employees.
All indications suggested that 2020 was going to be a
record year, as well. Then the bottom fell out. In the most
recent week alone, passenger volumes declined to levels that we
have not seen since the 1950s, before the dawn of the Jet Age.
It's remarkable. It's almost surreal, and it is painful for
everyone involved, the airports, our employees, the
manufacturers, and everyone who travels and ships.
For quick context, passenger volumes have fallen over 95
percent. More than 3,000 airplanes have been put in storage.
That's 50 percent of the United States active fleet. Despite
the sharp reductions in the number of flights, I think as
Chairman Wicker pointed out, we're averaging 17 passengers per
domestic flight and 29 per international flight. If you've been
on a plane, it's eerie. U.S. carriers at this point are losing
$350 to $400 million every single day of the week.
The crisis hit what was a robust airline industry at
lightning speed. Unfortunately, the recovery will not be as
quick. It's going to be a very long and difficult road ahead
and everyone involved has to join hands and work on it
together.
Passenger volumes took 3 years to recover after 9/11 and 7
years after the financial crisis. The duration and breadth of
the impacts directly on our industry compounded by the larger
impacts on the economy leave no doubt that the U.S. airline
industry will emerge a shadow of what it was on March 1 of this
year.
That said, we have a history of being resilient and
reacting to this new normal as quickly as possible to address
the near-, mid-, and long-term challenges of the pandemic.
While addressing consumers' confidence is going to take
many actions, both by the public and private sector, we're
aggressively dealing with the variables that we can control.
Last week, A4A's member airlines agreed that customers must
wear face masks along with our employees on every flight. We
hope that is going to extend throughout the entire flight
journey from arriving at the airport to leaving.
We've also implemented a range of other policies. Wherever
possible, modifying boarding procedures to put passengers
further apart from each other. As Mr. Fanning pointed out,
we've increased our cleaning. We're all at or exceeding CDC
recommendations. There are a number of highly enhanced cleaning
procedures being used, including fogging and electrostatic
cleaning.
We are using temperature checks for some of our employees
and discussing with some of the government agencies involved
about whether that should be expanded.
Anyway, we're taking substantial steps. There are many more
to speak about to try to protect our employees and our
passengers who every day are our highest priority. Their safety
is our highest priority.
We're also going to continue to work with government and
health officials across the country to ensure that travel
continues, and that essential shipments, personnel, and relief
supplies are delivered to the communities that need them.
We want to thank the Committee again and the Congress and
the Administration because the CARES Act has provided a bridge.
It's given us some breathing room to move on to the next step
to try to survive where we are.
The bottom line on all this is this is a matter of sheer
gut survival. These companies have been crippled in a matter of
about 7 weeks. We're looking forward to trying to come back,
find our footing, find our way to the next step, and lead the
economy to recovery.
Thank you very much.
[The prepared statement of Mr. Calio follows:]
Prepared Statement of Nicholas Calio, President and Chief Executive
Officer, Airlines for America
Airlines for America (A4A) appreciates the opportunity to testify
today to share with you the impact of the COVID-19 pandemic on the
commercial aviation industry. On behalf of our more than 750,000
employees and our Nation's airlines, I would like to acknowledge and
sincerely thank Congress and the Administration for reaching agreement
on the bipartisan Coronavirus Aid, Relief, and Economic Security
(CARES) Act, which included provisions intended to assist the U.S.
airline industry to continue making payroll and protect the jobs of
pilots, flight attendants, gate agents, mechanics and others. Our
employees are the backbone of the industry and our greatest resource.
U.S. airlines were among the first industries to feel the economic
impacts of the pandemic and without passage of the CARES Act, the near-
term impacts of the COVID-19 pandemic would have been even more
devastating to our industry and our workforce.
Particularly, Chairman Wicker, I thank you and your staff for your
unwavering leadership on behalf of our industry during the CARES Act
debate. While we are thankful to so many in Congress and the
Administration for their role in that process, this Committee played a
central, material and critical role in providing our industry a
lifeline at the most humbling moment in our history. The ripple effects
of your work provided much-needed solace to many of the 11 million U.S.
workers our industry either directly represents or supports economy-
wide. We are beyond thankful.
Impact of the COVID-19 Pandemic
Before the COVID-19 pandemic, U.S. airlines were experiencing what
some have called the ``Golden Age.'' Just a few months ago, I gave a
speech in which I quoted a J.D. Power survey question, ``Is this the
golden age of air travel?'' The question was the first line in a press
release announcing the findings of the 2019 North America Airline
Satisfaction Study which found that a combination of newer planes,
better ticket value and improved customer touchpoints had driven
overall satisfaction with airlines to its highest point in history.
In many ways, 2019 seems like a distant memory now. U.S. airlines
were seeing an average 2.5 million passengers each day. Air travel
between the U.S. and foreign countries reached an all-time high with
nearly 80 million foreign visitors coming to the U.S. last year. The
Transportation Security Administration (TSA) reported its busiest day
ever on May 24, 2019--the Friday before Memorial Day--screening
2,792,525 passengers and crew members. That day, the TSA issued a press
release touting the numbers and also announcing that the agency
anticipated more than 4 percent traveler growth over the summer months,
with the expectation that it would see more record travel in the coming
weeks. In fact, on July 7--the Sunday after the Fourth of July
holiday--the TSA screened 2,795,369 people. And on Sunday, December 1--
the Sunday after Thanksgiving--the TSA once again set a new record,
screening 2,870,764 travelers in a single day.
This record travel was in large part because of two main factors:
affordability and accessibility. Airfares were at historic lows.
Accounting for inflation, average fares were down about 22 percent
since 2000 and 44 percent since deregulation in 1978. It was truly
remarkable how accessible air travel had become. At the time, 23
percent of Americans who flew had family incomes below $50,000. 42
percent of people who flew had family incomes below $75,000. Plus,
airlines were offering more flights, more routes and going to more
destinations than any time in the history of commercial aviation.
Think about your own travel. We took it for granted that we could
make it anywhere in the country or around the world to attend an
important business meeting, participate in a family reunion, attend a
grandchild's graduation or dance at their wedding.
All indications were for air travel to rise again and set more
records in 2020. In January and February, U.S. airlines saw year-over-
year increases of 5.5 percent and 6.7 percent, respectively. Then the
bottom fell out. In the late April, passenger volumes were down an
unfathomable 96 percent to a level not seen since the 1950s, before the
dawn of the jet age. Many of you and your Senate colleagues saw the
effects of this firsthand as you traveled to Washington this week. Your
hometown airport may have been eerily empty--with restaurants closed
and shops shuttered. And you probably noticed that there were
significantly fewer flights taking off.
The impact of government-and business-imposed travel restrictions
compounded by public concern has decimated demand for air travel, which
has all but evaporated. Since the beginning of March, U.S. air
carriers--both passenger and cargo--have seen their previous positions
of strong financial health deteriorate at an unprecedented and
unsustainable pace. The human, financial and operational impacts are
difficult to comprehend, and the future remains uncertain. Attached is
a PowerPoint slide deck of industry data that can better paint the
dismal picture; below is a non-exhaustive list of some of the facts
that encapsulate the unprecedented changes we have seen over the course
of a few short months:
After growing steadily in January and February, 2020, A4A
member airline passenger volumes have fallen over 95 percent;
Despite sharp reductions in the number of flights operated,
A4A passenger carriers are averaging just 17 passengers per
domestic flight and 29 passengers per international flight;
Net booked passengers have fallen by nearly 100 percent YOY
and net booked revenues have fallen over 100 percent;
U.S. passenger airlines have grounded over 3,000 aircraft,
nearly 50 percent of the active fleet. Planes are sitting
parked nose to tail and wing to wing on airstrips in the desert
and any place else that can accommodate them. While the numbers
are staggering, pictures show the magnitude of this harsh
reality. I encourage you to see the pictures included in the
accompanying PowerPoint slide deck.
At present, U.S. airlines are collectively burning more than
$10 billion of cash per month; and
Standard & Poor's has lowered the ratings of every U.S.
passenger carrier and placed some cargo carriers on negative
watch.
Challenges Resulting From the COVID-19 Pandemic
The COVID-19 crisis hit a previously robust airline industry at
lightning speed. Unfortunately, recovery from the crisis will not be
nearly as swift. We anticipate a long and difficult road ahead. For
context, passenger volumes took 3 years to recover from 9/11 and over 7
years to recover from the global financial crisis in 2008. Once demand
does recover, it will take years to retire the newly accumulated debt
and to address the sizable interest accrued, thereby limiting carriers'
ability to reinvest in their people and products. History has shown
that air transport demand has never experienced a V-shaped recovery
from a downturn.
Our industry is adapting on an almost daily basis to the unique
near, mid-, and long-term challenges of the pandemic. However, to set a
realistic and practical expectation, while the industry will do
everything it can to mitigate and address the multitude of challenges,
no factual doubt exists that the U.S. airline industry will emerge from
this crisis a mere shadow of what it was just three short months ago.
There is simply no way around the detrimental and lasting economic
impact this pandemic will have on our industry.
Beyond the health concerns raised by the spread of the virus,
businesses and consumers are also facing a sharp global economic
downturn of unknown duration. Unlike after 9/11, when air-travel demand
reductions were largely confined to domestic and transatlantic markets,
the effects of COVID-19 are clearly global. With unemployment soaring
to historic levels, family incomes plummeting and household net worth
evaporating, we expect to see businesses, governments and households
alike curtail travel. The airline industry is bracing for what will be
an extremely difficult operating environment for the coming years.
Our industry has a history of being resilient, and airlines are
reacting nimbly to this new normal. While addressing consumer
confidence will take many actions by both the public and private
sector, airlines are aggressively dealing with the variables they can
control. A good example of these efforts is aircraft cleaning
procedures.
U.S. airlines have been taking substantial steps to protect
passengers and employees since the onset of this crisis. A4A's member
carriers all comply with or exceed the Centers for Disease Control and
Prevention (CDC) recommended cleaning protocols, in some cases to
include electrostatic cleaning and fogging procedures. Carriers are
working around the clock to sanitize cockpits, cabins and key
touchpoints--including tray tables, arm rests, seatbelts, buttons,
vents, handles and lavatories--throughout the day with disinfectants
approved by both the Environmental Protection Administration (EPA) and
the CDC. And airlines have increased the frequency of deep cleaning
procedures for both domestic and international flights. Additionally,
carriers have implemented a range of policies--including back-to-front
boarding and adjusting food and beverage services--to help ensure the
wellbeing of passengers and crew. The industry will continue to adapt.
A prime example of this occurred last week when A4A passenger
carriers voluntarily came together to require customer-facing employees
and passengers to wear a cloth face covering over their nose and mouth
throughout check-in, boarding, in-flight and deplaning. These are not
easy decisions, but our industry will continue to work closely with
public and private sector partners to address tough policy issues,
including government-administered temperature checks and contact
tracing because it is the right thing to do.
On contact tracing, I would like to thank the Committee for its
work and attention in this area, specifically the leadership shown by
Aviation Subcommittee Chairman Cruz and Ranking Member Sinema. They
have been vigilant and innovative in their efforts to create a
thoughtful, practical and workable approach to contact tracing specific
to aviation and more broadly. We appreciate their continued work.
Those efforts specifically listed, and many other measures such as
vaccine development, will play a critical role in establishing a
comprehensive set of broad components needed to bring global travelers
out of their homes safely, securely and confidently. We are committed
to playing a positive role in that process.
Implementation of the CARES Act
As noted, the industry is extremely thankful to Congress for the
relief opportunities provided in the CARES Act. We are equally thankful
for the implementation work done by the Administration, particularly
the efforts undertaken by Treasury Secretary Mnuchin and Department of
Transportation (DOT) Secretary Chao. Both continue to play a pivotal
role in the evolving implementation process. For their part, air
carriers continue to work through their respective agreements with
Treasury and with the DOT on service issues. We expect the situation to
remain fluid and it is important on-going communication channels remain
open as the economic environment evolves. I would note for the
Committee, while carriers are certainly complying with the CARES Act
requirement and DOT Show Cause Order requiring minimum service levels
to U.S. communities, the cost associated with operating nearly empty
flights to communities with little to no demand significantly
exacerbates air carrier liquidity. We would ask both this Committee and
the Administration to seek solutions to address the challenges posed by
this unsustainable requirement. Make no mistake, as the duration of
this pandemic lingers, the reasonability and practicality of this
requirement significantly diminishes. Carriers and communities alike
are going to have to come together and acknowledge the footprint and
frequency of service in 2019 cannot convey to the 2020 COVID-19
pandemic reality.
While the U.S. Government has played a vital role in the near-term
stability of the industry, airlines have and will continue to do their
part. Over the past decade airlines had reinvested $143 billion into
the fleet, facilities, technology and other equipment and spent $424
billion on the workforce--hiring at a brisk pace and boosting average
wages and benefits per worker by 56 percent. In both hiring and wages,
U.S. airlines sharply outpaced the rest of the U.S. private sector. As
of February 2020, U.S. passenger and cargo airline industry headcount
had risen to 754,359, the highest since June, 2001. By managing their
businesses well--including the retirement of $91 billion in long-term
debt--and taking care of their employees, airlines acted as an outsized
multiplier for overall U.S. economic activity, helping drive 5 percent
of U.S. GDP.
As a result of COVID-19 and accompanying government actions to
contain it, those strong balance sheets have been challenged and much
of the years of gains attributable to their business improvements have
been erased within a few short months. In turn, carriers have engaged
in significant self-help measures to bolster their liquidity which will
be critical to surviving this unprecedented economic event. These self-
help measures include, but are not limited to:
Accessing outside sources of cash such as, but not limited
to, unsecured or secured loans amounting to nearly $40 billion
since late February;
Rescinding all planned issuance of dividends or stock
repurchases;
Deferring aircraft deliveries to the extent negotiable with
manufacturers;
Prematurely retiring more than 1,000 planes from the current
fleet;
Halting almost all discretionary (not operationally
critical) capital projects;
Trimming unprofitable flying;
Redeploying passenger aircraft to provide essential cargo-
only service to transport medical supplies;
Negotiating with vendors and airport partners to secure
relief on payment terms and timing; and
Securing voluntary unpaid leaves of absence or salary
reductions.
To the last point, we are grateful for the strong collaboration
between labor and management to address the realities of this crisis.
In fact, to date, more than 100,000 employees have opted for some form
of reduced hours, reduced pay, or early retirement which has brought
much needed flexibility to an almost unmanageable situation. We
appreciate all employees who have dedicated their lives to the U.S.
airline industry and are helping the industry to survive this public
health crisis.
It is also important to note, the funds provided in the CARES Act
are truly an investment in our economy. According to a Compass Lexecon
study conducted at A4A's request, the CARES Act payroll support program
funds are estimated to have saved 736,000 U.S. jobs (386,000 airline
jobs and 350,000 non-airline jobs) through September 30, 2020.
Specifically, the air carrier investments are expected to:
Enable airlines to preserve jobs and support $162 million
per day in salaries and benefits through September 30, 2020;
Maintain between $3.4 and $5.8 billion in federal/state/
local income tax revenues and Social Security and Medicare tax
contributions;
Avoid between $5.8 and $9.9 billion in both state and
Federal unemployment insurance claims; and
Support between $4.7 and $8.0 billion of economic spending
in the U.S. economy--as every dollar spent of airline wages
generates additional spending as the recipients spend that
income in their local economy.
The CARES Act investments will be an important component of air
carrier sustainability throughout a challenging summer, going into a
very uncertain fall season.
Finally, I would like to directly address the issue on which our
industry has been most fervently criticized, and that is the issue of
cash refunds. First, I want the Committee and the American public to
know, we are all human and we understand and appreciate the myriad of
challenges this pandemic has brought to individuals and families. We
are committed to working with each and every customer to address their
circumstances and situation. We strictly follow and comply with all
Federal laws and regulations on this matter and when a refund is due
under those regulations, carriers promptly provide them. It is also
true, while policies vary from carrier to carrier based on their
respective business models, many carriers are encouraging customers to
accept vouchers for future travel. This practice is not done with ill
intent, but instead underscores the economic reality that if air
carriers refund all tickets, including those purchased under the
condition of being non-refundable or those cancelled by a passenger
instead of the carrier, this will result in negative cash balances that
will lead to bankruptcy. Vouchers, future credit opportunities and
other incentives are being offered as a means to stem untenable cash
drain in order to protect our employee's livelihood. Airlines
understand the frustration and always strive to make the travel
experience positive. That's why we are working collaboratively with
policy makers and the flying public to find the right balance as we
also work to protect and sustain the jobs of our workers while
navigating this crisis.
Moving Forward
U.S. carriers continue to work with government and health officials
across the country to ensure that essential travel continues, and that
essential shipments and relief supplies are delivered to the
communities that need them as safely and efficiently as possible. This
includes moving critical cargo--including medical supplies,
pharmaceuticals, perishable food and mail--as well as the
transportation of medical, government and military personnel.
Throughout the pandemic, U.S. carriers have continued to transport
medical patients who need regular care, such as cancer treatment not
available in their hometown or metropolitan area and assist in the
repatriation of thousands of Americans on regularly scheduled
commercial flights. Additionally, there are operational and logistical
justifications for some flights to ensure planes and crew are at the
right place to execute these essential flights.
The safety and wellbeing of our customers and our employees is the
top priority of U.S. airlines. This continues to be a rapidly evolving
situation and U.S. carriers will remain in close contact with Congress,
the Administration, Federal agencies and public health experts. And, as
travel restrictions and stay-at-home orders are lifted, we look forward
to once again connecting friends, families and colleagues across the
country and around the globe. The U.S. commercial aviation industry
wants to lead the way to economic recovery.
______
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The Chairman. Thank you very much, Mr. Calio.
Mr. Hauptli, welcome.
STATEMENT OF TODD HAUPTLI,
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
AMERICAN ASSOCIATION OF AIRPORT EXECUTIVES
Mr. Hauptli. Thank you, Mr. Chairman.
As a passenger, when you approach a boarding gate at an
airport, you are literally in walking distance to almost
anywhere on the planet, but you don't walk alone. It takes
aircraft manufacturers and safety inspectors, mechanics,
airport employees, and TSA screeners. It takes pilots and
flight attendants, air traffic controllers and gate agents. It
takes ramp workers and fuelers and baggage and cargo handlers
and the magic of flight. It takes all of them and more.
The aviation industry is an intricate interconnected just-
in-time enterprise. It requires each of us to do our job as
safely and as efficiently as possible time after time after
time.
And while aviation allows for the movement of people and
goods across the country and around the globe, it is also the
oxygen that fuels our economy, and we need a healthy industry
in order to return to a healthy economy.
Mr. Chairman, I have three additional points I'd like to
make.
One, thank you and thank you to the Committee for the
leadership in the passage of the CARES Act. The funds headed to
airports are a lifeline that will protect jobs, enhance
cleaning and sanitization efforts, ensure that debt payments
will be made, and help keep construction projects moving
forward, at least in the near term.
Point Number 2, the challenges facing airports and our
industry partners are unprecedented and will require further
Federal support to meet ongoing needs and to prepare for what
will become the ``new normal.''
Billions of dollars in revenue that airports expected to be
generated by passengers and PFC collections have evaporated.
Given the significant decline in aviation activity and revenue
and the precipitous drop in passenger facility charge
collections that help support bond payments, airport will need
additional Federal assistance at least as large as the initial
amount provided in the CARES Act. And Congress must provide
billions of dollars in financial support for other parts of the
aviation ecosystem--general aviation airports, business
aviation, concessionaires, and other airport partners that have
been significantly dislocated and impacted by the crisis.
I recognize it's not popular to come up here and ask for
more help, but the scale and the scope of this crisis requires
it, and we're going to have to get past the ``sticker shock''
and get to ``yes.''
Third point, in addition to the Federal resources, the
aviation industry needs clear and consistent Federal guidelines
and standards to protect passengers and workers now and as
travel returns to the system.
Airports are already working diligently to clean and
sanitize their facilities. They're taking steps to promote
physical distancing, upgrading air filtration systems, and
promoting a touchless travel experience.
Face coverings are becoming more prevalent as airports,
airlines, and our Federal partners all requiring their use
throughout the travel journey. The matter of health screenings
is another area that requires a consistent approach. We need
clear and consistent processes and procedures throughout the
system so that passengers know what to expect regardless of the
airline or airport they happen to choose for their travel.
We have great Federal partners with TSA Administrator
Pekoske and FAA Administrator Dixon and I want to publicly
thank them and their teams for the proactive approach they've
taken to help create a safe and healthy environment for their
employees and all who travel throughout the aviation system.
The road ahead won't be easy, Mr. Chairman. I'm reminded of
the Churchill line. ``When you're going through hell, keep
going.'' Resiliency is the hallmark of the aviation industry.
We survived 9/11, we survived the Great Recession and countless
other hurdles, and we will survive the challenges before us
now.
Thank you.
[The prepared statement of Mr. Hauptli follows:]
Prepared Statement of Todd Hauptli, President and Chief Executive
Officer, American Association of Airport Executives
Chairman Wicker, Ranking Member Cantwell and members of the Senate
Committee on Commerce, Science and Transportation, thank you for
inviting me to participate in today's hearing on the State of the
Aviation Industry: Examining the Impact of COVID-19 Pandemic. It is
always an honor to appear before the Commerce Committee.
On behalf of the American Association of Airport Executives (AAAE),
the world's largest professional organization representing the men and
women who manage and operate commercial service, reliever, and general
aviation (GA) airports, I want to thank you for your continued
leadership in responding to the unprecedented challenges caused by the
coronavirus and on other issues of importance to airports and the
aviation industry.
These are challenging times, and we appreciate all that Congress
and the Administration are doing to help our country manage this
crisis. You acted quickly to address urgent needs with passage of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act, which
included much-need assistance to help airports, passenger and cargo
carriers, and airline contractors impacted by the coronavirus. This
critical funding will assist airports in your respective states and
allow them to stay open, undertake enhanced cleaning and sanitization
protocols, keep workers employed, address existing debt obligations,
and help keep necessary capital projects on track.
While there is much we don't know at this point about COVID-19 and
the path forward for the aviation industry, it is clear that recovery
will be slow and painful. Just as Congress rose to the occasion to
provide immediate relief, we are now seeking your assistance as we work
to mitigate the impacts of the coronavirus on the aviation industry and
turn our attention to recovery and ensuring the health and safety of
passengers and our employees.
Resiliency is a hallmark of the aviation industry, and I am
confident that we will find a way to survive this crisis and thrive in
due time. One needs to look no further than the commitment of front-
line employees that has been on display over the past few months to
gain a sense of optimism about the future. Pilots, flight attendants,
and other airline workers; transportation security officers; air
traffic controllers; airport concessionaires; air cargo operators;
airport executives and other dedicated professionals across the
aviation ecosystem have risen to the occasion. We are grateful for
their service.
Coronavirus: How the Pandemic is Impacting Airports
Before the spread of the coronavirus, airports and airlines were on
sound footing. Passenger levels were on the rise, and airport terminals
were bursting at the seams with activity. The Federal Aviation
Administration (FAA) was predicting that enplanements would increase to
964 million in 2020--up more than 120 million from 2017. With rising
demand and aging facilities, airports were focused on finding ways to
pay for growing infrastructure needs with limited Federal and local
resources.
That all changed when the coronavirus turned the aviation industry
upside down. The number of people flying has dropped precipitously, and
U.S. carriers have idled roughly half of their fleet. According to the
Transportation Security Administration (TSA), the agency screened fewer
than 100,000 passengers on several days last month.
On April 14, fewer than 88,000 passengers traveled through security
checkpoints--a low during the pandemic. In the past week, we have seen
an uptick in the number of passengers screened by TSA. The agency
screened slightly more than 134,000 passengers on Saturday, May 2 and
170,000 on Sunday. But the May 3 numbers represent a reduction of 93
percent from the 2.5 million passengers who traveled on that same date
last year.
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Of the flights that do remain, load factors are at historic lows.
According to Airlines for America (A4A) carriers are averaging 16.9
passengers per domestic flight and 28.6 passengers per international
flight.
With the unprecedented reductions in travel, airport revenues have
experienced a similar nosedive. The drop in passenger levels continues
to have a huge financial impact on large and small airports alike.
Fewer passengers mean significantly lower revenues from all the
activities that keep an airport operational, including parking, car
rental operations, airport concessions, and other revenue streams.
In Atlanta, for example, the airport has closed two concourses,
most of a third concourse, and half of a fourth. Three hundred of the
airport's 340 concessions are closed. On a recent day, 10,000
passengers passed through the airport, down from the 310,000 who would
have done so in normal times. U.S. Customs and Border Protection (CBP)
processing of international passengers has dwindled to a few hundred
from 20,000. Of the airport's 32,000 available parking spaces, some
3,000 are now filled, mostly by contractors on a temporary basis. These
numbers translate into hundreds of millions of dollars in lost revenue
to the airport.
The numbers are similarly stark in Boston, where a recent half-full
flight was cause for celebration. The airport's 18,000 parking spaces
sit mostly empty save for a couple hundred cars.
Passenger Facility Charge (PFC) collections have also declined
significantly for airports. Commercial service airports rely on PFC
revenue to build critical safety and security projects, meet debt
service obligations, and pay the local match on Airport Improvement
Program (AIP) projects. Billions of dollars in PFC collections airports
anticipated collecting in 2020 have evaporated leaving the future of
some projects in doubt.
For airports like Gulfport-Biloxi International in Mississippi,
PFCs are the primary source of revenue for existing bonds with
operating revenue serving as a backstop. The loss of both PFC revenue
and airport revenues has left Gulfport-Biloxi and many other airports
with few options to meet ongoing needs, including debt service.
Collective losses in revenue across the Nation's airports already
total billions of dollars, and the prospect for quick recovery is dim.
For instance, the Seattle-Tacoma (SEA-TAC) International Airport
indicates that it is ``serving only about 2,500 departing passengers
per day compared to over 50,000 normally this time of year. Overall
daily flights are down by two-thirds. Airlines suspended international
flights and reduced service, totaling almost 700 cancelled
international flights in April.'' Consider SEA-TAC's current
projections:
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For SEA-TAC, this translates into a projected loss of $251 million
in revenue in 2020. The airport also has $321.7 million in debt
payments this year. Other large hub airports are reporting similar
losses with upcoming debt payments.
Medium, small, and nonhub airports are also being hit hard by the
crisis. The Lincoln Airport in Nebraska has experienced a severe
reduction in passengers and revenue. Passenger levels at the nonhub
airport dropped 53 percent in March compared to the same month in 2019.
April was even worse with passenger levels declining by 95 percent.
Airport officials expect that revenue will be down $250,000 a month
during the pandemic, in part, because of lost parking revenue.
Nonprimary commercial service, reliever and GA airports have also
been struggling financially during the coronavirus crisis. One director
at a large GA airport in the northeast pointed out that revenue from
landing fees, operations and fuel sales all declined between 80 percent
and 89 percent in April. Last month, the airport went 11 days without
selling any jet fuel--a record low. GA airports around the country have
experienced similar losses.
Traffic is down 71 percent at Centennial Airport near Denver. On
April 12, the busy GA airport recorded only 22 flights. That is far
less than the 1,400-2,000 operations that the airport would have had on
a typical weekend. Meanwhile, jet and turbo-prop volume, based on fuel
sales, is down by as much as 90 percent. The airport is also paying for
two CBP officers, even though airport officials point out that
international travel ``has practically come to a standstill.''
With so little revenue coming in during the coronavirus crisis,
airports face tough questions about how to cover personnel costs,
ongoing operating expenses, and a collective $7 billion in debt
payments due in 2020. Meanwhile, concessionaires, rental car companies,
fixed-base operators and other important airport partners and critical
components of the airport and aviation ecosystem face similar revenue
declines.
CARES Act: A Critical Lifeline for Airports in the Near-Term
The challenges facing airports of all sizes are daunting. The $10
billion in assistance provided to airports as part of the CARES Act is
serving as a critical lifeline that will help facilities in your states
and across the country weather the immediate storm. We appreciate the
leadership of this committee in securing both airport and airline
assistance as part of the CARES Act. For airports, the funding and
flexibility provided will help cover immediate operating costs,
including payroll and enhanced cleaning and sanitization throughout the
airport environment; help service debt, and assist with keeping
construction projects moving forward.
As you know, $7.4 billion of the $10 billion in CARES Act funding
is dedicated to commercial service airports based on enplanements, debt
service, and cash reserves. Another $2 billion is designated for
primary commercial service airports based on a modified AIP
apportionment formula. In addition to the overall funding, airports
greatly appreciate that the bill provides them with flexibility to use
those funds for any lawful purpose including operations and debt
service.
For instance, the CARES Act funding will allow the Gulfport-Biloxi
airport referenced earlier to meet its existing debt obligations. The
Rapid City Regional Airport in South Dakota is slated to receive
approximately $9.3 million from the CARES Act. Airport officials
indicate they plan to use half of that revenue for operating expenses
and the other half for debt service payments. The airport also plans to
invest more than $250,000 on coronavirus mitigation efforts.
The Golden Triangle Regional Airport in Columbus, Mississippi is
slated to receive $1.2 million in CARES Act funding. The nonhub
airport's largest sources of revenue come from parking and rental car
operations. With so few passengers flying, the airport's revenue
dropped 77 percent last month. The CARES Act grant will allow the
airport to supplement its operating budget, avoid laying off valuable
employees and move forward with necessary equipment purchases.
The bill also included another $500 million to eliminate the local
match requirement for AIP grants that airports receive in Fiscal Year
(FY) 2020. Removing the local match requirement will free local revenue
for airports to use on operating expenses and personnel-related costs.
It is also allowing some airports to move forward with critical
projects that would not be possible without a 100 percent Federal
share.
Finally, the bill included $100 million to help GA airports. Those
airports--like commercial service airports--have seen steep declines in
revenue. The funding in the CARES Act is a step in the right direction
and will allow GA airports to receive anywhere from $1,000 to $157,000
for the busiest GA airports that traditionally have large numbers of
annual operations. And while the $100 million in the CARES Act helps,
it is nowhere near what is needed going forward.
Airports appreciate that Congress and the Administration worked
together to pass the coronavirus relief package so quickly. I would
also like to thank Secretary Elaine Chao, Federal Aviation
Administrator Steve Dickson and all the dedicated employees at the
Department of Transportation (DOT) and FAA who worked around the clock
during consideration of the CARES Act and after the President signed
the bill to get money out the door to airports as quickly as possible.
Airports frequently give the FAA and the Office of Airports high
marks for efficiency in distributing annual AIP funding. We realize
that distributing $10 billion with new requirements, new formulas, and
a new application process in a very short period is not an easy task.
Airports deeply appreciate DOT's and FAA's commitment and dedication to
helping airports during this crisis.
The CARES Act also included other provisions to help airports and
small communities. For instance, it contained $56 million in additional
funding for the Essential Air Service (EAS) program. The measure also
included $100 million for the TSA to spend, in part, on cleaning and
sanitization at security checkpoints.
Finally, the CARES Act included a package of grants, loans and loan
guarantees for passenger and cargo carriers, along with funding for
airline contractors. We strongly supported provisions in the CARES Act
to help stabilize the airline industry. Airports and airlines may
disagree on policy matters from time to time, but we have a symbiotic
relationship that requires us to work together now and in the future as
we confront the challenges that will remain long after COVID-19 is
dominating the headlines.
Outlook: Significant Challenges Ahead
Mr. Chairman, it's unclear how long the coronavirus crisis will
last, when passenger levels will start to return to pre-COVID levels,
or the time it will take for airports and airlines to operate in the
``new normal.'' But we expect the post-pandemic road to recovery will
take a significant amount of time and additional resources.
One international transportation consulting firm estimates that
domestic passenger levels in the United States could decline between 63
and 69 percent this year compared to 2019. International traffic could
suffer even more with an expected drop of anywhere between 71 and 83
percent this year. Overall, the firm expects passenger levels to be
down between 64 and 71 percent this year compared to 2019.
Airports, airlines, other stakeholders and our Federal partners
will need to work closely together to protect the health and safety of
passengers and our employees. We have done this before, after 9/11, to
improve aviation security. Of course, that tragic event led to the
creation of an entirely new Federal agency, new security measures for
airports and airlines, new capital investments, and changes in the way
we travel.
We expect the coronavirus pandemic will also fundamentally change
the aviation industry. Airports and airlines are already taking steps
to respond to the crisis such as implementing enhanced cleaning and
sanitization. Face coverings are becoming more prevalent with airports,
airlines, and our Federal partners moving to require their use for
passengers and employees throughout the travel journey.
Enhanced cleaning and sanitization and facemasks are just some of
the many changes that passengers will see the next time they travel.
Airports are also taking steps to promote physical distancing, upgrade
air filtration systems, and considering ways to expand touchless
travel. But we will need clear and consistent Federal guidelines and
standards--especially on the matter of health screenings--to ensure
that passengers know what to expect when they arrive at the airport
regardless of which airport it is or what airline they may be flying.
The road ahead will require continued coordination and
collaboration between industry and government and additional Federal
investments. Help to this point from the CARES Act has been critical,
but we respectfully call on Congress to continue its support to help
ensure the health and safety of our passengers and employees and to
help restore confidence in our aviation system.
The Need for Additional Assistance: Recommendations to Continue Helping
Airports Impacted by Coronavirus
The funding in the CARES Act will help airports weather the current
storm and respond to the immediate crisis. But it is becoming
increasingly clear that large and small airports will continue to
struggle financially as this crisis drags on and as airports take new
steps to protect the health and safety of their passengers and
employees.
Provide Additional Funding to Help Airports Respond to COVID-19:
The CARES Act provided much-needed funding to help airports survive the
immediate crisis. However, airports expect to face tremendous financial
losses in the months and years ahead. In some cases, the CARES Act will
only provide enough funding to cover losses over the next few months.
Our partners at Airports Council International-North America estimate
that U.S. airports collectively will lose $23.3 billion as a result of
the COVID-19 pandemic.
Airports point out that they will need to continue making bond
payments with significantly less incoming revenue and with increasing
coronavirus-related operational and infrastructure requirements.
Airports rely heavily on PFC revenue for debt service. The anticipated
decline in PFC revenue will cost airports billions and decrease a
critical source of funding for bond payments.
According to the FAA, airports collectively held $100 billion in
debt at the end of 2018. Airports have had no choice but to rely on
bonds to help pay for critical infrastructure since Federal AIP funding
has been relatively flat in recent years and the Federal cap on local
PFCs has been stagnant for the past 20 years.
Meanwhile, airports of all sizes are facing pressure from airlines,
concessionaires, rental car companies, fixed-base operators and other
tenants to defer or abate their rental payments or renegotiate their
minimum annual guarantees. Airports understand that their partners are
struggling and are trying to be as helpful and accommodating as
possible. But with dramatically less revenue coming in and more
pressure from their partners, airports find themselves being squeezed
on both ends.
In light of the dramatic decline in aviation activity and the
associated reduction in non-aeronautical revenues at airports--along
with the precipitous drop in PFC revenues that help support bond
payments--airports will need additional Federal assistance at least as
large as the initial amount provided in the CARES Act. Additionally,
Congress must provide greater financial support for general aviation
airports, business aviation, concessionaires, and other airport
partners that have been significantly impacted by the crisis. The
entire aviation ecosystem has been dramatically dislocated and needs
help to survive.
Continue to Provide Airports with Flexibility: The CARES Act
provided much-needed flexibility by allowing airports to use Federal
funding in the bill for ``any purpose for which airport revenues may
lawfully be used.'' We urge you to maintain that flexibility if
Congress should provide additional funding for airports in another
coronavirus relief package. During this crisis airports should continue
to be allowed to use Federal funds for operations, debt service,
maintenance, terminal projects, and other necessary lawful expenses.
Extend Elimination of Local Match Requirement: As noted, the CARES
Act included $500 million to cover the local match requirement for
grants that airports received in the FY 2020 appropriations process.
That funding will help free up local revenue that airports can use for
operational purpose, debt service and other needs.
We expect that it will be difficult for many airport and
communities to come up with a local match during these times of steeply
declining revenues. We urge you to provide a 100 percent Federal share
as part of any subsequent relief package and for AIP grants provided to
airports as part of the FY 2021 appropriations process.
Help Airports that Participate in Contract Tower Program: Mr.
Chairman, Ranking Member Cantwell, I would like to thank you and
members of this committee for being strong supporters of the FAA
Contact Tower Program. As you know, 256 airports from 46 states
currently participate in this well-respected and cost-effective program
as validated once again by the DOT Inspector General audit released
last week. As you consider the next coronavirus relief package, I ask
you to take additional steps to help those airports during this crisis.
First, AAAE and U.S. Contract Tower Association urge Congress to
provide $8.15 million to help approximately 93 nonprimary commercial
service and GA airports that participate in the program. These airports
traditionally use local funds to pay for tower maintenance, repairs and
upgrades, controllers to operate extra hours, and janitorial services.
Eleven of those airports also participate in the cost share program.
Using Federal funds to cover local expenses would help those airports
that have little incoming revenue during the current pandemic.
Second, we urge Congress to temporarily suspend the benefit/cost
(b/c) analysis for contact tower airports except those that have or
plan to submit applications in FY 2020 and FY 2021 The FAA
reauthorization bill, which Congress passed in 2018, included a welcome
provision that eliminated b/c's for contract towers unless they have
more than a 25 percent decrease in air traffic in a single year.
Temporarily suspending the b/c analysis when passenger levels have
declined so substantially will eliminate an unforeseen penalty.
Third, we urge you to include S. 2898, the Continuity for Operators
with Necessary Training Required for ATC Towers Act, in a subsequent
coronavirus relief package. This legislation would provide an incentive
for retired Federal air traffic controllers to continue working as
controllers at contract tower airports and help reduce staffing
challenges those airports are facing.
The CONTRACT Act, which was introduced by Senators Inhofe, Moran
and Murray, enjoys strong bipartisan support in both chambers and is
endorsed by the National Air Traffic Controllers Association. To date,
41 members--including many members of this committee--have cosponsored
S. 2898. We're grateful for your support and thank the committee for
approving the CONTACT Act late last year.
Expand Programs that Help Small Airports Retain Commercial Air
Service: Again, the CARES Act included an additional $56 million for
the EAS program. I urge you to increase funding for EAS and the Small
Community Air Service Development program in the next coronavirus
relief package.
Both programs help ensure that small communities in rural America
and less populated areas have access to the national airspace system.
Small communities have used Small Community Air Service Development
Program funds for a variety of projects including financial incentives
for airlines and marketing initiatives. Those incentives will be even
more important in the months and years ahead.
We expect that it be challenging for many small-and some medium-
sized airports to retain commercial air service in the aftermath of the
current crisis. Increasing funding for EAS and the Small Community Air
Service Development programs would provide smaller communities with a
much-needed boost. I would also encourage you to expand eligibility for
the Small Community Air Service Development Program and take other
steps to ensure more small-and medium-sized communities are not left
behind should U.S. airlines contract in size as many are predicting.
Help Nonprimary, Reliever and General Aviation Airports Impacted by
COVID-19: There are approximately 3,000 nonprimary commercial service,
reliever and GA airports throughout the country, and they play a key
role in our aviation system.
While its operating revenue is down dramatically due the
coronavirus pandemic, Centennial Airport is spending approximately
$40,000 on Personal Protective Equipment (PPE) due to the high number
of air ambulance operations at the airport. Centennial has seven air
ambulance companies that operate at the facility and assist with
patient transfers.
After receiving limited funding in the CARES Act, Centennial is
facing about a $2.4 million funding gap. Other GA airports are likely
to need additional assistance beyond the limited amounts provided in
the CARES Act. We urge Congress to help close the GA funding gap by
providing at least $1 billion to $2 billion to GA airports in any
future coronavirus relief package.
Road to Recovery: Recommendations to Make Aviation System Safer for
Passengers and Employees
Mr. Chairman, as we continue to deal with the impacts of COVID-19,
airports, airlines, other stakeholders and Federal agencies are
developing proposals to ensure that the aviation system is safe for
passengers and employees alike. We were pleased to be part of an effort
by the U.S. Travel Association to establish ``Industry Guidelines to
Ensure the Health and Safety of Travelers'' that were released publicly
earlier this week.
AAAE and its airport leaders have developed a set of
recommendations for a post-pandemic recovery. You will notice that many
of the recommendations below will require Federal leadership,
assistance and investment. Our goal is simple: we need to take steps
now to assure the traveling public that: 1) industry and government are
committed to providing the highest levels of health and safety for air
travelers and aviation workers; and 2) there are consistent processes
and procedures throughout the aviation system so passengers know what
to expect regardless of the airline or airport they happen to choose
for their travel.
Implement a Consistent Passenger and Aviation Worker Health
Framework: The aviation industry urgently needs a clear and consistent
framework from the Federal government including the Centers for Disease
Control and Prevention (CDC) to help protect the health and safety of
passengers and aviation workers during the COVID-19 pandemic. A Federal
framework would help airports, airlines, FAA, TSA, CBP and other
partners to ensure passengers receive consistent treatment and
protection throughout their travel experience.
In particular, we believe the Federal government should determine
the effectiveness and necessity of certain protective safeguards for
passengers and workers, including the use of face coverings,
questionnaires, and temperature checks. A Federal framework should also
include any protocols that may be necessary for screenings to be
consistently applied throughout the aviation system. As this framework
is being developed, AAAE recommends that all passengers and employees
in the airport environment wear appropriate face coverings.
Determine Appropriate Roles and Responsibilities: Airport operators
are proactively working with airlines, tenants, and our Federal
partners to create a clean, safe, and secure airport environment for
passengers and employees. This is a community effort that needs
appropriate roles and responsibilities for each stakeholder in
accordance with the following key principles:
Health screening of passengers is the responsibility of
public health agencies. However, airports should play a
critical role in determining key factors such as location,
timeline and operational procedures for health screenings if
the Federal government and CDC determine that health screenings
are necessary. Airports and other employers at an airport
should also receive Federal guidance for ensuring proper health
screening of their employees.
Airports, concessionaires, airlines, and their Federal
partners all have a role in implementing important, consistent
measures, such as physical distancing markers and
announcements; heating, ventilation, and air conditioning
(HVAC) system upgrades; enhanced cleaning and sanitization
efforts; installing plexiglass barriers; employee education on
health monitoring and protection; and deploying personal
protective equipment and face coverings for employees.
The Federal Government, led by CDC and the Environmental
Protection Agency, should continue to provide robust research
support to determine the effectiveness of technological
solutions for meeting large-scale disinfecting needs, such as
ultraviolet light, ozone, and steam.
Provide Airports and Our Federal Partners with Critical Recovery
Tools: Airport operators will face increased costs to implement new
measures to protect the health of the traveling public. Airports will
need dependable financial and operational tools to ensure a smooth
recovery and rebuilding of the aviation industry. To help with these
efforts, we urge Congress to:
Ensure access to an adequate, available supply of face
coverings and other necessary protective equipment for all
employees in the airport environment;
Provide Federal funding for increased operational and
infrastructure development costs associated with responding to
COVID-19 and future public health emergencies such as helping
airports implement physical distancing and touchless travel;
enhance cleaning and sanitization; upgrade HVAC systems and
make other necessary investments to protect passengers and
employees;
Continue reimbursing airports for the enhanced cleaning and
sanitization efforts at TSA security checkpoints;
Protect staffing and funding levels for TSA and CBP. While
passenger demand remains low as recovery begins, TSA personnel
can resume or enhance responsibilities beyond the checkpoint,
including initiatives related to insider threat mitigation and
exit lane staffing;
Stop the diversion of funds collected from the TSA passenger
security fee to ensure TSA has the resources it needs to
address both evolving security threats and safety
considerations;
Extend the REAL ID enforcement deadline beyond October 1,
2021 if state-level metrics indicate that a significant
majority of the traveling public still does not have a REAL ID
or another acceptable form of identification; and
Provide general fund revenue to ensure the continued
solvency of the Airport and Airway Trust Fund to protect the
AIP program, which provides much-needed grants for airport
construction projects, and other FAA functions.
Prepare for the Resumption of Increased Operations: AAAE
appreciates the efforts by the FAA and TSA to accommodate the needs of
aviation stakeholders and their willingness to remain flexible
throughout the pandemic. We encourage both agencies to continue working
closely with airports to be prepared to manage an increase in aircraft
operations and a rise in passenger levels as passenger confidence
improves and the recovery begins to take effect. In the past week, we
have already seen an uptick in the number of passengers screened by
TSA.
For instance, the FAA should remain flexible in granting needed
extensions and waivers for airports to comply with various Part 139
certification requirements that may conflict with physical distancing
and other CDC guidelines. AAAE continues to work with its airport
members on developing recovery plans to ensure airports are ready and
prepared to scale up when necessary.
Plan for Long-Term Enhancements to the Travel Experience: We expect
airports, airlines, and their Federal partners will need to plan for
long-term enhancements to the passenger travel experience. This
includes moving toward a touchless travel experience; using biometric
identity verification at check-in, bag drop locations and at security
checkpoints; and using digital identification and payment methods.
With help from the Federal government, airports can also explore
the use of automation and robotics to meet the increased demand for
enhanced cleaning and sanitization. We urge Congress and Administration
to provide Federal resources to supporting these new initiatives.
Chairman Wicker, Ranking Member Cantwell and members of the
committee, thank you for inviting me to participate in today's hearing.
I look forward to continuing to work with you as Congress, the
Administration and stakeholders continue focusing on mitigating the
impacts of the coronavirus and as we turn our attention to recovery and
making our aviation system safer for passengers and employees.
The Chairman. Thank you very, very much.
And now Dr. Godwin is joining us from Seattle and I think,
Dr. Godwin, we've already done a mic test, is that correct?
Dr. Godwin. That is correct.
The Chairman. Well, you are welcome, and thank you for
joining us. You're now recognized for five minutes.
STATEMENT OF DR. HILARY GODWIN, DEAN, UW SCHOOL OF
PUBLIC HEALTH; AND PROFESSOR, DEPARTMENT OF
ENVIRONMENTAL AND OCCUPATIONAL HEALTH SCIENCES, UNIVERSITY OF
WASHINGTON
Dr. Godwin. Thank you.
Good afternoon, Chairman Wicker, my own Senator, Ranking
Member Cantwell, and Distinguished Members of the Committee.
Thank you for the opportunity to testify during this
unusual time and via this novel medium about health, safety,
and air travel during the ongoing COVID-19 pandemic.
My name is Hilary Godwin. I'm Dean of the University of
Washington School of Public Health and I'm also Professor of
Environmental and Occupational Health Sciences.
As we enter the next phase of the pandemic, resumption of
regular commercial flights will be pivotal to economic
recovery. However, this will pose significant public health
challenges.
As the volume of passengers and the frequency of air travel
begins to increase, the aviation industry and public health
officials must work together to prioritize keeping airports,
airplanes, and the public safe.
On a typical day in the not-too-distant past, millions of
individuals would flow through airports, including people
coming from and traveling to many different locations around
the globe. These numbers have dropped dramatically in recent
weeks but will undoubtedly start to increase as we restart the
economy.
The likelihood that healthy individuals will interact with
one of more people who are infected with COVID-19 increases
exponentially as the number of people passing through airports
increases.
Key strategies to reduce these risks in airports includes
frequently disinfecting high-touch surfaces and providing ready
access to hand sanitizer, maintaining social distancing, and
requiring employees and travelers to wear face coverings.
As the number of individuals who are flying increases, it
will also be critical to keep airplanes safe for both employees
and travelers. The measures I just described need to be applied
on planes in addition to in terminals.
Additional strategies to promote safe flights include
requiring HEPA filtration systems be used on all planes and
thoroughly disinfecting planes between flights.
A final but equally important priority is keeping the
public safe. Key strategies that can help to reduce the risk of
introducing new outbreaks of COVID-19 in our communities that
are beginning to heal include the following.
First, requiring that all flight manifests be maintained,
including current contact information for all passengers.
Public and private entities must work together to develop a
system that allows public health departments to access this
information quickly so that they can later reach individuals
who are potentially exposed while traveling.
We also need to develop national guidance for limiting
COVID-19 transmission in U.S. airports and on flights that
originate from or terminate in the United States. While most
public health measures are left to the discretion of states, it
would be extremely difficult to communicate and enforce a
patchwork set of regulations and guidance for travelers going
from one state to another or entering into the United States
passing through different states.
Finally, we will need to develop and deploy effective
communication campaigns for both employees and travelers about
the importance of adhering to all of these measures both in
airports and on planes.
In recent years, we've seen an increase in the density of
people in both airports and on planes. COVID-19 requires us to
rethink this. Public health considerations must play a far
greater role than before.
Developing and implementing guidance that promotes safety
can also help business by making individuals feel more
comfortable returning to air travel.
I realize that these changes will not be easy. Each of the
strategies I mentioned previously comes with limitations and
logistical challenges. However, combining them together creates
a net that will help to reduce overall risk to millions of
individuals who work in, travel using, and benefit from the
aviation industry each day.
Mr. Chairman, Ranking Member Cantwell, and Distinguished
Committee Members, air travel is a critical part of our
Nation's economy. As we resume air travel, we must prioritize
keeping airports, airplanes, and the public safe.
We can improve safety by implementing a variety of measures
to limit virus transmission throughout the travel journey. The
aviation industry and lawmakers must also work closely with
public health agencies to rapidly integrate new information as
it comes to light and to ensure that communities have the
plans, tools, and resources to identify potentially exposed
individuals during and after air travel.
We will all benefit if public health professionals are
involved in these conversations throughout the planning
process.
I thank you again for this opportunity and welcome any
questions.
[The prepared statement of Dr. Godwin follows:]
Prepared Statement of Dr. Hilary Godwin, Dean, UW School of Public
Health; and Professor, Department of Environmental and Occupational
Health Sciences, University of Washington
Good morning, Chairman Wicker and Ranking Member Cantwell, my
Senator, and distinguished Members of the Committee. Thank you for the
opportunity to testify during this unusual time and via this novel
medium about health, safety and travel during the ongoing COVID-19
pandemic. My name is Hilary Godwin and I am the dean of the University
of Washington's School of Public Health and a professor at in the
Department of Environmental and Occupational Health Sciences. I am
trained as a chemist, with over 20 years of experience in environmental
chemistry and environmental health, and specialize in how environmental
factors impact the health of individuals and populations.
As we enter the next phase of the pandemic, resumption of regular
commercial flights will be pivotal to economic recovery. However, this
will pose significant public health challenges. As the volume of
passengers and frequency of air travel begins to increase, the aviation
industry and public health officials must work together to prioritize:
1. Keeping airports safe;
2. Keeping airplanes safe; and
3. Keeping the public safe.
Why this virus is different
To understand the challenges that the aviation industry will face
as regular commercial flights resume, it is helpful to provide context
about why this virus is different from other respiratory pathogens
(such as seasonal influenza or the common cold). These include:
The majority of Americans have not yet been infected with
COVID-19 and hence are vulnerable to infection.\1\
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\1\ https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-
in-us.html
We do not know whether those individuals who have already
been infected with COVID-19 but have recovered are immune to
future infection.\2\
---------------------------------------------------------------------------
\2\ https://www.scientificamerican.com/article/what-immunity-to-
covid-19-really-means/
We do not have a vaccine or validated treatments for COVID-
19, and it likely will take more than a year for these to
become widely available.\3\
---------------------------------------------------------------------------
\3\ https://www.gatesnotes.com/Health/What-you-need-to-know-about-
the-COVID-19-vaccine?
WT.mc_id=20200430100000_COVID-19-vaccine_BG-EM_&WT.tsrc=BGEM
Not everyone who is infected with COVID-19 and who is
capable of transmitting it to others shows symptoms.\4\
---------------------------------------------------------------------------
\4\ Arons MM, Hatfield KM, Reddy SC, et al., Presymptomatic SARS-
CoV-2 infections and transmission in a skilled nursing facility. N Engl
J Med. DOI: 10.1056/NEJMoa2008457.
As a result of these factors and limited testing and contract-
tracing capacity in early phases of the pandemic, the United States has
had to rely upon non-pharmaceutical interventions such as community-
level social distancing. While we race to expand our testing and
contact-tracing capacities, these other factors will continue to
complicate our response and re-opening.
Other factors that will complicate our ability to recover from
COVID-19 include:
Different countries, states and communities have experienced
the pandemic at different times and with different severities.
We expect there to continue to be regional differences in
COVID-19 prevalence, which means that travel between these
communities creates opportunities for re-seeding the pandemic
in communities that have low levels of transmission, as
occurred during the 1918 flu pandemic.\5\
---------------------------------------------------------------------------
\5\ Saunders-Hastings PR, Krewski D. Reviewing the History of
Pandemic Influenza: Understanding Patterns of Emergence and
Transmission. Pathogens. 2016 Dec 6;5(4):66. doi: 10.3390/
pathogens5040066.
Within the US, different states have different capacities
and are responding to the pandemic in different ways.
Keeping Airports Safe
Our first priority as our Nation transitions from critical travel
only and regular commercial flights resume will be to keep airports
safe both for employees and for travelers. Maintaining safety will be
challenging because of the inherent nature of airports and travel.
Typically, millions of individuals flow through airports, including
travelers coming from and traveling to different locations around the
globe. The probability that healthy individuals will interact with one
or more individuals who are infected but may not know increases
exponentially as the number of people passing through the airport
increases. Thus, it is critical to reduce the number of close contacts
that each person has, to require individuals to wear masks and/or
gloves, and to lower the chances of virus transfer via surfaces. Key
strategies include:
Developing and deploying effective communications for
employees and travelers that reinforce the importance of good
hand hygiene practices and adherence to other measures designed
to lower the risks of transmission while in the airport;
Maintaining social distancing in all airport areas,
including curbside, check-in, security screening, intra-airport
shuttles and light rail systems, concessions, lounges,
restrooms, boarding queues, baggage claim areas, rental car
shuttles and parking lots;
Limiting access to the airport to travelers and employees
only;
Minimizing physical contact between employees and passengers
(e.g., during screening processes), particularly where higher
risk passengers such as the elderly require employee
assistance;
Requiring employees and travelers to wear masks in the
terminal;
Requiring employees to wear gloves (and to change them
regularly);
Frequently disinfecting high-touch surfaces (including those
in restrooms and concession stands);
Making hand sanitizer readily available throughout airports
and allowing passengers to bring their own hand sanitizer
through security.
Additional strategies that could be considered include:
Requiring employees and/or travelers to attest to being
asymptomatic prior to travel (e.g., prior to reporting to work
each day for employees and during the check-in process and
prior to boarding for passengers).
Using point of care tests for current COVID-19 infection at
entry points to airports when these tests become widely
available.
Keeping Airplanes Safe
Second, as the number of individuals who are flying increases, it
will be critical to keep airplanes safe for both employees and
travelers. This will be inherently challenging because airplanes are
enclosed spaces where potentially large numbers of individuals are in
close contact with each other for extended periods of time, which are
the conditions under which human-to-human transfer is most likely to
occur. Key strategies include:
Developing and deploying effective communications for
employees and travelers that reinforce the importance of good
hand hygiene practices and adherence to other measures designed
to lower the risks of transmission while on airplanes;
Requiring crew and passengers to wear masks or cloth face
coverings;
Regularly disinfecting high-touch surfaces (including those
in the lavatories) during flights;
Requiring HEPA filtration systems be used on all planes/
during all flights;
Thoroughly disinfecting planes between flights;
Creating social distancing during the flight (e.g., through
selective assignment of seats).
Additional strategies that could be considered include:
Limiting food and beverage services and consumption on
flights, particularly short ones. Food and beverage service
requires attendants to interact with large numbers of
passengers in succession and also requires passengers to remove
masks (to consume food and beverages).
Keeping the Public Safe
A final, but equally important, priority is to keep the public
safe. Air travel inherently involves transporting individuals from one
region to another and hence increases the chance of re-introducing the
virus in areas where it has been eliminated or transmission has been
substantially reduced. Key strategies that can help to reduce the risk
of re-seeding the pandemic are:
Requiring that all flight manifests be maintained, including
current contact information for all passengers on both domestic
and international flights and ideally where they have traveled
in the past two weeks. Federal, state and local health
departments, the Department of Homeland Security, and the
aviation industry must work together to develop a system that
allows state, territorial and local health departments to
access this information quickly in the event that a recent
traveler to their jurisdiction is subsequently found to be
infected with COVID-19, so that they can contact individuals
who came into close contact with the infected individuals while
traveling.
Developing national regulations or guidance for U.S.
airports and flights that originate from or terminate in the
United States. While most public health measures are left to
the discretion of states, it would be extremely difficult to
communicate and enforce a patchwork set of regulations and
guidance for travelers going from one state to another or
entering the U.S. and passing through different states.
Final Notes
To summarize, careful consideration needs to be given when making
decisions that impact density of individuals in airports and on
airplanes. Normally, economic considerations drive increasing the
density of people in both the airport and on planes. COVID-19 changes
this equation: public health considerations must play a far greater
role than before this pandemic. Developing and implementing regulations
and/or guidance that promote safety in the aviation industry can also
help business by making individuals feel more comfortable returning to
air travel and smooth the transition back to more regular travel
levels. While each of the strategies discussed here comes with inherent
limitations and poses its own logistical challenges, combining them
together creates a ``net'' that will help to reduce overall risk to the
millions of individuals who work in, travel using, and benefit from the
aviation industry each day.
Notably, new information about the pandemic, as well as new tools
to control its spread and manage its impacts, are available almost
daily. As such, public health officials need to be equal partners in
all phases of planning for air travel resumption, and the industry must
position itself to rapidly respond to new guidance and integrate
evidence-informed control practices.
Mr. Chairman, Ranking Member Cantwell and distinguished Committee
members, I recognize that air travel is a critical part of our Nation's
economy. But, as we resume air travel, we must prioritize keeping
airports, airplanes, and the public safe. As I've laid out, we can
improve safety by implementing a variety of measures to limit virus
transmission throughout the travel continuum. The aviation industry and
lawmakers must also work closely with federal, state, territorial and
local health agencies to rapidly integrate new information, ensure that
communities have the plans, tools and resources to identify potentially
exposed individuals during and after air travel, as well as ensure
sufficient healthcare capacity in high volume destinations. Public
health professionals must be involved in these conversations and
throughout the planning process. I thank you again for this opportunity
and l welcome your questions.
The Chairman. Thank you very, very much, Dr. Godwin, and
thanks to all four of our panelists for their thoughtful
remarks.
Let me begin my questions with Mr. Calio. Thus far, has the
assistance provided by the CARES Act achieved its objective in
preventing the mass layoffs of hundreds of thousands of
workers? Are you able to quantify how many airline workers have
had their jobs preserved by the CARES Act?
Mr. Calio. Mr. Chairman, the CARES Act is working. The jobs
have been preserved. They're preserved through September 30 of
this year. As I said, I think, in my oral comments, the CARES
Act provided a bridge, gave us breathing room, provided much-
needed liquidity.
It also had a very good effect, a side effect in that it
opened up the private markets to some carriers to further plump
up their liquidity, all of it intended to try to keep their
employees.
I referenced how many new employees we hired in the last 10
years. We had 10 profitable years in a row and we invested that
money. We have a good relationship with our employees. You
know, every day isn?t perfect but we value our employees
because they're the back bone of our industry, and the last
thing we want to do is lose those employees.
We're in a difficult situation, however. We're fighting for
our survival. We need our employees and as you all know, in the
airline industry, there are various certifications, training
requirements, et cetera, involved. So, keeping the employees on
will speed any ramp-up that we have later on.
The Chairman. OK. The Payroll Support Program, let's talk
about that. It was oversubscribed and this forced the Treasury
to impose a 24 percent haircut.
Were you surprised by this, Mr. Calio? We've heard concerns
that the PSP funding might not be sufficient to forestall mass
layoffs after September and until the industry genuinely
recovers.
Of course, Congress included $29 billion in Economic
Stabilization Fund loan authority for the airlines' critical
partners. You mentioned that private sources of liquidity had
come available and I'm glad that whatever we did might have
helped in that regard.
Do your members believe that accommodation of PSP direct
assistance, together with loans and private sources, will be
enough to sustain employment after the end of this fiscal year?
Mr. Calio. Our members are doing everything they can to
ensure the greatest level of employment possible. We were
dismayed by the haircut.
I think one thing that needs to be pointed out, most people
don't realize this, we took the position that we would keep
everyone until September 30. That for our members, it will
cover what they got in the loan grant portion of the CARES Act.
The PSP will cover anywhere from 50 percent to 80 percent of
their actual expenses.
The Chairman. You know, actually I think we were surprised
that it was oversubscribed and I didn't hear anyone predicting
that, but, boy, it's hard to know when you're putting together
such a massive program in a few days.
Mr. Hauptli, let me ask you about the $10 billion in grants
distributed over 3,000 eligible airports.
The CARES Act airport grants are used for many purposes,
including financing day-to-day operations and servicing debt
payments.
There have been some concerns. First, the formula used to
allocate commercial service airport grants created some
surprise outcomes. Some airports were entitled to receive
surprisingly large amounts, others not so much.
Second, the $100 million dedicated for general aviation
airports is said not to be enough.
So would you comment on those in the 49 seconds we have?
Mr. Hauptli. Certainly, Mr. Chairman. Yes, the formula did
create out of 3,200 and some odd airports eligible to receive
funding, there were a couple of dozen where there were some
surprises. Ninety-nine percent out of a hundred is not bad for
the FAA on that, but there were some anomalies in there for
sure.
I agree with you, Senator, that $100 million for the
general aviation community is not going to be enough. As I
indicated in my testimony, we believe billions of dollars will
be necessary in additional funding beyond the money for
airports, also for general aviation airports, business
aviation, and concessionaires.
The Chairman. Thank you very much.
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman.
I have many, many questions. So hopefully we'll get a
second round here and maybe I'll predicate with some things to
think about.
Obviously, Mr. Fanning, I want to follow up on your
comments about the workforce and who we're losing right now
because these are skilled workers that once they disappear and
they go find a job wherever they can find a job that has health
care, I want to know what we're going to do about health care
because they only have 1 month of health care benefit. Then
after you're going to be in a pandemic still. You're going to
go find a job with health care. You're not going to wait.
So then when we restart in a more aggressive way, where are
those workers going to be and we've lost our competitiveness.
So if you could think about that.
But I'd like to go to Dr. Godwin, if I could. Thank you so
much for your articulate assessment of what we have to do to
return safety, public health safety to aviation, and thanks so
much for the University of Washington's leadership in our state
as we've dealt with this.
We just couldn't have dealt with the crisis in our state
without the University of Washington. So thank you for
everything that they've been doing on testing and with the
Institute of Health Metrics Evaluation and with this innovative
program on COVID Safe. So can't thank you enough.
What level of travel do you think that aviation, if we were
following the guidelines and implementing a national guideline
policy, as you discuss, what level of air travel do you think
that we could achieve safely?
Dr. Godwin. That's a great question, Senator. I guess I'm
less worried about what level we can achieve at this point
because we have working in our favor that right now we're
starting from very low levels and we don't expect a switch to
flip and all of a sudden to go up to super high levels of
travel.
We expect people to re-enter and to travel gradually and
that gives us a period of time to implement these measures in a
way that is very protective of travelers and airport personnel
and workers.
As we see the level start to increase, hopefully we'll also
start to see the pandemic continue to wane globally and so my
hope would be that by the time we get up to higher levels of
travelers that some of the risks associated with COVID-19 may
be diminishing.
I think the most important thing to convey in terms of how
we manage this interim time is this question of density,
though. Normally, we would try to fly as few planes as possible
with as many people on each plane as possible and what we know
from public health is that it's that close proximity of
individuals for extended period of time that creates the
greatest risk of transmission.
So we want to balance that driver to lower the costs with
those public health safety considerations.
Senator Cantwell. Thank you. I think that's so important,
what you said, because you're saying, from what my father used
to say all the time because he was a Navy man, steady as she
goes, right?
So you're not trying to like--you're trying to implement
the health care policy. That's our best bet. Implement the
health care policies and then we can move forward.
Mr. Calio, what about that? What about getting a national
guidance policy that is across the United States? Hopefully--
no, not more hopefully than hopefully. Let's not say to the
flying public we're going to charge you to keep the middle seat
open. Let's just get the airlines to do the right distancing,
if that's what it takes.
So what about getting a national guideline policy
implemented?
Mr. Calio. There are two questions there. On the
distancing, we are doing that now to the greatest degree
possible. I'm going to be straightforward. As you know, I
always am. In the long term, that's a business model that
cannot be sustained because if we can't--if it costs more to
fly people from point A to point B, it's a total money-losing
proposition which then means it's a job lost proposition.
So hopefully by the time we reach the point later on where
travel is picking up, other measures will be in place,
vaccines, testing, et cetera, that will give the public the
assurance they need and be able to protect both our employees
and that the customers.
In terms of national guidelines, there's an awful lot going
on voluntarily. Our preference would be to go down that route
mostly. I think it's great that Dr. Godwin is on the panel
today because it provides the opportunity to talk about these
things, and we have been talking about these with many other
experts in the area and would be happy to talk to you about it,
as well.
Senator Cantwell. Thank you. And I know my time has
expired, but, Mr. Chairman, I want to say to Mr. Calio, if your
partner associations--look. I think it's United backing off of
what they were trying to do on forced hour reduction was the
right move and I hope that Jet Blue and Delta are going to do
the same things.
We're definitely going to get out of the Treasury the right
guidance on this and clearly we wanted to help protect the
payroll of those individuals. So thank you.
Mr. Calio. You're welcome.
The Chairman. Thank you, Senator Cantwell.
Senator Moran joins us remotely.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Chairman Wicker, thank you very much, you
and Ranking Member, for doing this hearing. Thanks to our
witnesses for joining us.
I'm going to try to get a couple questions in, one for
Secretary Fanning.
Mr. Secretary, you indicated during your testimony about
the importance, the priority of the retention of workforce is.
As you know, there's a legislative effort afoot to try to
accomplish a public/private partnership in that regard.
Could you speak specifically to the importance of having
established a manufacturing workforce that's intact once the
COVID-19 virus consequences are behind us, what national
security interest does that involve, and what repercussions
could be expected to be seen on the industry without
establishing that kind of effort, that public/private
partnership?
Mr. Fanning. Thank you, Senator. We have two primary
concerns that in many ways are one and the same. That's
protecting the industrial base, that's shared commercial and
defense in many cases, and preserving our workforce, which is
critical. It's hard for our companies to recruit the right
workforce. They spend a lot of time and money training them and
they're working on retaining them and we want to make sure that
that workforce is there when we come out of this.
We also recognize that this is a long-term situation for us
and so we're looking for solutions that allow us to do that
over a longer period of time and we think a private/public
model will allow us to share those costs, industry with
government, and then extend the period of time that we do this
beyond just getting to the fall because we need to have that
workforce there when orders start coming in again, which again
is a long-term prospect, in order to deliver on those and help
get the economy going again.
Senator Moran. Mr. Secretary, thank you. Let me see if I
can get a question in or two for Mr. Hauptli.
Mr. Hauptli, tell me what you think the condition of
airports will be in the future at the point in time in which
COVID's consequences are generally behind us? How will airports
be different then than they are prior to COVID, and give you a
chance to highlight, if there's a dramatic gap, what's
required, what is needed once again to get rid of that
detriment that's occurred in the interim?
Mr. Hauptli. Thank you, Senator Moran, for the question.
They'll be cleaner, airports will be cleaner. There's a lot of
deep sanitization and cleaning that's gone on. It's never been
a cleaner facility than it is now. We'll see that in the
future.
There will be thermal cameras in place. There will be
plexiglass in place. There will be physical distancing in
place. There will be a lot of changes. You members of the
U.S. Senate travel back and forth every week. It will be a
different travel experience for all of you in the future.
That's going to cost billions of dollars and the money made
available in the CARES Act is a great initial first step, but
as I indicated earlier, it will require additional resources
for airports to institute those measures that I talked about,
the touchless travel experience.
People aren't going to want to put their fingerprints down
on things. They're not going to want to touch. They're going to
want to be able to check in in a different fashion. They're
going to need standoff detection equipment. There's an array of
things that will look and feel different that you will see as a
passenger and that you won't see behind the screen, if you
will.
Senator Moran. Mr. Hauptli, I wouldn't want to miss the
opportunity in case you could help me and demonstrate or
indicate the importance of the Contract Tower Program.
Is it playing any particular role in COVID-19 days and
again highlight for the Committee, if you would, the importance
of that program?
Mr. Hauptli. Again, Senator, thank you for the question.
The Contract Tower Program is very important. The Contract
Tower controllers and those towers, like the Federal towers and
the Federal controllers, are right in the middle of all of this
in the response to COVID-19.
Medevac flights, air ambulances, cargo that is bringing in
medical supplies, military training and readiness, these are
all occurring within the Contract Tower Program, and at those
facilities.
In my testimony, Senator, I talked about the importance of
not only the program but the need to provide the contract tower
airports with $8 million. There are 93 non-primary commercial
service and general aviation airports that will require about
$8 million, about $88,000 apiece, to help with increased
janitorial services, improvements at their facilities,
etcetera.
The final point, briefly, Senator, is I just want to thank
you and a majority of the Committee for your support of the
Contract Act which provides incentives for retired Federal air
traffic controllers to move over and become contract
controllers. That's very, very important.
Senator Moran. Thank you for reminding us and highlighting
that and let me say that how you are too right. I should thank
all air traffic controllers for the tremendous effort that they
are undertaking.
I've had conversations with controllers in Kansas City and
Wichita and there seems to be significant cooperation between
them and their employers and the system seems to be working as
a result of that.
I thank the air traffic controllers for their tremendous
work.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Moran.
And next is Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Mr. Chairman and
Ranking Member Cantwell. Thank you for giving us this remote
option.
As you know, Senator Blunt and I with the Rules Committee
have worked hard on this and we're glad it's working
successfully.
So, first, I want to thank our witnesses and we know how
tough this is right now to be working in airlines, whether it
is as an employee, whether it's a passenger. We also know that
it's hard for other people in travel and tourism, as well.
But I did want to follow up on something that Senator
Cantwell was asking about at the end and that was making sure
that passengers right now can stay at a safe distance and how
important it is, as the doctor pointed out, to protecting their
health but recent news reports, as she's pointed out, indicate
that at least one airline, and that's Frontier, is requiring
customers to pay an additional $39 fee for a more room seat
option which would come with a blocked-off middle seat to
provide passengers with additional distance from other
travelers.
This is already a budget airline and I'm just concerned. I
don't think it's appropriate for some passengers who can't
afford to pay an additional charge for a seat to be less safe
than other travelers, and I wondered if you could comment on
that.
Do you think that we need to have guidelines from the CDC?
What do we have to do to fix this?
I would also then ask Dr. Godwin for her thoughts about it.
Mr. Calio.
Mr. Calio. Thank you, Senator. None of A4A's members are
charging for separating their passengers. I can't speak for
Frontier. They are not a member. I don't anticipate anything
like that and, as I said earlier, our members are making every
effort to keep passengers as separated as possible to make them
comfortable.
We are following CDC guidelines. We're not boarding from
the back to the front, so people don't have to pass each other
going to and fro.
In many cases, we are passing out masks. As you know, we're
requiring masks, as well.
Senator Klobuchar. Just to be very clear, so if there was
some kind of a--it's mandatory right now or a guideline put in
place, it wouldn't be a problem for the rest of these airlines,
the ones that are your members, I shall say?
Mr. Calio. I'm sorry, Senator, I did not hear your
question.
Senator Klobuchar. I said that it would not be a problem
for your airlines if there was some rule in place because
they're following it?
Mr. Calio. I think a rule put in place is not necessary at
this time. Hopefully the marketplace will take care of that.
Senator Klobuchar. Well, it didn't with Frontier.
Dr. Godwin.
Dr. Godwin. Thank you, Senator. I think the example that
you raised is exactly the reason that some national level
guidance, even if it's not a regulation, at least guidance,
should be made available.
I really commend the airlines that are stepping up and
airports that are stepping up to the plate and doing a great
job. Just having some uniformity across the entire industry and
across the entire nation----
Senator Klobuchar. Exactly.
Dr. Godwin [continuing]. I think would be very helpful for
travelers to have a better sense of what they can expect.
Senator Klobuchar. Right. OK. Thank you. That's very
helpful.
Also, could I ask you, Dr. Godwin, we have the contact
tracing issue, and do you think airlines are doing enough to
collect passenger information and making it available for
public health officials, and should we be doing this
voluntarily? Do we need guidelines on this, as well?
Dr. Godwin. So this is another area where I feel quite
strongly that some national guidance would be very helpful.
As you're probably aware and people who are testifying
probably can provide more details, the last report that I saw
out suggested that the airlines right now are getting maybe 56
percent of passenger e-mails as part of their P&Rs and 75
percent with phone numbers.
That information needs to be more complete and it needs to
be consistently gathered and also put into a system that is
readily accessible to our local health jurisdictions across the
country.
One thing that's very challenging in the United States is
that contact tracing is something that's left to local
jurisdictions and so we need to have a system where each one of
those little local jurisdictions can have access to this really
critical information so that if someone who shows up in their
jurisdiction who's traveled recently ends up positive for
COVID-19, that they can use that information to contact other
people who came in contact with that person when they're
thought to have been infectious.
Senator Klobuchar. OK. That's very helpful, and I am out of
time. So I will leave my other questions for the record about
the pilots and the flight attendants.
Thank you very much.
The Chairman. Thank you, Senator Klobuchar.
Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you very much, Mr. Chairman, and
to you and the Ranking Member, thanks for having this very,
very important hearing.
Secretary Fanning, I just want to begin by saying that I am
very grateful and keenly aware of the points that you raise
about the aerospace supply chain. Many of them are in
Connecticut. They are struggling and we sought to aid them
through the PPP.
I would like to work with you on other ideas and
initiatives that you may have in mind. A number of us in the
Senate, Senator Warner, myself, Doug Jones of Alabama, and
Bernie Sanders of Vermont, spanning the ideological spectrum of
the Democratic Party but also some on the Republican side, have
a thought for a paycheck security act that would replace many
of these programs and guarantee all the payroll of these
companies, keep them intact, and prevent the freefall that we
see coming to workforces and that is a very, very important
point. So I look forward to working with you.
Mr. Calio, I was prepared in coming here to be conciliatory
but I must say, listening to your testimony and reading the
paragraph that says in effect, and I'm quoting, ``To stem
untenable cash drain,'' basically the airlines are going to
continue their present practices, and regarding refunds to
consumers, I want to quote to you an article from last week,
April 29, from the Wall Street Journal, that begins with the
following: ``The United States airline bailout ended up with no
relief for travelers stuck with vouchers from airlines refusing
refunds. Now airlines are getting more creative, even
duplicitous, in pushing vouchers on customers to whom they owe
money.'' That's the news article. It's not an opinion piece.
The reports that I've seen--and I ask that this article and
also one from NPR in the last week or so as well as Politico
all be entered into the record.
The Chairman. Without objection.
[The information referred to can be found on the following
links:]
Wall Street Journal: https://www.wsj.com/articles/after-the-
coronavirus-bailout-all-i-got-was-this-lousy-airline-voucher-
11588170599
NPR: https://www.npr.org/2020/04/21/839678851/airlines-offer-vouchers-
credits-for-canceled-flights-customers-want-cash
Politico: https://subscriber.politicopro.com/article/2020/04/
frustrated-with-airline-refusals-to-issue-coronavirus-refunds-
consumers-take-to-the-courts-1915225
Senator Blumenthal. And ask also that a letter from the
Airline Pilots Association International be entered into the
record.
The Chairman. And without objection, that will be done.
[The information referred to follows:]
Air Line Pilots Association, International
Washington, DC, May 5, 2020
Hon. Roger Wicker,
Chairman,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Hon. Maria Cantwell,
Ranking Member,
Senate Committee on Commerce, Science, and Transportation,
Washington, DC.
Dear Chairman Wicker and Ranking Member Cantwell:
As you take up very critical questions about our Nation's air
transportation system, I respectfully submit the views of the Air Line
Pilots Association, International (ALPA) for consideration during your
Committee's hearing on ``The State of the Aviation Industry: Examining
the Impact of the COVID-19 Pandemic.''
On behalf of our membership, we express our sincere gratitude for
the immediate action of the U.S. government to secure the economic
viability of the airline industry and protect its workforce. We
appreciate Congress' swift measures to provide relief for our airlines
through the Coronavirus Aid, Relief, and Economic Security (CARES)
Act--and its directive to ensure that payroll continues to flow
exclusively to frontline workers while protecting our collective
bargaining rights. The Act is a lifeline for our industry to ensure
that, when we emerge on the other side of this pandemic, we are well
positioned for recovery. And it is our goal to facilitate a safe return
to ``business as usual'' for air travel as soon as possible.
Our country's airline pilots proudly serve on the frontlines
fighting the COVID-19 pandemic--we're flying doctors, nurses, supplies,
and equipment to the communities where Americans need them most.
Indeed, we are the backbone of FEMA's Project Air Bridge that the
Administration created to expedite the movement of medical supplies.
We're equally prepared to increase our contribution to the recovery by
transporting passengers, goods, and services as America gradually
reopens and our economy strengthens.
However, nearly 300 ALPA pilots have tested positive for COVID-19,
and at least 3 have tragically lost their lives due to the virus.
Despite pilots contracting the virus at a higher rate than the general
public, some airlines are still ignoring the need for uniform and
proper cleaning and disinfecting of our flight decks and the aircraft,
as well as preventive measures to stop the spread of the virus. And
unfortunately, the Federal Aviation Administration (FAA), which
regulates the safe and healthy operation of air carriers, has been
unwilling to require U.S. airlines to follow CDC guidelines, despite
its clear statutory authority to do so. Without this requirement, rates
of sickness will continue to rise.
The 63,000 members of ALPA reiterate our commitment to work
collaboratively with you to address the challenges we face as a nation
during this unprecedented time. As additional governmental response is
considered to ensure workplace health and safety and economic recovery,
we urge you to protect our Nation's pilots and flight crews and keep
the air transportation system safe and secure for the citizens and
businesses that rely on it.
Like other essential employees, airline pilots are putting
themselves in harm's way each time we go to work. We accept our
responsibility willingly and proudly, knowing we are not only preparing
our industry and economy to safely rebound as soon as possible, but
also because we are committed to move urgently needed health-care
workers, equipment, and medicine, as well as repatriating Americans
from overseas and ensuring the air transportation system operates
safely and efficiently.
However, as for the state of our industry ALPA has dire concerns.
Because of the economic impact of the COVID-19 crisis, business and
leisure travel have disappeared. Our average daily passenger count is
less than 10 percent of what it was a year ago. We need to consider
what we as an industry need to do, steps we need to take to again
attract passengers to our industry, and what steps we need to take to
regain their confidence so they can travel safely, and equally
important, remain healthy. We are concerned that our members--and the
flying public--are being exposed to excessive and unnecessary health
risks that could be avoided by clear government action.
We believe that part of the reason is the failure of the airlines
in following health and safety guidelines set forth by the FAA and the
Centers for Disease Control and Prevention (CDC). Combined with the
FAA's unwillingness to mandate compliance with the government's own
guidance, this leaves our pilots exposed to unnecessary danger and
poses systemic risks to the air transportation system. The FAA's
failure to act as a safety regulator when Congress has granted it clear
statutory authority to do so endangers employees, the public, and the
effectiveness of the government's response to COVID-19.
We have communicated our concerns to the FAA many times in recent
weeks and while we were successful in getting FAA to issue guidance to
the airlines using the CDC guidelines as a basis, FAA continues to
refuse to mandate compliance by the airlines. As a result, compliance
by the airlines continues to be voluntary and implementation is
haphazard, inconsistent and confusing.
Airline pilots are essential workers, yet we do not have uniform,
reliable access to personal protective equipment. We have no assurance
that our workplace has been cleaned and disinfected according to CDC
guidance and with approved cleaning agents, and we are frequently told
that disinfection supplies are unavailable. In addition, airline pilots
are not consistently and properly notified when we may have been
exposed to another employee who has tested positive for COVID-19 and
are pushed to operate aircraft that may be contaminated.
For example, we have many reports of pilots using their own supply
of hand wipes to disinfect cockpit instruments because cleaning
supplies are unavailable, multiple reports of visibly dirty cockpits
which have been reported as ``cleaned'', and numerous instances of
employees forced to stand shoulder to shoulder in company transport
vans with no regard to social distancing protocols. There has also been
a report of pilots flying with a flight attendant who did not call in
sick because of fear of retaliation by the company and tested positive
for COVID-19 several days later. Here is one example of a report
submitted to ALPA:
I contacted the company scheduling department by telephone that
I was ill & headed to the ER and would not be available for
work the next day. The ER diagnoses me as having COVID-19
(later proven correct when a POSITIVE result occurred on my
test kit from the ER). I called scheduling again in the early
morning and advised them that the hospital as well as the local
Health Department had advised me the entire crew should be
considered infected. Scheduling did not remove the rest of my
crew from their flights and they continued the rest of the 4-
day trip. The company did not advise anyone I had flown with of
my diagnosis and their probable infection. I was forced to try
and reach out through friends of friends and other non-standard
sources to contact the multiple pilots and Flightcrew members I
had flown with to advise them of my confirmed positive
infection. The company refused to remove these pilots from
work, and most of them continued to be scheduled for work by
the company.
As you consider necessary legislation to further address the health
crisis and stimulate the economy, we urge you to prioritize the health,
safety, and livelihoods of frontline airline workers, including pilots.
Specifically, we ask Congress to direct the FAA to mandate that
airlines comply with CDC and FAA guidelines related to aircraft and
flight deck cleaning and disinfection, personal protective equipment
for flight crews, and employee notification of test-positive cases in
the workplace.
We are mindful of the need to ensure the safety of all those who
utilize and rely on our air transportation network which is why we
support a requirement that all workers and passengers wear face masks
in the aviation environment. We believe a holistic approach that
ensures clean crews, clean aircraft and clean airports will help
instill public confidence and a safe return to flying.
As you undertake the difficult but necessary task of additional
legislative measures to deal with the continuing impact of the
pandemic, we also see an opportunity to execute needed technical
corrections to the CARES Act to promote economic stability and to
ensure that U.S. airline workers can contribute to our recovery in a
meaningful way. We appreciate that under your leadership, the CARES
Act, for the first time in U.S. history, provides financial assistance
to airlines conditioned on promoting, rather than subordinating, the
livelihoods of employees. In contrast, the financial assistance that
was provided to air carriers after the attacks of September 11, 2001,
did not flow through to employees, was heavily conditioned on eroding
workers' collectively bargained wages and benefits, and protected
airlines' shareholders at the expense of workers and the taxpayers.
Airlines were free to reject, through a one-sided bankruptcy process,
collective bargaining agreements and impose inequitable long-term
conditions on their employees that endured far longer than the crisis.
In the process, aviation workers conceded $83.5 billion in wage and
retirement concessions, including the dissolution of almost every
defined benefit pension plan. The CARES Act was crafted to avoid a
repeat of these practices, but more must be done to safeguard hard-
working Americans in the airline industry.
We anticipate the recovery from COVID-19 will be a lengthy process.
Many airlines are expecting two to three years to sustainably return to
pre-crisis levels, with a number of Wall Street analysts anticipating
that it could take up to five years before we will see robust travel.
We are concerned that airline workers who are protected under the CARES
Act from involuntary furloughs and certain worker protections through
September 30, 2020, may be faced with significant hardship and
deficient safeguards if demand for air travel does not return both in
the short and long term. As such, we urge you to extend worker
protections and make necessary and appropriate reforms to the airline
bankruptcy process to ensure that taxpayer relief to the airlines is
not used to again facilitate disproportionate and long-term harm to
employees during any airline restructuring. In addition, we believe
that furloughed workers should be able to remain on employer health-
care plans at active employee rates.
As you work toward additional COVID-19-related relief and economic
stimulus legislation, we respectfully ask that you consider the
perspective of frontline aviation employees and allow us the
opportunity to collaborate with you to develop meaningful solutions to
protect public health, U.S. jobs, and the global economy. Airline
pilots are committed to working as equal partners with you and our
airlines to navigate through these turbulent times. We know that
working in partnership gives each of us the strongest opportunity for
success on behalf of our passengers, shippers, and all who benefit from
the U.S. air transportation system.
Sincerely,
Capt. Joseph G. DePete,
President.
Senator Blumenthal. These articles document what we are
hearing from our constituents, namely, they are receiving no
cash refunds from canceled flights because they are given
misleading and sometimes deceptive responses when they go to
claim those cash refunds. Instead, they are given vouchers of
questionable value. They need that cash in their pockets to put
food on the table and pay their rent and utilities and they
feel betrayed.
So when you come to us and ask for more assistance, my mind
goes back to the bailout we've just given you, more than $25
billion in taxpayer money, and now in effect you are continuing
to mislead and deceive those taxpayers who have given you that
bailout.
In effect, you are, forgive me, screwing the very taxpayers
whose money is going into your pockets and you're giving
basically no relief if those passengers on their own have to
cancel flights out of a concern for public health.
So I think that you come to this committee, and I'm
speaking not about you personally, please don't take it
personally, but the industry comes to this committee with a
history. It's a history of bumping passengers, multiplying
fees, shrinking seats, taking tax breaks and using them for
stock buybacks and executive compensation, and I think getting
those passengers back into your seats is going to depend on
trust and credibility which you are failing to earn back.
You won't get passengers back in your seats. Your companies
won't be back on their feet. You won't get those planes back in
the skies unless you regain trust and credibility and the
policies that you have on refunds, which is basically to
mislead consumers into taking vouchers or denying them any
refunds if they themselves have to cancel those flights, I
think, is leading you down a very, very dangerous path.
I would be eager to hear your response.
Mr. Calio. Thank you, Senator. First of all, Senator, I
appreciate and understand your concerns, and if a passenger
under current law and regulation is entitled to a cash refund,
they are getting it, and if they are offered a voucher that has
been clarified by DOT, instead it shouldn?t happen. It ought to
be clear to them that they're entitled to a refund under
current law.
They're basically two bad choices here, however. It's been
said that we should ignore or change the current law and
regulation so that any passenger that cancels is entitled to a
refund.
I'll just lay it out there for you. Right now, negative
revenue exceeds bookings. So that's where we're bleeding that
cash every day. So you have one choice. You could insist that
everybody get a refund who canceled the flight themselves
instead of a voucher or you can drive the companies toward
bankruptcy which would happen very quickly at the rate things
are going in terms of the revenue coming in and the refunds.
For all of our members right now, refunds are exceeding
revenues and so if we want to protect the airline employees and
keep us in business, it's really, I guess, a Hobson's choice.
Is that the term? I truly regret that, but I don't think we're
misleading anybody.
I do know there were reports maybe four or 5 weeks ago
where passengers were encouraged to take vouchers instead of
refunds when we canceled the flight. I do not believe that is
happening anymore.
Senator Blumenthal. Well, I can just tell you these reports
are very recent. The Wall Street Journal's report is from last
week. The calls I'm getting from my constituents are literally
within 24-48 hours, and as you point out, there is a Federal
law that requires you not only to make the refunds but, in my
view, to tell passengers about those cash refunds.
That's part of what you're failing to do and it may be
painful, it may be inconvenient, but you are being sued, United
and a number of other companies, now in court because they're
violating that legal obligation. You have a Notice of
Enforcement from DOT April 3.
Mr. Calio. Correct.
Senator Blumenthal. Of course, they have delayed any
enforcement action and you have a moral and a political
obligation to do the right thing here because you're coming
back for more money. That's taxpayer money and those taxpayers
are the ones who ultimately are suffering from these practices.
So you are killing the goose that lays the golden egg for
you.
Mr. Calio. Senator, if I could clarify----
The Chairman. Mr. Calio, if you could answer briefly, we've
allowed considerable leeway in this series.
Mr. Calio. All I was going to say is in no way did I
mention that we were coming back for more money. It's the hope
of our members that this money we got previously and the loan
program already in place would be the bridge to the future that
we need and not have to come back and ask for more money.
The Chairman. Thank you very much, Senator Blumenthal.
Senator Lee, you are next.
STATEMENT OF HON. MIKE LEE,
U.S. SENATOR FROM UTAH
Senator Lee. Thank you very much, Mr. Chairman. Thanks to
all of you for being here.
This has been a really difficult time for our country and
we want to find solutions to make it better.
Mr. Calio, I'd like to start with you. The CARES Act
provided a rather considerable amount of funding for airlines
in the form of loans, loan guarantees, and cash assistance, but
the CARES Act also authorizes the U.S. Department of
Transportation to require that air carriers maintain scheduled
flights that were in place prior to March 1, 2020.
Given the drop in passengers that we've experienced due to
travel restrictions and other government-imposed mandates, does
the requirement that you have to maintain air service at pre-
COVID-19 levels and based on pre-COVID-19 flights, does that
make sense, and does it allow the airline industry to
restructure and do what else it needs to do in order to
respond?
Mr. Calio. Thank you, Senator. That's a very good question.
First of all, we would like to commend Secretary Chao and
her staff. They have been wonderful partners, both in the
passage of the Act and trying to work with us on the essential
air service. It is part of the CARES Act. It is causing an
awful lot of planes to be flown with no passengers, one
passenger, five passengers. That does not help any kind of
liquidity problems and our employees in the long run.
The law also says it should be reasonable and practicable
in terms of the continuation of service. We hope for a closer
look, and a rationalization, at the reasonable and practicable
language, both on behalf of our crews and the industry.
It doesn't make sense when you've got multiple carriers
flying multiple flights into places where there is no demand.
Senator Lee. Right. So, in other words, if you've got
flights that are continuing to take off, especially if those
are redundant of other flights, be they from the same carrier
or another one, and these multiple flights are each operating
with no passengers or very, very few passengers, in the end,
tell me how that harms the consumer of airline services, of
airline tickets.
Mr. Calio. It harms the consumer because the recovery will
be longer, the chance of keeping the most employees onboard
will be undermined, and if you want to look at it from an
environmental point of view, we shouldn't be flying airplanes
that are empty.
Senator Lee. Sure. When we look at it from the taxpayer
standpoint, we've set aside a certain amount of money to help
with this crisis.
Wouldn't those same dollars go a lot farther if we allowed
additional flexibility for airlines to take into account
flights as to which there's no demand?
Mr. Calio. Yes, sir, they would.
Senator Lee. I think there is something of a false argument
that the aviation industry cares nothing about health and
safety of its customers or of its employees. That, of course,
ignores a fundamental truth that unhealthy customers and
employees means that you go out of business.
I mean, it stands to reason that if you mistreat those who
are your customers or your employees, either one of them,
especially both of them, it's not going to be good for
business. Am I out on a limb here or does this reflect what you
see within the industry?
Mr. Calio. No, Senator, we do not see you as out on a limb.
We make the case all the time. Passengers and shippers have
been voting with their feet, so to speak. Two and a half
million passengers a day. So, I always tell the story, I was
born in the 1950s in Cleveland, Ohio. Where I grew up, nobody
was able to get on an airplane ever.
The first time I flew was when I was being recruited for a
sport in college and I flew two times after that until I
graduated law school because we couldn't afford it.
It's been more accessible and more affordable and the
Deregulation Act has helped. We care deeply about our
customers. The level of satisfaction last year was the highest
ever by the J.D. Power study, not something that we produced.
So there's, you know, two sides of this equation and
somewhere the facts bear out about our customers and our
employees.
Senator Lee. Last I checked, the airline industry is still
heavily regulated, not in the same way that it was prior to
deregulation when, as you pointed out, air travel was
unaffordable for nearly all Americans, but it's still heavily
regulated, right?
Mr. Calio. I think, if I recall correctly, 13 agencies,
20,000 regulations.
Senator Lee. Yes. And so if we were to add to those
regulations right now, we were to compound the regulatory
compliance costs, what does that do to the affordability of air
travel?
Mr. Calio. It decreases the affordability and increases the
price.
Senator Lee. And in the end, what impact would that have on
the health of the American people if they can't travel?
Mr. Calio. I think the American people would be
disappointed. Many people get angry if a flight's late or
something like that happens. But you take big machines, or
weather, things happen. There are mechanical delays and we
won't put a flight in the air if it's not safe for our
passengers or our crew, and personally, I believe that people
have taken flying for granted for some time. It still thrills
me every time I get on an airplane because maybe, you know,
growing up I couldn't do it, but I think it's going to be a
real change in the American people's lives and our customers'
lives with the restrictions that are in place now on air travel
just out of necessity because of this pandemic and because of
what's going to happen in terms of demand and potentially cost
later.
Senator Lee. One day I look forward to having other
conversations that are more favorable circumstances on ways
that we can diminish unnecessary talking on the public address
system by flight attendants, the use of unnecessary terms like
at this time, and the famed repetition of the same warnings
over and over again, but for now, we're going to have to leave
it at that, given the amount of time.
Thank you very much.
Mr. Calio. Thank you, Senator.
The Chairman. Senator Lee, how would we get around the
antitrust problems in doing what you suggested? I think all of
us would be happy to find a way not to have empty planes.
Senator Lee. Oh, yes. I was hoping you were talking about
the unnecessary talking about flight attendants on the public
address system.
Yes. There is a complicated relationship between regulated
industries and competition. In the railroad industry, you've
got an excessive, elaborate system of regulations that inhibits
competition. You've got corresponding exemptions from a number
of otherwise applicable antitrust laws. The same thing could be
a model for this industry.
Now I'm not suggesting that anyone ought to simply shut
down their flights, but what I am saying is that there ought
not be artificial constraints by which we require an airline to
continue operating air service for which there is no demand.
There needs to be some flexibility on the part of the airlines
because if there is not, we're going to burn through that money
that much more quickly and we're going to make air travel that
much less affordable.
The Chairman. Surely we can think that through. Thank you
very much.
Senator Udall, you are joining us remotely and you are
recognized, sir.
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you. Is my video on?
The Chairman. We know what you look like.
Senator Udall. Chairman Wicker, thank you so much.
I think this is directed at Mr. Fanning and then maybe Mr.
Calio, but we're hearing some calls from some industries that
they want to be protected from paying damages to their
employees and customers who get sick due to the lack of COVID
protections.
After receiving tens of billions of taxpayer support, are
the airlines asking to expand liability protection and, if so,
what specific and binding safety and consumer protection
standards would the industry agree to in exchange for expanding
protection from liability?
Mr. Calio and Mr. Fanning, would you both give that a shot
quickly because I want to come back on one more question here?
Mr. Calio. Senator, I'm going to come back by saying that I
will come back to you on that. I didn't realize until yesterday
that this issue had arisen and I don't like to talk about
things that I don't know about. So if I can get back to you in
writing?
Senator Udall. This is a big issue. I would prefer you tell
me what you think today. We have you here before us. Tell us
what you think.
Mr. Calio. Senator, I'm not capable of answering the
question appropriately. I'm sorry.
Senator Udall. How about Mr. Fanning and the other airline
witnesses?
Mr. Fanning. Senator, I would just say that I don't think--
the conversation's at an early stage. Anybody that I know is
not thinking about this type of protection or exemption for
people that aren't following very strict safety rules,
regulations, at a minimum what we hear from CDC and OSHA, but I
know it's a concern for members of my association, particularly
small businesses that don't necessarily have the resources to
confront something like this.
We have a member of our executive committee who has a
business with 110 people and she says this keeps her up at
night and scares her to death and so I would welcome having a
conversation about this, but I think at a minimum this is for
people that are adhering to the highest safety standards.
Senator Udall. Yes. Would you--would all of the airline
witnesses, would you agree to everything that Dr. Godwin has
outlined in her testimony? She's given very specific and strong
HEPA filters, disinfect between flights, flight manifests so
that public health people can get into contact tracing.
Everybody wears masks, physical distancing and overall reducing
density on planes and in airports. Would you all agree to that?
Those sound like good public health measures.
Mr. Calio. Senator, those are good issues to discuss. We
have already implemented or are implementing many of them.
We're continuing to discuss them with our regulators. We're
happy to discuss them with the Congress, as well. They're all
things that need to be looked at and we will look at them. But
to sign off on it, after a single hearing, just having heard
them 30 minutes ago, I don't think is something I'm going to do
today.
Senator Udall. Mr. Fanning, how about you?
Mr. Fanning. Senator, I would say airplanes already have
HEPA filters on them. Just in a larger sense, if we don't get
the safety issue right, the whole thing falls apart. If you
think about the sequence here of the manufacturers building the
plane, the airports being where you get on the planes, and the
airlines flying the planes, if any one element of that doesn't
get the safety aspect right, then people aren?t going to fly,
and so it has to be a priority and I think it is a priority for
everyone certainly in the manufacturing sector.
Senator Udall. Thank you very much. I would yield back.
The Chairman. What percentage of the planes have HEPA
filters?
Mr. Fanning. I think it's virtually all of them, but I can
get you the exact number and by breakdown.
The Chairman. OK. Well, please do that.
Next, we have Senator Tester joining us remotely.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Well, I just have to say, first of all,
thanks for everybody testifying and thank you for having this
hearing, Mr. Chairman, Ranking Member.
Mr. Calio, I guess the first thing I would say, and this
kind of goes off of Senator Lee's questions, is you guys can
reduce flights. You just don't have to have this same level of
service. You can reduce it.
For example, from Great Falls, Montana, to Minneapolis, if
you so choose, you don't have to have that be a direct flight.
You can go through Salt Lake and up to Minneapolis, isn't that
correct?
Mr. Calio. Senator, that's partially correct. To my
knowledge, it depends on filing for the exemption and how the
DOT rules on that exemption.
Senator Tester. OK. Because I'm here to tell you from
personal experience that we don't have near the service in
Montana now that we had 2 months ago. I mean, it's
significantly less. For example, I had to fly--I mean, I had to
drive 250 miles to get on a flight to get here. Otherwise, I
would have had to get on a plane on Sunday and stay overnight
to get here. But I'm from Montana and it's a rural state and
I'll get to those in a second.
The first question I have for you, though, Mr. Calio, is
Congress has invested significant taxpayer dollars into the
airlines. It's made significant investment, and it's important
that the airlines that are relying on this cash are held
accountable under the rules that Congress has put into place.
Can I get a commitment from you that your association will
work with Congress to ensure that all the airlines that you
represent comply with congressional oversight of the CARES Act?
Mr. Calio. Absolutely.
Senator Tester. Good. I told you a minute ago I was from
Montana. We're a rural state----
Mr. Calio. I know that, Senator.
Senator Tester.--and my concern is we're going to be
disproportionately affected when air service comes back on and
I would tell you that could have an enormous impact on our
economy, on our business community, on our recreation economy,
just go down the line.
There have been a number of flights that have canceled, a
bunch of flights that have been canceled, and I happen to live
in Central Montana, which has kind of felt the brunt of it
because I think my nearest airport is the fourth or fifth
busiest in the state.
But the question is, when we weather this storm, I am
concerned that financial decisions will be made and we will
still not have the service that we had before the COVID crisis.
What are your recommendations to make sure that Rural
America is not cutoff after this crisis is over?
Mr. Calio. Senator, I guess what I would say is the reason
you had the flights you had prior to this pandemic was because
there was demand for those flights. If that demand comes back,
I guarantee you you'll have the flights.
Senator Tester. Yes. Well, the question becomes--and this
applies to the economy as a whole. I believe until we get
testing and ultimately a vaccine, that demand is going to be
diminished and if in fact people think that flights are not--if
they think they can contract coronavirus on a flight that will
also push it back.
So what is the plan to be able to make sure that that
consumer confidence is there in flying to make sure that those
numbers do bounce back?
Mr. Calio. The plan is currently being executed and it's
some of the things that I mentioned before, Senator Tester.
The increased cleaning, which is substantial, the spacing
people out where there's room to do it and before there's a
vaccine or testing.
Senator Tester. If you could stop just there for a second?
This is tough doing it by videoconference. But if in fact we're
going to have spacing within the airplane and if in fact we've
got to have the demand back to where it was before because most
every flight I flew out of Great Falls to Minneapolis or Salt
Lake were packed to the gills, but if we're going to have
spacing, they can't be packed to the gills and so how can I
assume that we're still going to have that level of service and
you're still going to have spacing and you're not going to have
the numbers in that 70-passenger airplane? You might only have
35 or 40 people that have proper spacing.
Mr. Calio. Senator, I was addressing your question about
instilling confidence and right now, while we're in the midst
of the pandemic without any vaccine, without sufficient testing
and a variety of other items, we have the--I guess I would call
it the luxury of spacing. So we're doing that to help people
feel like they can get back on the plane.
I said earlier that we would not be for keeping all the
seats open, that we can't space forever. That would be the same
thing in terms of a movie theater, Broadway.
Senator Tester. I hear you. I understand what you're
saying. The question I have from a rural perspective, the fact
that we've had service--and I'm not arguing that it shouldn't
have been reduced. I mean, if the demand isn't there, it should
be reduced.
But the bottom line is, if you're going to have people that
have faith in the airlines and you expect the numbers to be
back up where they were pre-COVID before you bring those
flights back, those two are counter to one another.
Mr. Calio. Senator, I'm sorry. I missed the last part of
what you said.
Senator Tester. What I said was is that they seem to be
opposites, going against one another. If in fact we have to
have the numbers back to get the flights schedule back we had
before COVID and if in fact you have to have spacing to have
the kind of luxury you had and the fact that we're a year or
year and a half out at a minimum for a vaccine for this, how
can we expect places like Montana and it may apply to other
places, too, by the way, ever have the ability to have the
flights we had before, say, the first of March?
Mr. Calio. Again, I think it'll be a product of demand and
it's going to be a product of a private sector/public sector
combination, everyone working to instill confidence in the
public, and the way you instill confidence in the public is
look across in this particular case the health system to make
sure that people are comfortable and that we can do everything
we can to make them comfortable and confident in flying.
Senator Tester. OK. Well, I would just tell you I hope that
there's some liberty given to the rural states on re-
establishing these flights. Otherwise, it's going to be an
economic killer.
Mr. Calio. Yes, sir.
Senator Tester. Not that we haven't been through enough
already, but airlines, as you well know, Mr. Calio, are very
important to our economy. That's why the money was put forth in
the CARES Act.
Thank you, Mr. Chairman.
The Chairman. Senator Tester, I like the haircut. I
understand it took you 7 weeks to grow that head of hair.
Senator Tester. When I grow up, I want to look like you,
Mr. Chairman.
The Chairman. I think you look 20 years younger.
We have Senator Duckworth next.
STATEMENT OF HON. TAMMY DUCKWORTH,
U.S. SENATOR FROM ILLINOIS
Senator Duckworth. Thank you, Mr. Chairman.
Two months ago, the Aviation Subcommittee held a hearing
about the role of aviation in containing the spread of
infectious disease. At that time, Illinois had identified four
individuals who testified positive for COVID-19. A mere 63 days
later, 65,962 Illinoisans have contracted COVID-19 and my state
has confirmed that 2,838 are known to have tragically died from
this terrible pandemic and my heart breaks for every family and
every individual touched by this pandemic, both medically and
economically.
So it's now clear that many of the systems we take for
granted, including our aviation network, were not adequately
prepared for this pandemic, despite having dealt with H1N1,
MERS, and Ebola in recent years.
Congress provided the aviation industry with a $60 billion
bailout at the same time that President Trump stubbornly
refused to support a single dollar to protect the 500,000
United States Postal Service employees whose mission is
enshrined in the Constitution.
Leader McConnell suggests that states and cities that
employ millions of Americans should use the bankruptcy route,
whatever that means.
I voted for the CARES Act to protect workers. I will vote
on future relief efforts based on how it helps workers.
Our aviation workforce was especially at risk in March and
continues to be, but this uncertainty extends to every corner
of our economy and every community in our Nation.
I hope that Senators on both sides of the aisle can
continue to work together on reasonable solutions that protect
and reinforce the livelihoods of all of our neighbors, not just
a few.
The aviation industry is not alone in its struggles to
endure this deadly pandemic but it has received significant
support ahead of many other deserving Americans.
With that said, I want to associate myself with the
comments of Senator Cantwell and others who highlighted a
potential mismatch between Senate Democrats' intent to protect
workers through the CARES Act and how that dynamic is playing
out in agreements between airlines and the Treasury Department.
Mr. Calio, this is a complicated topic, but I want your
commitment that you will continue to work with me and other
Senators to make sure all the facts are available and that the
issue is resolved. Thank you.
Mr. Fanning, it has been 6 weeks since Congress passed the
bipartisan CARES Act, yet many of your members are still
waiting on the Treasury Department to finalize their loan
applications.
I worked closely with Senators Inhofe, Durbin, Moran, and
Young to ensure that MRO companies that maintain and repair
commercial aircraft were specifically eligible for loans in the
relief package.
Yet the furloughs that CARES Act was designed to prevent
are still happening because Treasury is not approving
applications in a timely manner. Airline contractors and
catering companies are in the same boat.
Mr. Fanning, I assume you're as frustrated as I am. What
are your members telling you about Treasury's process and the
consequences of current bureaucratic delays?
Mr. Fanning. Well, it's a herculean task, I'm sure, what
the Department of Treasury is facing, but in some instances,
the rules took longer than in other instances to be established
and to get out to businesses for them to decide whether they
were eligible for this.
This is an area where it's been a little bit slower than
other areas and I'm glad you're highlighting it. It's an
enormous workforce that often gets forgotten in the aviation
industry.
Congress moved very quickly for which we're very
appreciative, but, of course, when we move at that speed, we
see where there are gaps and some things were missed that we're
addressing in this next wave.
For example, a lot of maintenance work is not done at the
airport or even on the plane and they weren't covered in the
legislation, in the rules, and we're trying to get that fixed
in the next wave, but thank you for keeping attention on this.
Senator Duckworth. Thank you.
Mr. Chairman, before I yield back, I'd ask Mr. Calio and
Mr. Fanning to briefly share their thoughts about the FCC's
recent decision to approve Legato Network's application to use
L Band Spectrum for a 5G network.
While the FCC's decision was unanimous, no less than a
dozen Federal agencies, including DoD, DHS, and DOT, opposed
the effort, saying it could harm our global positioning system.
Mr. Fanning. Senator, we are strongly supportive of the
development, deployment of 5G technology. We're all going to
use it in our businesses, but we strongly oppose this decision.
We think a decision impacting spectrum, especially an important
one like this, should be based on data, and there are numerous
tests showing clearly that there's interference on GPS that has
national security implications.
It has implications for air transportation. It has
implications for everyone's life every single day, and we know,
we have proven that there's interference there, and so we would
like to have this decision changed and have a discussion about
how to find room on the spectrum for 5G again that we'll all be
relying on.
Senator Duckworth. Thank you. Mr. Calio, did you want to
say something?
Mr. Calio. Senator, Airlines for America would associate
itself with Mr. Fanning's comments.
We're opposed to the FCC's decision. It needs to be
reconsidered or it needs to be corrected. There are some
significant concerns and implications here that apparently the
FCC, unlike many other agencies involved and departments
involved, did not consider.
Senator Duckworth. Thank you. I yield back, Mr. Chairman.
The Chairman. Thank you, Senator Duckworth.
Senator Cruz.
STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
Senator Cruz. Thank you, Mr. Chairman, and thank you for
holding this hearing on this critically important topic.
Welcome to each of the witnesses. Thank you for being here.
Mr. Calio, let me say I like the beard. It is a very strong
look in a time of crisis to have a literal and figurative gray
beard here advising us. It gives gravitas and wisdom to this
gathering.
Mr. Calio. Thank you, Senator. I knew somehow that you
would approve it.
Senator Cruz. So let's talk, first of all, about contact
tracing. As you're well aware since the beginning of this
crisis, Federal agencies have been attempting to mandate that
your members collect data on passengers for contact tracing and
that's obviously important for stopping the spread of a
pandemic but there are serious logistical hurdles to executing
upon that.
As you know, on March 4, which seems like a lifetime ago, I
chaired a subcommittee hearing on the coronavirus and its
impact on aviation and during that hearing, I asked
Administration officials if it would make sense for the
government to run and maintain an online portal to compile
passenger data, and the airlines, as I understand it, had
offered to cover the startup costs for that but have it
developed by a third party vendor and stood up online.
I sent a letter subsequently with Senator Sinema to the
Administration asking for the development of a secure app and
web platform and the response we received from HHS and Homeland
Security and DOT was less than encouraging and that's why
Senator Sinema and I are together working on bipartisan
legislation that would have the government implement a secure
portal for contact tracing instead of trying to force the
carriers to carry out that function.
In your judgment, what's the right way to do this and how
can we keep people safe and be effective at it?
Mr. Calio. Thank you, Senator. We want to thank you and
Senator Sinema for getting involved in this. It's been a source
of great frustration to us. We've been trying to work with the
CDC on this for some time, as you know. We have not been able
to get our questions answered.
We believe this is a government function and the best way
to get the information and transmit the information is for the
government to collect it. Currently, we are unable under our
current systems to collect all the information they say that
they want.
Born out of that frustration, we did go to a third party
vendor and we did get a mobile app and a website set up that so
far it looks like it works and can get the information.
We have offered to gift that to the government because we
don't think it's appropriate for us to have all of that
information. You know, we only sell 50 percent of our own
tickets. So if somebody comes back to us and says that my e-
mail address is [email protected], we don't have a
real way to check that. We don't know, we can't find out if
they have a second phone number or not.
So if you want the information quickly and want to transmit
it quickly so it can be effective, this should be run by the
government who can require that the information be provided.
What they have asked us to do would take 12 months, 14
months if we could do it, we will do it, but it's not going to
do anything for this pandemic. Meanwhile, there are solutions
right at hand. Along the way, we learned that the CDC actually
has a website set up, but as far as we know, it's not being
used.
So there are some questions to be answered here, but we
ought to be seeking solutions and doing them in the quickest
and best way possible.
Senator Cruz. Well, thank you for that, and we'll continue
to work together to try to implement a system that is safe and
effective.
As everyone on this committee is well aware, the economic
consequences of this pandemic have been devastating across the
country and across the world, but aviation in particular has
been hammered at an extraordinary level.
In fact, I saw recent statistic that, to name just one of
the major carriers, United Airlines is on pace to fly fewer
people in the entire month of May 2020 than they flew in just
any single day in May 2019. That is extraordinary. It is
putting an enormous threat to millions of jobs across our
country and all of us are united in wanting to be sure when we
come out of this crisis and we will come out of this crisis
that we have a strong and robust commercial aviation sector.
Critical to that is people being safe when they fly and
feeling safe when they fly.
My question, Mr. Calio, is, is what should we be doing as
we transition into reopening the economy, as we hopefully move
out of this crisis, what should we be doing to enhance consumer
confidence, to help people feel comfortable and safe, and are
there steps government should be doing to bring the flying
public back and be willing to get on airplanes and travel?
Mr. Calio. For all of us, I think it's making a visible
display and an understandable display of the steps that we are
taking, both the government and the airlines, the airports, and
the manufacturers, to protect the health of our customers and
the flying public, and it goes broader than that actually.
I think that is the first and the biggest step and there
are many things that can be done. It's working in concert with
each other to look at what, based on science and data, will
help.
Candidly, we are doing some polling and focus group work on
a consistent basis to find out what people really think and
what it's going to take to get them back on the airplane, you
know, the combination of factors. We'd be happy to offer that
briefing to anyone on this committee who would like it.
But there has got to be a series of steps taken that ensure
the health of the flying public down the line. We're all in
uncharted territory. We all want to keep all our employees
working, but this hasn't happened before, and if we had all the
answers, it'd be a little easier, but we're going day by day
but trying to make rational decisions based upon what we
believe will happen, what we hope will happen, and how we can
help it to happen.
Senator Cruz. Thank you.
The Chairman. Thank you, Senator Cruz.
Senator Markey, joining us remotely.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much, and
thank everyone who is making this entire day possible. Thank
you.
Mr. Calio, the airlines right now are refusing to give a
refund to passengers who have canceled their own flights during
this coronavirus pandemic. Understandably, families have great
health concerns. They don't want to put their families in
jeopardy. They've canceled.
But the airlines are saying they don't want to give that
money back to those families, that they want to give them a
voucher for some future flight, but for families right now,
that money in their pocket for food, for housing, for other
necessities is absolutely invaluable.
So, Mr. Calio, can you explain why the airlines are
unwilling to just give that cash back to passengers and let
them decide when they would want to ever fly again and give
them that extra cash which they need for their families right
now?
Mr. Calio. Yes, Senator, I will try. First of all, we
understand your concern. We understand our passengers' concern.
We work with our passengers to try to meet their needs and
their circumstances on this.
There's no good answer here. There are two bad choices. We
could refund. As you know, under the current law and
regulation, if you cancel your own flight, you are entitled to
a voucher and it depends on what kind of ticket you buy and a
variety of other things.
If we cancel the flight, you are entitled to a cash refund.
We are currently sticking to the regulations as we have to for
a very simple reason. We want to preserve the jobs in our
industry. We want to be part of the economic recovery.
As I explained earlier, right now refunds going out the
door, and cash refunds exceed the revenue we are taking in by a
significant amount. We're losing between $350 and $400 million
a day.
Senator Markey. No, I appreciate that, but Spirit and
Allegiant have given refunds back to their passengers in this
same situation, and my feeling is that using these passengers
as the way in which the airlines are able to get a cash-flow is
a situation where you're putting these families in a belt-
tightening situation. They have to make tough choices for their
families.
So again, Mr. Calio, I recommend very strongly to you that,
given the Federal Government's help to the airlines, that the
airlines should in turn try to help these passengers. Give them
their money back. I think that would be the right thing to do.
They need it just as much as the airlines do right now. It's
just a very difficult situation all around, I appreciate that,
but they're not flying because of the public health catastrophe
which has hit our country. They deserve to have that. I would
just say that to you, Mr. Calio, and that's something that I
think is a very important thing to do.
In the days to come, we have to address an unprecedented
series of immediate and long-term challenges to securing the
health and safety of the flying public. Just a small sample
includes requiring all air travelers to wear face masks and
securing personal protective equipment for crew members
performing boarding and security lines in the age of social
distancing, enhancing cleaning procedures for airlines and
airports, for flying passenger health screenings while
protecting privacy and preparing for the potential seasonal
reoccurrence of the coronavirus.
It will take a lot more than one hearing to address these
challenges and to prepare for a new normal in air travel after
the pandemic subsides. That's why Senator Blumenthal and I have
introduced the Restoring Safety in the Skies Act. The
legislation instructs the Departments of Health and Human
Services, Homeland Security, and Transportation to establish a
joint task force, including airports, airlines, aviation
workers, public health experts, security officials, and more,
who will provide the emergency and long-term plans we need for
the future of air travel.
So, Mr. Hauptli, do you agree that we urgently need an
expert task force to help secure the health and safety of the
flying public?
Mr. Hauptli. Senator Markey, thank you for the question,
and thank you for summarizing the challenges facing the
industry going forward.
Mr. Calio and I speak regularly along with the FAA
Administrator, the TSA Administrator, airports, airlines,
collectively. We are already doing that, but we do believe that
consistent Federal guidance is necessary and so your
legislation putting together a task force would, in my mind,
sort of codify what we're already doing at this point and so we
would be supportive of that effort.
We need CDC, HHS, DHS, TSA, DOT, FAA, airports, airlines,
the whole ecosystem working together. As Mr. Calio said
earlier, unprecedented challenges for the industry and we're
all going to need to work together to solve the problem.
The Chairman. Thank you. Thank you, Senator Markey.
Senator Markey. Thank you. I think we should do it as
quickly as possible to make sure that it's formalized and
reporting back to the Congress.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
Senator Fischer.
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Mr. Chairman.
Mr. Calio, I would like to know what airlines are doing to
maintain their current contractual obligations. I've heard from
airline contractors, such as those that provide ground handling
services, that airlines are demanding reduced or delayed
payments on current contracts.
However, on April 30, the Treasury reported that it began
disbursing funding from the CARES Act to airlines. Treasury has
yet to provide similar CARES Act relief to contractors and
that's another issue.
So on the one hand, we have airlines and they're beginning
to receive their CARES Act funding and, on the other, they're
requesting concessions from contractors and while I certainly
understand that airlines are in a difficult place financially
through no fault of their own, so are those they have contracts
with.
Now that airlines are receiving CARES Act support, will
airlines maintain their contractual obligations, such as those
with ground handling service providers?
Mr. Calio. Senator, I'm going to have to get back to you on
that because that's a problem I have not heard of. To my
knowledge, our carriers maintain their contractual obligations.
Certainly, I've heard nothing about this.
Senator Fischer. OK. We will definitely give you
information on that probably before you get out the door today.
Thank you very much.
Mr. Hauptli, FAA programs, such as entitlement funding in
the Airport Improvement Program, is based on previous levels of
enplanements at airports.
However, as you noted for the Lincoln Airport in Nebraska,
enplanements at airports are down as much as 95 percent.
What do you expect the impact on FAA grant programs, like
AIP entitlement funding, will be if this year's enplanements
are used to calculate AIP funding the next couple of years?
Mr. Hauptli. Senator, thank you for the question. It goes
right to the heart of what we were talking about earlier in
terms of the need for flexibility going forward because you're
exactly correct.
If we use this year as a baseline, everything blows up. We
can't do that. So we're going to need flexibility. The FAA has
been great so far in administratively being flexible. If
necessary, we may need legislative assistance in that regard.
Senator Fischer. Thank you. And as you probably know, I'm
also a strong supporter of the Essential Air Service Program.
It provides a vital connection to seven of our communities in
the state of Nebraska.
What kind of challenges do you think that these small
airports, such as those in the Essential Air Service Program,
are going to face in retaining their commercial air service
during and also after the pandemic?
We've seen some really optimistic improvements in the
Essential Air Service that we have in the state of Nebraska. We
have good partners in those programs and I would hate to see us
go backward in these really worthwhile programs that are so
important in a state that has the vastness like mine.
Mr. Hauptli. Senator, we agree completely with you. You've
been a very strong supporter of the Essential Air Service
Program. It's a vital link to making sure that all Americans
have access to the aviation system and so that's something
we're watching very closely. Very important issue and we'll
need to be very careful and cognizant as we move forward and
travel returns that everyone has access to the system.
Senator Fischer. You know, we want to make sure that we can
continue to keep that commercial air service that we have. We
have good partners and we really would hate to lose them. So I
appreciate your help in addressing that.
Mr. Calio, to what extent are the Airlines for America's
members going to continue service to smaller communities after
the CARES Act minimum requirements are gone, particularly for
communities that were seeing an increasing number of those
enplanements prior to the pandemic?
Mr. Calio. Senator, that is a question that I can't answer.
That's for my members to answer. They make those decisions on
their own and it's something that A4A does not get involved on
I mean ever.
Senator Fischer. OK. Thank you very much.
And, Mr. Fanning, it's nice to see you again. We had some
interaction when you were Secretary of the Army and you would
come before Armed Services Committee. So nice to see you, sir.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Fischer.
I am told that Dr. Godwin has had some problems with
connectivity. Are you back on? Are you back in touch with us,
Dr. Godwin?
Dr. Godwin. Yes.
The Chairman. OK. And also for those in the audience, there
are two members of this committee who are having problems
getting connected remotely and we continue to work with them
but for now, let me just ask; Dr. Godwin, does it surprise you
that Secretary Fanning says almost all of the airline aircraft
already have HEPA filters?
Dr. Godwin. That does surprise me, based on what I had
read, although I would hope that he would be even better
informed than I would be, given his position.
The Chairman. That would be good news.
Dr. Godwin. I'm sorry. What?
The Chairman. I think we could agree that would be good
news and we'd be a step farther along with your proposal.
Dr. Godwin. Oh, absolutely. I think you're just closing the
loop and making sure that those remaining planes are covered
would be great.
The Chairman. Let me ask you; if I am on a plane sitting
three abreast and we all have a face mask, a proper face mask,
to what extent am I at a greater risk? Are you able to quantify
that, Doctor?
Dr. Godwin. It really depends upon the type of face mask
that you are wearing. So as you're probably aware, we have
three different kinds of face coverings that we routinely see.
The most protective is the N95 mask, which is currently we're
really reserving for individuals who are at high risk of
exposure, for instance, our medical professionals.
The next category would be the surgical masks that you see,
those disposable masks.
The Chairman. Well, I have a mask on that most Senators are
wearing. So how much protection is that going to give the folks
next to me?
Dr. Godwin. Yes. It's giving them more protection than they
would have if you were not wearing anything. It's giving you a
little bit of protection but it's not providing either you or
them a huge amount of protection the way that we would see with
N95 masks really protecting the user to a very large extent.
So it's better than nothing and we want you to continue
wearing them, particularly in circumstances where you can't
have social distancing, but if you're talking about a situation
where people are sitting for long periods of time in close
proximity to each other, that mask, while good and we want you
to wear it, it does not give you absolute protection from the
people that are surrounding you.
The Chairman. And if I'm wearing gloves that helps a lot,
also?
Dr. Godwin. So gloves are helpful if you are someone who's
working, for instance, in the screening areas where they would
be touching a lot of objects that a large number of people had
touched and so we're trying to protect them but also give them
the ability to quickly remove those gloves and get rid of the
contamination.
They are less helpful in general for respiratory pathogens
because the main mechanism of transmission in this particular
case is through droplets and then next aerosols. So they're not
quite as helpful as having a mask would be and definitely not
as helpful as sitting farther apart from each other, keeping
that social distancing.
The Chairman. And, Doctor, Senators and House members are
working today for the most part in a hot zone, Washington,
D.C., and then we fly out on Thursday afternoons and Friday
mornings and go back to our constituencies in our various
states. That being the case, from a public health standpoint,
not from a personal safety standpoint, would you recommend that
Senators and Representatives be tested here in Washington so
that we can know which of us ought to be isolated here and not
return home and spread this around to 50 states?
Dr. Godwin. So unfortunately, the testing doesn't tell us
whether or not you've been exposed and are incubating the virus
but have not yet built up high enough levels in order to test
positive on the test or exhibit symptoms.
So you could test negative today, if we tested you, but
still end up developing COVID-19 a couple of days from now due
to an exposure that happened today or yesterday. So just doing
a single test is not enough. This is why we have had to resort
to this process of identifying people who have been in close
proximity, in contact with individuals who are known to be
infected and then asking them to self-quarantine, to self-
isolate, and to monitor their symptoms. That is part of the
contact tracing approach.
It would be fabulous if we could have a test that would
tell you you've been exposed but that actually is not the way
most of our infectious disease tests work. Most of them require
that you have not only been exposed but also have built up
enough of the pathogen in your system to be able to detect it.
The Chairman. Thank you. That's very helpful.
Senator Rosen now joins us remotely. You're good, yes. You
look great.
STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Oh, perfect. OK. First time on this one in
the office.
Thank you, Chairman Wicker and Ranking Member Cantwell, for
holding this hearing and thank you for the witnesses for being
here. It certainly is trying times for all of us in so many
ways.
But today, I want to talk a little bit about the economic
impact of the pandemic on our airports and tourism, of course,
in Nevada. Our economy depends on travel and tourism from
restaurants to those casinos on the Las Vegas Strip, our
outdoor recreation business near Lake Tahoe and everywhere in
between. That's why the economic shutdown caused by the
coronavirus, of course, has been so devastating to us and in
few places no more evident than this as the Gateway to Nevada,
our airports.
In 2019, Las Vegas McCarron International Airport saw over
50 million passengers, generated nearly $35 billion in economic
output, supported approximately a quarter of a million jobs,
and was responsible for 18 percent of our area's gross domestic
product. But in the wake of the pandemic, passenger totals have
dropped precipitously.
At the Reno Tahoe Airport, travel has been down 96 percent
in the last several weeks. This travel slowdown means job
losses not only at our hotels and our convention halls but at
the airports themselves, including places we might not
immediately think of, such as the numerous small business
retailers and the restaurants that operate inside our airports.
So, Mr. Hauptli, what other additional hidden costs this
pandemic to airports might we be unaware of and what can we do
as Members of Congress to address these challenges and then
more broadly to everyone on the panel, when it is fully safe to
travel again, how can we work to instill confidence in the
American people that they can come back to places, like Las
Vegas or Reno, for a convention, vacation, or business and how
can Congress help you and help everyone do this?
Mr. Hauptli. Senator Rosen, thank you very much for the
question. You're right. Your state relies on tourism and
everybody coming in to your state. In fact, we'll be having our
annual conference in 2021 in Las Vegas. So we're very anxious
to make sure we get this fixed and ready to go by next spring
when we will be out and joining you in Las Vegas.
The Las Vegas airport director sent me a note the other day
saying that they're going to be down 50 percent at minimum in
terms of their lost revenue. You point out that Reno Tahoe is
down 96 percent in traffic. It's a major, major issue for not
only the airports in your state but clearly the airports all
around the country.
AAAE and ACI, the two airport organizations; Mr. Calio's
organization, A4A; and an array of travel and hotel groups have
all gotten together under the umbrella of U.S. travel and put
out some guidance that I think will be very useful for people,
passengers, people visiting hotels as we reopen the economy to
provide comfort for folks that it is safe to travel and safe to
stay in hotels and safe to go back to conventions and
conferences going forward.
So you've identified a very, very serious issue and
problem, and a big part of the economic engine that the country
needs and certainly your state needs is aviation.
Senator Rosen. And more broadly to everyone, if you could
really answer what can we do to help you particularly meet some
of these challenges, especially for the small businesses,
businesses that are at our airports?
Mr. Hauptli. Senator, I would say in a sense you've already
started that process by passing the CARES Act. I think it's
monitoring and providing oversight like this committee is doing
here today, to continue to do that and monitor real-time
problems and make sure that the solutions are going to work and
not be ineffective because they have not been backed by data
and science.
I think a better way to say it is, you know, everybody
working together to try to get to a solution on this and I'm
particularly aggrieved, I have to tell you, Senator, because
one of the first victims of this pandemic was my yearly trip to
Las Vegas with all of my high school friends that we've been
doing for probably 25 years.
Senator Rosen. We want to welcome you back as soon as we
can.
Mr. Hauptli. We're looking forward to it. Senator, if I
could just tack on to my earlier comment, we've asked in our
testimony for not only an additional $10 billion or more for
airports in the next round of assistance but also billions of
dollars for general aviation, business aviation, and, very
importantly, to your question, to concessionaires that are
operating at airports. That whole aviation ecosystem is
intertwined and there are concessionaires that are hurt very
badly and dislocated by this crisis, as well.
The Chairman. Thank you, Senator Rosen.
Senator Sinema--Senator Rosen. Senator Sinema is now
joining us by voice only. We've had some trouble with that
connection, but are you able to hear us, Senator Sinema?
STATEMENT OF HON. KYRSTEN SINEMA,
U.S. SENATOR FROM ARIZONA
Senator Sinema. I think I'm here, Chairman Wicker. Can you
hear me?
The Chairman. Yes. We can hear you fine. You are
recognized.
Senator Sinema. Wonderful. Thank you, Mr. Chairman, for
holding this hearing on the State of the Aviation Industry.
You know, this is an important opportunity to discuss what
Congress can do in the coming weeks and months to protect
highly skilled aviation industry jobs while also protecting the
health of passengers, employees, and the American public.
We've seen a substantial decline in air travel as people
across the world listening to health care professionals have
stayed at home. It's essential to help lessen the spread of the
virus, but it also creates significant economic challenges for
the aviation and aerospace industries.
Back in March, as the Ranking Member of the Subcommittee on
Aviation and Space, Senator Cruz and I held a hearing,
Examining the Role of Global Aviation in Containing Infectious
Diseases.
Now is an appropriate time for us to further examine this
issue as we now manage the dual challenge of keeping our
aviation system intact while protecting the jobs and health of
employees and passengers.
In order to bend the curve of the virus and prevent a
second wave, we need contact tracing systems in place, cleaning
and hygiene standards, and a workforce that's both protected
from the virus and ready to support the industry.
I'm grateful for today's witnesses and look forward to us
working together to keep Americans employed and our travelers
safe.
My first question is for Mr. Calio. Contact tracing, when
properly established, can mitigate the spread of coronavirus
and similarly communicable diseases. Local governments and
states are setting up their programs now, and I'm working with
Senator Cruz, stakeholders, and other Members of Congress on a
solution for international travel to the U.S.
This government-implemented system would allow information
to be directly collected from travelers and provide for more
complete, accurate, and timely collection of data.
Our legislation will also ensure that all persons entering
the U.S. are held to the same standard during a health
emergency.
Are there any issues air carriers encounter when they
attempt to conduct contact tracing given our current systems
and the way data is shared with the government, and can you
provide a few examples?
Mr. Calio. Yes, Senator, I can. First of all, I'd like to
thank you and Senator Cruz for everything that you have been
doing on contact tracing. It's a significant issue and it's
something that we need to handle going forward not just in
aviation but across the board to try to control the disease.
Currently, as you know, we have a passenger name record and
advance passenger information system where much of the data
requested that the government would like to have cannot be
verified by us. In some cases, it can. In many cases, it can't
because we don't sell all of our own tickets. There are global
distribution systems. There are travel agents and then there
are other airlines where we have connecting passengers.
We can't validate the e-mail address and we oftentimes
don't usually get anything near the address, phone numbers or
the physical address.
We think this is a government function. It's one that can
be easily handled. It needs to be required and it would work
more quickly and better if the government were to do it.
As you know, because I think you've seen the demonstration,
the mobile app and website we created. I mentioned earlier and
again we are happy to gift this to the government. I don't
think that's all that complicated but something like this, you
know, with our technology could be stood up pretty quickly,
even accounting for privacy concerns, and it would be much
better if we had all of that information, if the government
agencies had it themselves rather than through an intermediary.
Senator Sinema. Well, I appreciate that and we agree. Thank
you.
So my next question is for Mr. Fanning. Mr. Fanning, in
recent years, Arizona has been a leader in attracting aerospace
manufacturing. We just created thousands of high-paying jobs.
This includes large and small manufacturers. We developed fixed
wing aircraft, helicopters, defense systems, spacecraft, and,
of course, do the maintenance, repair, and overhaul
capabilities to supplement it.
What impact is the virus having on the aerospace industry
jobs in Arizona, and what can Congress do to help keep these
jobs afloat during this difficult time?
Mr. Fanning. Well, I think you've already done an enormous
amount to help. The initial focus, as the Chairman said, it was
on liquidity, on trying to keep money flowing through the
supply chain and keep it working.
Now as we see how serious this is, even more so than we
realized 7 weeks ago, our focus is really turning and trying to
maintain the workforce and what programs we can come up with
together to get us over what is really a longer period of time
than we initially imagined.
So in the way forward, we are exploring that private/public
partnership concept where both sides are putting money in in
order to retain the at-risk workforce so that it's there when
business picks up again.
Senator Sinema. I appreciate that. Thank you.
Mr. Chairman, my time's expired. Thank you.
The Chairman. Thank you, Senator Sinema.
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman, and other than
not being able to get the video from Senator Sinema, I want to
thank our colleagues, Senators Klobuchar and Blunt, for their
hard work on getting the system set up so our committee and
other committees in the Senate could participate this way. This
has been a great experience and great work by the people who
are working the audio and video. So thank them for all of that.
I wanted to go back to Mr. Fanning. I started at my opening
round of questioning with this issue about the supply chain and
losing a workforce that is hard to replace.
One of the things that has come up in the implementation of
the CARES Act is that the definition of national security has
limited the applications. I think for all of us who have been
thinking about these issues for some time, we think of lots of
things as part of national security. We didn't specifically
mean you actually are producing X number of product as a
defense contract.
I mean, in general, we think that airlines and having an
airline sector is part of national security. So what do we need
to do to fix that element of the language or what do we have to
do to clarify because we were clear and so we're definitely
going to communicate to Treasury about this.
Mr. Fanning. Well, I think--thank you for that question.
There were a number of issues that probably precluded companies
from accessing that money.
The rules came out rather late on that one, later than
most, and companies were only given a week to apply. That
caused some problems, but I think the main problem is what you
highlighted. It was a very narrow definition of national
security. It was what they call a rather wonky DX designation,
which really limited it very severely and left out a lot of
companies that anybody would argue are doing national security
work.
But DoD and the Treasury are working on that right now and
refining that definition. So I think we'll make some progress
on that and make those funds available to a larger pool of
companies that are very clearly doing national security work.
Senator Cantwell. So if you're part of the supply chain for
commercial aviation, should that be part of the national
defense?
Mr. Fanning. I think so, absolutely. The supply chain is
shared and a lot of companies want a foot in both sides as a
risk mitigator and that's important. It's great, but we are
worried about the impact on the commercial side, what the
commercial side might have on the national security side, and
so I don't think that you should require a company to be doing
a hundred percent national security to have them be critical as
a part of the defense industrial base.
Senator Cantwell. Thank you. And what do we do about the
health care? Do you support us doing something to help further
the health care of laid-off aerospace manufacturing workers in
this time period?
Mr. Fanning. I do. A number of our companies--we're first
and foremost focused on not losing the workforce for all the
reasons you mentioned in your question, but when it comes to
that, many of the companies are extending benefits, giving
extended periods for the benefits, but we would look for some
help to help those people who no longer have their jobs as a
result of this pandemic. The market is contracting and we're
looking for ways to ride through that, but it's going to be a
difficult journey.
Senator Cantwell. And can you just explain that a little
bit more because I think people think, well, of course people
would want to go back to aerospace, but the point is if you
lose your job in aerospace manufacturing now and you have 1
year--I'm sorry--you have 1 month of health care from your
employer under their COBRA system, and then you could yourself
purchase another year or I think it's 12 months of that, but do
you have the $2,000 or whatever the benefit is to purchase
that? If you don't, you're going to not hang around and wait
for the aerospace job to come back. Maybe I'm explaining it for
you but anyway, I want to emphasize how critical it is that if
we want to retain these workers and retain them being able to
help us again in aerospace, which is a very competitive
environment, that we need to do something about health care.
Mr. Fanning. Absolutely. I think you got most of it. These
are highly sought-after workers and if we can't keep them
employed in aerospace industry, others will want to come after
them obviously. They're highly skilled. They're highly trained.
Other industries that might be able to ramp up faster than we
would would be attractive and have jobs available perhaps.
On the defense side of our industry, for example, some of
the companies are hiring through this. So there are places out
there that are hiring and we want to make sure we retain that
workforce because this is an industry that is an important
economic driver for the country in many ways. It's leveraged in
terms of the economic activity that it engenders but it also is
an important part of our global competitiveness.
Senator Cantwell. Thank you. If I could, Mr. Chairman, just
quickly?
Dr. Godwin, would you give us your response about the
temperature issue? I went to China I think maybe 10 years ago
after H1N1 and was tested before I could be let into the
country. Where do you think temperature checks play into the
equation of aviation, even if it's on the international
arrivals side?
Dr. Godwin. I think that, you know, temperature checks,
again coming back to this concept of a net, we want to have a
bunch of different reinforcements. It's not like one thing is
going to be key to protecting people and the temperature checks
are a way to identify those people who are really active cases
of either COVID-19 or some other infectious disease.
So it's a great way to identify probably some really high-
risk people. What we've seen with this disease, though, is that
not everyone runs a temperature and there are people who are
asymptomatic who are still transmitting. So it's one piece of
the puzzle but perhaps not--you know, it should only be one
part of what we're doing, if it's not a quick fix.
I would also like to say really basic like hand washing, so
we want to make sure that we're providing people with
opportunities to keep themselves safe, as well.
Senator Cantwell. Thank you, and thank you, Mr. Chairman,
and to this last point about what is it going to take to get
the public going again, somebody mentioned that, one of our
witnesses, I would say it's listening to Dr. Godwin and the
health care officials. That's what's going to convince the
public. When they say if these standards are here and this is
what will make us safe, that's where we need to start.
Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Cantwell.
Senator Blumenthal.
Senator Blumenthal. Thanks, Mr. Chairman. I apologize that
I have been out of the room at an Armed Services Committee
hearing, but I want to thank all of the witnesses who are here
today for this very valuable session and apologize if I'm
covering ground that may have been asked by other members of
the Committee.
Senator Markey and I sent a letter to the United States
Department of Transportation and the Department of Health and
Human Services urging those agencies to immediately issue a
rule requiring face masks for all individuals, whether in
airports or on airplanes, a mandate that would in effect adopt
the CDC guidelines.
I'd like to ask--maybe this is a question for you, Mr.
Hauptli and Mr. Calio--what your view on that kind of mandate
would be? I know that some airlines are doing it voluntarily
but it certainly is not a uniform mandate in all airports or on
all airlines.
Mr. Hauptli. Senator, thanks for the question, and it
appears that there is this consensus growing around face masks
at airports, airlines. TSA is using them for their screeners,
and I read just today that TSA is contemplating requiring
passengers, when they present themselves at screening, to be
wearing a face mask.
It would be my belief that airport workers and people
passing through airports would be wearing face masks for the
foreseeable future.
Senator Blumenthal. Well, the last category is the most
numerous, right, people passing through? You can control TSA.
You can control airport employees, but without some mandate,
it's going to be voluntary. So would you be in favor--I
recognize there's a growing consensus. Shouldn't there be some
Federal mandate?
Mr. Hauptli. What we've said, Senator, is there needs to be
the very groups that you identified--CDC and others, HHS--
working together to come up with Federal guidelines to make
sure we have a consistent approach throughout the travel
experience, no matter which airline or which airport you
travel.
Senator Blumenthal. Mr. Calio?
Mr. Calio. Thank you, Senator. It's something that needs to
be seriously considered. You know, we are requiring it now. We
have, from our gate agents to our customer-facing employees,
you have to wear a face mask. We're requiring it of our
customers. There are a lot of questions that arise from that,
and when you have a situation where someone gets to the
airport, goes through security without a mask and then gets to
the gate and has to put a mask on, it begs the question.
Senator Blumenthal. Yes. I would think that your position
on requiring them would be greatly strengthened if the flight
attendants or whoever's at the gate could say it's the law.
It's not just our policy, it's the law, correct?
Mr. Calio. Yes, sir.
Senator Blumenthal. The letter that I put into the record
earlier from the Airline Pilots Association International
referred to the lack of uniform and proper cleaning and
disinfected practices on flight decks and aircraft.
Mr. Calio, I know you probably haven't had a chance to look
at the letter, but I assume you're familiar with the substance
of it. Could you respond to it?
Mr. Calio. Yes, sir. We received a letter ourselves
previously some while back. We asked the Airline Pilots
Association for examples so we could follow up because whenever
we get complaints like that, they're usually handled locally
but we always look for trends, if there's a problem. We have
been unable to find a trend. We're doing everything we can in
our cockpits to keep it clean in terms of the pilots and our
flight attendants. We've enhanced the cleaning procedures.
So I guess we don't agree with the claims, and we've asked
a second time probably now three or four weeks ago, for
examples that we could trace down. We're also doing contact
tracing now with our crews and so I guess bottom line we just
don't agree with the claims.
Senator Blumenthal. Well, I would like whatever follow up
there may be insofar as you may make further findings be made
available.
I'm going to have some more questions for the record, if
that's OK, Mr. Chairman?
I just want to make one last comment. Mr. Calio, when I
referred earlier to possibly additional funds that are
necessary for the airline industry, I was reacting to some
extent to Mr. Hauptli's point about more resources being
necessary to restore this industry.
It may not be direct bailout money of the kind that the
CARES Act or COVID 3 provided, but I assume you would not
disagree that additional Federal commitments may be necessary.
Mr. Hauptli, you seemed to indicate that they would be
necessary.
Mr. Hauptli. Senator, absolutely. The money that was
provided to the airport community is greatly appreciated and is
an important first step, but is nowhere near what airports
need, business aviation, general aviation, the concessionaires
need going forward. There are hundreds of millions and billions
of dollars in gaps.
Senator Blumenthal. And I'm not raising that point to say I
question your judgment but Mr. Calio seemed pretty unequivocal
about not needing any more money for the airlines and I would
just make the point that it is an industry. Airlines are no
good without airports and without the rest of the industry
that's necessary to make them fly successfully and so I think
there is an overall consumer trust issue here that needs to be
addressed.
Mr. Calio. Senator, may I?
Senator Blumenthal. Sure.
Mr. Calio. Yes. Perhaps I made my point imprecisely.
Basically, we think it's early. We're doing everything we can
self-help-wise to make it work.
I said earlier at some point this is uncharted territory.
Everybody's trying to work our way through it, you, us,
everybody. So it would never be never, but I know with some of
my members, their hope is that they don't need further
government assistance. That's the point I was trying to make.
Senator Blumenthal. And I just want to indicate that I
voted for this package. I have urged stronger oversight
measures and other potential improvements going forward, but I
think we're all hoping for a successful airline industry, and I
just want to again thank you for being here and thank you, Mr.
Chairman.
The Chairman. Thank you, Senator Blumenthal. I count 14
Senators that were able to participate today either, in-person
or remotely. I think we've had a good hearing and I'm getting a
little feedback here.
The hearing record will remain open for two weeks. During
this time, Senators are asked to submit any questions for the
record. Upon receipt, the witnesses are requested to submit
their written answers to the Committee as soon as possible.
I thank the witnesses for appearing today and I thank each
member, and this hearing is now adjourned.
[Whereupon, at 4:30 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Timothy R. Obitts, President and Chief Executive
Officer, National Air Transportation Association
Chairman Wicker, Ranking Member Cantwell, Chairman Cruz, and
Ranking Member Sinema:
The National Air Transportation Association has been the voice of
aviation businesses for 80 years. In 1940, general aviation in the U.S.
was at risk. With the looming threat of war, the U.S. Army sought to
ban all flights by privately owned aircraft in the national airspace.
That year, 83 charter members representing all types of general
aviation businesses unified as a singular voice to successfully tell
Congress and the Administration to keep the airspace open to this
important industry.
Today, NATA represents the interests of nearly 3,700 aviation
businesses across a broad cross section of the industry, including
FBOs, Part 135 air carriers and fractional ownership companies, flight
training, maintenance, airport sponsors at general aviation airports,
air medical operators, and others. The Association serves to elevate
the safety and professionalism of its members by convening industry
thought leaders on its policy committees, examining contemporary
issues, and pursuing solutions that prioritize safety and economic
viability. To that end, the Association's ongoing major policy
initiatives include a campaign to educate and end the practice of
illegal air charter, efforts to reform outdated hangar fire protection
standards, elevating the professionalism of the air charter broker
industry, and promoting a consistent regulatory framework.
Fixed Base Operators
Fixed base operators (FBOs) are the primary service and fuel
providers to general aviation aircraft operators. The FBO industry in
the U.S. today are located at 3,233 airports around the country. FBO's
may also provide maintenance; aircraft rentals, charters, aircraft
management and/or aircraft sales; or flight instruction.
Additionally, at many Part 139 commercial airports FBOs also
perform line maintenance, cabin cleaning, and baggage handling for Part
121 commercial, passenger, and cargo airline customers.
Airports
One of NATA's fastest-growing membership categories is general
aviation airports. Over 330 airport sponsors are NATA members. General
aviation airports, 4500 in total, are vital economic engines, serving
as arrival and departure points for economic developers, components for
local manufacturing, agriculture missions, fire-fighting hubs, and
access to critical medical care. By contrast, scheduled air carriers
fly only to those places where the economics of operation justify
service, approximately 500 airports.
Maintenance/Repair Stations
The term ``repair station'' refers to a maintenance facility that
has a certificate issued by the Federal Aviation Administration (FAA)
under 14 CFR Part 145 and is engaged in the maintenance, preventive
maintenance, inspection, and alteration of aircraft and aircraft
products. Another more general term used throughout the industry is
MRO, referring to repair stations as maintenance, repair, and overhaul
facilities.
Flight Training
Across the country, a number of accredited universities and
colleges integrate a flight training curriculum under 14 CFR 141 into
the academic requirements for a degree in aviation science, educating
the next generation of aircraft captains. In addition, many FBOs and
independent flight instructors provide flight training under 14 CFR
Part 61.
Part 135 On-Demand Air Charter
One of the most important contributions of general aviation is
providing on-demand (or as needed) transportation for freight and
passengers--especially to airports that have no scheduled commercial
air carrier service. Most operators using general aviation aircraft in
a for-hire passenger and/or cargo service are certificated to operate
under 14 CFR Part 135. Aircraft used in on-demand air charter
operations are limited to no more than 30 passenger seats and a 7,500-
pound payload.
Part 135 air charter businesses conduct numerous types of
operations, including medical flights.
Fractional Ownership Companies
For those who do not need the use of an airplane full time,
fractional ownership plans offer all of the benefits of private
aviation, including on-demand transportation, consistently high service
levels, and an excellent safety record.
As the term fractional implies, participants are brought together
to buy into a specific airplane, with each holding a fractional share
entitling them to usage of an airplane on a predetermined hourly basis,
normally over a 12-month period. The day-to-day operational management
of an aircraft involved in a fractional plan is carried out by the
plan's operator who is responsible for the acquisition and management
of the aircraft on behalf of the shareholders. This operator also
provides flight crews and takes charge of maintenance and scheduling.
Aeromedical Services
Approximately 250 organizations in the U.S. are currently engaged
in the transport of seriously ill or injured people to hospitals for
emergency care. Air medical transport saves lives by bringing more
medical capabilities to the patient than are normally provided by
ground emergency medical services, along with faster transit times to
the appropriate specialty care location.
Aircraft Brokers, Dealers, and Distributors
General aviation aircraft are marketed for sale primarily through
dealers and brokers. The sale of new aircraft is handled by independent
distributors.
Since its foundation, NATA has not only focused on advocacy, but
also on elevating the safety and professionalism of the industry.
NATA's Safety 1st program is the industry standard for training general
aviation support personnel. Since 2008, Safety 1st has trained over
40,000 individuals. With Safety 1st, organizations and training
administrators are empowered with flexible tools allowing them to
customize learning pathways to meet the specific needs of their
operations and the specific learning needs of their team members.
However, at its core, the SFTC still employees its unique approach to
online learning by blending online content and assessment with locally
provided on-the-job (OJT) training and practical skills assessment.
Topics include misfuelling avoidance, aircraft movement and ramp
safety, regulated hazmat handling, and flight coordinator training.
NATA also is represented on numerous working groups with U.S.
Customs and Border Patrol and the Transportation Security
Administration on issues pertaining to general aviation security.
Over the years, NATA has worked with policymakers at the Federal
Aviation Administration (FAA) and in Congress, including the Senate
Committee on Commerce, Science, and Transportation to effect real
policy changes that positively impact safety and ensure the economic
viability of our industry, including key provisions in the FAA
Reauthorization Act of 2018 that promote a more efficient regulatory
framework, beginning to identify policy options to end the practice of
illegal air charter, and important safety improvements.
NATA's statement will focus on three subjects. First, the impact of
the COVID-19 pandemic on our industry. Second, it will provide
perspective on the implementation and effects of the CARES Act, and
will close with policy recommendations we believe will lay the
foundation for the next era of a prosperous industry.
A viable general aviation industry is imperative to the existence
of commercial airlines in this country. As the airlines return to
service they will need to rely, as they always have, both directly and
indirectly on a network of general aviation businesses to support their
operations. But today, those businesses are struggling and their future
is unclear. A shrinking general aviation industry will fundamentally
alter the commercial aviation system that Congress worked to save in
the CARES Act.
The Impact of COVID-19
Commercial aviation in the U.S. can only function because it is a
part of an interconnected industry that relies heavily on a general
aviation workforce for supply chain, service, support, and workforce
development. Congress acknowledged the national significance of the
commercial airlines by providing them assistance in the CARES Act. As a
condition of the receipt of their grants and loans, however, the U.S.
Department of Transportation has required air carriers operating under
14 CFR 121 to maintain certain minimum levels of service along the
routes within their networks. But meeting such obligations will be
difficult for air carriers in the absence of general aviation
businesses that support their operations.
In the week prior to the first case of COVID-19 in the United
States, industry news reported earnings for air charter were up, the
aircraft sales markets were solid, and some FBO's were reporting a
record year as they closed out their financials for 2019.
In the weeks that followed, companies began quarantining flight
crews who returned from international trips, aircraft manufacturers
began issuing guidance on aircraft sanitization, and industry observers
calling the pandemic the ``biggest gut punch to the industry'' since
the September 11, 2001 terrorist attacks.\1\
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\1\ March 16, 2020. Bruno, Michael. ``How COVID-19 Could Change the
Aerospace and Defense Supply Chain.'' The Weekly Business of Aviation.
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On March 16, 2020, NATA led the general aviation industry in
sending a letter to Secretary of Transportation Elaine Chao, asking
that general aviation be allowed to continue its record of operating
safely during times of crisis.
While NATA member companies responded quickly, developing and
implementing standard operating procedures for aircraft cleaning and
sanitizing, passenger facilitation, and daily operations, many
companies that traditionally used Part 135 or fractional ownership
carriers to transport staff implemented travel bans that led to
declines in levels of activity never before seen in general aviation.
Acknowledging the vital role they play, the CISA guidance issued
March 28, 2020 in response to the COVID pandemic designated most
general aviation workers as ``essential.'' The majority of NATA member
companies are small businesses. In times of crisis, they are best
equipped to provide lifesaving support and time sensitive supplies.
These businesses support the movement of flights carrying medical and
testing equipment, key personnel, and humanitarian relief supplies.
For example, Grandview Aviation, and NATA member and small business
based in Baltimore, Maryland has been in operation since 2004.
Grandview is a Part 135 air carrier operating seven aircraft with 49
employees. Prior to the pandemic, Grandview usually flew 400 hours per
month, which has declined sharply to around 50 hours per month due to a
decline in discretionary travel. However, Grandview also transports
organ transplants, which saw an increase as the COVID-19 crisis
worsened. They must maintain three crew shifts on daily to ensure it
can be ready to fly at a moment's notice. Normally, Grandview supports
the higher overhead associated with organ flights by flying private
passenger charters. However, passenger operations have completely
stopped since shelter in place orders were enacted. While Grandview
received support through the PPP, they are unsure whether they will
receive support under Title IV of the CARES Act, and believe they will
have to reduce staffing to a level that will make it impossible to
complete these vital organ flights and ground most or all of the fleet
by June if additional assistance does not materialize.
An essential lifeline to rural America, general aviation companies
operate at nearly 4,500 airports and thousands of cities that are not
served at all by the airlines, but are nonetheless impacted by major
changes in industry activity. The aviation activity in these cities and
towns supports good paying jobs, economic activity, and connectedness.
General aviation airports and general aviation businesses support EMS,
agriculture flights, police work, Border Patrol, executive transport,
cargo, flight schools, vocational schools, research, drones, powerline
patrol, pipeline patrol, conservation efforts, fire control/fighting,
construction, seismic work, sightseeing, organ transport, non-emergency
medical transport, charter, and providing medical staff from major
cities to the community to provide routine medical service.
Companies like Grandview are optimistic that they will see a
rebound in business when the pandemic subsides; a number of their
regular clients are elderly and immunosuppressed who choose to charter
specifically out of health precautions.
Implementation and Effects of the CARES Act
Title IV of the CARES Act provided relief to certain aviation
businesses, some of whom are NATA members. However, many of those
businesses, including those eligible as ``contractors'' to the
commercial airlines have not yet received funding.
Air carriers operating under Part 135 were eligible for assistance
under Title IV of the CARES Act. NATA thanks Congress for its attention
to the concerns of this important segment of the industry, which has
played a key role in delivering personal protective equipment (PPE) and
medical personnel in pandemic response efforts. While Part 135 air
carriers fulfill critical and time sensitive missions that cannot be
completed by commercial airlines, many of the businesses that support
the existence of the commercial airline industry that Congress
prioritized in the CARES Act and support rural America did not receive
assistance under Title IV.
NATA thanks this Committee and its staff for providing contact with
key officials at the Department of Treasury to discuss implementation
of the Title IV relief programs. We have found the Department to be
responsive and receptive to our inquiries, even incorporating a number
of our concerns in subsequent programmatic guidance. NATA was able to
share with the Department the aspects of Part 135 businesses that would
make, for example, mandatory service levels or the proffering of
financial instruments unworkable for most of the industry. We
appreciate that the Department incorporated those recommendations when
implementing the programs.
NATA member companies who have received Title IV assistance are
pleased that the funds allow them additional flexibility during what
could be a protracted recovery. And while we can appreciate that the
Department of Treasury has been inundated with both applications and
efforts to provide assistance quickly, the Association is aware of many
members--in particular those who are eligible as Part 135 passenger air
carriers, air cargo operators, and contractors to the airlines--who
applied before the priority deadline of April 3rd and, as of today,
have still have not received funding. Additionally, confusion about the
particulars of the program and what would be required of participants
that were not Part 121 passenger air carriers led to many eligible
businesses who desperately need the relief not filing by the April 3rd
priority deadline or not filing altogether.
The CARES Act also provided $10 billion of assistance to airports.
However, out of the $10 billion only $100 million went to the 4,500
general aviation airports, with the remainder going to just over 500
Part 139 certificated airports that serve Part 121 commercial passenger
air carriers. This led to thousands of general aviation airport
sponsors being eligible to receive $30,000 or less under the CARES Act,
with many receiving only $1,000, while general aviation airports report
declines in activity between 75 percent to over 95 percent. Per
longstanding FAA policy under FAA Grant Assurance 24, airports that
receive funds from the FAA are required to be as financially self-
sustaining as possible relying on user fees and rental income from
tenant businesses. Those businesses are part of a broader operational
ecosystem, and when they are unable to meet payroll obligations and the
terms of their tenancy agreement with their airport sponsors, it
imperils the ability of the airport to operate safely and efficiently.
While the Paycheck Protection Program (PPP) created by the CARES
Act may have supported some general aviation businesses for a period of
8 weeks, the future of these essential businesses is unclear as air
traffic--and revenues--continue to decline. The PPP funds authorized in
the CARES Act were allocated in two weeks, and as of today, the second
round of funding is largely allocated, despite myriad of technical
problems and difficulties with the application process.
Likewise, the Emergency EIDL Grant program through SBA continues to
experience problems. But perhaps most disconcerting is the fact that
nearly half of the FBOs across the Nation are owned and operated by the
airport sponsor, most often the local unit of government; thus, these
critical system stakeholders were not eligible for PPP assistance at
all. Faced with a decision to allocate scant Federal assistance to the
airport or to, perhaps, a local health system, local government
officials have little choice. As the pandemic subsides, loss of
critical aviation infrastructure will jeopardize the revitalization of
our Nation's commercial aviation system, and for a network of such
strategic importance to our nation, cannot rely on a program with a
history of mixed success.
Recommendations to Preserve an Essential Industry
The future of our Nation's commercial aviation industry will rely
on robust general aviation activity to support it.
Because of the unique nature of our industry, experts are
predicting a lengthy recovery period, well beyond the term of
assistance provided by the PPP. Beside payroll, the lease obligations
of NATA member companies to the sponsors of the airports on which their
businesses reside represent one of the most significant operational
expenses. And in many cases, the lease arrangements between an airport
sponsor and tenant business include a Minimum Annual Guarantee (MAG).
Thus, lease obligations also represent one of the largest
vulnerabilities during times of reduced aviation activity. But because
the airport sponsors rely on this revenue to finance the day-to-day
operation of the airport itself, when tenants are unable to meet
payroll obligations and the terms of their tenancy agreement with their
airport sponsors, it imperils the ability of the airport to operate
safely and efficiently.
Congress may wish to consider providing assistance to airport
sponsors and their tenant businesses for relief of lease obligations.
One option would be for the Departments of Treasury and Transportation
to analyze the amount of airport sponsors' revenues that account from
the lease obligations of certain tenant businesses, and then to provide
a level of relief equal to that amount with the requirement that
airport sponsors abate lease obligations over the term of the
assistance provided.
Despite delays in delivering funds to successful applicants, the
Title IV programs of the CARES Act allow more flexibility to aviation
businesses. In the interest of efficiency, Congress may wish to
consider reauthorizing and recapitalizing those programs. If Congress
chooses to do so the Title IV, subpart B, programs of the CARES Act, we
ask that you consider eligibilities for a broader ecosystem of
businesses that provide support for the continued viability of all air
carriers, not just Part 121 passenger air carriers.
The fact that it was necessary for the Department of Treasury to
prorate assistance under Title IV, subpart B, of the CARES Act to air
carriers, including Part 135 operators because of the large number of
applicants speaks to the level of need and thus an impetus for Congress
to consider additional support in subsequent legislation.
NATA looks forward to working with this Committee to find policy
solutions that will support general aviation. We believe that support
for general aviation is directly linked to the future of passenger air
transportation in the United States. We thank the Committee for its
attention to these concerns and recommendations.
______
Prepared Statement of Ed Bolen, President and CEO,
National Business Aviation Association
Chairman Wicker, Ranking Member Cantwell, and members of the Senate
Committee on Commerce, Science & Transportation, thank you for holding
this hearing to discuss the unprecedented challenges our aviation
industry is facing due to the COVID-19 pandemic. The National Business
Aviation Association (NBAA) represents more than 11,000 member
companies that utilize general aviation aircraft to make their
businesses more productive and successful. We welcome the opportunity
to provide this statement to explain the unique challenges our segment
of the aviation industry is facing each day, and how we are
contributing to the humanitarian response.
The United States business and general aviation industry, which
includes all operations other than scheduled airline flights and the
military, supports 1.2 million jobs and $247 billion in economic
impact. Across the country, thousands of small and mid-size businesses
that generate $77 billion in labor income are facing unprecedented
challenges due to the COVID-19 pandemic and require additional relief.
Since early March, general aviation operations have declined more
than 70-percent, resulting in severe economic consequences for a wide
variety of businesses, from aircraft operators to airports and aviation
manufacturers. For example, in Mississippi, airports are laying off
workers, and flight schools at community colleges have closed. In
Washington state, many general aviation airports are reporting steep
declines in traffic. At Pierce County Airport in Puyallup, there has
been a 95-percent decline in traffic, while at Boeing Field in King
County, general aviation traffic and fuel sales have declined by more
than 70-percent.
Your efforts to provide near and mid-term relief for air carriers
and small businesses under the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) injected much-needed funds into general
aviation businesses. Still, we believe additional assistance will be
necessary. The uncertainty as to the longer-term prospects for aviation
requires us to think creatively beyond the CARES Act.
In addition to loans and grants for air carriers, the CARES Act
suspended certain Federal excise taxes for commercial air
transportation until January 1, 2021; however, it did not suspend non-
commercial aviation fuel taxes. While this excise tax suspension
provides longer-term relief to commercial air carriers, most general
aviation operations are non-commercial, and thus not eligible for this
tax relief that will help incentivize aviation activity as we recover
from the COVID-19 pandemic. As Congress considers a fourth relief
package, we respectfully request that aviation fuel taxes paid by non-
commercial operators also be suspended.
This temporary relief from fuel taxes will incentivize general
aviation businesses to preserve jobs and resume flying once we begin to
emerge from this crisis. For example, at crucial general aviation
airports in Florida, including Venice Beach Municipal and North Perry,
flight schools are either closed or seeing their business reduced
drastically. Across the country, these small businesses employ nearly
110,000 flight instructors and are a crucial driver of economic
activity at community airports. The suspension of non-commercial fuel
taxes will help reduce operating costs for flight schools and other
small businesses and provide a much-needed incentive to get back in the
air.
In addition to these examples, many other general aviation
airports, which are the backbone of our Nation's aviation
infrastructure, are facing unprecedented challenges. These facilities,
both large and small, provide communities a lifeline for critical
supplies and air medical flights. As a result of aircraft operations
dropping so drastically, these airports have lost their significant
sources of revenue, derived from fuel sales and landing fees. While
pavement will inevitably survive the crisis, airport operators are
struggling to maintain their skilled staff, essential to the ability to
operate the facilities safely. Fixed Base Operators and other airport-
based businesses are struggling to pay rent and retain their employees.
General aviation depends on these airports, which will be critical
in the recovery phase as well. Thank you for fully funding the Airport
Improvement Program (AIP). We also applaud your efforts to provide
airports with much-needed funding through the CARES Act by increasing
the Federal share to 100-percent and ask for your continued support.
We also recognize the COVID-19 pandemic has led to challenges for
the Airport & Airway Trust Fund (AATF). However, we believe the
suspension of non-commercial aviation fuel taxes would provide our
industry with similar relief to what commercial operators have
received. Also, temporary relief from the fuel taxes will serve as a
catalyst to help small general aviation businesses recover once the
immediate crisis begins to recede. In the long-run, this will benefit
the aviation system, the AATF, and our entire economy.
Beyond relief from air transportation excise taxes, the CARES Act
provided grants and loans for air carriers and other general aviation
businesses. These programs, administered by the Department of the
Treasury, have provided much-needed relief to general aviation air
carriers. To date, payroll support funds were provided to more than 90
air carriers, many of which are small and mid-sized businesses.
While this represents significant progress, air cargo operators and
eligible contractors have not yet received support. Also, based on
conversations with NBAA members, some air carriers are still awaiting a
final decision on their payroll support application and disbursement of
funds.
This uncertainty as to potential support presents significant
challenges to general aviation businesses that are already struggling
to survive. Air carriers and contractors are facing drastically reduced
revenues, which makes maintaining prior employment levels, potentially
unsustainable. If applicants had more detail as to when payroll support
decisions will be made, it would significantly inform their planning
and business decisions during these uncertain times. As Congress
continues its oversight of CARES Act programs, we respectfully request
that you work with the Treasury Department to provide additional
details on the timeline for a decision on payroll support payments to
applicants.
Along with the payroll support program, the Treasury Department is
also overseeing a loan program for air carriers and other eligible
aviation businesses. One challenge our industry is facing in applying
for these loans is the requirement to track available seat miles,
revenue per seat mile, and cost per available seat miles. Since most
general aviation air carriers provide on-demand flights, they are not
able to track these metrics as the large airlines do. As the Treasury
Department processes loan applications, we ask that they provide
flexibility for general aviation operators to suggest a metric that
more accurately represents the service they provide to communities.
We also applaud the recent action by Congress to provide an
additional $310 billion in funding to the Paycheck Protection Program
(PPP). Many NBAA member companies have been able to secure relief under
the PPP, and we are hopeful that this additional relief will reach more
general aviation small businesses. The $60 billion provided to small
community banks is also critical, as many of our members have developed
close relationships with their local lenders.
Even during these challenging times, we have continued to see
general aviation operators using their unique ability to connect more
than 5,000 airports across the country for humanitarian purposes.
Recently, our industry facilitated the delivery of one million
protective face masks and more than half a million COVID-19 test kits
from China. Other operators are using aircraft to transport medical
supplies where they are needed most and assist with the logistics of
moving medical equipment and personnel to communities experiencing a
surge in cases.
Through NBAA's Humanitarian Emergency Response Operator (HERO)
database, we recently formed a partnership with the American Hospital
Association to connect supplies and services with hospitals across the
country, including those in small towns and rural communities. This
response builds on past relief efforts coordinated by the HERO
database, including in the wake of major hurricanes, earthquakes, and
other natural disasters.
Business and general aviation are resilient, and we will recover
from this crisis; however, the road ahead will be very challenging. The
CARES Act helped respond to some of the immediate challenges our
community is facing, but additional long-term relief will be necessary
over the coming months. Thank you for holding this hearing, and we look
forward to continuing to engage with the Committee on efforts that will
help our general aviation industry recover.
______
Prepared Statement of Faye Malarkey Black, President and CEO, Regional
Airline Association
The Regional Airline Association (RAA) thanks the U.S. Senate
Committee on Commerce, Science, & Transportation for holding the
hearing titled, ``The State of the Aviation Industry: Examining the
Impact of the COVID-19 Pandemic.'' RAA submits this statement for the
record to inform the Committee on the current status of the regional
airline industry and share with it the actions the industry is taking
to safeguard our crewmembers, passengers, and support partners in
response to the COVID-19 pandemic.
On behalf of our entire membership, I want to thank this Committee,
along with the House Transportation & Infrastructure Committee and
House and Senate party leaders for their leadership in securing almost
$60 billion dollars in relief for passenger and air cargo air carriers
in the Coronavirus Aid, Relief, And Economic Security (CARES) Act.
These funds--specifically, the funding for air carrier worker support--
acted as a lifeline for the approximately 70,000 women and men working
for the regional airline industry. You and your staff worked tirelessly
to develop and enact meaningful legislation with speed and care and
kept the needs of small community air service in mind by ensuring
regional airlines were able to directly participate. Your leadership in
this area has been a crucial, first step in helping regional airlines
retain a ``ready status'' workforce that will be able to immediately
stand air service back up when the pandemic abates. While significant
needs remain, your actions increased the chance of survival for many
smaller airlines who may not have shouldered the unprecedented economic
blow without you. We are grateful for your support and determined to do
our part to uphold air service to communities who rely on us.
CARES ACT
We know that Congress is contemplating deep needs that extend far
beyond the aviation sector, as harm has touched nearly every American
and businesses of all sizes are facing significant challenges.
Understanding this, we humbly ask that this Committee keep in mind the
continuing vulnerability of regional airlines and the small communities
they serve in the coming months as this pandemic continues.
Specifically, we hope that Congress will differentiate between types of
air carriers, because we have vastly different compositions and
differing resources with which to deal with the economic impact
associated with the Coronavirus; however, we are all critical pieces of
the Nation's air transportation system.
As you know, the CARES Act payroll assistance program was so direly
needed, that air carrier claims far exceeded the available funds and
air carriers expect to receive approximately 76 percent of 2019 payroll
costs to help cover their full payroll costs today. Like most air
carriers, regional airlines planned to accommodate the exponential
growth seen across all aviation sectors and were typically staffed at
20 percent higher than those 2019 levels. When a combination of
government-mandated travel restrictions and the abrupt spread of COVID-
19 contagion decimated the aviation industry, regional airlines felt
the downturn, and subsequent financial effects, almost immediately.
Impacts on passenger loads have been nothing short of stunning and
major airlines have dramatically reduced the schedules of their
regional airline partners in response. Today, most of the regional
airline fleet is parked, and capacity cuts are likely to persist and
may worsen for months to come.
Regional airlines' partner-centered business model is one reason
the COVID-19 crisis has hit our sector particularly hard. Nearly all
regional/mainline partnerships operate under Capacity Purchase
Agreements (CPA's) where the larger airline sells the ticket and the
regional airline does the flying at the direction of the partner. Under
these arrangements, regional airlines typically dedicate 100 percent of
their capacity to flying on behalf of one or more mainline partners and
are compensated by the mainline--and not the passenger directly--for
this work. In this way, regional airlines help major airlines reach
smaller communities and passengers that major airlines could not
otherwise serve. Typically, the CPAs governing these arrangements are
fixed-term and, given the (heretofore) underlying stability and low-
risk nature of the relationships, reflect low profit margins.
Additionally, these agreements do not afford regional airlines control
of ticket prices or allow real-time rate adjustments. In fact,
increasing revenues would require regional airlines to seek contract
changes, an unlikely outcome given the margins underlying these
contracts are fragile during the best of times.
Today, these mainline partners are themselves deeply impacted by
COVID-19 challenges and are making unprecedented capacity cuts. The
aforementioned lack of direct, real-time revenue control limits
regional airlines' ability to bolster future revenue streams to raise
enough free cash flow to extinguish any debt or equity taken on to
sustain a workforce that is not flying as a result. This is one reason
that regional airlines are depleting liquidity at alarming rates during
this crisis, as payroll expenses in excess of CARES Act grant receipts
continue to deplete resources. While regional airlines are making every
effort to reduce non-payroll expenses, these efforts will not reduce in
tandem with revenue losses. Such ownership costs include IT systems,
aircraft maintenance, crew and employee training, simulator upkeep,
rent and leasing costs and more. Additionally, as with nearly all
companies, many regional airlines are asking supply company partners to
help shoulder the burden; however, regional airlines are vulnerable
here as well, as suppliers to major airlines facing their own
unprecedented liquidity crises.
Another important distinction sets regional airline recovery apart
from that of larger airlines. Where larger carriers can turn to the
Treasury's Air Carrier Loan program for additional assistance; many
regional airlines cannot. Despite the lower lending rates and stated
purpose of serving as a lender of last resort, regional airlines are
again constrained by the CPA structure that limits regional airlines'
ability to extinguish debt. Additionally, the requirements for
securitized loans and government equity stakes in concert with these
loans present additional hurdles; regional airlines generally do not
have significant unencumbered assets; as they lease or sublease their
aircraft and few regional airlines have slots, gates, frequent flier
programs, routes or other assets that could be leveraged for financing.
Regional airlines nonetheless support this program because it helps
their valued mainline partners. However, the inability to participate
directly in this assistance further limits resources available to help
weather the economic repercussions of the pandemic.
Beyond the circumstances already described, a few regional airlines
face additional challenges because they were erroneously categorized by
the U.S. Treasury Department as major airlines because of the size of
their payroll. Although these regional airlines collectively employ
nearly 10,000 FTEs and provide air service to dozens of communities not
served by mainline air carriers, they do not issue tickets or derive
revenue directly from passengers. They are nonetheless required to
provide an equity stake to the Federal government and to pay back 30
percent of their Payroll Assistance grants. In addition to dramatically
slowing the delivery of this assistance in support of these carriers'
workforce, it subjected some, but not all, regional airlines to
additional, disadvantaging conditions for aid. Treasury officials have
been responsive and communicative with RAA and our members and for that
we are grateful. However, we continue to firmly believe that warrant
and repayment terms intended for larger airlines should not apply to
any regional airline.
Although regional airlines are doing all they can to survive
despite these challenges, without additional resources, many remain
extremely vulnerable. Already, three regional airlines have ceased
operating due to the impacts of COVID-19. Trans States Airlines in
Missouri and Compass Airlines in Minnesota ended their operations at
the beginning of April. Between them, they supported 2,710 direct
employees. Subsequently, Ravn Air Group, then Alaska's largest regional
carrier, first filed a chapter 11 liquidation plan, then ceased all
operations. Ravn employed 1,300 direct employees and served 115
communities in Alaska--most of these remote and significantly isolated.
Ravn Air Group noted in its liquidation communication that it could not
secure enough assistance under implementation of CARES Act worker
support or loan programs to improve its chances for recovery.
SMALL COMMUNITY AIR SERVICE
As you know, the U.S. aviation system previously drove $1.6
trillion in annual economic activity and supported 10.6 million jobs,
with $446.8 billion in earnings. Regional airlines contributed to this
economic footprint by operating 41 percent of U.S. commercial airline
departures and serving approximately 153 million passengers last year.
Importantly, 409 airports (about two-thirds of our Nation's commercial
airports receiving scheduled air service) are too small to support air
service from larger airlines with larger aircraft, yet still need
reliable air service to receive perishable goods, connect with loved
ones and business contacts, travel to destinations around the globe and
participate fully in the economy. Regional airlines provide the only
source of scheduled, commercial air service for these airports,
connecting them with the Nation's air transportation system and the
economic and quality of life options that air service brings.
As you know, air service does not happen to communities in the
aggregate. While larger cities, with historically high yield, higher
density traffic may be confident that air service will return when the
crisis passes, those U.S. airports served exclusively or primarily by
regional airlines are vastly more vulnerable. With regional airlines
facing an existential threat, communities served exclusively by
regional airlines face an enormous downstream threat. This risk to
small and medium sized community air service could have an outsized
impact on state and local economies, where businesses need reliable air
service to remain viable. The economic consequences of leaving these
communities behind are not insignificant. In 2018, regional airline
service to the Nation's smallest airports alone (non-hub and small hub)
drove a conservatively estimated $134 billion in annual economic
activity and supported more than 1 million jobs, with $36.4 billion in
earnings at the state and local level.
We do not need to look far back in aviation history to see that
small communities are the first to lose air service when air service is
retracted for any reason. Considering this, RAA greatly appreciates the
role this Committee and other Congressional leaders played in support
of small communities, by requiring continuation of certain air service
for ticketing air carriers that accept government assistance.
Additionally, we are thankful for the Department of Transportation
(DOT)'s implementation of that requirement, which RAA believes to be
measured, fair and thoughtful. Moving forward, meeting small community
air service longer term relies upon the survival of regional airlines.
If regional airlines disappear, air service to small communities will
likewise collapse. Mainline airlines simply cannot serve smaller
communities on their own. Their aircraft are too large and the unit
costs and fuel inefficiencies of sending oversized aircraft with 150
seats or more into communities where forty passengers travel at a time
on three or four flights a day is untenable. Many communities lack the
passenger load to fill mainline aircraft. Elsewhere, substitution of
mainline aircraft would require dramatic reductions in frequency and
destinations that would damage the connectivity value of the service to
an economically unviable degree.
For these reasons, RAA asks that Congress consider implementing a
modest program designed to pick up where the CARES Act left off, in
order to support the health of the carriers serving the Nation's
smaller markets. For example, an unsecured, DOT-administered,
forgivable loan program could help regional airlines cover remaining
payroll and some modest, operating costs associated with small
community air service. Such a program would help, although not fully
offset, the extremely adverse cash flows that have weakened the
regional airline industry. Because the industry is small and does not
have a vast infrastructure, the cash requirements for such assistance
would be relatively modest and would be fully offset by the economic
benefit of preserving air service to smaller communities. Additionally,
we ask that Congress craft a mechanism to forgive the implementation
requirement for some regional airlines to repay a portion of the
workforce relief payroll grants, an act that would extend protection to
all regional airline workers and reduce the liquidity strain on those
carriers.
We also ask the Committee to help preserve meaningful air service
to smaller communities in the future. We fully support flexibility
today, where minimal service levels are required for each point. This
appropriately reflects the enormity of the crisis and its impact on
demand. In the future, additional support from DOT and Congress may be
necessary to ensure small and medium-sized communities see service
levels return, especially given that COVID-19 is expected to cause a
prolonged economic downturn within the air carrier industry. Major
airlines are anticipating a multi-year economic recovery period with
their operations reduced to account for the drop in passenger demand
and the potential for continuing travel restrictions. During this
period of recovery, strong support and ample funding for the Essential
Air Service Program will be vital to protect air service to
participating communities. Additionally, Congress may need to consider
creative solutions, such as an EAS-like program covering additional
small airports, which will become newly vulnerable to air service loss
or degradation due to COVID-19.
FUTURE WORKFORCE PROTECTION
Today, many industry experts predict that extensive furloughs will
follow this pandemic if it persists longer term. As this Committee
knows, only a few months ago the entire aviation industry was facing
workforce shortages across several work groups, most notably pilots.
Veteran industry observers will recall that a pilot shortage was
similarly developing in the late 1990s--averted only when the
devastating terrorist acts of 9/11 spurred industry downsizing. While
those 9/11 furloughs temporarily reversed the course of the pilot
shortage, they also served to deter future pilots from the profession.
By 2010, the shortage had returned and regional airlines, who are the
entry point for the professional pilot career, were the first and
hardest hit.
Regional airlines have accordingly spent the last decade building
and strengthening their workforce. This is another reason we are taking
every step to sustain today's workforce. Looking further into the
uncertain future, a return of the pilot shortage seems unlikely for
many years. Nonetheless, RAA continues to believe that closing the
funding gap between pilot training costs and student loan availability
is important, because it helps support the future of our industry and
because it ensures more pilots follow the structured training paths
that produce higher levels of proficiency.
RAA is pursuing language in an expected Higher Education
Reauthorization package, aimed to expand the dollars available through
the Federal student loan program (Title IV funds) for students who
attend accredited flight education and training programs. Critically,
given the uncertainty today's pilots face, we applaud Congress for
supporting a suspension of Federal student loan payments until
September 30th under the CARES Act and for the tax relief offered to
companies who help students with student loan payments. We ask Congress
to consider extending and expanding these provisions, as the need for
such support of students who aspire to take flight will not expire on
that date. Additionally, when legislation is introduced to help trainee
pilots access sufficient higher education funding, we hope Committee
members will support and help to advance it. Additionally, we encourage
the Committee to continue to work with stakeholders who have led on
technician workforce programs, to determine the best avenues for future
support.
RETURN TO SERVICE AND COMMITMENT TO HEALTH AND SAFETY
Regional airlines have been taking substantial steps to protect the
health, safety and wellness of their passengers and employees since the
World Health Organization (WHO) declared the novel 2019 coronavirus
outbreak and COVID-19 infection a public health emergency of
international concern. On January 31, 2020, the President issued
Proclamation 9984 directing the Department of Homeland Security and
other executive departments to take certain actions in response to the
coronavirus threat and to protect the interests of the United States.
Since then, RAA has been at the forefront of daily interactions and
discussions with multiple government agencies, including the Federal
Aviation Administration (FAA), the Centers for Disease Control and
Prevention (CDC), the Transportation Security Administration (TSA), and
the Cybersecurity and Infrastructure Security Agency (CISA) to ensure
all our member carriers have the latest information necessary to follow
the public health guidance.
Following safety guidelines issues by the FAA in collaboration with
the CDC, all RAA member airlines are proactively mitigating safety
risks posed by the COVID-19 outbreak, both independently and by working
closely with their mainline partners. These safety measures are either
in compliance with or exceed CDC's recommended protocols. Such examples
include, but are not limited to, crew members wearing face coverings
and other PPE as appropriate, providing PPE kits and enhanced Universal
Protection Kits (UPKs) on board aircraft; conducting aircraft cleaning
with approved cleaning agents during operations and electrostatic
cleaning or fogging during overnight maintenance. In addition,
passengers are required to wear face covering to uphold the overall
safety and protection of the travelling public and crew members.
RAA continues to facilitate member airline discussions, through our
Councils and Committees, and sharing of best practices related to
upholding the safety of employees and passengers. Further, RAA believes
the utilization of crucial safety programs and systems in place today,
such as the Commercial Aviation Safety Team (CAST), the Aviation Safety
Information Analysis and Sharing (ASIAS) and the Aviation Safety Action
Program (ASAP) allow airlines to quickly communicate emerging safety
and health risks and act to mitigate those risks using a data-driven
approach. Recognized globally, CAST is particularly well-suited for
advancing solutions given its successful government/industry working
group with the broad participation in the program by air carriers,
manufacturers and employee groups empowers the industry to meet the
urgency of emerging issues by collaboration on solutions.
As our country continues to battle this ongoing public health
crisis, regional airlines will remain vigilant, placing the health and
safety of their crew and passengers first. RAA will continue to work
with this Committee, government agencies and our member airlines and
their employee partners to help our members proactively meet and
respond to evolving concerns with appropriate safeguards. We
additionally hope the Committee will view RAA as a resource as you
consider proposals. Our team stands ready to assist and share our
ideas, expertise and insights.
Conclusion
Thank you for your leadership securing vital assistance to
passenger and cargo air carriers in response to the COVID-19 pandemic.
Your actions stabilized the financial health of our country's aviation
system. The Regional Airline Association stands ready to partner with
the Committee in its continued work to prevent and mitigate the spread
of COVID-19 in air transportation and ensure the continuation of air
service to all communities across the country. As we work together to
combat this pandemic, please know that the safety and health of our
crewmembers, passengers, and support partners are our foremost
priority, as we continue to uphold the highest level of safety. We look
forward to the day when we can safely bring air service back to
communities of all sizes.
Thank you for this opportunity to provide comments.
Sincerely,
Faye Malarkey Black,
President and CEO.
______
Prepared Statement of Airport Restaurant and Retail Association (ARRA)
and Airport Minority Advisory Council (AMAC)
Mr. Chairman and Members of the Committee:
As you know, airline travel has been devastated by the COVID-19
pandemic, and the restaurant and retail airport industry has been
particularly impacted, experiencing mounting losses in jobs and
revenues.
The Airport Restaurant & Retail Association (ARRA) represents the
companies who operate restaurant and retail stores and shops at
airports across the U.S. ARRA's mission is to work collaboratively with
the airport community and the aviation industry on matters of policy
decision-making with a collective impact on restaurant and retail
operators. Our companies represent large and small operators, including
many small minority and women-owned businesses.
The Airport Minority Advisory Council (AMAC) is a trade association
whose members include concessionaires, airports, contractors,
professional services firms and airport officials. AMAC business
members likewise include large and small firms, including minority and
women-owned firms. AMAC's mission is to advocate for diversity and
inclusion in the airport and aviation industry.
We are submitting this statement and urging Congress to pass
financial relief and assistance specifically for airport restaurateurs
and retailers given the unprecedented and long term detrimental
business impact caused by Coronavirus pandemic.
AIRPORT CONCESSIONS ARE A CRITICAL ELEMENT TO THE MULTI-BILLION AIR
TRAVEL INDUSTRY.
Beyond air carriers and airport operators, airport concessionaires
are third major partner in the ecosystem that serves air travelers. We
transform empty airport terminals into vibrant shopping and dining
destinations that generate $10B annually employ 125,000 workers in
steady jobs that often offer good pay and benefits and opportunities
for advancement. Moreover, concessionaires contribute $2.5B in non-
aeronautical revenue to airports under contracts and agreements that
deliver services travelers and airports need, and that fuel airport
operations, development, bond financing and growth.
AIRPORT CONCESSIONAIRES ARE A VITAL PART OF THE AIRPORT/AVIATION
ECOSYSTEM BUT WE ARE THE ONLY PARTNER NOT TO RECEIVE TARGETED
ASSISTANCE.
In the CARES ACT (Phase III), passenger air carriers received $50B,
air cargo carriers received $8B; airports received $10B and air carrier
associated contractors received $3B in immediate financial aid and for
future recovery. Airport concessionaires received $0.
Airport concessionaires are uniquely dependent on airline passenger
traffic. Airline passenger traffic (i.e., carrier/plane ``load
factor'') is down by more than 95 percent--and as a consequence, most
concessionaires' revenues are similarly down by 95 percent or more and
a comparable number of locations have already been forced to close.
Most industry experts do not expect passenger traffic and business
sales revenues to return to pre-pandemic levels for 18-36 months.
THE PAYCHECK PROTECTION PROGRAM DOES NOT WORK FOR
AIRPORT CONCESSIONAIRES.
Without immediate targeted help, many of these companies will
simply fold, taking jobs and potential revenues with them. We need
assistance now so when the economy begins to recover and air travel
takes off again, we can be there to serve the public while the policy
objectives of the of the Paycheck Protection Program (PPP) are
admirable, as a practical matter, it contains key timing and duration
limitations that are beyond the control of airport concessionaires. The
re-hiring of employees and re-opening of stores within 8 weeks during a
period when there are almost no air travelers, renders the program
insufficient to meet the real needs of these businesses.
Similarly while a few individual airports have indicated an initial
interest in helping their concessionaires (e.g., by temporarily abating
or deferring rents or other charges), it doesn't go far or deep enough.
Given that there are no funds in any of the CARES Acts or other relief
legislation specifically designated for the many issues confronting
concessionaires, these discussions are likely to be protracted or, in
the end, may not be successful. ARRA and AMAC have called on airport
operators to waive or abate Minimum Annual Guarantees (MAGS) and rents
for a period of 12-months. This is essential in order for these
companies to at least cover operating costs, to survive and to be
prepared to rehire employees and restart their restaurants and shops as
travelers begin to return. Unfortunately, despite receiving CARES Act
grants, of the top 50 airports, only about half have granted any type
of relief to concessionaires. Many of those are only deferring the
minimum rent, despite the fact that concessionaires have virtually no
sales.
However, even rent relief at local airports will not be enough to
sustain airport concessionaires, save their businesses or enable them
to fully participate in providing concessions services and revenues to
airports when the aviation system and economy rebound.
CONGRESS SHOULD AUTHORIZE AND APPROPRIATE $5.0 BILLION FOR A NEW GRANT
AND LOAN SPECIFICALLY DESIGNED TO SUPPORT AIRPORT
CONCESSIONAIRES AND PROVIDE A FOUNDATION FOR RECOVERY.
The proposal is not a new idea--in the Phase III stimulus
CARES Act; Congress authorized and appropriated $3 billion for
grants and loans reserved for air carrier contractors (to be
disbursed by the U.S. Treasury Department) as a means of
supporting those businesses and employees.
Seventy percent (70 percent) of the funds would be made
available in the form of FAA grants; thirty percent (30
percent) would be in the form of loans (sourced from Minority
Depository Institutions, i.e., minority-owned banks).
The amount of funding available to the concessions companies
at each individual airport would be based on that airport's
2018 enplanements (the most recent available.) Use of the funds
would be limited to provide economic assistance and relief for
concessionaires operating at the airport (i.e., to support an
individual concessionaire's operations at a given airport).
Concessionaires would be permitted to use the grants and/or
loans for re-opening expenses, employee wages, benefits and
training, inventory costs, utility costs, expenses related to
COVID-19 cleaning/sterilization requirements or protocols,
expenses related to airport security, interest and debt service
payment, or for workout arrangements.
In addition to restaurant and retail operators, other
concessions companies operating at an airport (as defined by
C.F.R. 49 Section 23.3) would be eligible to apply for grants
or loans.
For FAA grants, each concession company would prepare a
simplified FAA grant application that would be reviewed and
verified by the airport where they operate and then submitted
to the FAA. After review and determination that the application
meets the eligibility requirements, the FAA would provide the
grant assistance directly to the concession applicant for its
use for operating and capital projects only at that airport.
The funds could not be used at any other airport. FAA would
have authority to review and audit the expenditure of the funds
to ensure compliance with the eligibility and other
requirements.
The proposal is not a new idea--in the Phase III stimulus
Cares Act, Congress authorized and appropriated $3 billion for
grants and loans reserved for air carrier contractors as a
means of supporting those businesses and retaining jobs.
For these reasons, ARRA and AMAC urge Congress to SAVE OUR INDUSTRY
and include financial relief and direct assistance to airport
concessionaires as it works to mitigate the economic and public health
implications of this unprecedented pandemic.
Thank you.
______
______
Aeronautical Repair Station Association
Alexandria, VA, May 6, 2020
Hon. Roger Wicker,
Chairman,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
Hon. Maria Cantwell,
Ranking Member,
Committee on Commerce, Science, and Transportation,
U.S. Senate,
Washington, DC.
RE: Coronavirus Relief for the Aviation Maintenance Industry
Dear Chairman Wicker and Ranking Member Cantwell:
On behalf of America's aviation maintenance industry, the
Aeronautical Repair Station Association (ARSA) thanks you for your
efforts to provide relief to businesses suffering from economic
disruptions caused by the SARS-CoV-2/COVID-19 (``coronavirus'')
pandemic. We appreciate you convening today's hearing to examine the
health of the aviation industry and discuss opportunities to help the
aviation sector weather the unprecedented economic storm.
Unfortunately, despite recent legislation, conditions for aviation
businesses are dire. Hundreds of thousands of well-paying jobs at
Federal Aviation Administration (FAA) certificated repair stations and
parts manufacturing facilities throughout the country are in jeopardy
(a state-by-state overview of the maintenance industry's employment and
economic footprint is at arsa.org/news-media/economic-data).
Oliver Wyman CAVOK (OW), a leading aviation consultancy that
provides economic data for ARSA, recently reported that:
While 9/11 represented a sudden, severe shock to the North
American aviation market and the 2008 financial crisis
presented immense global economic challenges, COVID-19 is
proving to be an even greater threat to commercial aviation
because of global travel restrictions and massive reductions in
consumer demand for air travel, evidenced in cancelled and lost
bookings, and the uncertain prospects for a return to normalcy.
Commercial airlines have already been forced to make
significant cuts to their capacity through a combination of
placing aircraft in storage and operating the remaining
aircraft at lower levels of utilization. [Emphasis added]
OW has projected that because of the dramatic drop in aircraft
utilization, global maintenance, repair and overhaul (MRO) spending
will drop by more than 50 percent in 2020, from a pre-pandemic
forecasted level of $91.2 billion to $42.3 billion in the post-pandemic
world. In the United States, demand is expected to fall 43 percent.
The jobs of more than 250,000 Americans who work in the aviation
maintenance sector are at high risk due to the collapse of the MRO
market. Worse still, while other industries are likely to rebound
quickly from the present downturn, the aviation industry will take
years to recover. Under OW's baseline projection, industry revenues
will not return to pre-pandemic levels until late 2021; under the
worst-case scenario, the industry may not recover until early 2023.
Even once aviation activity returns to pre-pandemic levels, the
effects of the coronavirus disruptions are expected to linger and
suppress growth for years. OW projects that 4,500 fewer aircraft will
be added to the global fleet over the next decade than originally
anticipated and that maintenance spending in 2030 will be almost nine
percent below prior predictions because of the lingering effects of the
pandemic.
In light of the foregoing, it is critical that Congress continue to
provide immediate relief and identify opportunities to support aviation
over the long-term to help the industry survive.
The MRO sector is not only critical to air carrier operations, but
also supports general, business, government and military aviation.
Repair station workers are highly trained; it takes years to gain the
necessary expertise to be an effective technician. If the industry
loses a substantial portion of its workforce, repair stations will lack
the capacity to support the Nation's civil and military fleets as
aviation activity returns to normal levels. This, in turn, will pose
long-term risks to both the efficiency of the aviation system and to
national security.
As you consider the next phase of relief legislation, we ask that
you include the policy proposals below (and addressed in more detail in
the attached white paper) to protect
U.S. repair station jobs and ensure the survival of this vital
economic sector.
Specifically, ARSA encourages Congress to:
Improve repair station access to Federal relief by directing
the Small Business Administration (SBA) to immediately increase
the small business size standard for all North American
Industry Classification System (NAICS) codes applicable to
aviation maintenance industry companies to at least 1,500 (and,
ideally, to 3,000) employees and by temporarily exempting
companies covered by those NAICS codes from SBA's affiliation
rules for purposes of accessing pandemic relief.
Clarify the ability of air carrier maintenance contractors
and subcontractors to access Air Carrier Worker Support (ACWS)
resources.
Provide significant additional resources for both the
Paycheck Protection and ACWS programs.
Refrain from imposing unnecessary restrictions and
requirements on companies seeking access to relief.
Create temporary tax incentives and grant programs to
encourage business investment in worker training, equipment and
facilities and air carrier investment in maintenance.
Resolve the uncertainty surrounding the tax treatment of PPP
loans.
ARSA and its members look forward to working with you to continue
to implement the CARES Act and craft additional legislation to sustain
the U.S. economy through this uncertain period.
Thank for your consideration.
Sincerely,
Christian A. Klein,
Executive Vice President.
______
CORONAVIRUS RELIEF FOR THE AVIATION MAINTENANCE INDUSTRY
Background
The civil aviation maintenance industry is a vital part of the U.S.
economy and the aviation ecosystem. It provides close to two-thirds of
the maintenance for U.S. air carriers and supports general, business,
state and local government, and military aviation operations.
As of March 9, 2020, America's 4,017 Federal Aviation
Administration (FAA) certificated repair stations employed an estimated
263,000 workers and contributed more than $25 billion annually to the
U.S. economy. When aircraft parts and manufacturing distribution are
factored in, the industry employed approximately 320,000 workers and
generated more than $50 billion in annual economic activity. A state-
by-state analysis of the aviation maintenance industry's economic and
employment footprint is available at http://arsa.org/news-media/
economic-data/.
Because airlines are such important customers for so many repair
stations, the maintenance industry has been hit hard by the air travel
disruptions caused by the SARS-CoV-2/COVID-19 (``coronavirus'')
pandemic.
According to the Transportation Security Administration (TSA),
passenger traffic at airports is less than seven percent of what it was
a year ago. The latest industry economic forecast by aviation
consultancy Oliver Wyman CAVOK (OW) suggests that demand for
maintenance, repair and overhaul (MRO) services in 2020 will drop
nearly 50 percent compared to the firm's previous pre-coronavirus
pandemic estimates. Under OW's baseline projection, industry revenues
will not return to pre-pandemic levels until late 2021; under the
worst-case scenario, the industry may not recover until early 2023.
Even once the aviation activity returns to pre-pandemic levels, the
effects of the coronavirus disruptions will linger for years,
suppressing growth. OW predicts that 4,500 fewer aircraft will be added
to the global fleet over the next decade and that maintenance spending
in 2030 will be almost nine percent below prior predictions because of
the lingering effects of the pandemic. Similarly, according to Argus
International, charter flights are down 65 percent relative to the same
time last year.
The full impact of the disruptions and Federal relief is still
uncertain, but hundreds of thousands of maintenance industry jobs
throughout the country are at risk.
While the Coronavirus Aid, Relief and Economic Security (CARES) Act
(H.R. 748) has helped many maintenance companies, some repair stations
have fallen through the cracks and are ineligible for certain CARES Act
relief. And even those that have been able to access Federal resources
will almost certainly require more support to survive.
ARSA therefore encourages Congress and the administration to take
the actions described below to save as many aviation jobs as possible
in the months ahead. In addition to preventing repair station workers
from ending up on unemployment rolls and keeping small and medium-size
companies afloat, ARSA's proposals will help ensure that maintenance
industry has the necessary capacity to maintain the U.S. fleet when the
pandemic ends and air travel once again increases.
1. Update SBA Size Standard for Aviation Maintenance NAICS Codes
RECOMMENDATION: To address inequities in the CARES Act, allow
more aviation maintenance companies to access PPP resources and
save more repair station jobs, the next relief bill should
direct the SBA to issue a direct final rule (or take other
appropriate administrative action) within 10 days of enactment
to increase the small business size standard for NAICS codes
336413 and 488190 to at least 1,500 employees or, ideally,
increase the size standards for all NAICS codes applicable to
aviation maintenance to 3,000 employees.
Most aviation maintenance companies fall into one of the following
four North American Industry Classification System (NAICS) codes:
336411--Aircraft Manufacturing, including ``overhaul''
336412--Aircraft Engine and Parts Manufacturing, including
``overhaul''
336413--Other Aircraft Parts and Auxiliary Equipment
Manufacturing
488190--Other Support Activities for Air Transportation
Pursuant to 13 CFR part 121, the Small Business Administration
(SBA) establishes small business size standards for industries based on
NAICS codes. Companies classified as 336411 and 33641 are considered
small businesses if they have fewer than 1,500 employees. The standard
for 336413 is fewer than 1,250 employees. The standard for 488190--the
category into which many repair stations fall--is less than $35 million
in annual revenues.
Based on ARSA estimates that one employee, on average, is
associated with each
$100,000 in repair station revenues, a company with $35 million in
revenues would have just 350 employees, 80 percent fewer workers than
those companies considered small businesses in categories 336411 and
336412 and 72 percent fewer than the number of workers at category
336413 companies.
The CARES Act has highlighted how this disproportionality works to
the disadvantage of small and medium-size aviation businesses. Sec.
1102 of the law created a Paycheck Protection Program (PPP) through
which certain companies may obtain forgivable loans to cover payroll
and some overhead costs during the national emergency. To be eligible,
a company must either have 500 or fewer employees or be considered a
small business under its NAICS code (whichever is greater). Thus, while
companies in many industries with significantly more than 500 employees
will ultimately be able to obtain relief through PPP loans because of
the size standard for their NAICS codes, many repair stations with more
than 500 employees will not.
ARSA therefore requests that the next relief bill require the SBA
to issue a direct final rule or to take other appropriate
administrative action within ten days of enactment to increase the
small business size standard for NAICS codes 336413 and 488190 to at
least 1,500 employees or, ideally, increase the size standards for all
NAICS codes applicable to aviation maintenance to 3,000 employees.
2. Exempt Repair Stations from Affiliation Rules for PPP Purposes
RECOMMENDATION: To allow a broader cross-section of small and
medium-size repair stations to access PPP relief, Congress
should exempt businesses covered by aviation maintenance
related NAICS codes from SBA's affiliation rules for PPP
purposes.
The SBA's size standards and affiliation rules have also made it
difficult for some aviation maintenance companies to access PPP relief;
in particular, those partially or wholly owned by private equity
companies or operated as a family of small companies with a common
ownership umbrella.
13 CFR Sec. 121.103(a)(6) states that, ''In determining the
concern's size, SBA counts the receipts, employees, or other measure of
size of the concern whose size is at issue and all of its domestic and
foreign affiliates, regardless of whether the affiliates are organized
for profit.'' (Emphasis added.) 13 CFR Sec. 121.103(a)(1) states that,
``Concerns and entities are affiliates of each other when one controls
or has the power to control the other, or a third party or parties
controls or has the power to control both. It does not matter whether
control is exercised, so long as the power to control exists.''
Thus, if Company A is owned wholly or partially by an individual or
business with other business interests, the employees and receipts of
those other business interests are imputed to Company A in determining
whether it is a small business. As a result, many repair stations that
would otherwise qualify for PPP relief are excluded based on their
ownership structures.
Recognizing that the affiliation rules would prevent small and
medium-size businesses in certain industries from accessing PPP relief,
Congress included language in the CARES Act exempting them from the
affiliation rules. Sec. 1102 of the law waived the affiliation rules
for companies with up to 500 employees per location if the company was
assigned a NAICS code beginning with 72 (i.e., the accommodation and
food service sectors), for franchises assigned an SBA franchise
identified code and for business that receive financial assistance from
SBA-licensed small business investment companies. However, despite
being similarly situated and in desperate need of assistance, none of
these exemptions apply to repair stations, precluding some from
accessing PPP relief.
To allow a broader cross-section of small and medium-size aviation
maintenance companies to access PPP relief, ARSA urges Congress to
exempt businesses with NAICS codes 336411 (``Aircraft Manufacturing),
336412 (Aircraft Engine and Parts Manufacturing), 336413 (``Other
Aircraft Parts and Auxiliary Equipment Manufacturing'') and 488190
(``Other Support Activities for Air Transportation'') from the SBA's
affiliation rules for PPP purposes.
3. Ensure All Repair Stations Serving Airlines Can Access to Air
Carrier Worker Support Program Resources
RECOMMENDATION: Congress should amend Sec. 4111(3) of the CARES
Act to remove the requirement that airline contractors and
subcontractors must be ``on airport'' to access Air Carrier
Worker Support assistance.
Subtitle B of Title IV (``Air Carrier Worker Support'') (Secs.
4111-4120) establishes a program to provide direct assistance to
airlines, cargo carriers and airline contractors. The term contractor
is defined at Sec. 4111(3) to mean:
(A) person that performs, under contract with a passenger air
carrier conducting operations under part 121 of title 14, Code
of Federal Regulations--
(i) catering functions; or
(ii) functions on the property of an airport that are directly
related to the air transportation of persons, property, or
mail, including but not limited to the loading and unloading of
property on aircraft; assistance to passengers under part 382
of title 14, Code of Federal Regulations; security; airport
ticking and check-in functions; ground handling of aircraft; or
aircraft cleaning and sanitization functions and waste removal;
or
(B) a subcontractor that performs such functions.
The Treasury Department has recognized that maintenance is a
function directly related to air transportation and confirmed that
repair stations located at airports that provide maintenance to air
carriers are eligible to apply for ACWS relief. However, the lion's
share of aviation maintenance takes place ``off the aircraft'' and
``off the airport'' at highly specialized FAA certificated component
and engine maintenance facilities. These off-airport companies may be
direct contractors of airlines or may be subcontractors of other on-
airport repair stations.
ARSA believes that in creating the ACWS program it was Congress's
intent to provide relief to the full spectrum of airline contractors
impacted by the coronavirus-related airline disruptions. However, the
language of statute discriminates against airline maintenance
contractors not located at airports and is, at best, unclear about
where a subcontractor must be located to be eligible for the ACWS
program.
ARSA therefore urges that Sec. 4111(3)(A)(2) be amended to add
``maintenance performed under part 43 of title 14, Code of Federal
Regulations, regardless of whether such work is performed on the
property of an airport'' to the list enumerated functions in that
section.
4. Increase Loan and Grant Program Resources
RECOMMENDATION: Congress should increase and extend financial
resources available to businesses under the CARES Act's loan
and grant programs and reduce burdensome requirements to ensure
all companies requiring relief are able to access it.
The CARES Act created, inter alia, the $349 billion PPP for small
and medium size companies; the ACWS Program, which authorizes $25
billion for assistance to airlines, $4 billion for cargo carriers and
$3 billion for airline contractors; and a $500 billion loan program, of
which $25 billion is set aside in Sec. 4003(b)(1) specifically for FAA-
certificated part 145 repair stations, airlines and ticket agents. The
law also authorized a ``main street'' lending program with preferential
interest rates for medium size companies (i.e., those with between 500
and 10,000 employees).
The present crisis is likely to persist for at least several more
weeks and it is highly unlikely that air travel will return to pre-
March 2020 levels before the end of the year. ARSA therefore urges that
the grant and loan programs be extended and receive additional funds to
sustain affected companies and their workers. Doing so will help
maintain business capacity and worker readiness, thereby helping to
facilitate a speedier recovery.
ARSA also asks that Congress reconsider the various requirements
associated with accessing loan and grant money to make it easier for
already struggling companies to access these critical resources.
Congress created these new grant and loans programs to protect jobs in
industries affected by the coronavirus pandemic. However, the various
``taxpayer protection'' requirements applicable to the programs may
have the opposite effect. The CARES Act adds terms to loans that would
be unthinkable in the commercial world because they impact business
operations and limit decisionmaking well beyond the term of the loan.
For example, Main Street Lending Program recipients are prohibited from
outsourcing or offshoring jobs during the term of the loan and for two
years thereafter.
In other words, if a company facing desperate economic
circumstances through no fault of its own takes on debt now through the
program to pay its workers, even after the loan is paid off the company
will be limited in its ability to adjust supply chains and take other
actions to make itself more competitive in the future. By adding
restrictions to loans at a time when businesses are desperate for
liquidity, Congress has, in some respect, made it less attractive for
companies to seek government relief than it would be to obtain a
commercial loan.
The CARES Act also included $1.5 billion for the Economic
Adjustment Assistance (EAA) grant program administered by the
Department of Commerce's Economic Development Administration (EDA).
While these resources can play a vital role in expanding local economic
opportunities, particularly in distressed communities, the EDA has yet
to provide guidance and release CARES Act funding. EDA should be
encouraged to begin making grants as soon as possible because the
resources will enable state EDA offices to provide grants to mitigate
business lease and rent costs, support worker training and retraining
and fund entrepreneurial ideas that can stimulate more employment.
The CARES Act provides the infrastructure to channel economic
relief to American businesses and workers. Now Congress must refine the
programs to make them as effective as possible and ensure Federal
relief continues to flow as quickly and freely as possible.
5. Tax Credits to Encourage Investment, Training and Maintenance
Activity
Recommendation: Congress should create additional short-term
refundable tax incentives and/or grant programs to encourage
activity that will sustain affected industries during the
pandemic and position companies and workers for future success.
Historically, tax incentives such as the highly successful
depreciation bonus created after 9/11 have incentivized stimulated
economic activity by encouraging businesses to shift future purchasing
into the present.
While any relief provided to all employees and small-to-medium
sized organizations will be helpful to the long-term health of repair
stations, additional measures will no doubt be needed for the entire
aviation supply chain to survive intact. ARSA therefore proposes
Congress and the administration create a temporary refundable tax
credit for airlines and other aircraft operators equal to 50 percent of
the cost of maintenance contracted to and performed by U.S. repair
stations between April 1 and Dec. 31, 2020. The temporary tax credit
would encourage airlines and other aircraft operators to continue to
contract for maintenance during the downturn. Aside from creating
economic activity that will flow through the supply chains, this will
ensure that aircraft remain airworthy and that worker skills remain
sharp.
Similarly, Congress should use the tax code to incentivize
businesses to invest in employee skills during the downturn, when many
workers have been idled. ARSA therefore proposes that Congress create a
grant program or a temporary refundable tax credit equal to 50 percent
of training costs incurred by U.S. companies between May 1 and Dec. 31,
2020. This would encourage businesses whose employees are idled to
invest in those workers, allowing them to maintain proficiency and
acquire new expertise.
Finally, to help companies prepare for the ultimate recovery,
Congress should explore new ways to incentivize business investment in
research and development, facilities and capital equipment placed in
service before the end of the year. This could potentially be done
through refundable tax credits, grants or changes to depreciation
rules.
6. Resolve PPP Tax Uncertainty
Recommendation: Congress should work with the IRS to resolve
the uncertainty created by the IRS surrounding the tax
treatment of PPP loans or amend the CARES Act to waive the
applicability of 26 USC Sec. 265 to PPP loan forgiveness.
On April 30, the Internal Revenue Service (IRS) issued Notice 2020-
32 which ``clarifie[d] that no deduction is allowed under the Internal
Revenue Code (Code) for an expense that is otherwise deductible if the
payment of the expense results in forgiveness of a covered loan
pursuant to section 1106(b)'' of the CARES Act. The IRS notice
apparently contradicts Sec. 1106(i), which states that, with regard to
the ``taxability'' of the loan forgiveness available to PPP recipients,
any amounts forgiven by a PPP loan ``shall be excluded from gross
income.''
Many repair stations are small and medium size entities that have
likely taken advantage of the PPP. ARSA is concerned that, contrary to
the apparent intent of Congress, this IRS ruling will increase tax
liability for PPP recipients in the aviation maintenance industry at a
time when many companies are struggling to survive.
We believe that IRS's interpretation is inconsistent with the
intent of the law. Congress should work with the IRS to resolve the
inconsistency or amend the CARES Act to waive the applicability of 26
USC Sec. 265 from applying to PPP loan forgiveness.
* * *
For additional information regarding these proposals, please
contact ARSA Executive Vice President Christian Klein at
[email protected].
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Eric Fanning
Question 1. Mr. Fanning, your testimony discussed the difficulty
your industry members face in responding quickly once orders for your
products begin to climb, and the importance of ensuring that domestic
suppliers--both large and small--have access to assistance programs
provided by the CARES Act.
Given the reliance of your industry on a truly global supply chain,
can you discuss some of the difficulties your members face in
navigating the various restrictions on the movement of goods?
Answer. Like others, our industry did face some initial challenges
when states and localities began restricting movement through the
issuance of ``stay at home'' orders in March. However, with strong
support at the federal, state and local level, these issues have been
largely resolved. In the international arena, there have been issues
with the non-coordination across governments about which industries
should be deemed ``essential'' and therefore allowed to continue
working and producing products. Once those products are produced, U.S.
government agencies have been effective at ensuring items declared
essential are allowed into the United States. The larger issue for our
industry has been the effect of COVID-19 at reducing the output of
overseas suppliers which provide important parts, products, and
supplies to companies in the United States.
Question 2. To follow up on that, do you have any suggestions for
how the Federal government can be helpful in resolving these supply
chain challenges?
Answer. The Federal government should continue to recognize that
commercial aviation manufacturing is a highly competitive global
business with a necessarily global supply chain. As world leaders in
this sector, U.S. aircraft manufacturers and their suppliers will
increasingly serve overseas export markets that are projected to grow
fastest over the coming decades. As the world recovers from the COVID-
19 pandemic, we should do all we can to ensure overseas suppliers are
able to continue supporting U.S. aviation manufacturers.
Question 3. You also mentioned that Aerospace industries
Association is working closely with International Civil Aviation
Organization on restoring public confidence and development of safety
standards in response to the pandemic. Could you provide additional
information on these discussions and some of the standards being
considered?
Answer. AIA currently chairs the International Coordinating Council
of Aerospace Industries Associations (ICCAIA) which includes AIA and
similar aerospace organizations in other countries and regions. ICCAIA
has been heavily involved with the International Civil Aviation
Organization's (ICAO's) Council Aviation Recovery Taskforce (CART),
which was established to provide guidance to countries and industry on
how to restart aviation safely and incorporate appropriate measures to
reduce the transmission of COVID-19. CART has now published its report
setting out key principles that governments and industry should follow,
along with guidance for public health risk mitigation across the entire
aviation system. AIA believes this international focus is the best
approach to restore confidence in commercial aviation around the world
while helping to provide a roadmap to recovery. For more detail, the
ICAO CART report and its accompanying ``Takeoff'' Guidance can be
reviewed here: https://www.icao.int/covid/cart/Pages/default.aspx.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Hon. Eric Fanning
Question 1. I think we all agree that a strong airline industry is
critical to our economic recovery. The amount of passengers screened by
the TSA is down by about 94 percent. It's clear that in order to
increase confidence in air travel, we'll need to implement robust
health testing and screening protocols at our Nation's airports until a
vaccine becomes available. I'd like to get the panel's thoughts on
possible testing and screening options, including the feasibility of
temperature testing at TSA checkpoints, and whether you believe TSA is
the appropriate entity to carry out these activities?
Answer. The health of both passengers and aviation workers is the
highest priority for the entire aviation industry. AIA supports
measures that will provide confidence to the traveling public in
airport screening procedures while protecting the screening workforce.
We believe it is important for airlines and airports to be involved in
discussions about the requirements that would work best. The industry
is already taking measures such as increased cleaning of airplanes and
the use of passenger face masks. When combined with the hospital-grade
air filters found on commercial aircraft, these additional steps will
help minimize the risk of transmission during flight.
Question 2. What is the U.S. airline industry doing, or could be
doing, to build the confidence of the travelling public by sharing the
preexisting and new measures in place to protect the health of
passengers, such as the use of HEPA filters in air filtration systems?
Answer. Passengers need to feel safe throughout their entire air
travel experience, from the curb at the airport to the cabin of the
airplane to when they arrive at their destination. ICAO's CART
guidelines provide a strong starting point to begin reassuring the
flying public. As AIA represents companies across the aviation
manufacturing sector and supply chain, we're also coordinating with
leaders representing airlines and airports to develop resources and
materials for passengers to learn and understand both the pre-existing
and new measures in place to ensure their health and well-being.
The use of HEPA filters on aircraft is an important element of
strong cabin air quality. As the International Air Transport
Association (IATA) said in a 2018 issue paper: ``The majority of
modern, large, commercial aircraft, which use a recirculation type of
cabin air system, utilise HEPA filters. . .HEPA, or high efficiency
particulate air, filters have similar performance to those used to keep
the air clean in hospital operating rooms and industrial clean rooms.
These filters are very effective at trapping microscopic particles as
small as bacteria and viruses. . .HEPA filters are effective at
capturing greater than 99 percent of the airborne microbes in the
filtered air. Filtered, recirculated air provides higher cabin humidity
levels and lower particulate levels than 100 percent outside air
systems.''
______
Response to Written Question Submitted by Hon. Shelley Moore Capito to
Hon. Eric Fanning
Question. In response to the pandemic, Congress was able to provide
much needed support to the aviation industry and its workers. The CARES
Act provided up to $46 billion available for Federal loans and loan
guarantees to the aviation sector. In West Virginia, DOT has so far
awarded more than $9.3 million from the FAA to help fund continued
operations and make up for lost revenue for airports across my state.
As we move forward, what would be the primary recommendation for
Congress in future COVID support?
Answer. Although the reduction in airline activity is expected to
reduce demand in the short-and intermediate-term, it is important to
preserve the manufacturing workforce and its smaller suppliers so they
are still available as demand returns. One excellent and creative
example of how to accomplish this is the ``Private-Public Partnership
to Preserve Jobs in the Aviation Manufacturing Industry Act of 2020''
(S. 3705), a bipartisan bill introduced last month by Senators Jerry
Moran and Mark Warner. This bill would establish a cost-sharing
partnership between industry and the Treasury Department to preserve
the jobs of at-risk manufacturing employees.
Congress could also consider the expansion of research and
development partnerships that support the aviation sector. One example
of these is the FAA's highly successful Continuous Lower Emissions,
Environment and Energy (CLEEN) program. Through a government-industry
cost share, CLEEN has helped maintain U.S. aerospace leadership by
accelerating the advancement of several technologies that have improved
the environmental performance and fuel efficiency of aircraft.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Eric Fanning
We are hearing some calls from some industries that they want to be
protected from paying damages to their employees and customers who get
sick due to lack of COVID protections.
Question 1. After receiving tens of billions of taxpayer support,
are the airlines asking for liability protection too, and if so, what
specific and binding safety and consumer protection standards would the
industry agree to in exchange for protection from liability?
Answer. AIA can only speak on behalf of our membership, which
includes aviation manufacturers and their suppliers. AIA believes that
liability is one area where policy dialogue is warranted. Precedents
for such protections were authorized as the Nation recovered from the
9/11 terrorist attacks. Companies of all sizes are concerned about
lawsuits, especially small businesses. We believe that legal protection
for companies doing their best to control the spread of this disease
with the limited guidance available should be considered by Congress.
However, providing businesses with targeted and limited safe harbors
during these difficult times is not the same as shielding companies
from all liability. Liability protections should be tailored and
focused on the current pandemic and critical infrastructure businesses.
We do not believe that those who behave with gross negligence, willful
misconduct, intentional criminal misconduct, or intentional infliction
of harm should be protected or shielded from their actions. Creating
uniform Federal legal standards and limited, rational safe harbors for
companies that are acting responsibly will go a long way to ensure the
availability of people and products that are essential during the
pandemic and as we recover. Congress could also consider expanding
current ``Good Samaritan'' provisions to further address product and
volunteer liability issues.
Question 2. Would you agree to everything that Dr. Godwin has
outlined in her testimony?
The main elements of Dr. Godwin's testimony focused on commercial
operations of the aircraft, and we would defer to the airlines on those
subjects. We have provided additional information on HEPA filter usage
for the hearing record to provide more clarity on this subject.
This is not the first time that the airline industry has needed
dramatic help from the government and relief from taxpayers to get it
through rough times. We definitely recognize that the airlines are
being hit hard by the lull in travel driven by the coronavirus pandemic
and this is through no fault of their own. But we are facing another
major crisis: climate change. If we assume that once the pandemic
subsides that travel will return to normal, we will still be
confronting a major issue that many Americans care about. If we are
going to continue to use their tax dollars to get you through this
rough patch, we should be able to offer them benefits in return. If
anything, this time offers the airline industry a moment of pause to
replan and think creatively about how to reduce its carbon footprint.
And not just with offsets--actual reduction.
Question 3. So, how can airlines use this pause to rethink the
industry and the major crisis we are facing on climate change?
AIA can only speak on behalf of our membership, which includes
aviation manufacturers and their suppliers. However, the entire
aviation industry is committed to reducing climate change impacts. For
example, we would point to strong industry cost-sharing in the FAA's
Continuous Lower Emissions, Energy and Noise (CLEEN) program, which is
focused on reducing greenhouse gas emissions as well as aircraft noise.
With strong support from both industry and Congress, this program is an
example of a successful public-private partnership that will help us
meet long-term aviation environmental goals. Ensuring the aviation
industry remains successful will be key to making these goals a
reality, as well as continued investment in Federal R&D and sustainable
aviation fuels.
______
Response to Written Questions Submitted by Hon. John Thune to
Nicholas Calio
Question 1. Mr. Calio, you mentioned in your testimony that more
than 3,000 aircraft, or about half of the airline fleet, has been
grounded as a result of the evaporation in demand.
On average, how long does it take to bring grounded aircraft back
into service, and how does the grounding of so many aircraft affect the
industry's ability to quickly respond as demand picks back up?
Answer. In general, there is not an average, as each aircraft in
storage is different in age and number of cycles which affects the
level of maintenance necessary to reactivate. However, reactivation
work can take anywhere from 50-225 man hours per aircraft depending on
how much outstanding work is open with each aircraft. The efforts to
bring aircraft out of storage are also impacted by the total number of
aircraft being considered for reactivation, the more aircraft, the more
labor intensive and man hours needed. Bringing aircraft back into
service also requires necessary coordination with the FAA and the
airplane manufacturer.
Question 2. Can you speak to the effects the major reductions in
scheduled flights will have on crew training, and how airlines plan to
adapt?
Answer. Severe disruptions due to dramatically reduced flying and
the temporary closure of training facilities has impacted the ability
to conduct recurrent training and qualification requirements for ground
personnel, crewmembers, and aircraft dispatchers. These requirements
include training, testing, checking, evaluation, recency, and
observation activities. A4A has and will continue to work with the FAA
to mitigate challenges and ensure the completion of various training
and qualification requirements. As the situation evolves, managing the
backlog of personnel who still require training to maintain currency
will continue to be a challenge given limited access to training
facilities and simulators.
Question 3. Your testimony also discussed many of the immediate
actions airlines have taken to protect their employees and the
traveling public, including expanded disinfection protocols and mask
requirements.
As the industry looks toward long-term recovery, could you
elaborate on your discussions with Transportation Security
Administration, the Centers for Disease Control and Prevention, the
Department of Transportation, and other government agencies on measure
such as temperature checks, testing regimens, and contact tracing?
Answer. As health screening is a government function, we would
encourage Congress support the Transportation Security Administration
(TSA) in conducting temperature checks during the pandemic. Doing so
would create a consistent and well-recognized experience for passengers
at every U.S. airport. Temperature screenings are a critical component
of a multilayered and risk-based screening process and also instill
passenger confidence in overall health safety along with serving as an
effective deterrent to those that may be sick from going to the airport
in the first place.
We appreciate the leadership shown by TSA Administrator Pekoske
throughout the pandemic. TSA has been a steadfast partner through the
COVID-19 crisis and has routinely sought stakeholder input and provided
consistent communication to the industry at a time when coordination
efforts are at their most difficult.
Airlines also support the Centers for Disease Control and
Prevention (CDC) in collecting passenger contact information with the
shared goal of combating the spread of COVID-19 and mitigating any
future public health emergencies. We believe public health screening is
a government function and recommend the Department of Homeland Security
(DHS) and the Department of Transportation (DOT) should develop,
operate, administer and maintain a government process to collect
contract tracing data that will allow for direct and timely action on
an incredibly complex problem. To foster harmonization and improve
accuracy, reliability, and privacy protections, the U.S. government
should collect contact information directly from international
passengers in a holistic process across all modes of transportation and
through a Federal Government portal or mobile application. Importantly,
this direct collection by the U.S. government is the recommended
practice by the Council Aviation Recovery Task Force (CART) of the
International Civil Aviation Organization (ICAO).
Unfortunately, collaboration and dialogue with the CDC has not been
as productive as with other Agencies. A4A has had an ongoing (but off
and on) conversation since January about aviation contact tracing, with
no resolution. Airlines have repeatedly asked the CDC for technical
specifications--including in writing on several occasions--so that
airlines may begin the 12-18-month process of updating multiple
information technology (IT) systems to comply with the CDC's interim
final rules requiring airlines' collection of contact information. We
have received no response to our inquiries, and the last discussion
airlines had with CDC on this issue was March 2, 2020.
More importantly, even if airlines are required to collect the
information, they cannot guarantee the accuracy or validate the
information. The CDC, on the other hand, can collect accurate
information directly from passengers under the penalty of law. Simply
put, airline collection does not get the CDC what it needs: accurate
contact information. Notably, the CDC has already created its own
contact information collection website that it estimated could be
operated at a small fraction of the costs for airlines to collect
contact information. However, the CDC appears to have abandoned this
option, without explanation.
Further, the CDC has not adequately considered the privacy
implications of airlines collecting the information, which is best
demonstrated by the CDC's interim final rules. For example, the
collection of information from residents in the EU will trigger
protections under the EU General Data Protection Regulation (GDPR). In
fact, DHS had to enter into a special US-EU agreement for the sharing
of Passenger Name Record (PNR) information by airlines with the U.S.
government, which does not cover the airlines sharing of passenger
information for public health purposes. These privacy issues must be
addressed and are better address through the U.S. government's
collection of contact information directly from passengers.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Nicolas Calio
Question 1. Mr. Calio, there has been a general notion that cargo
carriers have not been heavily damaged by the economic impacts of
COVID-19--that is true for some cargo airlines. However, many smaller
carriers like Lynden Air Cargo and Northern Air Cargo from my state
have been greatly damaged by the tremendous economic downturn. Would
you agree that we need to ensure smaller cargo carriers are not
forgotten in the consideration of possible future assistance?
Answer. Yes, all air carriers should receive consideration.
Question 2. Mr. Calio, almost all passenger carriers are providing
masks to passengers and flight crew, with most carriers requiring that
passengers and/or flight crew wear masks. We all know there is a global
shortage of N95 masks, which should be provided to health care
providers and first responders before the general public. Have you
received any feedback from your carriers on the availability of
alternative cloth masks?
Answer. A4A carriers have not encountered systemic challenges in
obtaining sufficient quantities of alternative face coverings for
employees or passengers.
Question 3. Mr. Calio, since the CARES Act requires the Secretary
of Treasury to coordinate with the Secretary of Transportation on
implementation of the distribution of the loans, as DOT is best able to
determine the needs of the variety of stakeholders operating in the
national airspace, do you agree with the judgement of Congress that the
Treasury is to rely on the expertise of the Secretary of Transportation
for determining the manner in which to distribute the loans?
Answer. Section 4006 of the CARES Act directs Treasury to
coordinate with the Secretary of Transportation as it pertains to air
carrier financial assistance. We support this provision and encourage
Treasury to coordinate with the Secretary of Transportation in
accordance with the statute.
Question 4. I think we all agree that a strong airline industry is
critical to our economic recovery. The number of passengers screened by
the TSA is down by about 94 percent. It's clear that in order to
increase confidence in air travel, we'll need to implement robust
health testing and screening protocols at our Nation's airports until a
vaccine becomes available. I'd like to get the panel's thoughts on
possible testing and screening options, including the feasibility of
temperature testing at TSA checkpoints, and whether you believe TSA is
the appropriate entity to carry out these activities?
Answer. As health screening is a government function, we would
encourage Congress support the Transportation Security Administration
(TSA) in conducting temperature checks during the pandemic. Doing so
would create a consistent and well-recognized experience for passengers
at every U.S. airport. Temperature screenings are a critical component
of a multilayered and risk-based screening process and also instill
passenger confidence in overall health safety along with serving as an
effective deterrent to those that may be sick from going to the airport
in the first place.
Question 5. What is the U.S. airline industry doing, or could be
doing, to build the confidence of the travelling public by sharing the
preexisting and new measures in place to protect the health of
passengers, such as the use of HEPA filters in air filtration systems?
Answer. The safety and wellbeing of passengers and employees is the
top priority of U.S. airlines. Since the onset of this health crisis,
carriers have been taking substantial, proactive steps--in many
instances exceeding CDC guidance--to protect passengers and employees.
As noted, in addition to requiring facial coverings, at check-in
counters and gate areas, travelers may see agents sanitizing counters
and kiosks. Some airlines have installed plexiglass shields over the
counters to provide additional protection, and some have marked the
floors to ensure appropriate distance is maintained. All A4A airlines
have aircraft equipped with HEPA filters, which help generate hospital-
grade air quality. In fact, the CDC has said that, ``Because of how air
circulates and is filtered on airplanes, most viruses and other germs
do not spread easily on flights.''
U.S. airlines have also implemented intensive cleaning protocols,
in some cases to include electrostatic cleaning and fogging procedures
in addition to increasing the frequency of deep cleaning procedures for
both domestic and international flights.
For the most up to date and on-going efforts we would also
encourage you and your staff to visit https://
www.airlinestakeaction.com/ The website provides a robust view of the
multi-layered approach outlined above and it also highlights our ``Fly
Healthy. Fly Smart.'' campaign.
______
Response to Written Questions Submitted by Hon. Marsha Blackburn to
Nicolas Calio
Question 1. What do you believe is the appropriate method for
conducting contact tracing for the travelling public?
Answer. Airlines support the Centers for Disease Control and
Prevention (CDC) in collecting passenger contact information with the
shared goal of combating the spread of COVID-19 and mitigating any
future public health emergencies. We believe public health screening is
a government function and recommend the Department of Homeland Security
(DHS) and the Department of Transportation (DOT) should develop,
operate, administer and maintain a government process to collect
contract tracing data that will allow for direct and timely action on
an incredibly complex problem. To foster harmonization and improve
accuracy, reliability, and privacy protections, the U.S. government
should collect contact information directly from international
passengers in a holistic process across all modes of transportation and
through a Federal Government portal or mobile application. Importantly,
this direct collection by the U.S. government is the recommended
practice by the Council Aviation Recovery Task Force (CART) of the
International Civil Aviation Organization (ICAO).
Question 2. Do you think the airlines have been given the proper
guidance on contact tracing? I'm very concerned the Federal Government
is demanding that the private sector collect irrelevant information
from U.S. citizens and invade their right to privacy.
Answer. No. Airlines have repeatedly asked the CDC for technical
specifications--including in writing on several occasions--so that
airlines may begin the 12-18-month process of updating multiple
information technology (IT) systems to comply with the CDC's interim
final rules requiring airlines' collection of contact information. We
have received no response to our inquiries, and the last discussion
airlines had with CDC on this issue was March 2, 2020.
More importantly, even if airlines are required to collect the
information, they cannot guarantee the accuracy or validate the
information. The CDC, on the other hand, can collect accurate
information directly from passengers under the penalty of law. Simply
put, airline collection does not get the CDC what it needs: accurate
contact information. Notably, the CDC has already created its own
contact information collection website that it estimated could be
operated at a small fraction of the costs for airlines to collect
contact information. However, the CDC appears to have abandoned this
option, without explanation.
The CDC has not adequately considered the privacy implications of
airlines collecting the information, which is best demonstrated by the
CDC's interim final rules. For example, the collection of information
from residents in the EU will trigger protections under the EU General
Data Protection Regulation (GDPR). In fact, DHS had to enter into a
special US-EU agreement for the sharing of Passenger Name Record (PNR)
information by airlines with the U.S. government, which does not cover
the airlines sharing of passenger information for public health
purposes. These privacy issues must be addressed and are better address
through the U.S. government's collection of contact information
directly from passengers.
Question 3. A number of airlines are now requiring passengers to
wear masks and facial coverings. To help contain the spread of the
Coronavirus, do you believe airports should require masks and/or screen
the temperature of airline passengers at terminal entry points?
Answer. A4A announced in late April that our member passenger
carriers voluntarily would be requiring that customer-facing employees
and passengers wear a facial covering over their nose and mouth
throughout the journey--during check-in, boarding, in-flight and
deplaning. We encourage airports and the TSA to similarly require
facial coverings in the airport.
A4A also announced in early May that our member carriers are
supporting the TSA to begin checking the temperature of the traveling
public and customer-facing employees as long as necessary during the
COVID-19 public health crisis. As all screening processes for the
traveling public are the responsibility of the U.S. government, having
temperature checks performed by the TSA will ensure that procedures are
standardized, providing consistency across airports so that travelers
can plan appropriately. We urge the Administration to move forward, as
this is an important layer to protect the traveling public and instill
passenger confidence.
Question 4. I would like to commend your members' efforts on
Project Air Bridge. This is a great example of a well-executed public-
private project. Could you please explain to my colleagues how
important this project is to the American people?
Answer. Consistent with information on the FEMA website, Project
Air Bridge was created to reduce the time it takes U.S. medical supply
distributors to receive personal protective equipment and other
critical supplies. FEMA covers the cost to fly supplies into the U.S.
from overseas factories, reducing shipment times. The program is a good
example of a successful public-private partnership as it allowed for
the efficient distribution of vital resources to hospitals, nursing
homes, long-term care facilities, state and local governments, and
other facilities critical to caring for the U.S. public during this
pandemic.
Question 5. Do you feel your communication with the CDC has been
pristine and dependable? If not, what troubles are you still
encountering?
Answer. No. CDC has only been willing to engage the airline
industry through the FAA and has not engaged directly.
Question 6. Is there a contact you can e-mail or call at CDC and
receive a reply immediately?
Answer. No. Our substantive communications with CDC have all been
coordinated through the FAA.
______
Response to Written Questions Submitted by Hon. Shelley Moore Capito to
Nicolas Calio
Question 1. As you noted in your testimony, the CARES Act enabled
airlines to preserve jobs and support the salaries and benefits of
workers through September. As much as Congress wants to help, I believe
that it is more important now that we evaluate what is needed to be
done over the long-term. What steps are airlines taking to evaluate the
long term impacts the COVID-19 pandemic will have on the airline
industry?
Answer. The short answer is that airlines are evaluating every
single aspect of their business in order to sustain and survive the
economic challenges caused by the pandemic. The industry is focused on
ensuring the safety and well-being of its employees and customers and
its ability to weather through the current crisis and position itself
for a recovery.
The crisis hit a previously robust industry at lightning speed.
Unfortunately, recovery from the crisis will not be as swift. We
anticipate a long and difficult road ahead. For context, passenger
volumes took 3 years to recover from 9/11 and over 7 years to recover
from the global financial crisis in 2008. Once demand does recover, it
will take years to retire the newly accumulated debt and to address the
sizable interest accrued, thereby limiting carriers' ability to
reinvest in their people and products. History has shown that air
transport demand has never experienced a V-shaped recovery from a
downturn.
Our industry is adapting on an almost daily basis to the unique
near, mid-, and long-term challenges of the pandemic. However, to set a
realistic and practical expectation, while the industry will do
everything it can to mitigate and address the multitude of challenges,
no factual doubt exists that the U.S. airline industry will emerge from
this crisis smaller than what it was just three short months ago. There
is simply no way around the detrimental and lasting economic impact
this pandemic will have on commercial aviation.
Question 2. What do airlines plan on doing to keep and support jobs
in the long run?
Answer. Please see answer to Question 1.
Question 3. I appreciate the efforts U.S. airlines are taking to
protect passengers and employees during this time. I believe efforts
like the ones you described in your testimony (complying with CDC
cleaning protocols, increasing deep cleaning procedures, employees
wearing facemasks) can play a positive role in keeping travelers safe
and secure in the short-term. How are airlines planning to build
consumer confidence going forward?
Answer. The safety and wellbeing of passengers and employees is the
top priority of U.S. airlines. Since the onset of this health crisis,
carriers have been taking substantial, proactive steps--in many
instances exceeding CDC guidance--to protect passengers and employees.
As noted, in addition to requiring facial coverings, at check-in
counters and gate areas, travelers may see agents sanitizing counters
and kiosks. Some airlines have installed plexiglass shields over the
counters to provide additional protection, and some have marked the
floors to ensure appropriate distance is maintained. All A4A airlines
have aircraft equipped with HEPA filters, which help generate hospital-
grade air quality. In fact, the CDC has said that, ``Because of how air
circulates and is filtered on airplanes, most viruses and other germs
do not spread easily on flights.''
U.S. airlines have also implemented intensive cleaning protocols,
in some cases to include electrostatic cleaning and fogging procedures
in addition to increasing the frequency of deep cleaning procedures for
both domestic and international flights.
For the most up to date and on-going efforts we would also
encourage you and your staff to visit https://
www.airlinestakeaction.com/ The website provides a robust view of the
multi-layered approach outlined above and it also highlights our ``Fly
Healthy. Fly Smart.'' campaign.
Question 4. When do airlines anticipate people coming back?
Answer. There are many variables outside of aviation that will
impact air travel demand, such as a vaccine and/or treatment options,
the lifting of stay at home orders and others, that make it difficult
to anticipate timing. What we do know is it will be a long and
difficult road. Passenger volumes took 3 years to recover from 9/11 and
over 7 years to recover from the global financial crisis in 2008. Once
demand does recover, it will take years to retire the newly accumulated
debt and to address the sizable interest accrued, thereby limiting
carriers' ability to reinvest in their people and products. History has
shown that air transport demand has never experienced a V-shaped
recovery from a downturn.
Question 5. What further measures are need in order to rebuild
consumer confidence?
Answer. Temporary Temperature Screening: As health screening is a
government function, we would encourage Congress support the
Transportation Security Administration (TSA) in conducting temperature
checks during the pandemic. Doing so would create a consistent and
well-recognized experience for passengers at every U.S. airport.
Temperature screenings are a critical component of a multilayered and
risk-based screening process and also instill passenger confidence in
overall health safety along with serving as an effective deterrent to
those that may be sick from going to the airport in the first place.
Contract Tracing: Airlines also support the Centers for Disease
Control and Prevention (CDC) in collecting passenger contact
information with the shared goal of combating the spread of COVID-19
and mitigating any future public health emergencies. We believe public
health screening is a government function and recommend the Department
of Homeland Security (DHS) and the Department of Transportation (DOT)
should develop, operate, administer and maintain a government process
to collect contract tracing data that will allow for direct and timely
action on an incredibly complex problem. To foster harmonization and
improve accuracy, reliability, and privacy protections, the U.S.
government should collect contact information directly from
international passengers in a holistic process across all modes of
transportation and through a Federal Government portal or mobile
application. Importantly, this direct collection by the U.S. government
is the recommended practice by the Council Aviation Recovery Task Force
(CART) of the International Civil Aviation Organization (ICAO).
Question 6. As businesses begin to gradually reopen--while taking
precautions--I believe that liability protections are essential. We
know that the spread is still there and we need to make sure that the
businesses that are reopening safely aren't unduly punished.
Answer. We agree, Congress should enact targeted liability relief
in the wake of the COVID-19 pandemic. Airlines participating in CARES
Act grants or loans are required by law to maintain air service at
certain levels, therefore crucial protections should be put in place to
safeguard the industry from excessive and speculative lawsuits. Absent
a safe harbor, uncertainty from liability threatens to impede economic
recovery. There is precedent for granting safe harbor in the wake of
prior crises, such as post-9/11. Lawsuits do nothing to reduce
transmission of COVID-19 but they could hamper industry recovery.
Airlines should be focused on utilizing strained resources on recovery
not potential litigation.
Question 7. What are the liability concerns you are anticipating?
Answer. Airlines participating in CARES Act grants or loans are
required by law to maintain air service at certain levels, therefore
crucial protections should be put in place to safeguard the industry
from excessive and speculative lawsuits stemming from employees and/or
passengers.
Question 8. Do you believe that such protections are necessary for
the aviation industry?
Answer. Yes.
Question 9. In response to the pandemic, Congress was able to
provide much needed support to the aviation industry and its workers.
The CARES Act provided up to $46 billion available for Federal loans
and loan guarantees to the aviation sector. In West Virginia, DOT has
so far awarded more than $9.3 million from the FAA to help fund
continued operations and make up for lost revenue for airports across
my state.
As we move forward, what would be the primary recommendation for
Congress in future COVID support?
Answer. .Liability Protection: Congress should enact targeted
liability relief in the wake of the COVID-19 pandemic. Airlines
participating in CARES Act grants or loans are required by law to
maintain air service at certain levels, therefore crucial protections
should be put in place to safeguard the industry from excessive and
speculative lawsuits. Absent a safe harbor, uncertainty from liability
threatens to impede economic recovery. There is precedent for granting
safe harbor in the wake of prior crises, such as post-9/11. Lawsuits do
nothing to reduce transmission of COVID-19 but they could hamper
industry recovery. Airlines should be focused on utilizing strained
resources on recovery not potential litigation.
Temporary Temperature Screening: As health screening is a
government function, we would encourage Congress support the
Transportation Security Administration (TSA) in conducting temperature
checks during the pandemic. Doing so would create a consistent and
well-recognized experience for passengers at every U.S. airport.
Temperature screenings are a critical component of a multilayered and
risk-based screening process and also instill passenger confidence in
overall health safety along with serving as an effective deterrent to
those that may be sick from going to the airport in the first place.
Contract Tracing: Airlines also support the Centers for Disease
Control and Prevention (CDC) in collecting passenger contact
information with the shared goal of combating the spread of COVID-19
and mitigating any future public health emergencies. We believe public
health screening is a government function and recommend the Department
of Homeland Security (DHS) and the Department of Transportation (DOT)
should develop, operate, administer and maintain a government process
to collect contract tracing data that will allow for direct and timely
action on an incredibly complex problem. To foster harmonization and
improve accuracy, reliability, and privacy protections, the U.S.
government should collect contact information directly from
international passengers in a holistic process across all modes of
transportation and through a Federal Government portal or mobile
application. Importantly, this direct collection by the U.S. government
is the recommended practice by the Council Aviation Recovery Task Force
(CART) of the International Civil Aviation Organization (ICAO).
Aviation Excise Tax Holiday Extension: Section 4007 of the CARES
Act provided temporary aviation excise tax relief through January 1,
2021. In order to establish, encourage and bolster long-term airline
recovery, Congress should further extend the suspension of aviation
excise taxes through at least January 1, 2022. Until aviation demand
and financial health of the industry return, the revenues collected
from the excise taxes will in no way cover budgetary needs of the FAA.
The general fund will need to serve as the primary funding source of
the FAA regardless of tax policy. Tactical and mid-to-long-term excise
tax relief will promote economic recovery and be one less impediment
that discourages air travel.
______
Response to Written Questions Submitted by Hon. Todd Young to
Nicolas Calio
Question 1. Mr. Calio, has the industry come up with any further
policy recommendations that might assist airlines as they work to
recover from this crisis?
Answer. Temporary Temperature Screening: As health screening is a
government function, we would encourage Congress support the
Transportation Security Administration (TSA) in conducting temperature
checks during the pandemic. Doing so would create a consistent and
well-recognized experience for passengers at every U.S. airport.
Temperature screenings are a critical component of a multilayered and
risk-based screening process and also instill passenger confidence in
overall health safety along with serving as an effective deterrent to
those that may be sick from going to the airport in the first place.
Contract Tracing: Airlines also support the Centers for Disease
Control and Prevention (CDC) in collecting passenger contact
information with the shared goal of combating the spread of COVID-19
and mitigating any future public health emergencies. We believe public
health screening is a government function and recommend the Department
of Homeland Security (DHS) and the Department of Transportation (DOT)
should develop, operate, administer and maintain a government process
to collect contract tracing data that will allow for direct and timely
action on an incredibly complex problem. To foster harmonization and
improve accuracy, reliability, and privacy protections, the U.S.
government should collect contact information directly from
international passengers in a holistic process across all modes of
transportation and through a Federal Government portal or mobile
application. Importantly, this direct collection by the U.S. government
is the recommended practice by the Council Aviation Recovery Task Force
(CART) of the International Civil Aviation Organization (ICAO).
Question 2. In the near term, a return to any semblance of normalcy
in the travel industry is likely going to require health testing and
screening protocols at our Nation's airports until a vaccine becomes
available.
Mr. Calio, who is the appropriate entity to carry out these
protocols and how do you envision that process in practice--walk me
through what the ``new normal'' experience will be for someone who is
flying in the next few months?
Answer. We believe health testing and screening is a Federal
responsibility and the U.S. government is the most appropriate entity
to carry out those protocols.
For an up to date and comprehensive review of the `new normal' we
would encourage you and your staff to visit https://
www.airlinestakeaction.com/ The website provides a robust view of the
multi-layered approach outlined above and it also highlights our ``Fly
Healthy. Fly Smart.'' campaign.
______
Response to Written Questions Submitted by Hon. Rick Scott to
Nicolas Calio
Question 1. Mr. Calio, I wrote a letter, which I will submit for
the record, asking members of your association to clearly lay out their
plans to protect passengers and employees as we return to a `new
normal.' Many airlines have recently instituted new requirements while
on board their aircraft, including the wearing of facemasks. What
additional measures are your members in the process of implementing?
Answer. The safety and wellbeing of passengers and employees is the
top priority of U.S. airlines. Since the onset of this health crisis,
carriers have been taking substantial, proactive steps--in many
instances exceeding CDC guidance--to protect passengers and employees.
As noted, in addition to requiring facial coverings, at check-in
counters and gate areas, travelers may see agents sanitizing counters
and kiosks. Some airlines have installed plexiglass shields over the
counters to provide additional protection, and some have marked the
floors to ensure appropriate distance is maintained. All A4A airlines
have aircraft equipped with HEPA filters, which help generate hospital-
grade air quality. In fact, the CDC has said that, ``Because of how air
circulates and is filtered on airplanes, most viruses and other germs
do not spread easily on flights.''
U.S. airlines have also implemented intensive cleaning protocols,
in some cases to include electrostatic cleaning and fogging procedures
in addition to increasing the frequency of deep cleaning procedures for
both domestic and international flights.
For the most up to date and on-going efforts we would also
encourage you and your staff to visit https://
www.airlinestakeaction.com/ The website provides a robust view of the
multi-layered approach outlined above and it also highlights our ``Fly
Healthy. Fly Smart.'' campaign.
Question 2. Mr. Calio and Mr. Hauptli, what additional measures do
your members think should be taken by the Federal Government to ensure
the safety of passengers?
Answer. Temporary Temperature Screening: As health screening is a
government function, we would encourage Congress support the
Transportation Security Administration (TSA) in conducting temperature
checks during the pandemic. Doing so would create a consistent and
well-recognized experience for passengers at every U.S. airport.
Temperature screenings are a critical component of a multilayered and
risk-based screening process and also instill passenger confidence in
overall health safety along with serving as an effective deterrent to
those that may be sick from going to the airport in the first place.
Contract Tracing: Airlines also support the Centers for Disease
Control and Prevention (CDC) in collecting passenger contact
information with the shared goal of combating the spread of COVID-19
and mitigating any future public health emergencies. We believe public
health screening is a government function and recommend the Department
of Homeland Security (DHS) and the Department of Transportation (DOT)
should develop, operate, administer and maintain a government process
to collect contract tracing data that will allow for direct and timely
action on an incredibly complex problem. To foster harmonization and
improve accuracy, reliability, and privacy protections, the U.S.
government should collect contact information directly from
international passengers in a holistic process across all modes of
transportation and through a Federal Government portal or mobile
application. Importantly, this direct collection by the U.S. government
is the recommended practice by the Council Aviation Recovery Task Force
(CART) of the International Civil Aviation Organization (ICAO).
Question 3. Mr. Calio, The CARES Act provided substantial funding
to the airline industry. What oversight measures by your members are in
place to ensure these taxpayer dollars are spent wisely?
Answer. The aviation industry is very thankful for the financial
assistance opportunities provided in the CARES Act. Air carriers have
and will strictly adhere to their terms of agreement with the Treasury
and all other Federal laws and regulations.
The CARES Act also contained the establishment of an Office of the
Special Inspector General for Pandemic Recovery (Sec. 4018) and a
Congressional Oversight Commission (Sec. 4020), both of which will
provide additional oversight of taxpayer funding. It is also expected
that the Department of Transportation, Office of the Inspector General
and the U.S. Government Accountability Office (GAO) may add additional
layers of oversight. Airlines welcome and encourage oversight on this
matter.
Question 4. Mr. Calio, it has been reported in a recent Financial
Times article that a major foreign airline leasing company, backed by
the Bank of China, is using the opportunity to buy up airplanes from
distressed U.S. airline companies and lease them back. Is that common
practice for your members to lease planes from foreign companies backed
by known foreign advisories and couldn't this cause vulnerabilities for
a critical domestic industry?
Answer. U.S. commercial aviation is a global industry and air
carriers routinely utilize aircraft leasing as a financing mechanism.
Of note, as referenced in the GAO excerpt below, U.S. airlines are also
subject to specific ownership and control laws. While the U.S. aviation
industry, in some instances, does use lease back agreements, all of
those financial agreements are done in strict accordance with all U.S.
laws and regulations.
``U.S. aviation citizenship requirements--ownership and control--
are defined in statute. In order to operate as a U.S. airline, an
entity must obtain approval from DOT. This approval includes meeting
aviation ``citizenship'' criteria. The requirements were enacted in the
Air Commerce Act of 1926 and the Civil Aeronautics Act of 1938 and have
largely remained the same since then. A ``citizen of the United
States'' is an individual U.S. citizen, a partnership whose members are
U.S. citizens, or a corporation or association organized under U.S. law
where at least 75 percent of the total voting interest is owned and
controlled by U.S. citizens. The law does not specify any limits on
foreign investment in nonvoting stock or limits on the provision of
debt financing. The law also specifies that the airline president, as
well as at least two-thirds of the board of directors of the
corporation, must be U.S. citizens, and the airline must be under the
actual control of U.S. citizens.'' (GAO-19-540R Airline Foreign
Ownership)
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Nicholas Calio
Aviation Emission Trends. I understand that, according to the
Environmental Protection Agency, greenhouse gas emissions (GHG) from
the aviation sector accounted for 130.8 million metric tons of
CO2 equivalent in 2018, or about 7 percent of all
transportation sector GHG emissions. And that currently aviation
accounts for roughly 2 percent of global carbon emissions, but that
portion is expected to expand significantly as other sectors such as
energy and ground transportation make rapid progress to decarbonize. In
fact, the United Nations' International Civil Aviation Organization
(ICAO) projects global aviation emissions will triple by 2050, and by
that time aviation could account for 25 percent of global carbon
emissions. And that a recent study from the International Council on
Clean Transportation found that global carbon dioxide emissions from
airlines over the past 5 years increased at a rate that is 79 percent
higher than the projections used by ICAO when they found emissions
could triple by 2050.
Question 1. Mr. Calio, do you agree with these assessments?
Answer. A4A believes the U.S. Environmental Protection Agency's
(EPA) GHG emissions inventory is reasonably accurate and, in fact, A4A
routinely cites the inventory in our work and communications. Here you
note the figures of the aviation sector accounting for 130.8 million
metric tons of CO2 equivalent in 2018, or about 7 percent of
all transportation sector GHG emissions. We concur with these figures.
We also note that this means that aviation accounts for 2 percent of
the Nation's total GHG output.
We also concur that aviation accounts for approximately 2 percent
of global carbon emissions, as confirmed by sources such as ICAO and
the Intergovernmental Panel on Climate Change (IPCC).
While we note that certain ICAO analysis did determine that global
aviation emissions could triple by 2050 under an aggressive traffic
growth scenario (that was projected before the COVID-19 crisis) and
absent industry action, our industry has rigorous climate goals and
initiatives in place to address our GHG emissions so that will not
occur.
By way of context, the U.S. airlines have a strong climate change
record and a continuing commitment to further reduce the industry's
carbon footprint. Between 1978 and 2019, the U.S. airlines improved
their fuel efficiency by more than 135 percent, saving over 5 billion
metric tons of CO2--equivalent to taking more than 27
million cars off the road on average in each of those years. And
between 2000 and 2019, U.S. airlines improved their fuel and carbon
emissions efficiency by 40 percent.
These numbers are not happenstance. As an industry, we have
achieved this record by driving and deploying technology, operations,
and infrastructure advances to provide safe and vital air transport as
efficiently as possible within the constraints of our air traffic
management system.
Indeed, for the past several decades, airlines have dramatically
improved fuel efficiency and reduced CO2 emissions by
investing billions in fuel-saving aircraft and engines, innovative
technologies like winglets (which improve aerodynamics), and cutting-
edge route-optimization software.
A4A and our members are not stopping there. Since 2009, we have
been active participants in a global aviation coalition that committed
to 1.5 percent annual average fuel efficiency improvements through
2020, with a goal to achieve carbon neutral growth beginning in 2020,
subject to critical aviation infrastructure, technology, operations and
sustainable fuels advances by government and industry. Further, we have
adopted a long-term goal to achieve a 50 percent net reduction in
CO2 emissions in 2050, relative to 2005 levels.
The initiatives the U.S. airlines are undertaking to further reduce
our GHG emissions are designed to responsibly and effectively limit our
fuel consumption, GHG contribution and potential climate change impacts
while allowing commercial aviation to continue to serve as a key
contributor to the U.S., state and local economies as our Nation works
to recover from the COVID crisis.\1\ A4A and our members are keenly
focused on these initiatives, both at the national and international
levels. In addition to helping us achieve our environmental goals,
reducing fuel consumption directly reduces airline costs, thus
improving airline sustainability from both an economic and
environmental perspective. Further, as advancing technology,
operations, air traffic and ground-based infrastructure, and
sustainable aviation fuels to meet our rigorous goals requires
coordination across our broader industry and supply chain, our
coalition includes the airlines, business aviation, airframe and
aircraft engine manufacturers, airports, and air navigation service
providers from across the world.\2\
---------------------------------------------------------------------------
\1\ While we outline a number of our initiatives below, in response
to other questions, we note that a brief summary is available on A4A's
website at this link: https://www.airlines.org/airlines-fly-green/.
\2\ Details on our coalition and its initiatives are available at
these web links: https://www.atag.org/ and https://
aviationbenefits.org/environmental-efficiency/climate-action.
---------------------------------------------------------------------------
It is through these measures that we will prevent the worst-case
emissions growth scenarios that have been postulated and, in fact,
reduce the industry's emissions consistent with our 2050 target.
Question 2. Please detail any concerns or qualifications you may
have with any of these studies or their conclusions.
Answer. We believe you are referring to the ICCT Working Paper
``CO2 Emissions from Commercial Aviation,'' dated September
2019, which asserts an ``emissions growth rate'' for ``the past five
years'' that is ``70 percent higher than assumed under current ICAO
projections.'' \3\ A4A respectfully disagrees with the ICCT analysis,
as we believe there are underlying flaws in ICCT's methodology and
calculations. In fact, adjusting for these data and methodology issues,
one could conclude that global aviation CO2 emissions were
rising slower than ICAO had been projecting.
---------------------------------------------------------------------------
\3\ This is the only ICCT study we found with a five-year analysis
compared to ICAO projections. If so, we respectfully point out what may
be a typo in your question, which asserts a 79 percent higher growth
rate, rather than the 70 percent in the ICCT study we found.
---------------------------------------------------------------------------
First, it appears that ICCT inaccurately used data from the wrong
year--2012--as if it were 2013 data as a basis for its five-year
calculation. ICCT cites data from the International Air Transport
Association (IATA) to assert that the industry emitted 694 million
metric tons (MMT) of CO2 in 2013. However, this was a 2012
figure, whereas system-wide global commercial CO2 emissions
in 2013 were 710 MMTCO2. Second, ICCT appears to have
inappropriately mixed in its own modeling and methodology with IATA's,
without adjusting for the differences, thereby inflating the 2018
CO2 number.\4\ Third, the selection of 2013 as reference for
the ICCT analysis is arbitrary and ignores the cyclical nature of the
aviation industry. The five years chosen, 2013-2018, were
characteristic of the second half of a cycle. If the same analysis had
been conducted using a 11-year time window (which is on average the
period of a cycle of upward traffic and profitability in the aviation
industry and is typically used in trend assessments),\5\ ICCT would
have found that emissions were not rising faster than ICAO projections,
but were in fact rising approximately 18 percent slower than ICAO
projections.
---------------------------------------------------------------------------
\4\ As ICCT acknowledges, ICCT's modeling approach resulted in
overshooting the 2018 CO2 emissions by 2 percent relative to
IATA's data. (See page 4 of the ICCT report).
\5\ See Jiang, H. H., Hansman, R. J., 2004, ``An Analysis of Profit
Cycles in the Airline Industry,'' available at: https://dspace.mit.edu/
handle/1721.1/35759. We sadly note that this Massachusetts Institute of
Technology analysis and widely used reference point for industry cycle
analysis appears to have been somewhat prescient, in that year-end 2019
was when the industry reached its eleventh year in the cycle and the
COVID crisis in 2020 has clearly set the industry back.
---------------------------------------------------------------------------
Rather than debate the ICCT analysis, however, we reemphasize that
our industry's commitments to achieving carbon-neutral growth in the
near term and a 50 percent net reduction in CO2 emissions in
2050 relative to 2005 levels are aimed at ensuring we responsibly
manage and reduce our industry's carbon footprint.
Question 3. On March 2013, the International Air Transport
Association (IATA) Director General and CEO said that ``the ability to
manage our carbon emissions is our license to grow.'' Do you agree with
this statement?
Answer. Yes. As detailed above, A4A and our members are committed
to rigorous climate goals and initiatives as these are core elements of
sustainability, both for the industry and our planet. We believe that
environmental stewardship is not only critical to having a proverbial
``license to grow,'' it is critical to having a license to operate.
Adherence to Carbon Offsetting and Reduction System for
International Aviation Goals. I understand that ICAO adopted the Carbon
Offsetting and Reduction System for International Aviation (CORSIA)
program in 2016 and that it requires airlines to monitor and report
international emissions and to offset the growth in emissions above
average 2019-2020 levels using a global market-based carbon offset
program. The program is voluntary from 2021-2027 and does not address
domestic emissions from airlines.
On March 13, 2020, ICAO said they intend to move forward with
CORSIA without any modifications, but reports since then indicate that
ICAO intends to consider requests to modify the baseline during the
next scheduled meeting in June. Since March 30, 2020, IATA has argued
for modifications to the baseline because significant drops in
passenger traffic in 2020 would result in an unfair increase in the
cost to airlines to comply with emissions reductions over the 15-year
duration of CORSIA.
Question 4. Mr. Calio, are A4A and its members still committed to
the original targets and timeline of the CORSIA program?
Answer. A4A and our member carriers take our role in controlling
GHG emissions very seriously. Our primary focus is on getting further
fuel efficiency and emissions savings within the industry, through new
aircraft technology, sustainable aviation fuels and air traffic
management and other operational and infrastructure improvements.
However, A4A and our members strongly supported Congress' directive
under Public Law 112-200 that U.S. officials should conduct
international negotiations to pursue a global approach to address
aircraft emissions, and we have strongly supported both of the ICAO
agreements reached in 2016 as a result of this directive, i.e., the
CORSIA agreement, and the ICAO fuel efficiency and CO2
certification standard for future aircraft (which is slated to become
effective for new-type design aircraft this year and in 2023 for newly
manufactured in-production aircraft).
As you may know, the CORSIA agreement has two parts. First,
beginning on January 1, 2019, it required that all aircraft operators
with international flights emitting more than 10,000 metric tons of
CO2 monitor, verify, and report their emissions under a
common set of rules. All A4A members began complying with these
requirements in 2019. (Although U.S. aircraft operators have reported
fuel burn and emissions to the U.S. government for many years, the ICAO
CORSIA agreement called for reporting in a different format. It also
made such reporting a global requirement, such that other countries'
aircraft operators were compelled to start reporting activities that
U.S. airlines had been undertaking for decades). Second, CORSIA
includes a carbon offsetting obligation, which is slated to commence in
2021 and continue through 2035.
A4A and our members remain committed to CORSIA and the emissions
target that the countries agreed to when adopting it in 2016, to help
achieve carbon-neutral growth in international aviation from the levels
of CO2 emissions then projected to occur over the average of
2019-2020. When CORSIA was adopted, the projections were that 2020
international emissions would be above 2019 levels. The original
thought behind a two-year baseline was that it could smooth against
small market disruptions such as air traffic closures due to a volcanic
eruption in a particular region. However, no one envisioned a
disruption anywhere near as significant as that caused by COVID-19.
Accordingly, A4A supports the proposal before ICAO to use verified 2019
CO2 emissions data for calculating the baseline under
CORSIA, rather than using an average of 2019 and 2020 emissions, as
using the 2019 data will ensure that the potential for growth of
international aviation emissions is capped at the level the countries
intended when they entered the CORSIA agreement.
Question 5. If A4A and its members support any changes to its
commitments under CORSIA, please explain what they are and what impact
they would have in terms of additional aviation sector emissions?
Answer. As noted above, using the 2019 emissions data for CORSIA
will ensure that international aviation emissions are capped as
expected and intended. A4A has collaborated with IATA closely on this
matter. As illustrated in an IATA briefing on which we collaborated,
the average of the actual emissions in 2019 and 2020 is expected to be
equivalent to the sector's total emissions in 2010.\6\ As a result,
should this approach be used, the CORSIA baseline would be about 30
percent more stringent than it would have been without the COVID-19
crisis. Thus, we respectfully submit that using 2019 emissions for the
baseline has the intended impact on aviation emissions, whereas using
an average of 2019-2020 would be dramatically different than what the
counties agreed when adopting CORSIA.
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\6\ The briefing, entitled ``COVID-19 and CORSIA: Stabilizing Net
CO2 at 2019 `Pre-Crisis' Levels, Rather than 2010 Levels,''
is available at this web link: https://www.iata.org/contentassets /
fb745460050c48089597a3ef1b9fe7a8/covid19-and-corsia-baseline-
190520.pdf.
Question 6. How would a delay or decrease in the original agreed to
CORSIA targets impact the rate of deployment of technologies that can
help decarbonization the aviation industry?
Answer. We do not believe that ensuring CORSIA's emissions cap is
implemented at the intended level (using 2019 emissions data as the
baseline) will negatively impact technology deployment. However, the
COVID-19 crisis has negatively affected airframe and aircraft engine
manufacturers, who report that their research and development budgets
may be negatively affected due to the economic consequences of the
pandemic, and alternative fuel producers, who are reportedly struggling
as well.
Prospects for Sustainable Aviation Fuels. I am a strong supporter
of sustainable aviation fuels (SAFs) and believe they will be a key
component for airlines to meet future carbon pollution limits. In fact,
almost a decade ago, I chaired an Aviation Subcommittee hearing on
aviation fuels alternatives, and I authored legislation creating an FAA
biofuels Center of Excellence that was included in the 2012 FAA
reauthorization bill.
However, despite these investments, and notable multi-million-
dollar commitments by major airlines to purchase sustainable aviation
fuels, the International Energy Agency (IEA) reported that biofuel
accounted for less than 0.1 percent of total aviation fuel consumption.
Question 7. Mr. Calio, what do you think it will take to make SAFs
a significant portion of the domestic and international jet fuel
supply?
Answer. A4A and our members are also strong supporters of SAF,
which is a key pillar to the achievement of the aviation industry's
aggressive GHG emissions goals. Accordingly, the aviation industry has
worked hard to create the foundation for airline deployment of SAF, and
we appreciate your support for its development and deployment.
A4A was pleased to testify before your Aviation Subcommittee
hearing on SAF in 2011 and A4A and our members have continued to
steadily advance SAF since then. While we have made great strides,
making SAF reasonably cost competitive at scale remains a challenge.
Yet, before detailing that challenge and how we can overcome it, it is
important to take into account what has been done to create this
industry and in a relatively short time-frame (basically starting in
2006) as compared with ground-based alternative fuels that have had
substantial technology and policy support since the late 1970s.
As you know, to be sustainable, alternative jet fuel (i.e., SAF)
must be (1) as safe as petroleum-based fuels for powering aircraft; (2)
more environmentally friendly than petroleum-based fuels; and (3)
capable of being produced to provide cost-competitive, reliable supply.
A4A and our members have been working with government partners and
other stakeholders in a concerted effort to meet these criteria. For
example, in 2006, A4A, the Federal Aviation Administration (FAA), the
Aerospace Industries Association (AIA) and Airports Council
International-North America (ACI-NA) co-founded the Commercial Aviation
Alternative Fuels Initiative (CAAFI) \7\ to serve as the driving and
coordinating force for the development and deployment of SAF meeting
these criteria. We have made huge strides.
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\7\ See CAAFI's website at www.CAAFI.org.
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We are ensuring safety by requiring that all SAF meet the jet fuel
specification, having developed specific standards and processes for
this to be demonstrated. Accordingly, there are now seven approved
``pathways'' for SAF production, pairing processing technologies with
renewable feedstocks such as forestry residues, grasses, energy crops,
municipal solid waste and other biomass or industrial wastes, with
other pathways pending.\8\
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\8\ In addition, there are two pathways approved for jet fuel
production through co-processing renewable feedstock with crude oil-
derived middle distillates in petroleum refineries.
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We are ensuring environmental benefits by assessing the reduction
in GHG emissions associated with the production, transportation and use
of SAF, and an evaluation of the fuel under other relevant
environmental and social ``sustainability'' criteria. Indeed, as carbon
is fundamental to powering aircraft engines, the CO2
generated upon combustion cannot be eliminated through the use of SAF,
but it can be reduced by increasing the per-unit energy provided in the
fuel, reducing or avoiding GHG emissions somewhere along the
``lifecycle'' of the fuel, or some combination of the two. As a result,
SAF has been shown to achieve up to an 80 percent emissions reduction
as compared with fossil-based jet fuel.
As SAF currently tends to be considerably more expensive than
traditional jet fuel, we are working on means to scale up supply and
reduce costs. A key role our airlines are playing is to send
appropriate market signals to SAF producers (and would-be SAF
producers), the farmers and others who generate energy feedstock, and
investors in the alternative fuels industry. Further, A4A teamed with
the U.S. Department of Defense's procurement arm to encourage
alternative fuel producers to include SAF in their product slate and we
co-founded the Farm-to-Fly program with Boeing, the U.S. Department of
Agriculture and other partners ``to accelerate the availability of a
commercially viable sustainable aviation biofuel industry in the United
States, increase domestic energy security, establish regional supply
chains and support rural development.'' \9\
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\9\ See Agriculture and Aviation: Partners in Prosperity, available
at http://www.airlines.org/Documents/usda-farm-to-fly-report-jan-
2012.pdf; see also Agriculture and Aviation: Partners in Prosperity:
Putting Aviation at the Forefront of the President's Biofuels Targets,
Part II. Industry Recommendations, available at http://
www.airlines.org/Documents/Farm_to_Fly_Recom
mendations-A4A-Boeing-Jan2012.pdf.
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Our efforts are bearing fruit, such that United Airlines has been
taking commercial supply of SAF at Los Angeles International Airport
since 2016; American Airlines, Delta Air Lines, FedEx, Southwest, and
JetBlue (as well as United) all have prospective SAF purchase
agreements with the few existing and start up SAF suppliers; Alaska
Airlines has a Memorandum of Agreement with a SAF producer that is
intended to lead to procurement; and our other members have engaged in
demonstration flights and other activities to support SAF.
The aviation industry and existing and would-be SAF suppliers are
on the cusp of creating a viable SAF industry, but government support
is needed to provide financial bridging and other tools necessary to
help us get over the cusp. It is critical that Congress and the
Administration continue to provide positive support for alternative
energy programs and for public-private initiatives with SAF projects
such as CAAFI, FAA's Continuous Lower Energy, Emissions, and Noise
(CLEEN) program and the Center of Excellence for Alternative Jet Fuels
and the Environment (ASCENT) that you championed.\10\ Moreover, after
years of providing tax incentives and other support to ground-based
alternative fuels (in some cases reaching back into the 1970s),\11\
Congress should establish SAF-specific tax incentives (as discussed in
detail in response to Question #9 below) and SAF-specific loan
guarantee, grant and other such programs to support our efforts.
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\10\ For more detail on the U.S. airlines' SAF initiatives,
progress and remaining challenges, see A4A's primer, ``Deployment of
Sustainable Aviation Fuel in the United States'' (August 2019),
available at http://airlines.org/media/deployment-of-sustainable-
aviation-fuel-in-the-united-states/.
\11\ See, e.g., Congressional Research Service, Energy Tax Policy:
History and Current Issues, Oct. 30, 2008 (detailing ``action taken
during the 1970s to implement the new and refocused energy tax policy''
including ``the introduction of numerous tax incentives or subsidies
(e.g., special tax credits, deductions, exclusions)'' for ground-based
alternative fuels).
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There are strong policy arguments in favor of SAF-specific positive
incentives. First, while other sectors and modes of transportation can
be powered via a variety of energy sources, including electricity,
nuclear, solar, hydrogen and wind, to name a few, airlines will be
flying aircraft and engines requiring liquid, high energy-density fuels
for the foreseeable future. This drives our industry to be keenly
focused on the development and deployment of significant supplies of
liquid SAF. Yet this source of alternative energy has received no SAF-
specific tax or other incentives under Federal policy.\12\
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\12\ As discussed in our answer to question #9 below, however, some
SAF, that which is biomass-derived, does qualify as ``renewable
diesel'' for purposes of the biodiesel and renewable diesel tax credit
in 26 U.S.C. section 40A.
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Second, commercial aviation offers unique benefits to prospective
alternative fuels producers. First, fuel demand is highly concentrated.
The 40 largest U.S. airports account for an estimated 90 percent of all
the Nation's jet-fuel demand, while the top 10 airports account for
about half of demand. The country's largest airports--Los Angeles
(LAX), New York-Kennedy (JFK), Chicago O'Hare (ORD) and Atlanta (ATL)--
each demand more than one billion gallons of jet fuel annually. Demand
from Air Force bases and Navy installations is also highly
concentrated, and, in many cases, those facilities are located near
commercial airports. Thus, airports essentially compose a network of
markets that alone could support all the output from SAF production
facilities. In addition, with high-demand nodes across the country, the
aviation industry can support production from the full gamut of
potential producers, who will rely on different feedstocks depending on
where they intend to operate.
The benefits of a cost-competitive SAF industry that is capable of
producing at scale would not inure to the airline industry or would-be
SAF providers alone. The U.S. military, which has been a very active
partner to A4A in the pursuit of jet fuel alternatives, shares many of
the same interests as our airlines. Like airlines, jet fuel represents
a significant share of costs to the U.S. military, particularly the
U.S. Navy and U.S. Air Force. Volatile prices wreak havoc on military
budgets and present significant challenges for military planners. At
the same time, GHG emissions from military jet operations represent a
large portion of the Federal government's carbon footprint. Access to
stable supplies of SAF would also allow the armed services to address
these concerns and further enhance national security.
In addition, a vibrant SAF industry would support additional
American jobs and spur economic development at a time when this is
sorely needed. Rural America would benefit greatly from access to new
markets for new agricultural biomass crops, communities would benefit
from having increasing quantities of municipal solid waste diverted
from landfills and put to productive use, while industrial areas would
be revitalized through construction of new refineries and processing
facilities or revitalization of those that have been mothballed. At the
same time, a stable supply of SAF would improve our Nation's security
by further ensuring energy independence and would support national
economic security by improving our trade balance.
A4A and our members are committed to continuing to work to make SAF
commercially viable and we appreciate your support in this important
endeavor.
Question 8. The IEA estimated that roughly $10 billion would need
to be invested in at least 20 refineries for biofuels to account for 2
percent of annual aviation fuel demand and to make aviation biofuel
markets self-sustaining, do you agree with that assessment?
Answer. We believe this question is referring to the aviation
biofuels discussion in the International Energy Agency's (IEA) October
2018 market report, ``Renewables 2018: Analysis and Forecasts to
2023.'' \13\ In that discussion, IEA pointed out, correctly, that the
so-called HEFA [hydroprocessed esters and fatty acids] pathway is the
only SAF production pathway that ``is currently technically mature and
commercialized.'' Almost two years after the release of the Renewables
2018 report, the HEFA method is still the only commercialized pathway.
IEA went on to state that, absent other commercialized SAF production
processes, approximately 20 new HEFA SAF refineries would be required
by 2025 in order to supply 2 percent of the world's aviation fuel
demand, at an estimated investment cost of approximately $10 billion.
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\13\ Available at this web link: https://webstore.iea.org/download/
direct/2322. The aviation biofuels discussion appears at pp. 123-128,
and was expanded upon in a March 2019 IEA commentary piece, ``Are
Aviation Biofuels Ready for Take Off?,'' which is available at this web
link: https://www.iea.org/commentaries/are-aviation-biofuels-ready-for-
take-off.
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We agreed with the IEA's assessment when it came out, and we still
agree with it, although we would note that the total estimated
investment cost may now be higher due to the passage of time, the oil
price drop, and the COVID-related economic decline that has occurred
over the last few months. We also observe that HEFA refineries that
produce or are capable of producing SAF typically also produce
renewable diesel and other products, and for economic reasons they may
prefer to make more of their non-SAF product slate and,
correspondingly, less SAF. Thus, a key part of SAF supply scale up is
not only financing and capitalization of refining capacity but also
providing incentive support to make SAF more competitive with renewable
diesel and other products that have long enjoyed such support.
Question 9. For over a decade, Senator Grassley and I have
championed and managed secure extensions of the Section 40a tax credit
that provides a $1 per gallon tax credit for some kinds of biojet fuel.
Why do you think this credit has not had more of an impact in spurring
the adoption of sustainable aviation fuels?
Answer. A4A and our members are grateful for your work and that of
others to secure the ``biodiesel and renewable diesel tax credit,'' at
26 U.S. Code Sec. 40A, to provide a $1.00/gallon tax credit to those
who mix (i.e., blend) certain biofuels in the biofuel production supply
chain. While referred to as a ``biodiesel/renewable diesel'' credit,
and originally intended for ground-based fuels, Section 40A(f)(4)
expanded the eligibility criteria for the credit so bio-based jet fuel
meeting the relevant ASTM standard can qualify for the credit. While a
useful tool to help reduce the price gap between SAF and petroleum-
based jet fuel to a degree, it has not been sufficient to narrow the
gap given (a) the higher hurdle of producing SAF relative to ground-
based alternative fuels and (b) the fact that ground-based alternative
fuels (renewable diesel in particular) are eligible not only for this
tax credit, but many other incentives across the supply chain, which
make it more profitable for producers to produce. In addition, while we
very much appreciate Congress having included in the FY 2020
appropriations package a retroactive reinstatement and extension
through 2022 of the credit for biodiesel and renewable diesel under
section 40A, the two-year lapse did come at a crucial time for would-be
SAF producers and they have indicated to us that a longer time horizon
for such a tax credit is needed for SAF given the nascency of the SAF
industry.
To address these issues, we have been working with a coalition of
SAF producers, airlines, airports, labor, airframe and engine
manufacturers, and business aviation in urging consideration of a
unique, stand-alone blender's credit for SAF in the Internal Revenue
Code, as was done years ago with ground transportation alternative
fuels like ethanol and biodiesel/renewable diesel. (The tax credit for
ethanol and other alcohols (section 40) was put in place in 1980, while
the tax credit for biodiesel/renewable diesel (section 40A) dates back
to 2004/2005. Unlike ground-based alternative fuels, SAF has never had
its own dedicated, fuel-specific provision). Based on feedback from
alternative fuel producers who are capable of producing SAF or ground-
based alternative fuels, it is our understanding that to truly bridge
the gap and promote SAF production and use, the SAF-specific blender's
credit would need to be set at $2.00 per gallon, or $1.00 more than the
current level provided to biomass-derived SAF under section 40A. In
addition, such a provision would need to extend over a longer period,
such as over 10 years, to provide the market certainty the SAF
producers need. Moreover, whereas the current blender's credit in 40A
only applies to biomass, the SAF producers note that a SAF-specific tax
incentive should be defined to encompass fuel derived not only from
biomass but also the other feedstocks that are under development,
including waste streams and recovered gaseous carbon oxides.
Question 10. What other measures do you think the Federal
government could take to increase the production and utilization of
sustainable aviation fuels?
Answer. While A4A and our members are committed to doing our part
to make SAF commercially viable, we do believe the Federal government
has a role to play to complement our efforts. A SAF-specific blender's
tax credit, such as that outlined in our response to Question #9, is
one such measure. In addition, it is critical that Congress and the
Administration continue to fund the programs under the Energy Title of
the Farm Bill, make sure that these programs also are made available
for SAF, and support public-private initiatives such as CAAFI, CLEEN,
and ASCENT, which help enhance SAF technology and feedstock research
and development. Other potential options for consideration could
include SAF-specific grants and loan guarantees for production; support
for the review and approval process for new SAF pathways; a SAF-
specific production tax credit; development and enhancement of
production through tax creditable SAF production facility bonds; and
ensuring SAF regulatory parity with renewable diesel or preferably a
credit multiplier for SAF under the Renewable Fuel Standard (RFS).\14\
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\14\ Currently under the RFS Program, renewable diesel is accorded
an equivalence value of 1.7 (40 C.F.R. Sec. 80.1415), whereas SAF has
an equivalence value of 1.6. This means a gallon of renewable diesel
generates 0.1 more RINs (Renewable Identification Numbers) than does a
gallon of SAF, a disparity that, albeit small, contributes to
alternative fuel producers preferring to make the former over the
latter.
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We suggest that the following principles could help guide
complementary government action to further support commercially viable
SAF production and deployment:
Implementation of a policy framework that prioritizes
aviation and SAF production and use over road and maritime
transport alternative fuels. The road and maritime transport
sectors do indeed have other ``alternatives to decarbonize,''
such as electric vehicles, whereas aviation does not have
similar viable alternatives.
Selection of policy timeframes that match return-on-
investment timeframes, usually ten to twenty years, to reduce
investment risk.
Providing opportunities for public-private partnerships in
SAF production.
Providing continued support for SAF research and
development, including development of feedstock supply chains
and new and innovative SAF production technologies.
Consideration of all potential SAF feedstocks (e.g.,
traditional biomass sources, municipal solid waste, animal
fats, waste oils and greases, waste gases) and production
pathways.
We would be glad to discuss these and any other ideas with you in
detail should that be of interest.
Question 11. What do you think of the European Commission's
proposed initiative, ReFuelIEU Aviation, which aims to boost the supply
and demand for SAFs? Do you believe the U.S. market would benefit from
a similar initiative?
Answer. A4A reviewed and submitted comments on the overview
document the European Commission issued explaining what it plans to
consider under its ``ReFuelEU Aviation--Sustainable Aviation Fuels''
review. While this ``Inception Impact Assessment'' document for
ReFuelEU Aviation was light on details,\15\ as we conveyed to the
Commission, we believe several of the positive incentives and
supportive initiatives under consideration could be helpful, including,
for example, an increased multiplier for SAF credit under the recast
European Renewable Energy Directive (RED); a mechanism under which
funding assistance would be provided to SAF producers and/or airlines;
feedstock prioritization for SAF (over green (i.e., renewable) diesel
and other road transport alternative fuels); a central auctioning
scheme for SAF; a collaborative platform to facilitate SAF purchase
agreements; and technical facilitation and support for SAF producers
seeking qualification and approval of their fuel.
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\15\ The Inception Impact Assessment document is available at this
web link: https://ec.europa.eu/info/law/better-regulation/have-your-
say/initiatives/12303-ReFuelEU-Aviation-Sustainable-Aviation-Fuels.
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A4A supports the creation of ``a stable policy framework over a
sufficient time horizon to provide investors with the necessary
confidence to invest in the production of [SAF] and for airlines to
pursue efficient fuels policy'' as the Commission noted in its
Inception Impact Assessment. However, as we conveyed to the Commission,
we believe their plan to consider imposing a SAF blending and use
mandate is premature at this juncture. As the Commission acknowledged
in the Inception Impact Assessment, SAF are still a long way from being
commercially viable at scale. Until they are, we believe the focus
should instead be on positive measures and incentives that are geared
towards improving cost-competitiveness, expanding supply, and
establishing the long-term commercial viability of SAF.\16\
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\16\ The approach taken by Norway is instructive in this regard. On
January 1, 2020, a SAF blending mandate of 0.5 percent by volume of
total aviation fuel sold per year, excluding the military, went into
effect in the country. See https://lovdata.no/dokument/LTI/forskrift/
2019-04-30-555. We understand from a European airline that the mandate
has led to a significant increase in the price of SAF. Due to the lack
of SAF availability, the mandate has had the predictable effect of
shifting pricing leverage to SAF producers. A4A is concerned that the
same outcome and market distortion would result if the EU or one or
more Member States were to impose a blending mandate before the SAF
industry has become more mature and the price of and market for SAF are
made more cost-competitive.
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In our comments on the Inception Impact Assessment, A4A noted that
we and our members would be glad to be stakeholders in the ReFuelEU
Aviation process, sharing our experience from CAAFI and other
initiatives.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Nicholas Calio
Reports have highlighted the high rate of coronavirus infections in
flight crews, including the hundreds of pilots and flight attendants
who have tested positive for the virus. You testified that your
organization's member airlines are now requiring employees and
passengers to wear masks.
Question 1. Are airlines providing masks for both employees and
passengers free of charge?
Answer. Yes, A4A member airlines are providing masks for both
employees and passengers at no cost when a crew member or customer does
not have a mask of their own.
Question 2. Do airlines have access to sufficient supplies to
provide masks to employees and passengers, and do airlines have
contingency plans in place if they encounter supply issues?
Answer. Yes, A4A member airlines currently have sufficient supplies
and each respective air carrier has contingency plans, to the extent
feasible, for supply issues that may arise.
______
Response to Written Questions Submitted by Hon. Edward Markey to
Nicholas Calio
Question 1. I support efforts by airlines to now require all
passengers to wear face masks on airplanes. However, significant
questions remain about the implementation of these policies across
different companies. To your knowledge, how do the various airlines
intend to enforce this policy? What are the procedures and penalties
for non-compliance, and how will airlines continue to protect the
health and safety of crew members and fellow passengers in the event of
non-compliance?
Answer. A4A member carriers are vigorously enforcing face covering
policies. This step is just one critical element of the multiple layers
that A4A carriers are implementing to mitigate risk and protect
passengers and crew. Air carriers also have implemented other policy
updates regarding face coverings, including:
Preflight Communications: Each airline clearly articulates
its individual face covering policy in communications with
customers, which may require passengers to acknowledge the
specific rules during the check-in process.
Onboard Announcements: Onboard the aircraft, crew members
announce specific details regarding the respective carrier's
face covering policy including the consequences passengers
could face for violating the policy.
Consequences for Noncompliance: Each carrier determines the
appropriate consequences for passengers who are found to be in
noncompliance of the respective airline's face covering policy
up to and including suspension of flying privileges on that
airline.
Question 2. To your knowledge, has there been a science-driven
study of what exactly constitutes safe distancing in an aircraft cabin,
with and without the use of masks? Do you know of any science-based
studies that have contributed to the development of current airline
policies for seating or other behavior in aircraft cabins?
Answer. Just as there is no known vaccine or specific antiviral
treatment to prevent COVID-19, our industry, and nearly every other
business globally, awaits scientific studies and breakthroughs in order
to better understand how the virus acts and can be mitigated in
specific environments and situations. That said, along with the broader
work being done by the scientific community, individual airlines,
industry, trade associations and many others in the aviation community
are all conducting or facilitating research to better guide policy
decisions. As the science progresses, so will airline policies. The
aviation industry has been and will continue to evaluate all the
current layers of protective health measures across the passenger
journey to determine science-based efficacy and continuous reassessment
of better methods to mitigate risk of transmission. While risk can
never be eliminated, until a vaccine or treatment is available,
airlines will continue to take extraordinary steps to mitigate
transmission of the virus.
For more information on mitigation efforts, I would encourage you
to visit www.AirlinesTakeAction.com. I would also highlight A4A's
awareness initiative, ``Fly Healthy. Fly Smart.'' This initiative calls
attention to the enhanced cleaning and procedural changes U.S. airlines
are implementing as well as reminding the traveling public of steps
they can take to mitigate transmission. Some of these efforts include:
A4A's member airlines are requiring passengers and customer-
facing employees to wear a face covering over their nose and
mouth throughout the journey--check-in, boarding, in-flight and
deplaning.
A4A member airlines have aircraft equipped with HEPA
filters, which help generate hospital-grade air quality. The
Centers for Disease Control and Prevention (CDC) has said that,
``Because of how air circulates and is filtered on airplanes,
most viruses and other germs do not spread easily on flights.''
U.S. airlines have implemented intensive cleaning protocols,
in some cases to include electrostatic cleaning and fogging
procedures.
Carriers are working around the clock to sanitize cockpits,
cabins and key touchpoints--including tray tables, arm rests,
seatbelts, buttons, vents, handles and lavatories--with EPA-
approved disinfectants.
Carriers have implemented a range of policies--including
back-to-front boarding and adjusting food and beverage
services--to help allow for distancing between people.
As an additional layer of protection, A4A's member airlines
have endorsed temperature screenings conducted by TSA.
Question 3. Do you believe that public safety is best served by
what appears to be a patchwork approach to cabin safety by each of the
airlines, including seat blocking and aircraft sanitization?
Answer. The aviation industry has been and will continue to
evaluate all the current layers of protective health measures across
the passenger journey to determine science-based efficacy and
continuous reassessment of better methods to mitigate risk of
transmission. These efforts all have a unified outcome-based approach
to mitigate risk but may vary operationally at each carrier and/or
airport. There are certain layers of the mitigation process, such as
A4A member airline endorsed temperature screenings conducted by TSA,
that rigid uniformity may address well.
However, other variables such as boarding or check-in may not, as
neither all aircraft nor all airports are the same. Airlines care
deeply about their passengers and their crew members and will continue
to implement and continually evaluate better methods to mitigate risk
to best serve their health and safety.
Do you believe that the public and crewmembers would be
better served by uniform and consistent policies--based on
science--for safe occupancy of aircraft cabins during this
pandemic?
Answer. Please see previous answer.
To that end, do you support my legislation--the Ensuring
Health Safety in the Skies Act--that will charge a joint task
force of aviation, security, and public health experts to
develop recommendations for such policies?
Answer. While we appreciate the obvious well-intended premise of
the legislation, A4A does not believe a broad sweeping task force as
envisioned is the most effective and efficient approach to addressing
the COVID-19 circumstances. We are certainly willing to work with you
on the concept, but we do not believe high-level task forces are
equipped or the proper venue to determine such detailed and varied
topics as airplane boarding, de-boarding and baggage handling, amongst
others. We believe Congress would find greater value in supporting and
encouraging scientific breakthroughs and government centric
responsibilities such as contract tracing and TSA temperature
screenings.
Question 4. Do you believe that frontline essential workers, such
as flight attendants and other airline crewmembers, should be eligible
for retroactive ``pandemic pay,'' or hazard pay, for the risks they
assume through their everyday employment?
Answer. A4A is not aware of a specific proposal or the parameters
of such a proposal to determine a policy position on this matter.
Question 5. Despite $25 billion in emergency relief for airline
workers, many major carriers are predicting massive layoffs this fall.
What are your carriers doing to prevent a tragedy in which tens of
thousands of workers could lose their jobs?
Answer. Airlines sincerely appreciate Congress for reaching
agreement on the bipartisan CARES Act, which included provisions
intended to assist the U.S. airline industry to continue making payroll
and protect the jobs of pilots, flight attendants, gate agents,
mechanics and others. As this unprecedented event unfolds, airlines
will continue to evolve to survive. They are severely impacted by the
operational and financial realities of circumstances beyond their
control during this crisis. As we all face the difficulties of these
unparalleled times, please know that air carriers fully recognize
employees are the backbone of our industry and its' greatest resource
and are working every day to protect airline jobs.
Will you be looking for the Federal for government to again
step in on the behalf of frontline workers, and if so, what
might that support look like?
Answer. A4A is not aware of any efforts to seek additional Federal
assistance.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Nicholas Calio
We are hearing some calls from some industries that they want to be
protected from paying damages to their employees and customers who get
sick due to lack of COVID protections.
Question 1. After receiving tens of billions of taxpayer support,
are the airlines asking for liability protection too, and if so, what
specific and binding safety and consumer protection standards would the
industry agree to in exchange for protection from liability?
Answer. Airlines sincerely appreciate Congress for reaching
agreement on the bipartisan CARES Act, which included provisions
intended to assist the U.S. airline industry to continue making payroll
and protect the jobs of pilots, flight attendants, gate agents,
mechanics and others. Those funds help the industry to protect airline
jobs.
As part of a broader coalition of businesses both small and large,
including the New Mexico Association of Commerce & Industry and the New
Mexico Retail Association, airlines support safe harbor from
unwarranted lawsuits. Attached are two letters we believe you may find
useful as Congress deliberates this issue.
Question 2. Would you agree to everything that Dr. Godwin has
outlined in her testimony?
Answer. A4A appreciates the ideas and concepts Dr. Godwin brought
forth in her testimony. However, as Dr. Godwin's testimony is not an
A4A product, we neither endorse nor oppose any of the content.
This is not the first time that the airline industry has needed
dramatic help from the government and relief from taxpayers to get it
through rough times. We definitely recognize that the airlines are
being hit hard by the lull in travel driven by the coronavirus pandemic
and this is through no fault of their own. But we are facing another
major crisis: climate change. If we assume that once the pandemic
subsides that travel will return to normal, we will still be
confronting a major issue that many Americans care about. If we are
going to continue to use their tax dollars to get you through this
rough patch, we should be able to offer them benefits in return. If
anything, this time offers the airline industry a moment of pause to
replan and think creatively about how to reduce its carbon footprint.
And not just with offsets--actual reduction.
Question 3. So, how can airlines use this pause to rethink the
industry and the major crisis we are facing on climate change?
Answer. The U.S. airlines have a decidedly strong fuel efficiency
and greenhouse gas (GHG) emissions record that is often overlooked or
misstated. In fact, between 1978 and 2019, the U.S. airlines improved
their fuel efficiency by more than 135 percent,\17\ saving over 5
billion metric tons of carbon dioxide (CO2), equivalent to
taking 27 million cars off the road each of those years. Before COVID-
19 struck, U.S. airlines were transporting a record 2.5 million
passengers and 58,000 tons of cargo per day, while contributing just 2
percent of our Nation's GHG emissions.
---------------------------------------------------------------------------
\17\ Using a more recent timeframe, the U.S. airlines improved
their fuel-and carbon emissions-efficiency by 40 percent between 2000
and 2019.
---------------------------------------------------------------------------
These numbers are not happenstance. We have achieved this record by
developing and deploying technology, operations and infrastructure
advances central to providing safe and vital air transport as
efficiently as possible within the constraints of our current air
traffic management system. Even as the world is beset by a pandemic,
one that has decimated our industry, we reaffirm our commitment to
protecting the planet as we reconnect it.
Since 2009, we have been active participants in a global aviation
coalition that committed to 1.5 percent annual average fuel efficiency
improvements through 2020, with a goal to achieve carbon neutral growth
beginning in 2020, subject to critical aviation infrastructure,
technology, operations and sustainable fuels advances by government and
industry. Further, we have adopted a long-term goal to achieve a 50
percent net reduction in CO2 emissions in 2050, relative to
2005 levels. As we work to rebuild our previously robust and healthy
industry and the global economy, we will continue our unwavering
commitment to these goals.
The initiatives the U.S. airlines are undertaking to further reduce
our GHG emissions are designed to responsibly and effectively limit our
fuel consumption, GHG contribution and potential climate change impacts
while allowing commercial aviation to continue to serve as a key
contributor to the U.S., state and local economies as our Nation works
to recover from the COVID crisis.\18\ A4A and our members are keenly
focused on these initiatives, both at the national and international
levels.
---------------------------------------------------------------------------
\18\ While we outline a number of our initiatives below, in
response to other questions, we note that a brief summary is available
on A4A's website at this link: https://www.airlines.org/airlines-fly-
green/.
---------------------------------------------------------------------------
We will meet our commitment to protect the planet by bringing back
into service fuel-efficient aircraft and engines, by continuing to
develop and deploy sustainable aviation fuels and by implementing more
efficient procedures, both in the air and on the ground. Moreover, we
continue to strongly support both international aviation GHG emissions
agreements reached in 2016 under the International Civil Aviation
Organization, the United Nations body that sets standards and
recommended practices for civil aviation. The first of these agreements
established a fuel efficiency and CO2 certification standard
for future aircraft, which is slated to go into effect this year for
new-type design aircraft and in 2023 for newly manufactured in-
production aircraft. The second, the Carbon Offsetting and Reduction
Scheme for International Aviation (CORSIA) represents the first and
only global market-based measure for GHG emissions from an individual
business sector.
The Federal government has an important role to play in
complementing our efforts in four key areas:
1. Continuation and proper funding of aviation environmental
research and development programs to support the industry's
technology and operations initiatives;
2. Recognizing that the U.S. Federal government controls the air
traffic management infrastructure and airspace in which
aircraft fly, business-case-based implementation of a
modernized air traffic control system prioritizing existing
aircraft equipage;
3. Stable policies to further support making sustainable aviation
fuel commercially viable; and
4. Continuing commitment to the two international aviation climate
agreements reached under the International Civil Aviation
Organization in 2016.
We would be glad to discuss these initiatives with you in greater
detail at your convenience.
______
______
May 20, 2020
TO THE MEMBERS OF THE UNITED STATES CONGRESS:
The undersigned chambers of commerce urge Congress to pass timely,
temporary and targeted liability relief legislation to provide
businesses a safe harbor from unwarranted lawsuits that, left
unchecked, will endanger the fight against the pandemic and undermine
the safe and orderly return to work for millions of Americans.
From distillers who switched to producing hand sanitizers, to
manufacturers that transformed their operations to construct personal
protective equipment (PPE) and ventilators, to front line medical
professionals treating the afflicted, to pharmaceutical companies that
are expediting research into cures, American businesses have rallied to
fight the pandemic. During the stay-at-home orders, essential
businesses have remained open and innovated in ways that permitted them
to continue to provide critical services and supplies. Now millions of
other businesses are in the process of reopening, desiring to do so in
a safe manner that protects their employees and customers.
This is an unprecedented situation and despite employers' best
efforts to comply with public health guidance, many are concerned that
they will be forced to defend themselves against a wave of lawsuits.
Their concern is driven by the fact that each day brings news of more
lawsuits that have already been filed. That is why Congress should
provide a safe harbor that holds truly bad actors accountable, but that
protects those employers who are working to follow public health
guidance. Specifically, temporary protections should remain in place
for the duration of the pandemic crisis and response that cover:
Businesses that work to follow government guidelines against
COVID-19 exposure claims.
Healthcare providers and facilities on the front lines of
the COVID-19 response.
Manufacturers that repurposed production and distribution to
provide PPE, sanitizers, and other needed countermeasures.
Companies that have donated their stock of supplies to
hospitals and medical professionals.
Public companies that could face securities lawsuits,
including those driven largely on stock price drops resulting
from the global pandemic under the spurious assertion that
management failed to warn investors.
To ensure that we continue to wage war against the pandemic while
also safely returning Americans to work, Congress must act without
delay.
Sincerely,
Business Council of Alabama
Alaska Chamber
Arizona Chamber of Commerce and Industry
Arkansas State Chamber of Commerce/AIA
California Chamber of Commerce
Colorado Chamber of Commerce
Connecticut Business & Industry Association
DC Chamber of Commerce
Delaware State Chamber of Commerce
Florida Chamber of Commerce
Georgia Chamber of Commerce
Chamber of Commerce of Hawaii
Idaho Association of Commerce & Industry
Illinois Chamber of Commerce
Indiana Chamber of Commerce
Iowa Association of Business and Industry
Kansas Chamber of Commerce & Industry
Kentucky Chamber of Commerce
Louisiana Association of Business and Industry
Maine State Chamber of Commerce
Maryland Chamber of Commerce
Associated Industries of Massachusetts
Michigan Chamber of Commerce
Minnesota Chamber of Commerce
Mississippi Economic Council
Missouri Chamber of Commerce & Industry
Montana Chamber of Commerce
Nebraska Chamber of Commerce & Industry
Las Vegas Metro Chamber of Commerce
Business and Industry Association of New Hampshire
New Jersey Chamber of Commerce
New Mexico Association of Commerce & Industry
The Business Council of New York State
North Carolina Chamber
Greater North Dakota Chamber
Ohio Chamber of Commerce
State Chamber of Oklahoma
Oregon Business and Industry
Pennsylvania Chamber of Business and Industry
Puerto Rico Chamber of Commerce
South Carolina Chamber of Commerce
South Dakota Chamber of Commerce and Industry
Tennessee Chamber of Commerce & Industry
Texas Association of Business
Salt Lake Chamber
Vermont Chamber of Commerce
Virginia Chamber of Commerce
Association of Washington Business
West Virginia Chamber of Commerce
Wisconsin Manufacturers & Commerce
Wyoming State Chamber of Commerce
U.S. Chamber of Commerce
______
Response to Written Questions Submitted by Hon. John Thune to
Todd Hauptli
Question 1. Mr. Hauptli, I appreciate you mentioning the CARES Act
Airport Improvement Program assistance to Rapid City Regional Airport,
which has seen a precipitous decline in revenues the past two months.
Rapid City and the surrounding Black Hills are a major tourist
destination, and the airport is already anticipating a major decline in
travel for the summer months that will only exacerbate revenue
shortages.
You mentioned in your testimony the importance of Federal funding
flexibility to ensure airports can allocate funds where they see fit.
Have any of your members encountered challenges in spending these
funds, and do you have any suggestions for additional flexibility that
can be provided to airports as we look toward recovery?
Answer. Thank you for the question, Senator. Our members are
grateful that the CARES Act included $10 billion to help them through
the immediate coronavirus crisis. We also appreciate that the bill
included much-needed flexibility that allows airports to use Federal
funds for operations, debt service and other lawful purposes. This
flexibility is helping airports keep their workers employed and avoid
defaulting on their bonds. The Airport Improvement Program, which
airports rely on to fund infrastructure projects, does not include that
same flexibility.
Our members suggest that the flexibility in the CARES Act is
working well and is helping airports cover some of their immediate
needs. We realize that it is not easy for a Federal agency to quickly
distribute $10 billion. But our members generally give the FAA high
marks for working around the clock to help airports, for instituting an
expedited application process and for getting Federal funds to airports
as quickly as possible.
I would note that should additional Federal funding for airports
materialize, which we believe to be imperative given the depths of the
crisis and the unprecedented challenges facing airports, we would
recommend that Congress include the same flexibility provided by the
CARES Act. Specifically, the inclusion of language providing for the
use of funds for ``any purpose for which airport revenues may lawfully
be used.''
Question 2. You also mentioned the importance of the Essential Air
Service (EAS) program, which provides a critical service to three
airports in South Dakota. The Department of Transportation recently
released a notice providing temporary flexibility for the EAS program.
Do your members feel this order provided airlines serving these
communities with the flexibility needed to maintain a minimum level of
service?
Answer. Senator, thank you for your longstanding support for
airports in South Dakota and for programs that help small communities
have access to our national airspace system. As you mentioned, the
Department of Transportation has taken steps to help carriers that
participate in the Essential Air Service program. For instance, DOT is
authorizing subsidy payments for certain non-completed flights, and the
agency is not forcing EAS carriers to comply with certain requirements.
Considering the unprecedented and dramatic drop in passenger levels due
to the coronavirus, these actions and additional flexibility for EAS
carriers seem reasonable and appropriate.
That said, we believe Congress should take additional steps to
protect the EAS program and to ensure small communities continue to
receive commercial air service. Congress can start by increasing
funding for the EAS and Small Community Air Service Development
programs and by making modifications to both programs.
As you know, commercial airlines have reduced or eliminated service
to a long list of small communities in recent weeks. We expect that it
will be challenging for many small communities to regain commercial air
service in the aftermath of the current crisis. That could be even more
difficult if the airlines contract in size as many expect. Increasing
funding for EAS and the Small Community Air Service Development
programs would provide smaller communities with a much-needed boost and
help preserve commercial air service.
In addition to increased funding, we are encouraging Congress to
reexamine the eligibility requirements for communities to participate
in the EAS program, including the current subsidy caps and enplanement
standards. EAS communities should not be unfairly penalized because
passenger demand has declined due to the coronavirus.
We also urge Congress to expand eligibility for the Small Community
Air Service Development Program and eliminate unnecessary restrictions.
With increased funding more than 40 communities or consortia of
communities and more than four per state should be allowed to
participate in this underfunded program. We also recommend that
Congress eliminate an unnecessary restriction that prevents communities
from receiving additional grants to support the same air service
project.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Todd Hauptli
Question 1. I am concerned with the need for airport managers to be
able to utilize these funds for the preferred purpose at the local
level. While the funds allocated by DOT are intended to cover
continuing operations and replace the vital revenue lost from the sharp
decline in airport traffic caused by COVID-19, this financial support
may also be used for airport capital expenditures. Have any of your
member airports experienced difficulty in working with the FAA to
allocate funds in a manner preferred at the local level?
Answer. Our members are grateful that the CARES Act included $10
billion to help them through the immediate coronavirus crisis. Airports
also appreciate the flexibility in the bill that allows airports to use
Federal funds for operations, debt service, infrastructure and other
lawful purposes. This flexibility is helping airports to keep workers
employed, avoid defaulting on their bonds, and move forward with their
capital projects.
Our members suggest that the flexibility in the CARES Act is
working well and is helping airports cover some of their immediate
needs. We realize that it is not easy for a Federal agency to quickly
distribute $10 billion. But our members generally give the FAA high
marks for working around the clock to help airports, for instituting an
expedited application process and for getting Federal funds to airports
as quickly as possible.
As you mentioned, airports are allowed to use CARES Act grants for
capital projects, too. But those projects include additional
requirements and a separate application process. According to the
agency, a development or construction project must be consistent with
prior Federal obligations, meet safety and security standards and
comply with ``other specific requirements for new airport development
under the CARES Act.''
We recognize and appreciate the FAA's distinction between the use
of CARES Act funding for capital projects, which have a different set
of requirements to meet under the law, and noncapital expenses. We do
not, however, believe that it is wise or necessary to unduly burden
airports interested in utilizing CARES Act funding for capital
projects, as is clearly allowable under the law.
Question 2. A number of airlines are now requiring passengers to
wear masks and facial coverings. Of course, before passengers check-in
and board the aircraft, they must pass through the terminal, most
likely placing themselves within six feet of other people. To help
contain the spread of COVID-19, do you believe airports should play a
role in health-related screening and testing, including the provision
of masks at terminal entry points?
Answer. AAAE and our members believe that airports, airlines, our
Federal partners, and other stakeholders need to work closely together
to protect the health and safety of passengers and our employees. It is
critical that we have clear and consistent Federal guidelines and
standards, especially on the matter of health-related screenings and
testing and facial coverings. Passengers should know what to expect
when they arrive at the airport regardless of which airport or airline
they happen to use. They should also receive consistent treatment and
protection throughout their travel experience.
In regard to masks, AAAE has repeatedly recommended that all
passengers and employees in the airport environment wear appropriate
facial coverings. Many U.S. carriers are also requiring passengers and
customer-facing employees to wear facial coverings. However, since
there is no Federal policy on facial coverings, airports are
understandably following state and local guidelines. If there is a
local facial covering mandate, airports, in many cases, are providing
masks to those passengers who may need them.
AAAE anticipates that these efforts will expand shortly because the
Federal Emergency Management Agency is beginning to distribute
approximately 87 million cloth facial coverings to all Part 139
commercial service airports. These facial coverings will be made
available primarily for the traveling public, but airports may also
distribute them to their workers, tenants, and other partners at the
airport.
If the Federal Government determines that health screenings or
other testing is necessary before a person can travel, AAAE believes
this should be a Federal Government responsibility that should be
closely coordinated with local health officials and airport operators.
Airports simply do not have the medical expertise to conduct health
screenings of passengers. Additionally, the FAA continues to maintain
that the use of airport employees for public health screenings is
generally not considered a proper use of airport revenue.
For any future health screenings that are required, airports will
work closely with the appropriate Federal agencies and other aviation
partners to determine where to conduct any necessary medical
evaluations. Each airport configuration is unique, so the best location
for health screenings may vary from airport to airport. It will be
critical to evaluate locations so that these procedures do not create
unnecessary bottlenecks or other unintended consequences.
Question 3. I think we all agree that a strong airline industry is
critical to our economic recovery. The amount of passengers screened by
the TSA is down by about 94 percent. It's clear that in order to
increase confidence in air travel, we'll need to implement robust
health testing and screening protocols at our Nation's airports until a
vaccine becomes available. I'd like to get the panel's thoughts on
possible testing and screening options, including the feasibility of
temperature testing at TSA checkpoints, and whether you believe TSA is
the appropriate entity to carry out these activities?
Answer. I completely agree with your assessment about the need to
increase confidence in air travel. AAAE believes that the Federal
Government including the Centers for Disease Control should set Federal
standards and determine the necessity, effectiveness, and timeline for
any protective safeguards for passengers, including the use of health
questionnaires, health screenings or temperature checks. This Federal
framework should also include any protocols that may be necessary to
ensure that health screenings are consistently applied throughout the
aviation system.
While a general consensus has emerged on the use of facial
coverings by passengers and workers throughout the aviation system, the
issue of temperature checking is more complex. In addition to the
threshold question as to whether or not they provide a public health
benefit, there are numerous complex operational and policy questions to
understand. Where would the tests be conducted? By whom? Who would
determine whether or not an individual is fit to travel?
It is our understanding that an interagency effort with
participation from a broad section of U.S. government entities,
including the CDC, DHS, TSA, DOT, FAA, and others, is underway to look
at these and other issues regarding temperature checks, contact
tracing, and other initiatives, and we look forward to reviewing their
recommendations.
Question 4. What is the U.S. airline industry doing, or could be
doing, to build the confidence of the travelling public by sharing the
preexisting and new measures in place to protect the health of
passengers, such as the use of HEPA filters in air filtration systems?
Answer. I know others on this panel will be able to answer your
specific question about what the airlines are doing to build confidence
in the traveling public and protect the health of passengers. But I can
tell you what steps airports are taking to build confidence and to
ensure that our facilities are safe for passengers and airport
employees alike. Airport operators have undertaken numerous efforts
since the onset of this national emergency to mitigate the transmission
of the COVID-19 virus. Our members are working diligently to create and
maintain a clean, safe, and secure environment.
Airports are thoroughly cleaning, disinfecting and sanitizing their
facilities to a higher public health standard, including all high-touch
surfaces like toilets, faucets, sinks, tables, doorknobs, light
switches, countertops, and handles; all TSA checkpoints; baggage areas;
and other common use locations. Airports are using EPA-approved
disinfectants or alternative disinfection methods, such as ultrasonic
waves, high intensity UV radiation, and foggers. Airports are training
workers on new cleaning guidelines and are providing cleaning staff
with protective equipment to avoid contacting or spreading the virus.
Airports are also promoting physical distancing. They have
installed physical distancing markers and are making regular
announcements about the need for additional spacing. Airports, along
with other partners, have installed plexiglass barriers to protect
passengers and workers. And finally, airports are providing personal
protective equipment and facial coverings to airport employees and
passengers. These enhanced efforts are designed to better protect
passengers, employees and Federal partners who operate at airports from
contracting or spreading the COVID-19 virus.
As I mentioned during the hearing, airports are urging Congress to
provide Federal funding for increased operational and infrastructure
development costs associated with responding to COVID-19. For instance,
additional funding would help implement physical distancing and
touchless travel; enhance cleaning and sanitization; upgrade heating,
ventilation, and air conditioning system upgrades, and make other
necessary investments to protect passengers and employees.
______
Response to Written Questions Submitted by Hon. Marsha Blackburn to
Todd Hauptli
Question 1. Airport concessionaires play a vital role in the
airport and aviation ecosystem. Most concessionaires' revenues are now
down by 90 percent, and many have closed their locations. Are you
working closely with restaurants and retail stores to ensure their
employees will have a safe and reliable transition back to their place
of work?
Answer. You are absolutely correct that concessionaires play a key
role in the airport ecosystem. We value the close relationship that
airports have with concessionaires, car rental companies, fixed-based
operators and other airport partners. We realize that they--like
airports and airlines--are suffering due to the dramatic drop in
passenger levels and revenue. Even with funding in the CARES Act,
airports have limited resources and little incoming revenue because of
the dramatic drop in passengers during the coronavirus crisis. Despite
a long list of needs, airports are working closely with their partners
as they try to recover from the current the crisis and deal with huge
financial losses the entire airport ecosystem is facing. Many airports
have identified ways to assist concessionaires and other businesses
operating at their facilities. Because every airport and every
airport's financial situation is unique, those discussions are taking
place on an airport-by-airport basis. We expect that it will take
airports four to five years to fully recover. As I mentioned in my
testimony, we are urging Congress to provide airports with additional
resources to help them with their operating costs and debt service
payments at a time when revenues are still way below where they were
last year. We are also urging Congress to provide assistance for
concessionaires and other airport partners that have been significantly
impacted by the crisis.
Question 2. A number of airlines are now requiring passengers to
wear masks and facial coverings. To help contain the spread of the
Coronavirus, do you believe airports should require masks and/or screen
the temperature of airline passengers at terminal entry points?
Answer. To help prevent the spread of coronavirus, AAAE believes
that all passengers and employees in the airport environment should
wear appropriate face coverings. Since there is no nationwide policy on
the use of facial coverings, airports are following state and local
guidelines. If there is a local facial covering mandate, many airports
are providing masks to those passengers who may not have one.
AAAE anticipates that more passengers will be encouraged to wear
facial coverings because the Federal Emergency Management Agency is
beginning to distribute approximately 87 million cloth facial coverings
to all Part 139 commercial service airports. These facial coverings
will be made available primarily for the traveling public, but airports
may also distribute them for their workers, tenants, and other partners
at the airport.
In regard to health screening or temperature checks of airline
passengers, AAAE believes that the Federal Government including the CDC
should determine the necessity, effectiveness, and timeline for any
protective safeguards for passengers to travel. This Federal framework
should ensure that any protocols that may be necessary for health
screenings are consistently applied throughout the aviation system.
If the Federal Government determines that health screening of
airline passengers is necessary, those screenings should be conducted
by public health officials who have medical expertise. Airport
personnel do not have this expertise to conduct health screenings,
particularly for those travelers who may require additional scrutiny.
I appreciate your suggestion about screening passengers at the
terminal entry points and believe that should be considered by the
appropriate Federal agencies, working closely with airports and other
aviation partners, as future health screenings are contemplated. Since
each airport configuration is unique, it will be critical to evaluate
where best to accommodate these efforts so that these procedures do not
to create bottlenecks or other unintended consequences.
Question 3. Do you feel your communication with the CDC has been
pristine and dependable? If not, what troubles are you still
encountering?
Answer. Our association typically does not communicate directly
with Centers for Disease Control and Prevention. However, some of our
airport members have CDC quarantine facilities at their locations, and
they have been working regularly with the agency as travelers from
certain countries have been funneled to these locations for further
evaluation. In general, these airport members have strong working
relationships with CDC and their local health departments.
Question 4. Is there a contact you can e-mail or call at CDC and
receive a reply immediately?
Answer. It is our understanding that CDC has a contact form for
coronavirus-related inquiries. We're told that airports generally
receive responses from the agency quickly. Airports that have CDC
located in their facilities are able to call or e-mail their local CDC
officials, and generally they receive prompt replies. In addition, CDC
guidance has been helpful to airports as they develop emergency
response plans, internal health protocols, and recovery plans in
response to the ongoing pandemic.
______
Response to Written Questions Submitted by Hon. Shelley Moore Capito to
Todd Hauptli
Question 1. As you noted in your testimony, throughput at TSA
checkpoints have seen a significant reduction. General aviation and
corporate business aircraft have slowed resulting in lower fuel sales.
After reaching out to a number of airports in my state, their biggest
concern is their long term sustainability. For example, as of May 5th,
Yeager Airport in Charleston, WV had a total of 66 customer throughput
which is a 91.8 percent decrease from the same time last year. Our
airports in West Virginia are a vital source of economic activity in
our state, how can Congress sustain this vital infrastructure?
Answer. That is great question, Senator. Airports in West Virginia
and throughout the country share the same concerns. We are encouraged
by the recent uptick in throughput at TSA checkpoints. But progress is
exceptionally slow, and we expect the road to recovery will be long,
especially for smaller communities around the country. Based on our
experiences after the terrorist attacks on 9/11 and the Great Recession
in 2008 and 2009, many expect that it will take airports four or five
years to fully recover from the crisis.
Our members are grateful that the CARES Act included $10 billion to
help airports pay for operations, keep workers employed and ensure that
they don't default on their bonds. The funding in the bill provided a
lifeline to help airports survive the immediate crisis. But there are
other steps that Congress can take to help airports meet the challenges
during the recovery and in the longer term.
First, we urge Congress to continue to invest in airports and
ensure they have the resources they need to respond to COVID-19, repair
aging infrastructure, and build new facilities to help us prepare for
the new normal. As I mentioned in my testimony, we are urging Congress
to provide airports--both commercial service and general aviation
facilities--with additional resources to help them cover their
operating costs and other expenses and keep critical projects on-track
at a time when revenues are still well below where they were last year.
As you know, commercial airlines have reduced or eliminated service
to a long list of small communities in recent weeks. We expect that it
will be challenging for many small communities to regain commercial air
service in the aftermath of the current crisis. That could be even more
difficult if the airlines contract in size as many expect. Increasing
funding for EAS and the Small Community Air Service Development
programs would provide smaller communities with a much-needed boost and
help preserve commercial air service.
As you point out, airports play a key role in economic activity at
the state and local level. Investing in airports and air service
programs now will help put people back to work, stimulate the economy
and pay dividends down the road.
Question 2. In response to the pandemic, Congress was able to
provide much needed support to the aviation industry and its workers.
The CARES Act provided up to $46 billion available for Federal loans
and loan guarantees to the aviation sector. In West Virginia, DOT has
so far awarded more than $9.3 million from the FAA to help fund
continued operations and make up for lost revenue for airports across
my state. As we move forward, what would be the primary recommendation
for Congress in future COVID support?
Answer. As I mentioned in a response to a previous question, our
members are grateful that the CARES Act included $10 billion to help
airports pay for operations, keep workers employed and ensure that they
don't default on their bonds. The funding in the bill provided a
lifeline to help airports survive the immediate crisis. We are
encouraged by the recent uptick in throughput at TSA checkpoints.
However, airports expect to face tremendous financial losses in the
months and years ahead.
Our primary recommendation is that Congress provide airports with
additional resources to help them manage the coronavirus crisis in the
longer term. We expect that it will take airports four to five years to
fully recover from the current downturn in aviation activity. In light
of the dramatic decline in aviation activity and the reduction in
revenue we expect commercial airports will need an additional $13
billion and that general aviation airports will need between $1 billion
and $2 billion.
______
Response to Written Questions Submitted by Hon. Todd Young to
Todd Hauptli
Question 1. I was proud to support the CARES Act to provide $10
billion for our Nation's airports. In my home state of Indiana, more
than $96 million was awarded to 65 different Hoosier airports. This
funding will help Hoosier airports remain operational and maintain
employees as we continue to navigate the coronavirus pandemic. With
that said, my understanding is that some airports received
significantly less funding than other very similar airports. In
Indiana, the South Bend International Airport received roughly 50
percent less funding than the other two non-hub airports were awarded.
I understand that multiple variables were taken into account and I
don't intend to assign any blame--but what can we do to ensure that any
future relief does not result in such funding discrepancies for similar
airports?
Answer. Senator, thank you for the question and for supporting the
CARES Act. We deeply appreciate your help. I am aware of the issue you
have raised regarding the distribution of CARES Act funding and
appreciate the concerns that you and others have expressed. As we look
forward to future relief and recovery efforts for airports, care should
be taken to ensure that similar funding discrepancies do not occur. I
am confident that the experiences with the CARES Act and the lessons
learned will help ensure that is the case.
I would note that the FAA has attempted to address the issue you
identified by capping the initial grant amount an airport is allowed to
receive to four times its annual operating expenses. That action may
limit the amount of CARES Act funding that some airports ultimately
receive. Any additional funding that is recouped from that adjustment
could be redistributed--perhaps in the same geographic area--to help
address the concerns that have been raised.
Question 2. In the near term, a return to any semblance of normalcy
in the travel industry is likely going to require health testing and
screening protocols at our Nation's airports until a vaccine becomes
available. Who is the appropriate entity to carry out these protocols
and how do you envision that process in practice--walk me through what
the ``new normal'' experience will be for someone who is flying in the
next few months?
Answer. Thank you for the question. In regard to the first part of
the question, AAAE believes that the Federal Government including the
CDC should determine the necessity, effectiveness, and timeline for any
of protective safeguards for passengers to travel, including the use of
health questionnaires, health screenings or temperature checks. Also,
this Federal framework should include any protocols that may be
necessary for health screenings to be consistently applied throughout
the aviation system.
If the Federal Government determines that health screenings or
other testing is necessary before a person can travel, these tests
should be conducted by public health officials who have medical
expertise. Neither airport nor TSA personnel have this expertise,
particularly for those travelers that may require additional scrutiny
and could be told that they are not fit to travel that day.
Aside from health testing and screening protocols, passengers'
travel experiences will depend on the state and local health guidance
applicable to the airport. However, there are many new changes that
passengers should generally expect to encounter in the airport
environment as they begin to travel again in the ``new normal.'' For
instance, passengers and airport employees interacting with the
traveling public will be wearing facial coverings.
Passengers can expect that they will be asked to follow social
distancing guidelines as they check their bags, are screened by TSA, or
wait to board an aircraft. Ground markers, visual cues, and vocal
announcements throughout airport terminals will also remind the public
to follow such guidelines. Passengers will see increased cleaning and
sanitization efforts across the terminal, and most interactions with
concessionaire staff will be separated by a plexiglass barrier.
Airports, working with their airline and tenant partners, are also
planning to make the travel experience as ``contactless'' for
passengers as possible in the near future.
______
Response to Written Questions Submitted by Hon. Rick Scott to
Todd Hauptli
Question 1. What additional measures do your members think should
be taken by the Federal Government to ensure the safety of passengers?
Answer. Thank you for the question, Senator. As I mentioned in the
hearing, AAAE and our members believe that airports, airlines, our
Federal partners, and other stakeholders need to work closely together
to protect the health and safety of passengers and our employees.
However, it is critical that we have clear and consistent Federal
guidelines and standards, especially on the matter of health-related
screenings and testing and facial coverings. Passengers should know
what to expect when they arrive at the airport regardless of which
airport or airline they happen to use. Passengers should also receive
consistent treatment and protection throughout their travel experience.
Unfortunately, we do not have those Federal guidelines today.
In addition, AAAE believes that the Federal Government including
the CDC should determine the necessity, effectiveness, and timeline for
any protective safeguards for passengers to travel, including the use
of health questionnaires, health screenings or temperature checks. We
believe this Federal framework should include any protocols that may be
necessary for health screenings to be consistently applied throughout
the aviation system.
If the Federal Government determines that health screenings or
other testing is necessary before a person can travel, these tests
should be conducted by public health officials who have medical
expertise. Neither airport nor TSA personnel have this expertise,
particularly for those travelers that may require additional scrutiny
and could be told that they are not fit to travel that day.
We believe that Congress and the administration should provide
airports with the additional resources. As a result of COVID-19,
airports will need additional assistance for increased cleaning and
sanitization, potential facility modifications, the deployment of
touchless technologies, and to meet other emerging requirements that
will help keep passengers and airport workers safe.
We believe there is a real opportunity with Federal resources and
clear and consistent Federal guidance to not only improve security but
also advance and accelerate the deployment of technology to support the
new customer experience post pandemic. This includes moving toward a
touchless travel experience with improved and stand-off detection
technology; biometric identity verification at check-in, bag drop
locations and security checkpoints; and digital identification and
payment methods. Airports, along with their tenants and Federal
partners, are also looking to explore the use of automation and
robotics to enhance the cleaning and sanitization of their facilities.
Question 2. I have heard from airports in my state that the formula
used to distribute the funding set aside for airports in the CARES Act
was not distributed properly based on the formula used by the FAA,
which has adversely impacted some airports that needed it most. Have
other airports around the country expressed similar concerns, and has
the AAAE addressed these concerns with the FAA?
Answer. Thank you for the question, Senator. I am aware of the
issue you have raised regarding the distribution of CARES Act funding
and appreciate the concerns that you and others have expressed. As we
look forward to future relief and recovery efforts for airports, care
should be taken to ensure that similar funding discrepancies do not
occur. I am confident that the experiences with the CARES Act and the
lessons learned will help ensure that is the case.
We have communicated the concerns raised by airports to the FAA,
and I would note that the agency has attempted to address the issue by
capping the initial grant amount an airport is allowed to receive to
four times its annual operating expenses. That action may limit the
amount of CARES Act funding that some airports ultimately receive. Any
additional funding that is recouped from that adjustment could be
redistributed--perhaps in the same geographic area--to help address the
concerns that have been raised.
______
Response to Written Questions Submitted by Hon. Dan Sullivan to
Dr. Hilary Godwin
Question 1. I think we all agree that a strong airline industry is
critical to our economic recovery. The amount of passengers screened by
the TSA is down by about 94 percent. It's clear that in order to
increase confidence in air travel, we'll need to implement robust
health testing and screening protocols at our Nation's airports until a
vaccine becomes available. I'd like to get the panel's thoughts on
possible testing and screening options, including the feasibility of
temperature testing at TSA checkpoints, and whether you believe TSA is
the appropriate entity to carry out these activities?
Answer. With the appropriate guidance/protocols and training in
place, I do believe that this work could be carried out by TSA. Having
TSA implement the screening seems entirely consistent with the TSA's
mission. An additional advantage of having the TSA perform this
screening is that there would be a higher level of standardization
across the county than if the screening is performed by individual
airports.
Question 2. What is the U.S. airline industry doing, or could be
doing, to build the confidence of the travelling public by sharing the
preexisting and new measures in place to protect the health of
passengers, such as the use of HEPA filters in air filtration systems?
Answer. Several of the major airlines are already doing a great job
of making public the measures that they have in place to protect the
health of passengers. An important role for the Federal government is
to put in place guidelines that are applied across the country, so that
travelers can expect a safe experience throughout their trip. In
addition to ensuring that all commercial passenger aircraft have air
filtration systems with HEPA filters, airlines can improve the
confidence and safety of the traveling public by partnering with
airports to screen individuals for symptoms, requiring employees and
travelers to wear face coverings, maintaining social distancing to the
greatest extent possible, frequently disinfecting high touch surfaces,
making hand sanitizer readily available on flights, and thoroughly
disinfecting planes between flights. It is also absolutely essential
that airlines partner with government agencies to maintain flight
manifests with up-to-date contact information for all passengers and
ensure that this information is readily accessible to local health
departments, in the event that this information is needed for contact
tracing.
______
Response to Written Question Submitted by Hon. Shelley Moore Capito to
Dr. Hilary Godwin
Question. In response to the pandemic, Congress was able to provide
much needed support to the aviation industry and its workers. The CARES
Act provided up to $46 billion available for Federal loans and loan
guarantees to the aviation sector. In West Virginia, DOT has so far
awarded more than $9.3 million from the FAA to help fund continued
operations and make up for lost revenue for airports across my state.
As we move forward, what would be the primary recommendation for
Congress in future COVID support?
Answer. In addition to providing financial relief directly to the
aviation sector, Congress should provide the resources needed to
develop and maintain a secure national database of flight manifest and
traveler contact information.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Dr. Hilary Godwin
At Wednesday's hearing, we discussed my serious concerns about
Frontier Airlines' proposal to charge passengers more for safer seats
on flights during the pandemic--and Frontier has since confirmed it
will not charge that fee after all. You testified that we should have
Federal guidance on passenger safety to protect travelers.
Question. Can you elaborate on why you believe that Federal
guidance is needed to ensure passenger safety during this public health
crisis, and what are the key issues that should be addressed by any
such guidance?
Answer. Federal guidance is needed so that travelers can expect a
safe environment throughout their trip, regardless of which airline
they are flying and what airports they are traveling through. Federal
guidelines are critical because air travel is currently an inherently
high risk activity, and it will remain high risk as long as COVID-19 is
circulating at significant levels nationally and globally. Commercial
travel is inherently high risk because it involves transporting large
numbers of people over large distances and there is a large potential
for prolonged (> 10 mins) close (< 6 ft) contact between multiple
individuals. Federal guidelines should focus on reducing the number of
people that individual travelers and airport/airline employees come
into prolonged close contact with during their trip/day (e.g., using
social distancing interventions in airports and on planes) and
requiring employees and travelers to wear face coverings while in
airports and on planes. Federal guidance should also delineate air
quality and cleaning standards for airports and planes. The Federal
government also needs to play a critical role in mandating, funding,
and facilitating a national system for maintaining flight manifests
with up-to-date contact information for all commercial flights during
the pandemic so that local health departments across the country have
access to this information for contact tracing.
______
Response to Written Questions Submitted by Hon Tom Udall to
Dr. Hilary Godwin
Generally, if a state or the Federal government is giving liability
protections, there is a strong safety standard that industry needs to
meet to benefit from that kind of protection. Otherwise it simply gives
business a huge incentive to take unreasonable risks in pursuit of
profits--like reducing the number of flights to pack passengers in the
fewer remaining planes as one example.
Dr. Godwin, most commercial airlines have announced requirements
for passengers to wear masks, but the system is still a patchwork and
social distancing is almost impossible on an airplane.
Question 1. As a public health expert, can you briefly describe the
most effective tools all airlines should be implementing to help
protect passengers and employees from COVID-19?
Answer. The most effective tools for airlines are similar to those
for other settings:
When possible, limit the number of people that air travelers
and employees come into prolonged (>10 ft) close (< 6 ft)
contact with.
In situations where it is not possible to avoid having
people be in prolonged, close contact with others, ensure that
all people are wearing face coverings, both in airports and on
planes.
Regularly clean surfaces that a lot of people come into
contact with; airlines should also thoroughly clean planes
between trips.
Screen people entering airports and planes for symptoms. One
relatively simple methodology for screening to ask individuals
to attest that they do not have symptoms prior to entering
airports and/or prior to boarding flights.
Every public health expert I have heard from keeps hammering the
importance of widespread accessible diagnostic testing being in place
before the U.S. is ready to safely reopen the economy, which everyone
is eager to do. Air travel is not being restricted by the government,
but people are not going to come back in large numbers unless they feel
safe doing it.
Question 2. Dr. Godwin, don't you agree that defeating this
pandemic with testing, tracing and isolation is the only sustainable
solution--if we ``open up'' and people are getting sick in larger and
larger numbers, who is going to want to get on a plane? Is it your
opinion that there is enough testing being done at a national level to
keep essential workers, including airline employees, safe?
Answer. Testing, tracing, and isolation are critical to our ability
to controlling the COVID-19 pandemic both in the United States and
worldwide. At this time (6/22/20), most jurisdictions in the United
States are not conducting enough testing for us to be confident that we
can identify the majority of infected individuals in our country. It is
particularly problematic that we cannot identify all of the individuals
that are infected with COVID who are asymptomatic, because many of
these individuals may not even realize that they are sick and hence may
be less inclined to take the necessary precautions to control spread of
the disease. The approaches that I described in my testimony and my
previous responses will not remove all of the risks to travelers and
airport/airline employees, but they can lower the risk of COVID-19
transmission in airports and on airplanes.
Question 3. Are there special testing procedures that might be
useful specifically for airline employees, who are exposed to so many
people from so many different areas?
Answer. I am not aware of any special testing procedures that might
be useful specifically for airline employees. Before adopting a point
of care test for COVID-19, airlines should be sure to check to make
sure that the test they are considering does not produce a high
percentage of false negative results. Airlines should also be aware
that all tests provide information about a moment in time: an
individual can show up negative on a COVID-19 test and become ill with
COVID-19 the next day. As a result, any testing protocol airlines
implement for their employees would need to include regular/repeated
testing.
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