[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
COVID-19'S EFFECTS ON U.S. AVIATION AND THE
FLIGHTPATH TO RECOVERY
=======================================================================
(117-5)
REMOTE HEARING
BEFORE THE
SUBCOMMITTEE ON
AVIATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MARCH 2, 2021
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-274 PDF WASHINGTON : 2021
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri ELEANOR HOLMES NORTON,
DON YOUNG, Alaska District of Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas EDDIE BERNICE JOHNSON, Texas
BOB GIBBS, Ohio RICK LARSEN, Washington
DANIEL WEBSTER, Florida GRACE F. NAPOLITANO, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
SCOTT PERRY, Pennsylvania ALBIO SIRES, New Jersey
RODNEY DAVIS, Illinois JOHN GARAMENDI, California
JOHN KATKO, New York HENRY C. ``HANK'' JOHNSON, Jr.,
BRIAN BABIN, Texas Georgia
GARRET GRAVES, Louisiana ANDRE CARSON, Indiana
DAVID ROUZER, North Carolina DINA TITUS, Nevada
MIKE BOST, Illinois SEAN PATRICK MALONEY, New York
RANDY K. WEBER, Sr., Texas JARED HUFFMAN, California
DOUG LaMALFA, California JULIA BROWNLEY, California
BRUCE WESTERMAN, Arkansas FREDERICA S. WILSON, Florida
BRIAN J. MAST, Florida DONALD M. PAYNE, Jr., New Jersey
MIKE GALLAGHER, Wisconsin ALAN S. LOWENTHAL, California
BRIAN K. FITZPATRICK, Pennsylvania MARK DeSAULNIER, California
JENNIFFER GONZALEZ-COLON, STEPHEN F. LYNCH, Massachusetts
Puerto Rico SALUD O. CARBAJAL, California
TROY BALDERSON, Ohio ANTHONY G. BROWN, Maryland
PETE STAUBER, Minnesota TOM MALINOWSKI, New Jersey
TIM BURCHETT, Tennessee GREG STANTON, Arizona
DUSTY JOHNSON, South Dakota COLIN Z. ALLRED, Texas
JEFFERSON VAN DREW, New Jersey SHARICE DAVIDS, Kansas, Vice Chair
MICHAEL GUEST, Mississippi JESUS G. ``CHUY'' GARCIA, Illinois
TROY E. NEHLS, Texas ANTONIO DELGADO, New York
NANCY MACE, South Carolina CHRIS PAPPAS, New Hampshire
NICOLE MALLIOTAKIS, New York CONOR LAMB, Pennsylvania
BETH VAN DUYNE, Texas SETH MOULTON, Massachusetts
CARLOS A. GIMENEZ, Florida JAKE AUCHINCLOSS, Massachusetts
MICHELLE STEEL, California CAROLYN BOURDEAUX, Georgia
KAIALI`I KAHELE, Hawaii
MARILYN STRICKLAND, Washington
NIKEMA WILLIAMS, Georgia
MARIE NEWMAN, Illinois
Vacancy
Subcommittee on Aviation
RICK LARSEN, Washington, Chair
GARRET GRAVES, Louisiana STEVE COHEN, Tennessee
DON YOUNG, Alaska ANDRE CARSON, Indiana
THOMAS MASSIE, Kentucky SHARICE DAVIDS, Kansas
SCOTT PERRY, Pennsylvania KAIALI`I KAHELE, Hawaii
JOHN KATKO, New York NIKEMA WILLIAMS, Georgia
BRIAN J. MAST, Florida HENRY C. ``HANK'' JOHNSON, Jr.,
MIKE GALLAGHER, Wisconsin Georgia
BRIAN K. FITZPATRICK, Pennsylvania DINA TITUS, Nevada
TROY BALDERSON, Ohio SEAN PATRICK MALONEY, New York
PETE STAUBER, Minnesota JULIA BROWNLEY, California
TIM BURCHETT, Tennessee DONALD M. PAYNE, Jr., New Jersey
JEFFERSON VAN DREW, New Jersey MARK DeSAULNIER, California
TROY E. NEHLS, Texas STEPHEN F. LYNCH, Massachusetts
NANCY MACE, South Carolina ANTHONY G. BROWN, Maryland
BETH VAN DUYNE, Texas GREG STANTON, Arizona
CARLOS A. GIMENEZ, Florida COLIN Z. ALLRED, Texas
MICHELLE STEEL, California CONOR LAMB, Pennsylvania
SAM GRAVES, Missouri (Ex Officio) ELEANOR HOLMES NORTON,
District of Columbia
EDDIE BERNICE JOHNSON, Texas
JOHN GARAMENDI, California
PETER A. DeFAZIO, Oregon (Ex
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, and Chair, Subcommittee on Aviation:
Opening statement............................................ 1
Prepared statement........................................... 3
Hon. Garret Graves, a Representative in Congress from the State
of Louisiana, and Ranking Member, Subcommittee on Aviation:
Opening statement............................................ 5
Prepared statement........................................... 6
Hon. Peter A. DeFazio, a Representative in Congress from the
State of Oregon, and Chair, Committee on Transportation and
Infrastructure:
Opening statement............................................ 7
Prepared statement........................................... 8
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Ranking Member, Committee on Transportation and
Infrastructure, prepared statement............................. 93
Hon. Steve Cohen, a Representative in Congress from the State of
Tennessee, prepared statement.................................. 93
Hon. Michelle Steel, a Representative in Congress from the State
of California, prepared statement.............................. 94
WITNESSES
Heather Krause, Director, Physical Infrastructure, U.S.
Government Accountability Office:
Oral statement............................................... 10
Prepared statement........................................... 11
Nicholas E. Calio, President and Chief Executive Officer,
Airlines for America:
Oral statement............................................... 18
Prepared statement........................................... 20
Captain Joseph G. DePete, President, Air Line Pilots Association,
International:
Oral statement............................................... 25
Prepared statement........................................... 26
Peter J. Bunce, President and Chief Executive Officer, General
Aviation Manufacturers Association:
Oral statement............................................... 31
Prepared statement........................................... 32
Lance Lyttle, Managing Director, Seattle-Tacoma International
Airport, on behalf of the American Association of Airport
Executives:
Oral statement............................................... 37
Prepared statement........................................... 39
Edward M. Bolen, President and Chief Executive Officer, National
Business Aviation Association:
Oral statement............................................... 48
Prepared statement........................................... 49
SUBMISSIONS FOR THE RECORD
Submissions for the Record by Hon. Garret Graves of Louisiana:
Letter of June 2, 2020, to the U.S. Government Accountability
Office from Ranking Members of the House Committee on
Transportation and Infrastructure and Subcommittee on
Aviation................................................... 57
Statement of the American Car Rental Association............. 58
Submissions for the Record by Hon. Rick Larsen:
Statement of Faye Malarkey Black, President and CEO, Regional
Airline Association........................................ 94
Statement of the Travel Management Coalition................. 100
Letter of March 2, 2021, from Scott Kirby, Chief Executive
Officer, United Airlines................................... 101
APPENDIX
Questions to Heather Krause, Director, Physical Infrastructure,
U.S. Government Accountability Office, from:
Hon. Garret Graves........................................... 103
Hon. Mike Gallagher.......................................... 106
Questions to Nicholas E. Calio, President and Chief Executive
Officer, Airlines for America, from:
Hon. Steve Cohen............................................. 106
Hon. Garret Graves........................................... 107
Questions from Hon. Garret Graves to Captain Joseph G. DePete,
President, Air Line Pilots Association, International.......... 109
Questions to Peter J. Bunce, President and Chief Executive
Officer, General Aviation Manufacturers Association, from:
Hon. Garret Graves........................................... 110
Hon. Sam Graves.............................................. 112
Questions from Hon. Garret Graves to Lance Lyttle, Managing
Director, Seattle-Tacoma International Airport, on behalf of
the American Association of Airport Executives................. 113
Questions to Edward M. Bolen, President and Chief Executive
Officer, National Business Aviation Association, from:
Hon. Garret Graves........................................... 115
Hon. Sam Graves.............................................. 117
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
March 2, 2021
SUMMARY OF SUBJECT MATTER
TO: LMembers, Subcommittee on Aviation
FROM: LStaff, Subcommittee on Aviation
RE: LSubcommittee Hearing on ``COVID-19's Effects on
U.S. Aviation and the Flightpath to Recovery''
_______________________________________________________________________
PURPOSE
The Subcommittee on Aviation will meet on Tuesday, March 2,
2021, at 10:00 a.m. (EST) in 2167 Rayburn House Office Building
and virtually via Cisco WebEx to hold a hearing titled,
``COVID-19's Effects on U.S. Aviation and the Flightpath to
Recovery.'' The purpose of the hearing is to examine the
continuing effects of the COVID-19 pandemic on the U.S.
aerospace industry, what the industry will look like post-
pandemic, and how best to aid in the recovery. The Subcommittee
will receive testimony from representatives of the Government
Accountability Office (GAO); Airlines for America (A4A); Air
Line Pilots Association (ALPA); American Association of Airport
Executives (AAAE); General Aviation Manufacturers Association
(GAMA); and National Business Aviation Association (NBAA).
BACKGROUND
I. COVID-19 TRANSMISSIBILITY
The Centers for Disease Control and Prevention (CDC) states
that COVID-19 is most commonly spread during close contact;
individuals who are physically near (within 6 feet) a person
with COVID-19 or have direct contact with that person are at
greatest risk of infection.\1\ Some infections can be spread by
exposure to the virus through small droplets and particles that
can linger in the air for minutes to hours. These particles can
infect people who are further than 6 feet away from an infected
individual or after that individual has left the space. This
kind of spread is referred to as airborne transmission.\2\
Although less common, COVID-19 can also be spread when a person
touches a contaminated surface where respiratory droplets have
landed, and then touches their own mouth, nose, or eyes.\3\
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\1\ How COVID-19 Spreads, Ctr. for Disease Control (Updated: Oct.
28, 2020) available at https://www.cdc.gov/coronavirus/2019-ncov/
prevent-getting-sick/how-covid-spreads.html.
\2\ Id.
\3\ Id.
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In September 2020, the CDC reported that it had
investigated 1,600 cases of passengers flying commercial
airlines while COVID-19 positive and found nearly 11,000 people
may have been exposed; however, due to incomplete contact
tracing data, the CDC was unable to confirm any case of viral
transmission.\4\ However, in March 2020, a separate CDC
analysis found that a woman traveling from London to Vietnam, a
more than 10-hour flight, infected 15 other passengers on a
commercial flight prior to airline mask mandates.\5\ Other
studies have demonstrated the potential for the spread of
coronavirus during long duration flights as well.\6\
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\4\ Joseph Guzman, CDC says nearly 11,000 people may have been
exposed to COVID-19 on flights, The Hill, Sept. 22, 2020, available at
https://thehill.com/changing-america/well-being/
longevity/517566-cdc-says-nearly-11000-people-may-have-been-exposed-to.
\5\ Khanh N, Thai P, Quach H, Thi N, Dinh P, Duong T, et al.,
Transmission of SARS-CoV 2 During Long-Haul Flight, Vol. 26 No. 11
Emerging Infectious Diseases 2617-2624 (Nov. 2020) available at https:/
/dx.doi.org/10.3201/eid2611.203299.
\6\ Benedict Carey, One 18-Hour Flight, Four Coronavirus
Infections, N.Y. Times, Jan.7, 2021 (Updated: Jan. 26, 2021), available
at https://www.nytimes.com/2021/01/07/health/coronavirus-
airline-passengers-outbreak.html.
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As such, the CDC recommends people delay travel and stay
home as much as possible during the pandemic, to protect
themselves and others from COVID-19.\7\ Consequently, the
aviation industry has been severely affected by the significant
decline in air travel.
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\7\ Traveling During COVID-19, Ctr. for Disease Control (Updated:
Feb. 16, 2021), available at https://www.cdc.gov/coronavirus/2019-ncov/
travelers/travel-during-covid19.html.
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II. COVID-19 EFFECTS ON THE AEROSPACE INDUSTRY
The COVID-19 pandemic has had a devastating effect on the
U.S. aerospace industry. Demand for commercial air travel
plummeted last spring as the coronavirus cases surged, and it
continues to be far below typical levels. The most recent
airline traffic data showed a 61 percent decrease in passenger
traffic for November 2020 over November 2019.\8\ In January
2021, total traveler throughput at Transportation Security
Administration (TSA) checkpoints dropped by, on average, more
than 60 percent compared to the same period in 2020.\9\ The
International Air Transport Association (IATA) estimated in
October 2020 that global airlines were burning more than $13
billion in cash each month.\10\ IATA also predicts the airline
industry will not fully recover until 2024 at the earliest.\11\
Aerospace manufacturing has also been hit hard; by the end of
2020, it was expected that global civil aircraft production
would drop by nearly 50 percent, affecting the entire supply
chain and repair infrastructure.\12\
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\8\ U.S. Airlines November 2020 Passengers Decreased 61% from
November 2019 (Preliminary), Bureau of Transp. Statistics, Jan. 12,
2021, available at https://www.bts.gov/newsroom/us-
airlines-november-2020-passengers-decreased-61-november-2019-
preliminary.
\9\ TSA checkpoint travel numbers (current year(s) versus prior
year/same weekday), Transp. Sec. Admin. (Feb. 19, 2021), available at
https://www.tsa.gov/coronavirus/passenger-throughput.
\10\ Airlines continue to burn through cash, Int'l Air Transport
Assoc., Oct. 8, 2020, available at https://airlines.iata.org/news/
airlines-continue-to-burn-through-cash.
\11\ Recovery Delayed as International Travel Remains Locked Down,
Int'l Air Transport Assoc., July 28, 2020, available at https://
airlines.iata.org/news/airlines-continue-to-burn-through-cash.
\12\ Eric Fanning, It's time for Congress to act: Save jobs and
stabilize the aerospace industry, The Hill, Nov. 16, 2020, available at
https://thehill.com/blogs/congress-blog/economy-budget/
526245-its-time-for-congress-to-act-save-jobs-and-stabilize-the?rl=1.
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The reduction in U.S. air travel has also reduced the flow
of aviation-related excise tax revenues into the Airport and
Airway Trust Fund (AATF), the major source of funding for
Federal aviation programs, including airport infrastructure
grants, aviation safety programs, and air traffic control
operations.\13\ The Coronavirus Aid, Relief, and Economic
Security (CARES) Act (Pub. L. 116-136) suspended the collection
of most aviation excise taxes through calendar year 2020.\14\
Due to the suspension of such taxes, the balance of the Federal
Aviation Administration's (FAA's) AATF rapidly declined during
the pandemic, according to FAA staff, including a revised
projection of $571 million in downward Treasury adjustments and
a projected $2.4 billion reduction to the Trust Fund cash
balance.\15\ Therefore, the Continuing Appropriations Act, 2021
and Other Extensions Act (Pub. L. 116-159), included a $14
billion general fund transfer to shore up the AATF to ensure
funding stability for Federal aviation programs.\16\
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\13\ Airport and Airway Trust Fund (AATF) Fact Sheet, FAA (Updated:
April 2020), available at https://www.faa.gov/about/budget/aatf/media/
AATF_Fact_Sheet.pdf.
\14\ Coronavirus Aid, Relief, and Economic Security (CARES) Act,
Pub. L. No. 116-136 Sec. 4007 (2020).
\15\ FAA briefing for staff of the Committee on Transportation and
Infrastructure, April 21, 2020.
\16\ Continuing Appropriations Act, 2021 and Other Extensions Act,
Pub. L. 116-159 (2020).
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III. COVID-19 EFFECTS ON THE AEROSPACE WORKFORCE
More than 750,000 workers are employed by U.S. passenger
and cargo airlines,\17\ with a large number of these workers
facing the prospect of furlough as a result of substantially
reduced demand. According to recent industry analysis, an
estimated 100,000 aerospace manufacturing workers have already
lost their jobs nationwide and 220,000 additional jobs are at
risk of furlough.\18\
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\17\ Airline Employment Data by Month, Bureau of Transp.
Statistics, (Visited: May 29, 2020), available at https://
www.transtats.bts.gov/Employment/.
\18\ David Shepardson and Eric M. Johnson, U.S. lawmakers consider
aid for aerospace workers in COVID-19 bill, Reuters, Dec. 18, 2020.
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A. PAYROLL SUPPORT PROGRAM
Recognizing the immediate need to save airline jobs,
Congress passed the CARES Act, which included the Payroll
Support Program (PSP)--a $32 billion program to preserve the
jobs of employees of U.S. airlines and certain airline
contractors through September 30, 2020.\19\ The assistance
provided was conditioned on companies not involuntarily
furloughing or reducing the pay rates or benefits of workers,
refraining from stock buybacks, limiting executive
compensation, and other conditions. Every major airline signed
an agreement with the U.S. Treasury to receive PSP grants.\20\
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\19\ CARES Act, Pub. L. No. 116-136 Sec. 4112-20 (2020).
\20\ Payroll Support Program Payments, U.S. Treas., (Updated: Feb.
9, 2021) available at https://home.treasury.gov/policy-issues/cares/
preserving-jobs-for-american-industry/
payroll-support-program-payments.
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Unfortunately, airlines struggled to remain solvent in the
face of declining revenues, furloughing tens of thousands of
flight attendants, pilots, and other workers after the PSP
program and the prohibition on involuntary furloughs expired on
September 30, 2020. While a second round of PSP funding was
approved in December 2020 as part of a larger COVID-19 relief
package, with the condition that air carriers recall any
furloughed employees, the process to recall such employees is
proved extraordinarily complex and expensive.\21\ The recent
December 2020 PSP extension provided a total of $15 billion in
payroll grant funding for airlines and certain airline
contractors through March 31, 2021.\22\
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\21\ Consolidated Appropriations Act, 2021, Pub. L. 116-260 (2020);
CNBC, Airlines Begin Complex Process of Calling Back More Than 32,000
Furloughed Workers (Visited: January 15, 2021) available at https://
www.cnbc.com/2020/12/23/coronavirus-stimulus-gives-airlines-15-billion-
to-call-back-furloughed-workers.html.
\22\ Consolidated Appropriations Act, 2021, Pub. L. 116-260 (2020).
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B. WORKER HEALTH AND SAFETY
Aviation workers face significant risks of being exposed to
COVID-19. Throughout the pandemic, flight attendants, pilots,
gate agents, and service workers have had to deal with some
travelers who refuse to follow airline mask requirements, have
not been screened for the virus, and are unable to follow
social distancing precautions both in the air and on the
ground.\23\ There have been numerous reports of airline
passengers verbally abusing and taunting flight attendants as
they have tried to enforce airline mask requirements and of
passengers exploiting food and drink mask exceptions for
prolonged periods to avoid mask wearing.\24\ Moreover, these
disturbances have safety implications beyond even spreading the
virus, with at least one report of an airline captain being so
distracted by a mask-related problem with a passenger that the
captain mistakenly descended to the wrong altitude.\25\ While
an executive order now mandates passengers and crew wear face
coverings in airports and on flights, including during check-in
and boarding,\26\ many personnel still have concerns regarding
their safety, including mask enforcement, contact tracing, and
whether they can miss work without repercussions.\27\
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\23\ Harmeet Kaur and Natalia V. Osipova, For flight attendants,
getting people to wear masks is now one of the hardest parts of the
job, CNN, Jan. 21, 2021, available at https://www.cnn.com/
travel/article/flight-attendants-unruly-passengers-masks-trnd/
index.html.
\24\ Michael Laris, Sneezed on, cussed at, ignored: Airline workers
battle mask resistance with scant governmental backup, Wash. Post,
January 1, 2021, available at https://www.washingtonpost.com/local/
trafficandcommuting/coronavirus-mask-airplanes/
2020/12/31/09c12d52-4565-11eb-975c-d17b8815a66d_story.html.
\25\ Id.
\26\ Exec. Order No. 13998, 86 FR 7205, Jan. 21, 2021.
\27\ Johanna Read, `It's definitely not easy.' How flight
attendants are handling travel during COVID-19., Nat'l Geographic, Jan.
26, 2021 available at https://www.nationalgeographic.com/
travel/article/heres-what-flight-attendants-want-you-to-know-about-
flying-during-covid.
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IV. CONGRESSIONAL RESPONSE
A. THE CARES ACT
In response to the pandemic, on March 27, 2020, Congress
passed the bipartisan CARES Act.\28\ This sweeping law provided
economy-wide relief to individuals and businesses. In addition
to authorizing the aforementioned PSP, providing $32 billion in
payroll assistance to U.S. airlines and certain contractors
conditioned on certain employer assurances, the CARES Act
authorized $29 billion in Federal loans to airlines and a
separate loan fund designed for businesses critical to
maintaining national security.\29\
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\28\ CARES Act, Pub. L. No. 116-136 (2020).
\29\ Id. at Sec. 4003.
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The CARES Act also provided $10 billion in emergency aid
for airports to address the effects of the pandemic.\30\ In
exchange for receiving these Federal funds, small, medium, and
large hub airports were required to retain at least 90 percent
of their workforce as of March 27, 2020, through December 31,
2020. The measure also provided $100 million directly to
general aviation airports and $500 million to help airports
cover the non-Federal cost share of any Airport Improvement
Program (AIP) grant received in fiscal year 2020.\31\
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\30\ Id. at tit. XII, 134 Stat. 596.
\31\ Id.
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B. THE CONSOLIDATED APPROPRIATIONS ACT, 2021
On December 27, 2020, the bipartisan Consolidated
Appropriations Act of 2021 (Pub. L. 116-260) became law.\32\ In
the Act, the PSP was extended, authorizing an additional $16
billion for the program--$15 billion for air carriers and $1
billion for air carrier contractors. As such, it extended many
of the conditions on employer acceptance of financial
assistance through March 31, 2021.\33\ The Act also included
measures for airports similar to those included the CARES Act,
providing $2 billion in emergency aid for airports to help them
prepare for, mitigate, and respond to the effects of the COVID-
19 pandemic.\34\ Finally, the Act expanded the eligibility of
the loan fund designed for businesses critical to maintaining
national security created under the CARES Act to specifically
include aerospace suppliers.\35\
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\32\ Consolidated Appropriations Act, 2021, Pub. L. 116-260 (2020).
\33\ Id.
\34\ Id.
\35\ Id.
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C. BUDGET RECONCILIATION FOR FISCAL YEAR 2021
The reconciliation bill currently moving through the House
would provide $15 billion to extend the PSP to fund payroll
support for airline workers and related contract workers.\36\
As with the original PSP authorization and its first extension,
this second extension would prohibit air carriers and
contractors from involuntarily furloughing or reducing pay
rates or benefits of their workers until September 30, 2021, or
on the date on which the assistance they receive is exhausted,
whichever is later.\37\ The extension includes similar
restrictions on executive compensation and capital
distributions, such as dividend payments, and taxpayer
protections, as provided in the original program.\38\
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\36\ The American Rescue Plan of 2021, H.R. 1319, 117th Cong.
(2021).
\37\ Id.
\38\ Id.
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The bill also provides a total of $8 billion in emergency
aid for primary airports, non-primary airports, and airport
concessions.\39\ Of this amount, $6.4 billion would be
distributed to primary airports for costs related to
operations, personnel, debt service payments, and combating the
spread of pathogens at airports, among other things.\40\ In
exchange for receiving these Federal funds, small, medium, and
large hub airports are required to continue to retain at least
90 percent of their workforce as of March 27, 2020, through the
end of this fiscal year.\41\ Additionally, it would provide
$100 million to non-primary airports to help address costs
related to the current pandemic and more than $600 million to
help ensure all airports receive a 100 percent Federal cost
share for any AIP grant awarded to them in fiscal year
2021.\42\ The measure would allocate $800 million to airport
concessions at primary airports in the form of relief from rent
and minimum annual guarantee obligations.\43\ Of this $800
million allocation, 80 percent would be targeted toward small
businesses and minority-owned firms and 20 percent would be
provided to large concessionaires.\44\
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\39\ Id.
\40\ Id.
\41\ Id.
\42\ Id.
\43\ Id.
\44\ Id.
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Finally, the bill establishes a $3 billion payroll support
program for aerospace manufacturers. Administered by the U.S.
Department of Transportation (DOT), it would provide a 50
percent Federal share to eligible U.S. aerospace manufacturing
companies--those that involuntarily furloughed at least 10
percent of their workforce or experienced at least a 15 percent
decline in revenues in 2020 and have a majority of their
aviation employees based in the United States--to help cover
the wages, salaries, and benefits of manufacturing employees
most at risk of being furloughed and to facilitate the recall
or rehire of such employees furloughed during the COVID-19
pandemic.\45\ The assistance is also specifically targeted at
workers making less than $200,000 annually. Moreover, while
receiving Federal funds, a manufacturer recipient is prohibited
from conducting involuntary furloughs or reducing the pay rates
and benefits of its eligible employee groups.
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\45\ Id.
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V. COMBATING COVID-19 TRANSMISSION IN AIR TRAVEL_CURRENT AND PROPOSED
MITIGATION STRATEGIES TO INCREASE SAFETY AND
RECOVERY
A. VOLUNTARY SYMPTOM SELF-SCREENING
People infected with COVID-19 should not travel.\46\ Since
the easiest way to suspect a COVID-19 infection is with active
symptoms, the CDC and airlines currently ask passengers not to
fly if they have symptoms. Unfortunately, a recent CDC study
modeled that 59% of COVID-19 transmission came from people who
were asymptomatic.\47\ As such, self-screening is just the
first of many methods used to ensure public safety.
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\46\ Traveling During COVID-19, Ctr. for Disease Control (Updated:
Feb. 16, 2021), available at https://www.cdc.gov/coronavirus/2019-ncov/
travelers/travel-during-covid19.html.
\47\ Ben Guarino, People without symptoms spread virus in more than
half of cases, CDC model finds, Wash. Post, Jan. 7, 2021, available at
https://www.washingtonpost.com/science/2021/
01/07/covid-asymptomatic-spread/. Please note, this article is
referring to the general population and is not specific to airline
passengers.
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B. MASKS AND FACE COVERINGS
Wearing masks on any high-density public transport, if worn
correctly, substantially reduces transmission. Masks protect
both the wearer and others by containing the illness at its
source and, if it is a specific type of mask (e.g., N95), by
filtering the air the person breathes in. While the efficacy of
the mask greatly depends on material, fit, and
construction,\48\ masks and face coverings in the aggregate
have proven to be one of the most cost effective and minimally
intrusive measures to mitigate transmission.\49\
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\48\ Abrar A. Chughtai, Holly Seale, and C. Raina Macintyre,
Effectiveness of Cloth Masks for Protection Against Severe Acute
Respiratory Syndrome Coronavirus 2, Vol. 26 No. 10 Emerging Infectious
Diseases 3201 (Oct. 2020) available at https://wwwnc.cdc.gov/eid/
article/26/10/20-0948_article.
\49\ Deborah Netburn, New forecasts show why masks are the
easiest--and cheapest--way to save U.S. lives, L.A. Times, Oct. 23,
2020 available at https://www.latimes.com/science/story/
2020-10-23/if-americans-would-just-wear-masks-we-could-save-more-than-
671-000-lives.
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Initially, the FAA declined to require airlines to block
seats or to require passengers to wear masks on board
commercial aircraft. However, many major airlines began
independently requiring passengers and flight attendants to
wear masks or other protective face coverings on board their
aircraft. Unfortunately, once in the air, most airlines relied
heavily on customer compliance rather than enforcement.\50\
Seeing the need for stronger enforcement in view of belligerent
passengers, airlines began independently banning passengers for
non-compliance. In October 2020, it was reported that more than
900 passengers had been banned from airlines for refusing to
wear a mask.\51\ On January 13, 2021, citing increased
disruptive behavior by airplane passengers stemming from
refusal to wear masks, the FAA issued a zero-tolerance policy
by which the agency committed to taking enforcement action
against unruly passengers, including fines up to $35,000 and
possible jail time, as opposed to first using counseling and
warnings.\52\ The policy is currently in effect through March
30, 2021.
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\50\ Pete Muntean, Airlines Are Having Trouble Enforcing Their Face
Mask Policies, CNN, May 14, 2020, available at https://www.cnn.com/
2020/05/13/business/airlines-mask-policy-
enforcement/index.html.
\51\ Shannon McMahon, Delta, United and Alaska Airlines have banned
more than 900 passengers for not wearing masks, Wash. Post, Oct. 26,
2020, available at https://www.washingtonpost.com/travel/2020/10/26/
airlines-banning-passengers-masks/.
\52\ David Shepardson, Exclusive: U.S. FAA chief orders `zero
tolerance' for disruptive airline passengers, possibly jail, Reuters,
January 13, 2021, available at https://www.reuters.com/article/
us-usa-election-aviation-exclusive/exclusive-u-s-faa-chief-orders-zero-
tolerance-for-disruptive-
airline-passengers-possibly-jail-idUSKBN29I302; See also FAA, Press
Release--Federal Aviation Administration Adopts Stricter Unruly
Passenger Policy, January 13, 2021, available at https://www.faa.gov/
news/press_releases/news_story.cfm?newsId=25621.
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On January 21, 2021, President Biden issued an Executive
Order (EO) mandating masks to be worn on all forms of public
transportation, including in airports and on commercial
airplanes.\53\ The EO confers, upon agency heads, significant
discretion to authorize broad exceptions to the mask
requirement.\54\ The TSA has since announced that it will begin
fining travelers in the United States who refuse to wear a mask
in airports. The first time they fail to do so, the fine will
be $250. Repeated offenses will be fines of up to $1,500. Based
on substantial aggravating or mitigating factors, the TSA may
seek a sanction amount that falls outside these ranges.\55\ All
passengers over the age of two must wear a mask. Passengers who
refuse to wear a mask at the security check-in area will not be
allowed to enter the secure area of the airport, including the
terminal and gate area.\56\ Airlines have also revised their
language on masks to reflect CDC requirements and have pushed
such information out to passengers through a variety of
electronic communications.\57\ The DOT also issued a Notice of
Enforcement on February 5, 2021, to remind U.S. and foreign air
carriers of their legal obligation to accommodate passengers
with disabilities when implementing the Federal mask
mandate.\58\ According to a briefing from the TSA, passengers
have nearly universally complied with this mandate with little
to zero prompting from TSA officers.\59\
---------------------------------------------------------------------------
\53\ Exec. Order No. 13998, 86 FR 7205, Jan. 21, 2021.
\54\ Id.
\55\ Press Release, TSA to implement Executive Order regarding face
masks at airport security checkpoints and throughout the transportation
network, Transp. Sec. Admin. (Jan 31, 2021), available at https://
www.tsa.gov/news/press/releases/2021/01/31/tsa-implement-executive-
order-regarding-face-masks-airport-security.
\56\ Id.
\57\ Donald Wood, New Government Mask Mandate for Airlines Now in
Effect, Travel Pulse, Feb. 2, 2021, available at: https://
www.travelpulse.com/news/airlines/new-government-mask-
mandate-for-airlines-now-in-effect.html.
\58\ Notice of Enforcement Policy: Accommodation by Carriers of
Persons with Disabilities Who Are Unable to Wear or Safely Wear Masks
While on Commercial Aircraft, Dept. of Transp. (Feb. 5, 2021),
available at: https://www.transportation.gov/sites/dot.gov/files/2021-
02/Mask%20
Notice%20Issued%20on%20Feb%205.pdf.
\59\ TSA briefing for Members of the Subcommittee on Transportation
and Maritime Security, Committee on Homeland Security and some Members
of the Committee on Transportation and Infrastructure, February 17,
2021.
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C. CLEANING
Both public and private transportation services have
explored innovations in disinfection and U.S. airlines have
enhanced their airplane cleaning protocols since the onset of
the pandemic. For example, United Airlines has used an
antimicrobial coating called ``Zoono Microbe Shield'' that
inhibits the growth of microbes by forming a long-lasting bond
with surfaces, such as seats, trays, tables, and armrests.\60\
JetBlue has experimented with a machine from Honeywell that
uses UV light to disinfect cabins.\61\ Nonetheless, the CDC
still recommends frequent hand washing and use of hand
sanitizer containing at least 60 percent alcohol.\62\ To help
airplane passengers adhere to this recommendation, the TSA
allows passengers to carry on one container of hand sanitizer
up to 12 ounces.\63\
---------------------------------------------------------------------------
\60\ Press Release, United Adds Antimicrobial Spray to Already
Extensive Cabin-Cleaning Measures, United Airlines, September 16, 2020,
available at https://hub.united.com/2020-09-16-
united-adds-antimicrobial-spray-to-already-extensive-cabin-cleaning-
measures-
2647678535.html.
\61\ Cailey Rizzo, JetBlue Is Testing a Giant UV Light Machine That
Could Disinfect Plane Cabins in Under 10 Minutes, Travel + Leisure,
July 30, 2020, available at https://www.travelandleisure.com/airlines-
airports/jetblue/jetblue-airplane-cabin-disinfectant-
machine-coronavirus.
\62\ How to Protect Yourself & Others, Ctr. for Disease Control
(Updated: December 31, 2020) available at https://www.cdc.gov/
coronavirus/2019-ncov/prevent-getting-sick/prevention.html.
\63\ Hand Sanitizers, Transp. Sec. Admin. (Visited: Feb. 21, 2021)
available at https://www.tsa.gov/travel/security-screening/
whatcanibring/items/hand-sanitizers.
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D. AIRFLOW AND FILTRATION
If a virus is airborne--i.e., transmitted by aerosolized
small droplets--intra-cabin airflow plays a critical role in
its spread or lack thereof. For instance, while the cross-
sectional nature of circulation in the cabin (see image) limits
airflow up and down the aisle, studies have shown that air is
still shared a few rows to the front and back.\64\ Moreover,
gaspers (personal air vents in the passenger service unit above
your head) have the potential to drastically increase the
possibility of droplet spread.\65\ While there have been a few
recent studies on the topic, including one that was conducted
jointly by the Department of Defense and United Airlines, most
have not considered variables such as passenger movement,
eating and drinking, lavatory use, and humidity.\66\
---------------------------------------------------------------------------
\64\ Chen, McDevitt, et al., Infectious Disease Transmission in
Airliner Cabins, Report No. RITE-ACER-CoE-2012-01, National Air
Transportation Center of Excellence Research in the Intermodal
Transport Environment (RITE), (Feb. 22, 2012) available at https://
www.faa.gov/
data_research/research/med_humanfacs/cer/media/
infectiousdiseasetransmission.pdf; see also Walkinshaw, Germs,
Ventilation, Occupancy Density and Exposure Duration: A Thirteen
Setting Pathogen Inhalation Comparison, American Society of Heating,
Refrigerating and Air-Conditioning Engineers Indoor (ASHRAE) IAQ
Conference Papers (2010); see also Walkinshaw, A Brief Introduction To
Passenger Aircraft Cabin Air Quality, ASHRAE Journal, Oct. 2020
available at https://www.ashrae.org/file%20library/
technical%20resources/covid-19/12-19_
walkinshaw.pdf.
\65\ You, Chen, Lin et al., Investigating the impact of gaspers on
cabin air quality in commercial airliners with a hybrid turbulence
model, Vol. 111 Building and Environment, 110-122 (Jan. 2017); see also
Darrah, Bennet, Jones et al., Infectious Passenger Isolation System for
Aircraft, Vol. 125 Pt. 2 ASHRAE Transactions 288-296 (2020) available
at https://www.ashrae.org/
file%20library/technical%20resources/covid-19/kc021.pdf.
\66\ Gio Benitez and Sam Sweeney, Risk of COVID-19 exposure on
planes `virtually nonexistent' when masked, study shows, abcNews, Oct.
15, 2020, available at https://abcnews.go.com/Politics/
risk-covid-19-exposure-planes-virtually-nonexistent-masked/
story?id=73616599.
Most commercial airliners use high-efficiency particulate
air (HEPA) filters and have a high air-exchange rate, including
a mix of outdoor and recirculated air. Such HEPA filters play a
critical role in reducing risks as they can filter out almost
all airborne droplets that contain COVID-19.\67\ However, they
are also limited. For instance, a HEPA filter affords no
protection to an individual if they are exposed to the virus
prior to it settling or reaching the circulation intake.\68\ As
such, airborne particles generated by sneezing or coughing,
remain in the cabin air until they enter the ventilation system
and are effectively removed by HEPA filters or settle on common
surfaces, creating potential exposure for disease
transmission.\69\
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\67\ Johanna Read, How clean is the air on planes? Nat'l
Geographic, Aug. 28, 2020 available at https://
www.nationalgeographic.com/travel/article/how-clean-is-the-air-on-your-
airplane-
coronavirus-cvd.
\68\ Tim Heffernan, Can HEPA Air Purifiers Capture the Coronovirus,
N.Y. Times, Updated: Nov. 18, 2020 available at https://
www.nytimes.com/wirecutter/blog/can-hepa-air-purifiers-
capture-coronavirus/.
\69\ ACRP Report 91, Infectious Disease Mitigation in Airports and
on Aircraft, Nat'l Acad. of Sci., 2013 available at http://nap.edu/
22512.
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E. CONTACT TRACING
Contact tracing is a resource intensive exercise dependent
upon individuals with the right public health skills and access
to laboratory testing facilities. However, it has been shown to
be an effective measure to help control the spread of
infectious diseases, including COVID-19.\70\ It is also an
incredibly useful scientific tool to help public health
professionals learn how the disease spreads, in what
environments or work places, and what factors, or lack of
protective measures, may help to augment the spread of the
disease to others.
---------------------------------------------------------------------------
\70\ Matt J. Keeling, T. Deirdre Hollingsworth, and Jonathan M.
Read, Efficacy of contact tracing for the containment of the 2019 novel
coronavirus (COVID-19), J. of Epidemiology and Cmty. Health, October
2020, available at https://www.ncbi.nlm.nih.gov/pmc/articles/
PMC7307459/
#: :text=In%20general%2C%20contact%20tracing%20is,transmission%20from%20
the
%20secondary%20cases.
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A study by researchers at Harvard and Stanford
Universities, using a mathematical model, found that the most
effective contact tracing programs could reduce the overall
transmissions of COVID-19 infections by almost half.\71\ The
United States does not have a cohesive Federal contact tracing
program or plan.\72\ Instead, the Federal response has largely
left COVID-19 contact tracing efforts up to State and local
officials.
---------------------------------------------------------------------------
\71\ Alyssa Bilinski, MS, Farzad Mostashari, MD and Joshua A.
Salomon, PhD, Modeling Contact Tracing Strategies for COVID-19 in the
Context of Relaxed Physical Distancing Measures, JAMA Network Open
(Research Letter/Public Health), August 21, 2020, available at https://
jamanetwork.com/journals/jamanetworkopen/fullarticle/2769618.
\72\ Beth Duff-Brown, Model shows potential contact tracing impact
against COVID-19, News Center, Stanford Univ. School of Med., Aug. 24,
2020, available at http://med.stanford.edu/news/
all-news/2020/08/model-shows-potential-contact-tracing-impact-against-
covid-19.html.
---------------------------------------------------------------------------
In February, Airlines for America (A4A) announced that its
major members would all begin voluntarily collecting
information for contact tracing to turn over to the CDC.\73\
While, Delta and United have been engaging in this practice
since December, American, Southwest, Alaska, JetBlue, and
Hawaiian will now also ask passengers to make their names,
phone numbers, email, and physical addresses available to the
CDC.\74\
---------------------------------------------------------------------------
\73\ Press Release, Major U.S. Airlines Announce Support for
International Contact Tracing Program, Airlines for America (Feb. 19,
2021) available at https://www.airlines.org/news/major-u-
s-airlines-announce-support-for-international-contact-tracing-program/.
\74\ Airlines plan to ask passengers for contact-tracing details,
Associated Press, Feb. 22, 2021, available at https://apnews.com/
article/public-health-airlines-united-states-coronavirus-
pandemic-edb4fdb3997a07ab02ad35c347cb0839.
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F. NATIONAL AVIATION PREPAREDNESS PLAN
Following the Ebola outbreak in 2014, the GAO recommended
the U.S. Department of Transportation (DOT) develop a plan to
limit the spread of pandemics through the aviation system.
Specifically, the GAO issued following recommendation:
To help improve the U.S. aviation sector's preparedness for
future communicable disease threats from abroad, the Secretary
of Transportation should work with relevant stakeholders, such
as the Department of Health and Human Services, to develop a
national aviation-preparedness plan for communicable disease
outbreaks. Such a plan could establish a mechanism for
coordination between the aviation and public health sectors and
provides clear and transparent planning assumptions for a
variety of types and levels of communicable disease
threats.\75\
---------------------------------------------------------------------------
\75\ Gov't Accountability Office, Air Travel and Communicable
Diseases: Comprehensive Federal Plan Needed for U.S. Aviation System's
Preparedness 43, Rpt. No. GAO-16-127 (December 2015), available at
https://www.gao.gov/assets/680/674224.pdf.
According to the GAO, the DOT has not implemented this
recommendation. The GAO found that had the DOT implemented such
a plan, it ``could have improved coordination between public-
health and aviation sectors during COVID-19 to address issues
like passenger screening.'' \76\ Moreover, the GAO found that
since the time the 2015 report was published, the FAA had
sponsored limited research on disease transmission within
airplanes and airports.\77\
---------------------------------------------------------------------------
\76\ Gov't Accountability Office, Air Travel and Communicable
Diseases: Status of Research Efforts and Action Still Needed to Develop
Federal Preparedness Plan, Rpt. No. GAO-20-655T (June 2020), available
at https://www.gao.gov/assets/710/707757.pdf.
\77\ Id.
---------------------------------------------------------------------------
G. TESTING REQUIREMENTS
On January 21, 2021, the Biden Administration issued an
Executive Order which requires travelers seeking to enter the
United States from a foreign country to show proof of a recent
negative COVID-19 test prior to entry; and comply with other
applicable CDC guidelines concerning international travel,
including recommended periods of self-quarantine or self-
isolation after entry into the United States.\78\ Other
countries have put in place similar requirements.\79\
---------------------------------------------------------------------------
\78\ Exec. Order No. 13998, 86 FR 7205, Jan. 21, 2021.
\79\ COVID-19 Country Specific Information, U.S. Dept. of State--
Bureau of Consular Affairs (Visited: Feb, 24, 2021) available at:
https://travel.state.gov/content/travel/en/traveladvisories/
COVID-19-Country-Specific-Information.html.
---------------------------------------------------------------------------
In February 2021, there were media reports that the Biden
Administration was considering mandating a pre-departure
testing requirement of all passengers on domestic commercial
flights.\80\ It is estimated that such a requirement would
amount to approximately 900,000 tests per day (based on current
passenger levels), or 27 million more tests per month,\81\
requiring a massive scale-up in testing capacity. Moreover,
many experts agree that mitigation measures such as masks, hand
sanitizers, social distancing, and proper ventilation would
still need to be required, regardless of whether a passenger
tests negative.\82\ As such, numerous organizations voiced
their concerns that this could effectively lead to a ban on
domestic air travel, devastating U.S. airlines, with limited
benefit.\83\ On February 12, 2021, the Biden Administration
announced that it would not be pursuing such a requirement at
this time.\84\
---------------------------------------------------------------------------
\80\ Marnie Hunter, US considers Covid-19 testing requirement for
domestic air travel, CNN, Feb. 9 2021 available at https://www.cnn.com/
travel/article/us-domestic-
covid-19-test-considered-air-travel/index.html.
\81\ TSA checkpoint travel numbers (current year(s) versus prior
year/same weekday), Transp. Sec. Admin. (Feb. 19, 2021), available at
https://www.tsa.gov/coronavirus/passenger-throughput.
\82\ Holly Yan, Don't get a false sense of security with Covid-19
testing. Here's why you can test negative but still be infected and
contagious, CNN, Nov. 3, 2020, available at https://www.cnn.com/2020/
11/03/health/covid-test-negative-contagious-wellness/index.html.
\83\ Airlines for America Letter to Mr. Jeffrey Zients, COVID-19
Recovery Team Coordinator, The White House, A4A Joins Coalition in
Letter to White House COVID-19 Recovery Team (Jan. 29, 2021) available
at https://www.airlines.org/news/a4a-joins-coalition-in-letter-
to-white-house-covid-19-recovery-team/.
\84\ Alison Sider and Sabrina Siddiqui, Covid-19 Testing Won't Be
Required Before Domestic Flights, CDC Says, Wall St. J., Feb. 12, 2021,
available at https://www.wsj.com/articles/covid-
19-testing-wont-be-required-before-domestic-flights-cdc-says-
11613183533.
---------------------------------------------------------------------------
In a limited capacity, some airports and air carriers are
pushing a scaled-down rollout of testing between specific
destinations. This concept, otherwise known as ``safe travel
corridors'', would require passengers to take rapid COVID-19
tests before certain flights in exchange for removing the
destination country's travel restrictions and quarantine
requirements.\85\
---------------------------------------------------------------------------
\85\ Hira Humayun, Delta's new travel corridor offers quarantine-
free access to the Netherlands, CNN, Dec. 15, 2020 available at https:/
/www.cnn.com/travel/article/delta-air-lines-
atlanta-amsterdam-corridor/index.html.
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H. VACCINATIONS
When Ebola exploded across West Africa in 2014, it took
more than five years to get a vaccine approved.\86\ In 2020, ``
. . . researchers were able to develop multiple protective
coronavirus vaccines and get them authori[z]ed within 12 months
of the virus being discovered.'' \87\ On December 11, 2020, the
U.S. Food and Drug Administration (FDA) issued the first
emergency use authorization (EUA) for a vaccine for COVID-19 in
individuals 16 years of age and older.\88\ The EUA allows the
Pfizer-BioNTech COVID-19 Vaccine to be distributed in the
United States. A week later, on December 18, 2020, the FDA
issued an EUA for the Moderna COVID-19 vaccine for use in
individuals 18 years of age and older.\89\ On February 24,
2021, the FDA announced that the Johnson & Johnson COVID-19
vaccine had met the requirements for emergency use
authorization.\90\ All three vaccines were developed and FDA
approved in record time.
---------------------------------------------------------------------------
\86\ Olivia Willis, How COVID-19 vaccines were developed in record
time, without compromising safety, ABC Health & Wellbeing, Jan. 28,
2021, available at https://www.abc.net.au/news/health/
2021-01-29/how-covid-vaccines-were-developed-in-record-time/13096682.
\87\ Id.
\88\ Pfizer-BioNTech COVID-19 Vaccine, Food and Drug
Admin.(Visited: Feb. 24, 2021) available at https://www.fda.gov/
emergency-preparedness-and-response/coronavirus-disease-
2019-covid-19/pfizer-biontech-covid-19-vaccine.
\89\ Moderna COVID-19 Vaccine, Food and Drug Admin. (Visited: Feb.
24, 2021) available at https://www.fda.gov/emergency-preparedness-and-
response/coronavirus-disease-2019-
covid-19/moderna-covid-19-vaccine.
\90\ Jen Christensen, FDA says Johnson & Johnson Covid-19 vaccine
meets requirements for emergency use authorization, CNN, Feb. 24, 2021,
available at https://www.cnn.com/2021/02/24/
health/johnson-vaccine-fda-analysis/index.html.
---------------------------------------------------------------------------
According to the Department of Health and Human Services,
``vaccines will help prevent the spread of COVID-19 and bring
this pandemic to an end.'' \91\ COVID-19 vaccine availability
is increasing rapidly in the United States; as of February
24th, more than 13 percent of Americans had received at least
one COVID-19 vaccine dose.\92\ President Biden recently pledged
to make 600 million vaccine doses available by the end of July;
this is effectively enough to vaccinate every American.\93\
---------------------------------------------------------------------------
\91\ COVID-19 Vaccines, Dept. of Health and Human Services
(Updated: Feb. 2021) available at https://www.hhs.gov/coronavirus/
covid-19-vaccines/index.html.
\92\ Covid-19 Tracker, Bloomberg (Visited: Feb. 24, 2021) available
at https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-
distribution/.
\93\ Zeke Miller Jonathan Lemire, Biden says US is securing 600
million vaccine doses by July, Associated Press, Feb. 11, 2021
available at https://apnews.com/article/vaccine-biden-600-million-
doses-july-b7845a7d0f709199265d9243598b629e.
---------------------------------------------------------------------------
Airlines and analysts anticipate that increased vaccination
rates will release ``pent up demand'' for domestic air travel
in 2021.\94\ The belief is that the availability of vaccines
and testing will give air travelers comfort again.\95\ Another
analyst estimates that while travel was down by 50 percent last
summer, this summer there will be a 70-80 percent return in
leisure travel.\96\ As airline travel returns, hospitality,
tourism, airports, and aerospace manufacturing, maintenance,
and repair industries will also benefit.
---------------------------------------------------------------------------
\94\ Mina Kaji and Amanda Maile, Experts say vaccine rollout, cheap
fares may lead to more rapid air travel rebound, ABC News, January 12,
2021 available at https://abcnews.go.com/
Politics/experts-vaccine-rollout-cheap-fares-lead-rapid-air/
story?id=75202169.
\95\ Id.
\96\ Id.
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WITNESSES
LMs. Heather Krause, Director, Physical
Infrastructure, U.S. Government Accountability Office
LMr. Nicholas E. Calio, President and Chief
Executive Officer, Airlines for America
LCapt. Joe DePete, President, Air Line Pilots
Association, International
LMr. Peter Bunce, President and Chief Executive
Officer, General Aviation Manufacturers Association
LMr. Lance Lyttle, Managing Director, Aviation
Division, Port of Seattle, on behalf of American Association of
Airport Executives
LMr. Edward M. Bolen, President and Chief
Executive Officer, National Business Aviation Association
COVID-19'S EFFECTS ON U.S. AVIATION AND THE FLIGHTPATH TO RECOVERY
----------
TUESDAY, MARCH 2, 2021
House of Representatives,
Subcommittee on Aviation,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:02 a.m. in
room 2167 Rayburn House Office Building and via Cisco Webex,
Hon. Rick Larsen (Chair of the subcommittee) presiding.
Present in person: Representatives Larsen, DeFazio, Kahele,
Lynch, Stanton, Garamendi, Graves of Louisiana, Massie, Perry,
Mast, Stauber, Burchett, Nehls, Van Duyne, and Gimenez.
Present remotely: Representatives Cohen, Carson, Davids,
Johnson of Georgia, Titus, Brownley, Payne, DeSaulnier, Brown,
Allred, Lamb, Delegate Norton, Johnson of Texas, Fitzpatrick,
Balderson, Van Drew, and Steel.
Mr. Larsen. The subcommittee will come to order.
I ask unanimous consent that the chair be authorized to
declare recess at any time during today's hearing.
Without objection, so ordered.
I would note that we are expecting votes today, the first
votes between 11 o'clock and 11:30. We will be continuing the
hearing during the votes. And I will have people sit in as
chair, as necessary, so that people can vote from the committee
room, get from the floor and back.
For Members participating remotely, I want to remind you of
key regulations from the House Committee on Rules. Members must
be visible on video to be considered in attendance and to
participate, unless experiencing connectivity issues.
Members must also continue to use the video function for
the remainder of the time they are attending this meeting and
hearing, unless experiencing connectivity issues or other tech
problems.
If a Member is experiencing any connectivity issue or other
technical problems, please inform committee staff as soon as
possible so that you can receive assistance. A chat function is
available for Members on the Cisco Webex platform for this
purpose. Members can also call the committee's main line, 202-
225-4472, for technical assistance by phone.
Members may not participate in more than one committee
proceeding simultaneously. However, for security reasons,
Members may maintain a connection to the software platform
while not in attendance.
It is the responsibility of each Member seeking recognition
to unmute their microphone prior to speaking, and to keep their
microphone muted when not speaking to avoid inadvertent
background noise. Let me repeat that last phrase. It is your
responsibility to keep your microphone muted when not speaking
to avoid inadvertent background noise.
As the chair of today's meeting and hearing, I will make a
good-faith effort to provide every Member experiencing
connectivity issues an opportunity to participate fully in the
proceedings.
And finally, to insert a document into the record, please
have your staff email it to [email protected].
I will now start with my opening statement. I would ask
unanimous consent for my opening statement be entered into the
record in full.
Without objection, so ordered.
Because of our votes coming up, I will just give you a
truncated version of my opening statement and move to a few of
the things I want to hear from our hearing witnesses today.
First, following the 2014 Ebola virus outbreak, the GAO
recommended the Department of Transportation work with relevant
Federal agencies to develop an aviation preparedness plan for
communicable disease crises. Although these agencies did not
dispute the GAO's recommendation, they took no significant
action to develop a preparedness plan. So from Ms. Krause at
the GAO I look forward to hearing about the benefits of a
national aviation preparedness plan, and GAO's other
recommendations to improve the safety of the traveling public,
and to minimize disruptions to the national aviation system.
Moreover, the COVID-19 pandemic has created fragmented
travel requirements, resulting in a confusing system for
passengers, U.S. airlines, and flightcrews to navigate. These
challenges range from various acceptable COVID-19 test results
to inconsistent quarantine periods. To address these issues,
digital vaccine and testing passports are gaining popularity.
And recently, major carriers such as United Airlines and
American Airlines launched mobile apps which can enable
passengers to show immunization records and recent testing
results when traveling abroad.
So, Mr. Calio from A4A, I am interested in learning more
about U.S. carriers' efforts to develop these passports, and
what standards are necessary to scale up deployment, if
necessary.
Further, I often say that the public health response will
lead economic recovery. And since last December, the Food and
Drug Administration has issued EUAs [emergency use
authorizations] for three COVID-19 vaccinations. The President
has recently pledged to make nearly 600 million doses available
by the end of July. So, as we think about vaccine distribution
and administration across the country, frontline aviation
workers must be appropriately considered for access. So,
Captain DePete from ALPA, I look forward to hearing more about
the essential role of airline pilots in U.S. aviation's
recovery, and how improving access to vaccinations is critical
to ensuring the safety of flightcrews.
And as the U.S. aviation industry embarks on a flightpath
to recovery, the Nation needs a bold, FDR-like investment in
infrastructure to drive local economies, to create jobs, and to
fight climate change, something I think the full committee will
be taking up very soon. So I am pleased that Mr. Lance Lyttle,
the managing director of Seattle-Tacoma International Airport
in my home State of Washington, is here today on the panel on
behalf of AAAE. I look forward to hearing more about the
importance of Federal investment in airports' growing
infrastructure needs, and efforts to improve environmental
sustainability.
Also looking forward, the U.S. aviation system is
undergoing a historic shift with the continued growth of
unmanned aircraft and the emergence of new airspace entrants
such as Advanced Air Mobility. So, while collaboration between
the Federal Government, the aerospace industry, and other
stakeholders is ongoing, the safe integration of new entrants
is far from complete. And I know that Mr. Bunce from GAMA has
comments in his written statement about those issues. And I
would like to hear more from him about Congress' role to
establish a comprehensive policy framework and investment
necessary to foster innovation in the U.S. airspace, as we look
forward to recovery.
But a recovery is only possible with continued Federal
support for the hard-working women and men of the aviation
workforce and the next generation of engineers, pilots,
mechanics, and technicians. So, Mr. Bolen from NBAA, I look
forward to hearing more from you about ways to improve access
to STEM-based apprenticeships, skills training, and career and
tech education programs to diversify and grow the U.S. aviation
pipeline, comments I know that you have included in your
statement.
So I will conclude there, just to say the American people
are sacrificing greatly to combat COVID-19. We recognize that.
They are counting on us in Congress to do our part to keep
people safe and get the country to the other side of this
pandemic. And I am confident that, with Congress' continued
support, the U.S. aviation industry and workforce will be able
to move toward long-term economic recovery.
[Mr. Larsen's prepared statement follows:]
Prepared Statement of Hon. Rick Larsen, a Representative in Congress
from the State of Washington, and Chair, Subcommittee on Aviation
Good morning and thank you to today's witnesses for joining the
Subcommittee's first hearing of the 117th Congress on ``COVID-19's
Effects on U.S. Aviation and the Flightpath to Recovery.'' Before we
begin, I would like to thank my colleagues re-electing me to serve as
Subcommittee Chair. I look forward to working with Ranking Member
Garret Graves to address the pressing challenges and new opportunities
facing U.S. aviation.
The pandemic has tested the resiliency of the U.S. transportation
network like never before, and the aviation sector is no exception. In
my conversations with constituents and stakeholders, I hear about
tragic loss, economic anxiety and profound challenges. I have heard
from airports like Bellingham International in my district, which
experienced a 71 percent decline in enplanements last year when
compared to 2019, and is expecting a cumulative loss of nearly $11
million in revenue. I have heard from local aerospace manufacturing
suppliers like Hexcel Corporation in Burlington, struggling to keep its
doors open and employees on payroll due to halted production and
stalled deliveries. I have heard from a regional airline pilot from
Marysville who is concerned about paying off his student loan debt,
while caring for his growing family. While these issues in total may
seem insurmountable, U.S. aviation, as it has done before, will
persevere.
Last week, the House passed the American Rescue Plan, a
comprehensive aid package that gets more vaccines in arms, gives
Americans a long overdue raise, enables working families to return to
their jobs, and ensures communities can continue to maintain crucial
services. The package also provides urgent relief to sustain U.S.
aviation and aerospace during the pandemic, and protect workers and
restore lost manufacturing jobs, including:
A $15 billion extension of the successful Payroll Support
Program through September 2021 to keep frontline aviation workers on
payroll with benefits;
$8 billion to help keep U.S. airports and airport
concessionaires operational; and
Language from my bipartisan bill, the Aerospace
Manufacturing Jobs Protection Act, providing $3 billion to help retain
and rehire aerospace supply chain workers.
As the nation works to safely get to the other side of this
pandemic, ensuring safety and restoring confidence in air travel is key
to the nation's long-term economic recovery. Keeping the flying public
healthy from COVID-19 is even more difficult because of the lack of
coordinated federal leadership by the previous administration. The
Biden administration has since taken actions to reinforce public
health, including the requiring of masks on in airports and onboard
commercial aircraft. I was also pleased the Federal Aviation
Administration is taking a zero-tolerance enforcement policy against
unruly passengers who disobey flight and cabin crew instructions during
flight. However, the federal government can--and must--do more.
A national aviation preparedness plan would ensure the safety of
aviation crews and passengers in the event of a future public health
crisis. Following the 2014 Ebola virus outbreak, the Government
Accountability Office (GAO) recommended the Department of
Transportation work with relevant federal agencies to develop such a
plan for communicable disease crises. Although these federal agencies
did not dispute GAO's recommendation, they took no significant action
to develop a preparedness plan. Ms. Krause, I look forward to hearing
about the benefits of a national aviation preparedness plan and GAO's
other recommendations to improve the safety of the traveling public,
and minimize disruptions to the national aviation system.
Moreover, the COVID-19 pandemic has created fragmented travel
requirements, resulting in a confusing system for passengers, U.S.
airlines and flightcrews to navigate. These challenges range from
various acceptable COVID-19 test results to inconsistent quarantine
periods. To address these issues, digital vaccine and testing
``passports'' are gaining popularity. Recently, major carriers such as
United Airlines and American Airlines launched mobile apps which can
enable passengers to show immunization records and recent testing
results when traveling abroad. Mr. Calio, I am interested in learning
more about U.S. carriers' efforts to develop these passports and what
standards are necessary to scale up deployment.
I often say that the public health response will lead economic
recovery. Since last December, the Food and Drug Administration has
issued emergency use authorizations for three COVID-19 vaccinations.
President Biden recently pledged to make nearly 600 million doses
available by the end of July. As COVID-19 vaccine distribution and
administration continues across the country, frontline aviation workers
must be appropriately considered for access. Captain DePete, I look
forward to hearing more about the essential role of airline pilots in
U.S. aviation's recovery and how improving access to vaccinations is
critical to ensuring the safety of flightcrews.
As U.S. aviation embarks on a ``flightpath to recovery,'' the
nation needs a bold, FDR-like investment in infrastructure to drive
local economies, create jobs and fight climate change. I am pleased Mr.
Lance Lyttle, Managing Director of Seattle-Tacoma International Airport
in my home state of Washington, is on today's witness panel on behalf
of AAAE. Mr. Lyttle, I look forward to hearing more about the
importance of federal investment in airports' growing infrastructure
needs and efforts to improve environmental sustainability.
U.S. aviation is also undergoing a historic shift with the
continued growth of unmanned aircraft and the emergence of new airspace
entrants such as Advanced Air Mobility, including electric aircraft
which can help reduce traffic congestion by moving people and cargo at
lower altitudes across regions. While collaboration between the federal
government, aerospace industry and other key stakeholders is ongoing,
the safe integration of new entrants is far from complete. Mr. Bunce, I
would like to hear more from you about Congress' role to establish the
comprehensive policy framework and investment necessary to foster
innovation in U.S. airspace.
However, full economic recovery is only possible with continued
federal support for the hardworking women and men of the aviation
workforce and the next generation of engineers, pilots, mechanics and
technicians. Mr. Bolen, I look forward to hearing more about ways to
improve access to STEM-based apprenticeships, skills training and
career and technical education programs to diversify and grow the U.S.
aviation pipeline.
The American people are sacrificing greatly to combat COVID-19.
They are counting on Congress to do its part to keep people safe and
get the country to the other side of this pandemic. I am confident that
with Congress's continued support, the U.S. aviation industry and
workforce will be able to move toward long-term economic recovery.
Thank you again to today's witnesses. I look forward to our discussion.
Mr. Larsen. So I want to say thank you to today's
witnesses, and turn to Representative Garret Graves of
Louisiana for an opening comment.
Mr. Graves of Louisiana. Thank you, Mr. Chairman, and I
want to thank all the witnesses for being here. I appreciate
the opportunity to have this hearing today.
This pandemic has been extraordinary, in terms of the
impacts to everyday Americans. Everything from mental health
challenges, an increase in suicides, an increase in opioid
dependence, lost jobs, lost economic activity. Of course, folks
in nursing homes unable to have their loved ones come visit,
causing mental health as well as physical health problems.
The good news, as the chairman noted, is that 130 million
vaccines have already been prepared and available for Americans
as of the end of this month. And we are on track right now to
have access to vaccines by the summer for all Americans, which
is great news.
Mr. Chairman, as you well know, back in April of last year,
passenger flights were down 95 percent--95 percent--year over
year. Looking at 2019 to 2020, flights were down 60 percent. It
is estimated that somewhere between $1.6 and $1.8 trillion in
additional savings were realized as a result of the
extraordinary drop in economic activity and in flights.
Congress has stepped up and twice now provided the Payroll
Support Program, supporting workers, because what is important
is that we actually have the bandwidth, we have the capacity of
our airline industry, we have the ability to have business and
recreational travel, tourism travel available for when the
economy picks back up again. And so those investments have gone
to help ensure that we have that bandwidth, we have the
capacity.
We have also made investments in airports to ensure that
the infrastructure is there, is ready, and ready to go. And I
am going to say it again, this is absolutely integral to our
economic recovery.
Now, something else that we need to be thinking about and
considering--and I am interested to hear from some of the
witnesses on this--is the fact that, since airline passenger
flights and travel has been down significantly, are we ready,
in terms of a safety perspective, the equipment that has been
in storage or mothballed, the pilots that aren't getting the
number of hours that they normally get, the other airline
support workers, flight attendants, and others, are we ready to
go, and to do it safely, and to ramp back up quickly to 100
percent capacity?
As the chairman noted, we don't need to just get back to
where we were before. We have had extraordinary challenges in
the aviation industry with some of the safety issues associated
with the 737 MAX, as well as all the statistics I just covered,
including the 95-percent reduction in flights dating back to
April of last year. But we have some amazing opportunities on
the horizon within the aviation industry. And, of course, one
of the biggest being unmanned systems and integration into our
airspace.
So I am looking forward to hearing the witnesses'
testimony, and I just want to again reiterate what the chairman
said in regard to helping us to think forward and project some
of the needs out of this body to ensure that we are ready to go
from a capacity and a safety perspective whenever the economy
fully opens back up.
Thank you, Mr. Chairman. I yield back.
[Mr. Graves of Louisiana's prepared statement follows:]
Prepared Statement of Hon. Garret Graves, a Representative in Congress
from the State of Louisiana, and Ranking Member, Subcommittee on
Aviation
Thank you, Mr. Chairman, and I want to thank all the witnesses for
being here. I appreciate the opportunity to have this hearing today.
This pandemic has been extraordinary in terms of its impacts--
everything from mental health challenges, increased suicides, increased
opioids dependence, lost jobs, lost economic activity, and of course
folks in nursing homes unable to have their loved ones come visit,
causing mental health as well as physical health problems.
Some good news, as the Chairman noted, is that 130 million vaccines
have already been prepared and are available for Americans, as of the
end of this month. And we're on track right now to have access to
vaccines by the summer for all Americans, which is great news.
Mr. Chairman, as you well know back in April of last year,
passenger flights were down 95 percent. Ninety-five percent. Year to
year, looking at 2019 to 2020, passenger counts were down 60 percent.
It's estimated that somewhere between $1.6 and $1.8 trillion dollars in
additional savings by Americans were realized as a result of the
extraordinary drop in economic activity, including reduced flying.
Congress has stepped up and twice provided the payroll support
program--supporting workers--because what is important is that we
actually maintain the capacity of our airline industry and the ability
to have business, recreational, and tourism travel available for when
the economy picks back up again.
And so, those investments have gone to help ensure that we have
that maintained capacity. We've also made investments in airports to
ensure the infrastructure is there and ready to go.
And I am going to say it again: this is absolutely integral to our
economic recovery.
Now something else that we need to be thinking about--and I am
interested to hear from the witnesses on this--is that since airline
passenger flights and travel have been down significantly: Are we
ready? In terms of safety, are we ready? Equipment has been in storage;
pilots aren't getting the number of hours they normally get; and what
about other airline workers, flight attendants, and mechanics? Are we
ready to go, to do it safely, and to ramp back up quickly to 100
percent capacity?
As the Chairman noted, we don't need to just get back to where we
were before. We have had extraordinary challenges in the aviation
industry with some of the safety issues associated with 737 MAX, as
well as all the statistics I just covered, including the 95 percent
reduction in flights dating back to April of last year.
But we have some amazing opportunities on the horizon and within
the aerospace industry. And of course, one of the biggest being
unmanned systems and their integration into our airspace.
I am looking forward to hearing the witnesses' testimony, and I
just want to again reiterate what the Chairman said in regard to
helping us to look forward and project what some of the needs might be
from this body, to ensure that we are ready to go from a capacity and
safety perspective whenever the economy fully opens back up.
Mr. Larsen. Thank you, Representative Graves.
Representative DeFazio, you are recognized for an opening
statement.
Mr. DeFazio. I thank the gentleman.
It seems like we have been here before, about once every 10
years. We had the Gulf War. We saw the failures of Pan Am and
Eastern, and bankruptcy filings. We lost a lot of jobs. The 9/
11 terror attacks resulted in bankruptcies of numerous
airlines, and a loss of a lot of jobs, and a lot of people lost
their pensions and everything else.
But this time, it is a little different. Congress rose to
the occasion, and we created what I think is the most
successful part of the CARES Act or anything we have done
during the pandemic to support working Americans. The Payroll
Support Program, totally scandal free, unlike the Paycheck
Protection Program--where some major chains and others scammed
the system and other problems with that. Not a penny went to
the airlines; there were restrictions on executive pay,
bonuses, stock buybacks, dividends; and we have saved, in the
aggregate, I would say, tens of thousands or up to 100,000
jobs, including contractors--and that kept people in their
homes, kept their health insurance and other benefits.
To be ready for the return of the aviation industry, which
is beginning to look better and better--last April there were 3
million passenger boardings in the month; in November, we were
up to almost 30 million. I am hopeful, with this current
program--which is included in this COVID package pending over
in the dysfunctional Senate, with stupid rules written by
Senators who have been dead for 10 years. But PSP is not
challenged under the dead guy rule, so hopefully it will go
through as written. I am hoping by September 30th we are not
going to need another extension.
There are ongoing concerns. We do not have comprehensive,
long-term plans in place. They were first proposed by GAO to
the Obama administration, to come up with comprehensive plans
for modes of transportation. They didn't. Four years of the
Trump administration didn't. I, numerous times, asked the FAA
Administrator to impose a mask mandate, and he refused, saying,
``Oh, you couldn't do that.''
So we left it up to the airlines, who did come through. But
it is one thing to have the airlines say, ``This is our rule,''
and it is another thing to have the announcements at the
beginning, which are getting better. These need to be emphatic,
particularly for the jerks who get on and suck on a lollipop or
sip a bottle of water for 6 hours. They need to hear that you
can remove your mask briefly--briefly--for food or drink or to
take a medication. They need to hear about the fines that will
be imposed if they don't follow the mask rule. They need to
hear about being banned from flights by the airlines, which a
number of the airlines took their own initiative to do. We have
to be emphatic.
And the chair and I introduced a comprehensive bill last
year, the Healthy Flights Act of 2020. We will be informed by
this hearing on changes, potential changes to that legislation.
And I still think we need to put those strictures in place,
because the FAA doesn't seem to take much initiative.
And I have also been working with Homeland Security
Committee Chair Thompson to get the TSA to strictly enforce the
mask rule at the checkpoint. That is the best place, much
better than getting to the gate and having the gate agents
having to deal with unruly people. They still haven't gone as
far as I want, which is to have posters that show people what
they can and can't wear. We have to inform people that a lot of
things people are using routinely are not allowed on airplanes.
You can't have just a gaiter, a single layer, or you can't have
a kerchief, and you have to actually cover your nose and mouth,
which a lot of people don't quite seem to get.
We don't want to move too quickly, as we recover, to remove
these precautions. And we want to know that, long term, we have
a strategy to keep people safe when they fly during this, the
end of--hopefully--the end of the pandemic and in future
pandemics.
With that, Mr. Chair, I yield back the balance of my time.
[Mr. DeFazio's prepared statement follows:]
Prepared Statement of Hon. Peter A. DeFazio, a Representative in
Congress from the State of Oregon, and Chair, Committee on
Transportation and Infrastructure
Thank you, Chair Larsen, for calling today's hearing on the
aviation industry's recovery from the COVID-19 pandemic, and I welcome
all of our witnesses.
Last month this country passed the dreadful marker of half a
million deaths from COVID-19. But now that we are starting to see the
faint glow of a light at the end of the tunnel, it is appropriate to,
even at this early stage of the Nation's emergence from the pandemic,
start thinking about the aviation industry's recovery.
As our witnesses know all too well, the aviation industry has
suffered financial crises about once every 10 years since deregulation.
In 1990 and 1991 we saw the failures of Pan Am and Eastern Air Lines,
with numerous others filing for bankruptcy, amid a recession and the
first Gulf War. Ten years later, the 9/11 terror attacks sparked a
financial crisis that resulted in the loss of roughly 128,000 aviation
jobs and the bankruptcies of United, Delta, Northwest, and US Airways,
as well as the failures of several smaller airlines like Aloha. Shortly
less than a decade later came the global financial crisis, when roughly
25,000 airline workers lost their jobs.
And now, unfortunately, here we are again.
This time, however, Congress rose to the occasion by creating the
Payroll Support Program: a pass-through program to pay airline workers'
salaries, wages, and benefits, keeping them off unemployment lines
during the first six months of the pandemic without a penny going into
the pockets of company executives or shareholders. We extended this
highly successful program in December through this month, and a further
extension through the end of September is included in the ``American
Rescue Plan Act of 2021,'' which the House passed and sent to the
Senate early Saturday morning.
Moreover, passenger traffic is recovering slowly but surely. While
U.S. airlines reported a drop to only 3 million passenger boardings at
the outset of the pandemic in April 2020, by November the number of
boardings had rebounded to 29 million, although that's still less than
half of the 73 million boardings recorded during the same time in the
previous year. I'm hopeful that by September 30th when the pending
Payroll Support Program expires, the airlines will find that
sustainability is in sight, for the benefit of those who rely on them,
including their workers.
While the Payroll Support Program keeps airline workers on the
payroll, those workers must occasionally deal with unruly passengers
who refuse to wear masks.
That's why last year, I along with Chair Larsen, introduced the
``Healthy Flights Act of 2020,'' which, among numerous health and
safety measures, explicitly gave the FAA Administrator the authority to
require passengers to wear masks and also imposed a standalone mask
requirement on board airplanes and in airports. Based in part on what
we learn from today's hearing, I plan to reintroduce that legislation
in the near term.
Meanwhile, I want to commend the Biden administration for issuing
Executive Orders requiring mask use in transportation, including air
transportation. While I believe an express statutory mandate is
appropriate, this was a necessary step to protect aviation workers and
passengers.
I, along with Homeland Security Chair Thompson, sent a letter last
month calling on the Transportation Security Administration to strictly
enforce the President's new order by denying entry at screening
checkpoints of any travelers refusing to wear masks and calling on the
FAA to work with U.S. airlines to ensure there's appropriate and
proactive messaging about face masks well in advance of a flight,
including at ticket purchase and during mobile check-in. I hope to hear
from today's witnesses about how the Federal mandate has helped the
airlines, airports, and aviation workers across the system.
Separately, the FAA must continue to take strong enforcement action
against passengers who become unruly when told they must wear masks
while on board aircraft. Just last week, the FAA announced a $27,500
fine against a Delta passenger who struck a flight attendant in the
face after the passenger's companion refused to follow crewmember
instructions and wear a mask. The FAA must continue to enforce a zero-
tolerance policy and use the regulations in its toolbox, such as the
prohibition on interference with the duties of crewmembers, to go after
people who recklessly endanger the lives of their fellow passengers.
Finally, as vaccines become more prevalent and the country returns
to a healthy state, we must ensure that the aviation industry has a
plan in place to transition safely from current mitigation techniques
to future ones. If the industry is too eager and moves too fast to
remove certain precautions, the health and safety of workers and
passengers could be negatively affected.
Meanwhile, if issuance of new guidelines is too slow, we run the
risk of perpetuating uncertainty and becoming the victim of a patchwork
quilt of standard procedures. With mass vaccinations already underway,
the Federal Government must utilize science and develop a strategy
ahead of time, to ensure that regulations are uniform and our
transition back to ``normal'' is a safe one.
The aviation industry that emerges from this pandemic will not be
the same industry that was flourishing on January 1, 2020. I look
forward to hearing from our witnesses as to what that industry will
look like, and how Congress can support the needs of workers and users
of our air transportation system to ensure that more than 1 million
aviation workers remain employed and that the risk of catching the
coronavirus on an airplane is de minimis.
Again, thank you, Chair Larsen, for calling today's hearing.
Mr. Larsen. Thank you, Chair DeFazio.
Before I go to witnesses, I just want to make one
acknowledgment today. I want to acknowledge my senior
legislative aide, Alexandra Menardy. Today is Alex's last
Aviation Subcommittee hearing as a member of my personal staff.
She is not going far. She is actually going to the professional
staff for this subcommittee. So I want to thank Chair DeFazio
for his wisdom in hiring her, and also I will send him the
bill.
Alex, though, has been a valued member of my staff for
nearly 4 years on aviation policy, on energy policy, on Tribal
and environmental policy in the Pacific Northwest. So I want to
thank Alex for her hard work and dedication, and she will do a
great job here, at the subcommittee.
With that let's move to the witnesses. To save time, rather
than to run through introductions and titles, we will just go
one at a time. I think folks have the information about the
individual witnesses. We are going to start with Ms. Heather
Krause from the GAO.
So, Ms. Krause, you are recognized for 5 minutes for an
opening statement.
TESTIMONY OF HEATHER KRAUSE, DIRECTOR, PHYSICAL INFRASTRUCTURE,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE; NICHOLAS E. CALIO,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, AIRLINES FOR AMERICA;
CAPTAIN JOSEPH G. DePETE, PRESIDENT, AIR LINE PILOTS
ASSOCIATION, INTERNATIONAL; PETER J. BUNCE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, GENERAL AVIATION MANUFACTURERS ASSOCIATION;
LANCE LYTTLE, MANAGING DIRECTOR, SEATTLE-TACOMA INTERNATIONAL
AIRPORT, ON BEHALF OF THE AMERICAN ASSOCIATION OF AIRPORT
EXECUTIVES; AND EDWARD M. BOLEN, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, NATIONAL BUSINESS AVIATION ASSOCIATION
Ms. Krause. Chairman DeFazio, Chairman Larsen, Ranking
Member Graves, and members of the subcommittee, thank you for
the opportunity to discuss our ongoing work on the effects of
the COVID-19 pandemic on the aviation industry.
International flight restrictions, local stay-at-home
orders, and a general fear of contracting and spreading COVID-
19 through air travel had a sudden and profound effect on all
aspects of the aviation industry. According to the Department
of Transportation statistics, as was noted, passenger traffic
was down 60 percent systemwide in 2020, compared to traffic
levels in 2019. The ripple effect from this unprecedented and
sustained reduction in demand has affected airlines,
industrywide employment, and the entire aviation supply chain.
Congress and the administration have taken a number of
actions to help the Nation's aviation industry respond to and
recover from the economic effects of the pandemic, most notably
providing over $100 billion in economic relief to aviation
businesses. In return, recipients were required to generally
maintain their employment levels, among other requirements.
My testimony today is based on our continued work
overseeing CARES Act and other funds to the aviation industry,
and the industry's response to the pandemic. It focuses on
three areas: one, actions that businesses across the aviation
industry have taken to respond to reduced passenger demand;
two, factors that may affect industry recovery; and three,
considerations for any Federal actions.
First, in response to reduced passenger demand, aviation
businesses quickly built their cash reserves to weather the
downturn and implemented measures to reduce their costs. These
actions included leveraging Federal assistance; raising money
in the private markets; and reducing labor, operating, and
capital expenditures.
For example, airlines, airports, and others leveraged
Federal assistance provided in two Federal coronavirus relief
laws to support payroll and other expenses. In addition,
industry associations and credit rating agencies said that
Federal assistance increased confidence in the aviation
industry, enabling aviation businesses to raise money in
private debt and equity markets to strengthen their cash
reserves.
Even with these and other actions, the U.S. aviation
outlook remains uncertain. The industry's eventual recovery to
prepandemic passenger levels is highly dependent on factors
outside the industry's control. According to several industry
forecasts, public health factors affecting the recovery include
the success of COVID-19 vaccinations, the spread and impact of
potential COVID variants, and public confidence in the safety
of air travel, among others.
In addition, recovery in some aviation sectors will depend
on how the airline industry responds to the financial pressures
and changes in demand associated with these uncertainties. For
example, one aviation manufacturer we spoke with said airlines
are likely to continue to postpone the delivery and purchases
of long-haul aircraft over the next few years to better align
with passenger demands. In turn, this would affect demand for
aviation manufacturing and aircraft maintenance services.
While many are optimistic for a postpandemic economic
recovery, the speed and degree to which the aviation industry
will be able to rebound is likely to vary across different
sectors. For example, credit rating agencies told us that low-
cost, leisure-oriented airlines are likely to recover faster
than network airlines that are more dependent on business and
international travel.
As we enter the second year of the pandemic and the pace
and duration of the recovery becomes clearer, Congress may
contemplate additional actions to support the industry's
recovery. GAO has identified three fundamental principles that
can serve as a framework for considering future assistance.
They include, one, identifying and defining the problem; two,
determining the national interests and setting clear goals and
objectives that address the problem; and three, protecting the
Government's interests.
In applying these principles, some issues emerge that may
help inform how best to design any response. For example, when
addressing the longer term public health implications of the
pandemic, the Federal Government plays an important role in
working with the industry to mitigate the effects of the
pandemic and understand how various technologies and processes
could help protect the health of air travelers.
In addition, the entire aviation industry could benefit
from the development of a national aviation preparedness plan
for communicable diseases; a recommendation, as was mentioned,
we made to DOT in 2015, and have since urged Congress to
require DOT to develop such a plan.
In closing, the challenges facing the aviation sector are
unprecedented, and many uncertainties remain as to the pace and
extent of recovery. We will continue to support Congress in
understanding and addressing these pressing issues.
This concludes my statement. I look forward to answering
your questions.
[Ms. Krause's prepared statement follows:]
Prepared Statement of Heather Krause, Director, Physical
Infrastructure, U.S. Government Accountability Office
Chairman Larsen, Ranking Member Graves, and Members of the
Subcommittee:
I am pleased to be here today to discuss our ongoing work assessing
the effects of the Coronavirus Disease 2019 (COVID-19) pandemic on the
aviation industry.
The COVID-19 pandemic has resulted in catastrophic loss of life and
substantial damage to the global economy. International flight
restrictions, local stay-at-home orders, and a general fear of
contracting and spreading COVID-19 through air travel had a sudden and
profound effect on passenger air carriers, airports, and the entire
ecosystem of manufacturers, repair stations, and other businesses that
comprise the U.S. commercial aviation industry. According to Department
of Transportation (DOT) statistics, passenger traffic was down 60
percent system-wide in 2020 compared to traffic levels in 2019. The
ripple effect from this unprecedented and sustained reduction in demand
has affected airline business models, employment, and the entire
aviation supply chain. For example, according to the Bureau of Labor
Statistics (BLS), as of November 2020, an estimated 122,600 jobs in the
air transportation sector--over 23 percent--have been lost since peak
employment levels of 516,900 in February 2020.\1\
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\1\ According to BLS, the air transportation sector includes
scheduled air carriers that fly regular routes on regular schedules and
operate even if flights are only partially loaded, and non-scheduled
carriers that provide chartered air transportation of passengers,
cargo, or specialty flying services and often operate at nonpeak time
slots at busy airports. Among others, these numbers do not include
activities such as airport operations and aerospace manufacturing or
repair activities, if conducted by companies other than airlines.
---------------------------------------------------------------------------
As an immediate response to the public health and economic crises,
Congress and the administration took a number of actions to provide
funds for pandemic relief to aviation businesses. Notably, in March
2020, Congress passed, and the President signed into law, the CARES
Act,\2\ which appropriated, among other things, $88 billion to help the
nation's aviation industry and airports respond to and recover from the
economic effects of the COVID-19 pandemic. This included:
---------------------------------------------------------------------------
\2\ Pub. L. No. 116-136, 134 Stat. 281, 470.
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$32 billion in payroll support to passenger air carriers,
cargo air carriers, and certain aviation contractors to continue paying
employee wages, salaries, and benefits;
Up to $46 billion for loans and loan guarantees to
provide liquidity to aviation and other eligible businesses; and,
$10 billion to support U.S. airports of all sizes
experiencing severe economic disruption caused by the COVID-19
pandemic.
The Consolidated Appropriations Act, 2021 appropriates an
additional $16 billion to the Department of the Treasury to provide
payroll support for passenger air carriers and certain aviation
contractors, and $2 billion for eligible airports and certain
tenants.\3\ Together, the CARES Act and Consolidated Appropriations
Act, 2021 provided certain parts of the aviation sector with economic
relief and in return required recipients to generally maintain their
employment levels, among other requirements.\4\
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\3\ Pub. L. No. 116-260, 134 Stat. 1182.
\4\ GAO, COVID-19: Opportunities to Improve Federal Response and
Recovery Efforts, GAO-20-625 (Washington, D.C.: June 25, 2020).
Conditions of the two financial assistance programs include
prohibitions against involuntary layoffs or furloughs. Some airlines
took action to offer early retirement. In addition, through attrition
and hiring freezes, airlines were able to reduce headcount. As
authorized by the CARES Act and the Consolidated Appropriations Act,
2021, DOT has required scheduled passenger air carriers receiving
financial assistance to maintain minimum scheduled passenger service to
points in the United States served prior to the pandemic, with some
exceptions. Pub. L. No. 116-136, Sec. 4005, 134 Stat. at 477; Pub. L.
No. 116-260, Sec. 407, 134 Stat. at 2058-59.
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At the beginning of 2021, the outlook for U.S. aviation remains
uncertain. Demand for air travel remains far below pre-pandemic levels
with the exception of certain leisure markets. Notably, the most
profitable segments of the aviation industry--international and
corporate air travel--have only minimally recovered. Leisure travelers
have focused more on domestic and shorter-haul international
destinations that are less profitable. Some businesses have relied more
heavily on virtual meetings, which has led to a substantial reduction
in business trips.
Unlike past disruptive events in aviation, including September 11,
2001, and the economic recession of 2008-2009, passenger airlines
entered this crisis in a relatively strong financial position, with 10
consecutive years of industry profit from 2010 through 2019.\5\
Nonetheless, some industry analysts have forecast a long, multi-year
recovery before aviation passenger traffic returns to 2019 levels.
According to several forecasts, multiple uncertainties--ranging from
vaccine distribution to additional government-imposed restrictions as a
result of new COVID variants--suggest that a return to 2019 traffic
levels may not occur until 2023 or later.
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\5\ Prior to September 11, 2001, a weakening U.S. economy affected
passenger airlines. Throughout the 2000s volatile fuel prices, among
other things, also led to financial difficulties and some bankruptcies.
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My statement today is based on our ongoing examination of the
effects of the COVID-19 pandemic on selected aviation sectors--
including airlines, airports, manufacturers, and repair stations--and
on our extensive body of work on past financial assistance efforts,
including those directed to the commercial aviation industry. This
statement provides preliminary observations on the: (1) actions that
businesses across the aviation industry have taken to respond to
reduced passenger demand, (2) factors that may affect industry
recovery, and (3) considerations for federal support to the aviation
industry.
As part of our ongoing work, we reviewed a range of aviation
industry reports, financial data, government statistics from 2019-2020,
and documentation from selected businesses. We also interviewed a range
of entities, including representatives from domestic passenger, cargo,
and regional airlines; large and medium hub airports; manufacturers of
commercial and general aviation aircraft and engines; repair station
operators that perform inspections and maintenance on aircraft; and
multiple industry associations and labor groups representing a cross-
section of aviation interests. Interviews with selected businesses
provided insights on the effects of the pandemic and the actions
certain businesses and sectors have taken in response. Furthermore, we
interviewed representatives from credit rating agencies and several
industry analysts to gain insight on the uncertainties the industry
faces as it looks toward recovery. The results of these interviews are
not generalizable to the entire commercial aviation industry. When
completed, our ongoing work will include actions DOT and the Federal
Aviation Administration (FAA) have taken to help the industry respond
to the pandemic and the effects of those actions on industry
businesses, as well as aviation stakeholders' perspectives on the
effects of the CARES Act. We plan to complete this work by summer 2021.
The ongoing work on which this statement is based is being
conducted in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
Aviation Businesses Took a Range of Actions to Respond to Reduced
Passenger Demand
In response to reduced passenger demand brought by the COVID-
19pandemic, aviation businesses quickly implemented measures to reduce
financial losses and position themselves for recovery to pre-pandemic
levels. These actions included leveraging federal assistance, raising
money in private markets, and reducing labor, operating, and capital
expenditures.
To obtain needed funding to respond to impacts from the pandemic, a
wide range of aviation industry businesses leveraged the federal
financial support from the CARES Act and the Consolidated
Appropriations Act, 2021. According to representatives from airlines
and credit rating agencies, the federal government's early support via
the CARES Act helped to quickly provide stability to the aviation
industry. For example:
As of October 2020, Treasury provided $28.2 billion in
financial assistance from the CARES Act Payroll Support Program to help
airlines and contractors keep employees on their payroll. Treasury is
currently providing another $16 billion in financial assistance for the
Consolidated Appropriations Act, 2021 Payroll Support Program.\6\
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\6\ Treasury executed Payroll Support Program agreements with 352
passenger air carriers, 38 cargo air carriers, and 220 aviation
contractors. Total demand by cargo air carriers for these funds was far
below the $4 billion authorized for these carriers, so about $3 billion
of funds in this category were not awarded.
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Treasury executed loans totaling up to $21.2 billion that
allowed 24 aviation-related businesses to bridge revenue declines and
pay for ongoing expenses, including payroll and rent.\7\
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\7\ Of the $21.2 billion in loans, most of the loan assistance--
nearly $20.8 billion--was provided to seven major passenger air
carriers.
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Airports received approximately $10 billion in grants
under the CARES Act, and FAA is currently allocating another $2 billion
provided under the Consolidated Appropriations Act, 2021.\8\ These
grants allow airports to fund their operations and meet their ongoing
debt payments.\9\
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\8\ Both the CARES Act and Division M of the Consolidated
Appropriations Act, 2021--also known as the Coronavirus Response and
Relief Supplemental Appropriations Act, 2021--give FAA the authority to
retain up to 0.1 percent of the funds provided for Grants-in-Aid for
Airports to fund the award and oversight by FAA of grants made under
the respective Acts. Pub. L. No. 116-136, 134 Stat. at 597; Pub. L. No.
116-260, div. M, tit. IV, 134 Stat. at 1941.
\9\ FAA has begun to collect data from airports on general spending
categories for CARES Act funding through grant close-out reports, but
officials said that they have limited information until airport
sponsors draw down all funds for reimbursed costs. While FAA collects
these data, officials said airports are generally using CARES Act funds
on payroll, utilities, minor maintenance, and debt service. Although
FAA officials have not yet obligated or expended any Consolidated
Appropriations Act, 2021 funding, airport associations said that
airport sponsors generally plan to use these grants to pay for
operational expenses and costs related to mitigating effects of the
COVID-19 pandemic, such as cleaning and sanitation, social distancing
measures, and upgrading heating and cooling systems.
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Some aviation businesses, such as air carriers and
contractors, applied and were approved for Paycheck Protection Program
loans to help sustain them through the period of decreased demand.\10\
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\10\ The CARES Act and the Paycheck Protection Program and Health
Care Enhancement Act appropriated a total of $670 billion for the
Paycheck Protection Program (PPP) under the Small Business
Administration's 7(a) small business lending program. PPP loans are
made at 1 percent interest and will be fully forgiven if certain
conditions are met. These loans can be used for payroll and certain
non-payroll costs. In general, small businesses with 500 or fewer
employees, including tax-exempt nonprofit organizations, veteran's
organizations, and tribal businesses were eligible. Businesses in
certain industries with more than 500 employees were eligible for
loans.
Representatives from airlines and manufacturers also reported using
the tax provisions in the CARES Act to bolster their liquidity.\11\ In
addition, commercial aviation operators benefited from the CARES Act
provision suspending certain commercial air transportation taxes,
including those on passenger tickets, cargo, and fuel.\12\
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\11\ Airlines and aviation manufacturers reported using tax
provisions of the CARES Act, including deferring employer payroll
taxes, claiming employee retention credits, and carrying back five
years net operating losses arising in tax years beginning in 2018,
2019, and 2020. Pub. L. No. 116-136, Sec. Sec. 2301-2303, 134 Stat. at
347-56. The Consolidated Appropriations Act, 2021 made a number of
changes to these provisions, including extending the availability of
credits, among other changes. Pub. L. No. 116-260, div. N, Sec. Sec.
206-207, 134 Stat. at 3059-3066.
\12\ Pub. L. No. 116-136, Sec. 4007, 134 Stat. at 477. In October
2020, Congress moved $14 billion from the Treasury General Fund into
the Airport and Airway Trust Fund. Continuing Appropriations Act, 2021
and Other Extensions Act, Pub. L. No. 116-159, Sec. 1205, 134 Stat.
709, 728.
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Industry associations and credit rating agencies told us that
assistance from the CARES Act provided a degree of assurance in the
stability of the market that enabled private lenders to invest in the
aviation industry with greater confidence that they would be able to
recoup their investments. For example, major U.S. passenger airlines
added an estimated $59 billion in private and federal long-term debt by
the end of 2020, with their expected interest expenses to more than
double in the next few years, according to one industry association. In
some cases, businesses pursued private refinancing instead of pursuing
government financial support options. For example, Boeing was able to
issue $25 billion in new long-term debt in April 2020 to bolster its
liquidity and thus did not pursue any CARES Act loans.
At the same time that some airlines and other aviation businesses
were strengthening their cash reserves through federal support and
private financing, they also implemented broad cost-cutting measures,
including reducing their labor costs. Airlines and airports sought to
reduce their payroll expenses by, among other things, offering early
retirement and voluntary separation programs, voluntary unpaid leave
programs, freezing non-essential hiring, reducing executive and
management compensation, and in some cases, involuntary furloughs and
layoffs. For example, Delta Air Lines reported that 50,000 employees
took unpaid leaves of absence and approximately 18,000 employees
participated in its early retirement and voluntary separation programs
from April 1 through December 31, 2020. American Airlines reported
reducing its management and support staff team by approximately 5,100
positions (30 percent) and that more than 20,000 of its employees opted
for an early retirement or long-term paid leave. Manufacturers and
repair station operators have also reduced their workforces through
reductions to employees' hours, layoffs, and furloughs, and in some
cases, closing facilities. For example, one large manufacturer of
airplane engines permanently reduced its global workforce by
approximately 25 percent, while a general aviation aircraft
manufacturer told us that more than 600 employees were impacted when it
permanently closed a facility in California.
Airlines also took actions to reduce non-labor operating
expenditures as well as certain capital costs. For example, some
passenger airlines quickly reduced their capacity and the reach of
their networks by reducing flight frequencies, aircraft size, and the
number of airports served.\13\ Airlines also accelerated the retirement
of older aircraft to reduce maintenance costs and streamline their
fleets. For example, American Airlines accelerated the retirement of a
number of aircraft including certain Airbus A330, Boeing 757 and Boeing
767 models, and certain regional aircraft. According to American
Airlines' publicly available financial reports, these aircraft
retirements provide cost savings and efficiencies associated with
operating fewer aircraft types by removing complexity from the
airline's operations. Airlines also placed aircraft in temporary
storage. For example, representatives from one airline told us they
parked 44 of their older Airbus A320 aircraft because they were less
fuel efficient than other aircraft in their fleet. Airlines also
delayed and deferred delivery of new aircraft. For example, according
to company reports, Spirit Airlines deferred some of its aircraft
deliveries originally scheduled for 2020 and 2021.
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\13\ As noted previously, as authorized by the CARES Act and the
Consolidated Appropriations Act, 2021, DOT has required scheduled
passenger air carriers receiving financial assistance to maintain
minimum scheduled passenger service to points in the United States
served prior to the pandemic, with some exceptions. For example, DOT
has been exempting carriers from serving certain points where it is not
reasonable or practicable to serve all points or all frequencies in
their service obligations. Pub. L. No. 116-136, Sec. 4005, 134 Stat.
at 477; Pub. L. No. 116-260, Sec. 407, 134 Stat. at 2058-59.
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In addition to airlines, other aviation entities took similar
actions to reduce non-labor operating expenditures and capital costs.
Many airports reported deferring or delaying capital development
projects. For example, representatives from one medium hub airport told
us the airport had paused a $1.5 billion expansion project that
includes the addition of 16 new gates, a seven-story parking garage,
new cargo facility, and several other improvements to the airport.
Several airports accelerated the timeline of some capital projects to
take advantage of project savings that could be realized as the result
of reduced passenger traffic. Representatives from a large hub airport
said that reduced passenger traffic allowed them to reduce costs and
accelerate a taxiway replacement and runway projects because they did
not have to pay overtime costs or costs for construction during the
night. Some aircraft manufacturer representatives told us they reduced
spending on research and development, marketing, and advertising, and
deferred capital expenditures. Representatives from repair stations
told us they closed facilities, delayed previously planned expansions,
and deferred other capital expenditures.
Aviation Industry Recovery Depends on the Public Response to the
Pandemic, Economic Recovery, and Industry Responses to these
Uncertainties
The aviation industry's recovery to pre-pandemic passenger levels
depends on external factors, including pandemic-related public health
outcomes and economic improvement, and how the aviation industry
responds to the financial pressures and changes in demand associated
with these uncertainties.
As noted earlier, industry recovery is highly dependent on factors
outside the aviation industry's control, most notably pandemic-related
public health outcomes and the general recovery of the U.S. and global
economies. According to several industry forecasts, public health
factors include the pace and acceptance of COVID-19 vaccination;
ongoing public adherence to measures to mitigate disease transmission,
such as physical distancing and mask-wearing; the spread and impact of
different variants of the virus that causes COVID-19; the ability to
standardize international travel restrictions; and traveler sentiment
and public confidence in the safety of air travel. Airline
representatives are optimistic that air travel demand will pick up in
the second half of this year as a significant portion of the flying
public become vaccinated. Similarly, economists project that the
economy will also recover in the second half of 2021 as employment
levels, consumers' disposable income, business growth, and the
associated demand for corporate travel all rebound.
However, while many are optimistic for a post-pandemic economic
recovery, the speed and degree to which the aviation industry will be
able to rebound is likely to vary across different industry sectors.
Credit rating agency representatives told us that low-cost, leisure-
oriented airlines are likely to recover faster than network airlines
that rely more heavily on business and international travelers.
Airlines' responses to financial pressures will also likely impact
other aviation businesses, including potentially delaying demand for
their services. For example, airlines are likely to continue to delay
delivery and defer purchases of new aircraft, especially long-haul
aircraft, to better align with anticipated demand for domestic travel
over the next few years, according to representatives from an aviation
manufacturer. According to the consulting firm Oliver Wyman, as many as
4,700 aircraft that had been on the production schedule at the
beginning of 2020 will no longer be built as scheduled, which will have
a significant impact on the midsize and larger parts suppliers that
supply larger airframe and engine manufacturers.
Additionally, credit rating agency representatives told us that
repair station operators will likely be affected as airlines may
conserve cash by using up existing inventories of spare parts and
managing their fleet where possible to limit maintenance requirements.
Those representatives told us this could cause demand for repair
station services and parts to lag a recovery in air travel.
Representatives from an aviation manufacturer also told us that
changes in demand for aircraft may result in the loss of key skill sets
as manufacturing businesses reduce employment and skilled aviation
workers migrate to other industries. We have previously reported on
industry concerns that an insufficient supply of certain aviation
professionals--including those involved in aviation manufacturing--
could develop as a result of retirements and a perception that fewer
people are entering aviation professions.\14\
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\14\ GAO, Aviation Workforce: Current and Future Availability of
Aviation Engineering and Maintenance Professionals, GAO-14-237
(Washington, D.C.: Feb. 28, 2014).
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Considerations for the Federal Role in Assisting the Aviation Sector
In response to past economic crises, we have recommended a
framework for evaluating federal assistance to an industry; this
framework may be useful to Congress in considering any future support
to the aviation sector.\15\ We have identified three fundamental
principles that should be considered when providing large-scale federal
assistance.
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\15\ See, for example, GAO, Auto Industry: A Framework for
Considering Federal Financial Assistance, GAO-09-247T (Washington,
D.C.: Dec 5, 2008), Commercial Aviation: A Framework for Considering
Federal Financial Assistance GAO-01-1163T, (Washington, D.C.: Sep 20,
2001), Troubled Financial Institutions: Solutions to the Thrift
Industry Problem, GAO/GGD-89-47 (Washington, D.C.: Feb. 21, 1989),
Resolving the Savings and Loan Crisis, GAO/T-GGD-89-3 (Washington,
D.C.: Jan. 26, 1989), Options For Dealing With Farm Credit System
Problems GAO/T-GGD-87-11 (Washington, D.C.: April 7, 1987), Guidelines
for Rescuing Large Failing Firms and Municipalities, GAO/GGD-84-34
(Washington, D.C.: Mar. 29, 1984).
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Identify and define the problem. The government should
clearly identify and define the specific problems confronting the
industry--separating out those that require an immediate response from
those structural challenges that will take more time to resolve.
Determine national interests and set clear goals and
objectives that address the problem. After defining the problem,
Congress must determine whether a legislative solution best serves the
national interest.
Protect the government's interest. Because the pandemic
assistance programs pose a significant financial risk to the federal
government, appropriate oversight should continue to be included in any
future federal program to ensure that policy objectives are achieved
and to provide some level of protections for taxpayers.\16\
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\16\ With respect to Treasury's oversight of the Payroll Support
Program, we recommended in November 2020 that Treasury develop and
implement a compliance monitoring plan that identifies and responds to
identified program risks and addresses potential fraud. Treasury
neither agreed nor disagreed with our recommendation but committed to
reviewing additional measures that may further enhance its compliance
monitoring. See GAO, COVID-19: Urgent Actions Needed to Better Ensure
an Effective Federal Response, GAO-21-191 (Washington, D.C.: Nov. 30,
2020).
As discussed earlier in this statement, the challenges facing the
aviation sector are unprecedented and many uncertainties remain as to
the pace and extent of recovery in the coming years. Congress has
already determined that the benefits of immediate federal intervention
exceed the costs of a potential industry collapse that could result in
firm closures, layoffs of highly skilled aviation workers, and the loss
of critical transportation infrastructure amid a pandemic. As we enter
the second year of the pandemic and the pace and duration of recovery
becomes clearer, Congress can use the principles outlined above as it
considers any additional steps to assist the aviation industry.
Evaluating the government's response against these principles can help
structure a response that best supports the aviation industry, while
simultaneously protecting taxpayers' interests.
As Congress contemplates future support to aid the aviation
industry's recovery, the following issues emerge in light of the three
aforementioned principles and may help inform how best to design any
response:
Identifying the right type of assistance. Defining the
goals and objectives for future assistance would help Congress and
program administrators determine which tools are needed and most
appropriate to support an aviation industry recovery following the
pandemic. While Congress has already provided financial assistance in
the form of grants, loans, loan guarantees, and cost sharing programs,
other mechanisms could play a role in supporting the highly skilled
U.S. aviation workforce depending on the nature of the recovery. For
example, worker retention incentives, aviation workforce retraining,
and efforts to strengthen the pipeline of new applicants for careers in
aviation manufacturing and maintenance, among others, could help
prepare the workforce to be ready as air travel demand returns. In
addition, investing in research and development to support the
competitiveness and sustainability of the aviation industry can help
maintain U.S. leadership in civil aviation.
Targeting assistance to sectors that have the greatest
need. The pandemic has resulted in uneven effects across the commercial
aviation industry with certain sectors faring better or worse depending
on their business model, customers, and location. For example, domestic
cargo airlines have experienced an increased demand for service
compared to the decreased demand for passenger service. Recognizing
this, Congress did not extend assistance to cargo airlines under the
second round of aviation financial assistance. Furthermore, the pace of
recovery for domestic passenger airlines has been uneven, with some
low-cost airlines returning to profitability much faster than larger
network airlines that rely more heavily on international and business
passengers. These dynamics are also at play within the aviation supply
chain as, according to one consulting firm, suppliers that provide
services to other industries may have an advantage over those tied to
aviation manufacturing. Suppliers with military business may also be in
a comparatively better financial position. Finally, assistance should
be directed to businesses or sectors directly impacted by the pandemic
over those that experienced losses because of other unrelated events,
such as safety problems or declining market share.
Ensuring access to the national air transportation
system. Communities of all sizes seek access to air service as a driver
for attracting investment, generating employment, and providing
mobility for citizens. However, small communities were collectively
losing air service prior to the pandemic, and we have evaluated various
changes to existing subsidy programs.\17\ As authorized by the CARES
Act and Consolidated Appropriations Act, 2021, DOT has required air
carriers receiving loans to maintain some service levels to small
communities. In addition, the Consolidated Appropriations Act, 2021
allocates up to $5 million of the $45 million appropriated for Grants-
in-Aid for Airports to carry out the Small Community Air Service
Development Program, and directs DOT to prioritize allocating the
funding to communities that have had air carrier service reduced or
suspended as a result of the coronavirus pandemic.\18\ However, once
the CARES Act-related assistance ends, some small communities may face
a reduction in or complete loss of air service. Amid other concerns,
Congress could consider some additional near term steps to preserve a
minimum level of service to small communities until the airline
industry more broadly recovers.
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\17\ GAO, Commercial Aviation: Effects of Changes to the Essential
Air Service Program, and Stakeholders' Views on Benefits, Challenges,
and Potential Reforms, GAO-20-74 (Washington, D.C.: Dec 10, 2019),
Small Community Air Service Development: Process for Awarding Grants
Could Be Improved, GAO-19-172 (Washington, D.C.: Mar 26, 2019), and
Commercial Aviation: Status of Air Service to Small Communities and the
Federal Programs Involved, GAO-14-454T (Washington, D.C.: Apr 30,
2014).
\18\ Pub. L. No. 116-260, div. M, tit. IV, 134 Stat. at 1941.
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Addressing the longer-term public health implication of
the pandemic on aviation. As the aviation industry adjusts to current
and near-term demand, the federal government has an important role to
play in mitigating the effects of the pandemic and helping the industry
plan for a ``new normal'' in the years ahead. Much remains uncertain at
this point, but several airports we interviewed told us that they
expect a range of new technologies and processes to be implemented
across the air travel experience to make flying safer for the public,
some of which could benefit from federal government evaluation and
support. For example, airlines and airports have started--and are
expected to continue--to introduce touchless technology to reduce
opportunities for disease transmission at check-in and boarding.
Airports are also expected to grapple with new consumer habits and
expectations around social distancing that may have profound
implications for the design of air terminals as well as concession
businesses. The federal government is exploring the use of digital
vaccine certificates for use in international travel, but the
standards, solutions, and information security issues for digital
health passports or other measures are not yet defined.\19\ Other
aspects of the public health response to the pandemic have only begun,
including efforts to develop robust contact tracing and data sharing
between governments and airlines. Finally, the entire aviation industry
could benefit from the development of a national aviation-preparedness
plan for communicable diseases, a recommendation we made to the
Department of Transportation in 2015 that has not been implemented.\20\
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\19\ Promoting COVID-19 Safety in Domestic and International
Travel, Sec. 5(e), 86 Fed. Reg. 7205, 7207 (Jan. 26, 2021).
\20\ In the absence of efforts to develop a national aviation
preparedness plan, in June 2020, we urged Congress to take legislative
action to require the Secretary of Transportation to work with relevant
agencies and stakeholders to develop such a plan. See GAO-20-625 and
Air Travel and Communicable Diseases: Comprehensive Federal Plan Needed
for U.S. Aviation System's Preparedness, GAO-16-127 (Washington, D.C.:
Dec 16, 2015).
As part of our ongoing work, we will continue to assess how DOT and
FAA are supporting industry recovery. This work includes examining how
DOT and FAA are supporting research and development related to
protecting the health of air travelers during pandemics while also
maintaining aviation safety, security, and efficiency.
Chairman Larsen, Ranking Member Graves, and Members of the
Subcommittee, this completes my prepared remarks. We will continue to
assess these issues as part of our ongoing work, including making
recommendations as appropriate, and will be happy to assist the
Subcommittee as you work to support the aviation industry's recovery
from the pandemic. I would be pleased to respond to any questions that
you or other Members of the Subcommittee may have at this time.
GAO Contact and Staff Acknowledgments
If you or your staff have any questions about this statement,
please contact me. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
statement.
GAO staff who made key contributions to this testimony are Jonathan
Carver (Assistant Director), Amy Abramowitz, Sarah Arnett, Paul
Aussendorf, Melissa Bodeau, Kim Bohnet, Jean Cook, Jessica Du, Camilo
Flores, Joanie Lofgren, Gail Marnik, Justin Reed, April Yeaney, and
Susan Zimmerman.
Mr. Larsen. Thank you, Ms. Krause, and I want to commend
you for taking 5 minutes, and only 5 minutes, to set a great
example for not just the panel, but for Members of Congress. So
thank you very much.
Next up, Nick Calio with Airlines for America, you are
recognized for 5 minutes.
Mr. Calio. Thank you very much, Mr. Chairman. And thank
you, Ranking Member Graves and Chairman DeFazio.
I would like to start by acknowledging everything that this
committee, led by the chairman, the two chairmen, and the
ranking members have done for the aviation industry and the
airline industry over the last year. You have been great
partners, and we are forever in your debt. It is a model of the
way things should work when help is needed.
Right now, the state of the industry, it has been
referenced, a year ago we were in the golden age of flying. We
were flying 58,000 tons of cargo and 2\1/2\ million passengers
a day. The bottom fell out very, very quickly.
In April of last year, as Chairman Larsen pointed out, we
were flying about 5 percent of the people that we had the year
before. And domestic is doing better than international.
Right now, we are still down significantly. We are flying
about 40 percent of the passengers that we used to. We were
hoping that it would be better by now, but it hasn't, and we
have learned that you can plan with this virus, but you can't
forecast very well.
Currently, we are flying 50 percent fewer flights, which I
am sure you have noticed, than we were a year ago. Booked
revenue is down 80 percent. And most critically, we are still
losing $150 million a day. That is a lot better than it was at
points last year, but that is not sustainable as a business
model. We hoped by now we would break even. We are hopeful
that, by the end of the year, we will break even. That is going
to depend on the cooperation of the virus, the vaccines, and
many other factors.
In the meantime, the PSP has been a lifeline to the
industry. When it first happened last March, it gave us the
ability to go to private markets, even though the money was
passing through directly to our employees. And I agree with
Chairman DeFazio, the PSP is the single most successful part of
the CARES Act. The money has gone directly to employees to keep
them on the payroll.
By keeping them on the payroll, they continue to pay taxes,
they are not in the unemployment lines, they continue to spend
money. And most critically for our industry, they are ready to
get back on the planes and fly when they can. And that is
important in our industry, because of the training and
certification requirements that are constantly ongoing in terms
of how you can get on an airplane and be able to fly and
protect the public.
Throughout this pandemic we have worked hand in glove with
our employees and with our labor partners. It has been a very
good match, working with all of you to get this done. It hasn't
been easy. We are very grateful that the House has moved to
extend the Payroll Support Program. Again, things could look
very different than they do now. It is not going to be a
miracle cure, but it could look different come September 30th.
So we hope that the Senate will pass that bill quickly. We saw
last October what happens when you dawdle: tens of thousands of
people can lose their jobs.
The other thing is, throughout this, and in terms of,
Chairman Larsen and Chairman DeFazio, your bills about airline
preparedness, the changes that the airlines have made are going
to stay in place forever. We took a lot of self-help measures
early to protect ourselves. We cut executive compensation, even
before the CARES Act was passed. We went to the private market.
As the GAO has pointed out, we were able to raise over $70
billion. We suspended capital return programs and,
unfortunately, had to suspend a lot of capital investment
programs. We sold or retired aircraft earlier than was
expected, and we worked with our employees in terms of
voluntary paid leave and early retirements. It kept the
industry online.
We are still struggling, however, and in dire straits.
Throughout this, when you talk about measures that are
going to stay in place, we leaned into the science very heavy.
All of our member carriers hooked up with one clinic or
another, or one university or another. We put in place enhanced
cleaning and disinfection procedures. We imposed the face mask
requirement, and we are glad that the Government now backs that
up. We required health declarations before you get on the
airplane. We made announcements, we enforced, and a lot of
people are not flying our airlines now because they wouldn't
comply with the requirements.
Most importantly, we tried to educate the public about the
air filtration systems on aircraft, which give you hospital-
grade air and make it safer to fly, to be on an airplane than
it is to be in a grocery store, a bar, a restaurant, or in your
own home, actually. And I just want to say a word about that.
USTRANSCOM did a study about seated people seated next to each
other and the risk of transmission, if you were wearing a face
mask, given the air filtration system: .003 percent risk of
transmission.
We thought what we were doing was good. But we knew if we
said it, it wouldn't be credible. So with some other aviation
stakeholders, we engaged the Harvard School of Public Health.
We told them they had free rein. They gave us some
recommendations. They were independent. They gave us some
recommendations, which are now in place, in terms of air
filtration during boarding and deplaning, and boarding and
deplaning procedures. Every one of our----
Mr. Larsen. Mr. Calio, I am going to have to ask you to
wrap.
Mr. Calio. OK. In wrapping it up, I just want to say thank
you again to this committee.
Chairman DeFazio, I just wanted to, on a personal note--and
this is a compliment--you have worked like a farm animal
throughout this pandemic, plowing through on behalf of the
industry.
And we are grateful to you, Chairman Larsen, Ranking
Members, and this entire committee. Thank you very much.
[Mr. Calio's prepared statement follows:]
Prepared Statement of Nicholas E. Calio, President and Chief Executive
Officer, Airlines for America
Thank You
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. At the outset, I would like to thank
Congress, including many on this Committee, for your leadership and
bipartisan support of the aviation worker payroll support program
(PSP). The PSP was first established in the Coronavirus Aid, Relief,
and Economic Security (CARES) Act and subsequently extended in the
COVID Relief package passed in December. Those provisions have
supplemented the U.S. airline industry's ability to make payroll and
exclusively protect the jobs of flight attendants, pilots, gate agents,
mechanics and others. Without the PSP, the economic impacts of the
pandemic would have been even more devastating to our workforce.
Given the effectiveness of the PSP and its material benefit to our
workforce, we are hopeful the extension of the program that is
currently under consideration is enacted into law. We appreciate that
Congress has recognized that our employees are the backbone of the
industry and its greatest resource, along with being an important
component of any broader U.S. economic recovery.
Congress has truly been a champion of the U.S. aviation worker and
we sincerely thank you.
What Is Past is Prologue
This is the most challenging period in aviation history, but prior
to the pandemic we were experiencing what many have called the ``Golden
Age'' of air travel. U.S. airlines were flying 2.5 million passengers
and more than 58,000 tons of cargo each day. In 2019, U.S. airlines
carried an all-time high 927 million passengers in scheduled service.
Those record numbers were in large part because of two main factors:
affordability and accessibility. Accounting for inflation, and
including ancillary services, average domestic ticket prices fell 15
percent from 2014-2019, 22 percent from 2000-2019 and 44 percent from
1979-2019--the 40-year period following the Airline Deregulation Act of
1978. Those lower fares made commercial air travel accessible to nearly
all Americans. In fact, 42 percent of Americans who flew in 2019 had
family incomes under $75,000. Further, in 1971 only 49 percent of
Americans had ever flown commercially; by 2019, that figure had climbed
to 86 percent.
In February 2020, before the onset of the pandemic, U.S. passenger
and cargo airlines directly employed 757,000 workers and commercial
aviation supported 10 million U.S. jobs and drove over five percent of
the U.S. gross domestic product.
Air travel was opening doors and connecting loved ones across all
walks of life and economic circumstances, not just an affluent few. It
was also providing well-paying professional-level careers for hundreds
of thousands of employees, all dedicated to an industry that is truly a
modern-day indispensable manifestation of freedom and mobility. Our
industry is working every day to rebuild the foundation necessary to
restore and recover, but much has passed over the course of the last
year.
The Ides of March--Economic Devastation
Almost overnight, in March 2020, the COVID-19 pandemic hit the U.S.
and the bottom fell out of the airline industry. As travel restrictions
and stay-at-home orders were implemented, demand for air travel
declined sharply and suddenly. Though air cargo volumes have held, the
pandemic eviscerated passenger air travel. Coming off all-time highs in
2019, passenger traffic on U.S. airlines rose five percent in the first
two months of 2020 only to fall by 96 percent six weeks later, to a
level not seen since the dawn of the jet age in the 1950s. There was a
slight uptick over the summer and into the fall, but passenger levels
remain 60 percent below year-ago levels.
Years of work to strengthen balance sheets--recognized widely by
analysts and investors--were reversed overnight by COVID-19, as
evidenced by a series of downgrades by the major rating agencies. After
10 consecutive years of modest profitability, U.S. passenger carriers
reported $46 billion in pretax losses in 2020, with analysts currently
projecting $18 billion more in 2021. To put it into perspective, 2018
and 2019 were two years of modest profit for the industry. However,
when combined with 2020 and 2021, the cumulative pre-tax losses for
that four-year period are expected to exceed $30 billion. Quite simply,
the losses have been swift and profound.
Collectively, U.S. airlines are hoping to achieve breakeven cash
flow at some point in late 2021. To survive, they have worked at a
furious pace to shed operating costs and trim capital expenditures.
More alarmingly, they have been forced to sell assets and take on
massive amounts of debt, up an estimated $59 billion from year-end 2019
to year-end 2020. This giant increase in debt translates to projected
interest expense of $5 billion annually in 2021, 2022 and 2023--two-
and-a-half times the amounts paid in 2018 and 2019.
Given the economic maelstrom, the U.S. airline industry will remain
smaller for years to come. It took 10 years--from April 2010 to March
2020--for U.S. passenger airlines to add 83,000 workers to their
payrolls. Sadly, it took just 10 months--from March to November--to
shed 93,000 jobs. Rebuilding will take time. The return of demand,
particularly from corporate travelers, will be key to that timeline.
Payroll Support Program for Aviation Labor Workforce
On behalf of our employees, we remain eternally grateful to
Congress for their role in establishing the PSP at the U.S. Treasury
Department. However, I do feel compelled to clarify the practical and
factual realities around what the PSP is and what the PSP is not, as
some have erroneously referred to the program as an airline bailout.
This simply is not true.
The PSP is, as the CARES Act and subsequent extensions clearly
state, financial assistance provided to eligible air carriers that is
``exclusively for the continuation of payment of employee wages,
salaries, and benefit'' for employees defined as individuals at those
carriers that are not corporate officers. More simply, PSP funds are a
pass-through to airline workers.
These aviation workforce funds are truly an investment in our
economy. In fact, PSP could be used as an example of a government
program that works, as it has effectively met the goals and intended
purpose of the program to preserve jobs. The program also has the
downstream benefit of helping federal/state/local income tax revenues,
along with Social Security and Medicare tax contributions. The program
also helps avoid billions of dollars' worth of unemployment claims at
both the state and federal level. Finally, the PSP also supports
multiple billions 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.
However, PSP is neither an airline bailout nor a panacea for
addressing the economic impacts of the pandemic. As opposed to almost
all other relief measures in the CARES Act, the PSP funds, under the
auspices of being 'grants', came with significant eligibility
requirements including workforce retention commitments, air service
obligations, compensation restrictions, a repayment requirement of 29
percent of the funds with interest to Treasury, and the issuance of
warrants to Treasury. Air carriers, despite only serving as simple
pass-throughs of the funds, agreed to these terms in an on-going effort
to support their labor workforce. Participation in the program comes at
a price; for the nine largest passenger airlines--after deducting the
amount repayable to the U.S. Treasury--the PSP funds covered 82 percent
of payroll expenses, leaving them with a $3.7 billion shortfall for the
applicable six-month period.
We mention this not to complain, but instead to explain and level-
set what the PSP program has meant to airline ledgers. The same logic
holds true for all iterations of PSP including the $14 billion
currently under Congressional consideration. While the extension would
be a welcome and needed respite for our workers, it is estimated to
cover 60 percent of the industry's projected six-month full-employment
payroll costs.
The fact of the matter is, without that supplemental relief, tens
of thousands of aviation workers will lose their jobs--or experience
reductions to wages and benefits--effective April 1. Support of PSP
funding is an explicit recognition that the industry remains in dire
straits, even before factoring in the certainty that it will be
inundated with debt for years to come, some directly undertaken to
support and maintain our labor workforces. PSP funds are an investment
in our labor workforce, and they provide solace to tens of thousands of
aviation workers who would otherwise lose their jobs or experience
reductions to wages and benefits, as experienced by the temporary lapse
last fall.
We appreciate your consideration of the program extension and hope
there can be a universal understanding of the PSP and an agreed upon
set of facts to drive future discussion of the inclusion of punitive
measures on funds intended to be grants for our workers. Saddling air
carriers with additional debt and making them suffer the loss of much
needed management talent runs counter to the goals of recovery and
international competitiveness of U.S. airlines.
CARES Act Loans
U.S. passenger carriers have also drawn down $19 billion in CARES
Act loans. As opposed to the PSP financial assistance for workers, the
loans are intended to help airlines continue operations while demand
remains significantly impaired. Notably, and on top of the warrants
issued on PSP funds, Treasury will also receive warrants to purchase
common stock equal to ten percent of the total loan amount for each
participating air carrier. Combined with the PSP funds, the federal
loan eligibility came at a time when carriers were in most need of
immediate flexibility to deal with the lightning speed at which the
pandemic decimated demand for air travel. No carrier covets taking
federal loans, but the industry is sincerely appreciative of the timely
relief put forward at the beginning of this unrivaled global economic
crisis.
Self-Help Measures and Private Financing
Air carriers have also engaged in significant self-help measures to
bolster their liquidity which will be critical to survive this
unparalleled 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 more than $70
billion since late February 2020;
Restructuring aircraft order books through negotiations
with manufacturers;
Announcing the accelerated retirement of more than 600
aircraft, more than half of which exited the fleet in 2020;
Halting almost all discretionary (not operationally
critical) capital projects;
Trimming unprofitable flying;
Redeploying some 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, approximately 80,000 employees have opted for some
form of compensation adjustment or early retirement which has brought
much needed flexibility. 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.
COVID + PSP + CARES Loans + Self-Help Measures + Private Financing =
$150 Million Daily Loss
Even with all the public and private actions previously outlined,
U.S. carriers are currently burning an estimated $150 million of cash
every day, surviving only by taking on massive sums of debt that will
burden the industry for several years. Despite significant reductions
in operating costs and capital expenditures and despite federal
assistance to preserve airline jobs and their wages and benefits,
analysts are projecting daily cash-burn rates of $90 million per day in
the second quarter and $80 million per day in the third quarter of
2021. Though it is too early to project the fall, it appears that the
industry will continue to hemorrhage cash through the end of the year.
For most, breaking even would mark success.
Perseverance
Since the April 2020 low-water mark, demand has seen a slow climb,
with the shape of recovery best described as a reclining ``L'' and
bookings for the highly coveted corporate air travel segment down a
staggering 86 percent from 2019 levels. In the most recent week,
transatlantic air travel was down 90 percent, while transpacific and
U.S.-Canada air travel are down 94 percent and 96 percent,
respectively. While the advent of multiple vaccines is encouraging, we
do not expect volumes to return to pre-pandemic levels before 2024, at
the earliest. As traffic recovery eventually leads to revenue recovery,
shoring up our financial condition will be paramount. Carriers will
need to retire the massive sums of debt they have taken on to cope with
the evaporation of demand and consequent depletion of cash reserves. It
will take years, not months, to pay off that debt. Until that time, we
will see a much smaller industry with fewer operations, aircraft and
workers and scarce funds available for investment in their products.
The economic contribution of international travel and tourism
cannot be overstated. According to the World Travel and Tourism
Council, the U.S. is set to lose $155 billion from the economy due to
the collapse of international travel. A strong and stable aviation
industry is a key building block for a global recovery from the COVID-
19 pandemic. In 2019, international travel imports totaled $196
billion, creating a $59 billion travel trade surplus. Importantly,
international travel spending directly supported about 1.2 million U.S.
jobs and $33.6 billion in wages.
Recovery
Our industry has a history of being resilient. The financial
priorities for airlines are clear: reduce cash burn, restore
profitability and repair balance sheets. And given the freedom to do
so, U.S. airlines they will do just that; but the hurdle will be higher
this time. Prior to COVID-19, the rule of thumb was to have a cash
cushion that could withstand an event three times the magnitude of 9/
11. With the reality of a pandemic now painfully apparent, boardrooms,
workers and investors will all expect even stronger airline balance
sheets than before, allowing these companies to tap capital markets
fully and swiftly in the future--without depending on federal
assistance--while avoiding extreme distress and painful cuts for
employees. Time and again, our industry has proven its resilience and
agility. With that in mind, we have every reason to believe that our
nation's airlines will emerge from this crisis even stronger than
before, in a way that helps empower the recovery of the U.S. economy
and allows friends, family and businesspeople to meet face-to-face in a
matter of hours once again.
Applied Science
As the devastating impact outlined above makes clear, the aviation
industry understands we must get the virus under control in order to
restore travel, preserve jobs and reignite the economic contributions
driven by commercial aviation.
Since the beginning of this crisis, U.S. airlines have relied on
science to help guide decisions as they continuously reevaluate and
update their processes, procedures and protocols. U.S. airlines have
implemented multiple layers of measures aimed at preventing virus
transmission onboard the aircraft, including strict face covering
requirements, pre-flight health forms, enhanced disinfection protocols,
hospital-grade filtration systems, air exchanges onboard aircraft that
remove viruses, and new boarding and deplaning procedures.
Research has also shown that this layered approach makes the risk
of virus transmission onboard aircraft very low, specifically:
US TRANSCOM released a study showing the low risk of
COVID-19 transmission on commercial aircraft. Technicians ran 300 tests
over six months with mannequins to reproduce breathing and coughing to
determine how particles moved within the cabin when a mask was on or
off. The study concluded that when masks are worn, there is a 0.003
percent chance that particles from a passenger can enter the breathing
space of passengers sitting next to them.
Harvard T.H. Chan School of Public Health's Aviation
(APHI) further affirmed that the risk of onboard transmission is low.
The Harvard APHI research was the first to evaluate the entire inflight
experience including boarding and deplaning. The results confirmed
that--due to the multiple layers of protection noted above--the risk of
transmission on an airplane is ``very low'' and that being on an
airplane is ``as safe if not significantly safer'' than routine
activities such as going to the grocery store and eating at a
restaurant. Further, the Harvard researchers concluded that this multi-
layered approach is so effective that the possibility of exposure to
COVID-19 is reduced to a point so low that it ``effectively counters
the proximity travelers are subject to during flights.''
The Harvard research team also published results from a second
phase of their research in February. While the first phase of research
focused on the ``gate to gate'' experience, the second phase broadened
the scope to include the ``curb to curb'' experience at airports. The
key takeaways of the second phase are also insightful, namely that
airports have been proactive in implementing measures to combat the
COVID-19 pandemic and that the application of a multi-layered approach
significantly contributes to risk reduction.
If there is any silver lining to this pandemic, it is the fact that
industrywide, from manufacturers to air carriers, we have come to
together to share information and tackle issues head-on with science
and data at a level unseen before. This experience has honed a focus on
a common goal that will lead us out of this pandemic and provide the
science and data to address future challenges.
Air Cargo
In a year filled with layers of struggle and financial loss, and
despite the devastating impacts of COVID-19 across global economies,
the pandemic has shown the indispensable role that passenger carriers
and all-cargo air carriers play in both the domestic and global supply
chain. Domestic air cargo tons enplaned rose 13 percent in November and
9 percent through the first 11 months of 2020. U.S. airline
international air cargo tons enplaned rose 10 percent in November--the
fifth consecutive year-over-year increase.
Through close coordination with the healthcare community and
federal, state and local governments, the cargo industry has delivered
a staggering amount of personal protective equipment, diagnostic test
kits, essential medical supplies, humanitarian aid and vaccines across
the globe. They have played an outsized role during the pandemic and
will most certainly be critical to paving the way toward global herd
immunity and a return to a modicum of normalcy. Until one steps back to
fully appreciate the logistical effectiveness and efficiency of our
all-cargo operators, it is easy to take them for granted and thoroughly
recognize the incredible contribution they make to our daily lives.
Pandemic, or no pandemic, they are vital to our standard of living, but
this crisis has shown the pivotal role they play in saving lives.
Do No Harm
Over the course of the pandemic our industry has needed to remain
nimble and vigilant to many well-intended, but sometimes unnecessary,
misguided and/or untimely, legislative and regulatory proposals. As we
continue to face the challenges of today and drive toward a time when
we can cross the long precipice to actual recovery and growth, we
respectfully request that policymakers restrain from adopting punitive
policies such as tax or fee increases or onerous rules and regulations
that will otherwise cause harm to our debilitated industry. Doing so
will only hamstring our ability to recover and undermine the basic
underpinnings and purpose of the relief provided to our labor
workforce. This crisis was not caused or brought on by the airlines and
should not be used for convenient legislative opportunism to reregulate
or refashion what was a highly competitive and burgeoning well-paid job
creator prior to the pandemic.
Conclusion
U.S. airlines have always been critical to our nation's economy and
infrastructure. Now, as our nation looks toward the future, and resumes
connecting American communities, families and businesses with each
other and with the rest of the world, A4A and our member carriers stand
ready to work with Congress and the new Administration to help speed
the recovery of our industry, the nation and the world from the COVID-
19 pandemic. Now, more than ever, the U.S. commercial aviation industry
wants to lead the way to economic recovery.
Mr. DeFazio. What kind of farm animal? We will get to that
later.
Mr. Calio. A good, friendly one, Peter.
Mr. Larsen. A good, friendly one. I think it is best to
just take the compliment, and we will move to the next
panelist.
Captain Joe DePete with ALPA, you are recognized for 5
minutes.
Mr. DePete. OK, thank you, Chairman Larsen, Ranking Member
Graves, and the members of the subcommittee. I am Captain Joe
DePete, president of the Air Line Pilots Association,
International, which represents more than 59,000 pilots, and is
the world's largest airline pilot union and nongovernmental
aviation safety organization.
Since the pandemic began, airline pilots have been on the
front lines in the fight against COVID-19. We have kept supply
chains flowing, and the global economy connected. We have
transported medical personnel, PPE, and life-saving vaccines,
and we have worked to ensure that aviation can fulfill its
critical role in the Nation's economic recovery, once the
pandemic and public health crisis is behind us.
ALPA pilots have not allowed the pandemic to distract us
from what is always our highest priority, and that is safety.
For years, ALPA pilots have advocated a data-driven, risk-based
approach to safety. During COVID-19, pilots have instituted a
proactive safety culture on every flight. We got the data to
identify the effects of the pandemic, and informed
decisionmakers how to protect the traveling public. Backed by
the data, ALPA was among the first to call for uniform,
mandatory guidelines for cleaning and disinfecting aircraft,
employee exposure notification, and the use of face masks.
We appreciate this subcommittee's support of these
measures, and we are pleased that the Biden administration has
mandated masks for public transportation, something that should
have been done a long, long time ago.
In addition, ALPA has called for airline pilots to receive
priority access to vaccines to ensure that they continue to
support the public health response and economic recovery.
Flightcrews are already deemed essential workers by the
Cybersecurity and Infrastructure Security Agency, and they
should be deemed essential workers regarding vaccine
prioritization, as well.
Internationally, some countries have established COVID-19
policies that have disturbing consequences for U.S. pilots.
ALPA urges our Government to ensure that U.S. citizens can be
safely evacuated from any location, if necessary, and that we
preserve the dignity of work by ensuring U.S. pilots are not
subjected to unacceptable conditions related to the pandemic.
Research shows that a layered public health precaution has
created very low risks of virus transmission on airplanes.
Despite this evidence, the number of U.S. passenger flights is
currently down 50 percent from prepandemic levels. DCA, for
example, has experienced a 67-percent decline in scheduled
passenger flights from 2 years ago.
Similar drop-offs across the country have resulted in
shuttered airlines and aviation worker layoffs. Three ALPA
carriers, Trans States Airlines, Compass Airlines, and
ExpressJet have ceased operations, and their pilots are now
jobless. Because airlines may seek reorganization, Congress
must reform the broken chapter 11 process to protect collective
bargaining agreements. And in the meantime, ALPA pilots have
stepped up to weather this storm by negotiating more than 100
agreements with our airlines to help stabilize our companies
and fuel the recovery.
The COVID-19 crisis is unprecedented in its speed,
magnitude, and duration. By passing a CARES Act Payroll Support
Program, Congress kept tens of thousands of aviation workers on
the payroll and connected to healthcare. ALPA pilots are
indebted to Chairman DeFazio and Chairman Larsen and others for
developing and extending the PSP.
And while the PSP has been a historic success, our industry
remains in a precarious position. Many ALPA members and other
aviation workers have received notices of furlough as soon as
March 31st. Putting furloughed pilots back on the flight deck
isn't as simple as flipping a switch. Airline pilots are
subject to training requirements and medical certifications
that take time to requalify. Keeping a strong U.S. pilot
workforce is critical to our recovery.
Recently the importance of a strong pilot workforce and our
Nation having two qualified, trained, and experienced pilots on
board its airliners became clear once again, when a United
flightcrew made a safe emergency landing following an engine
failure on a flight from Denver to Honolulu.
With the hopeful trends in virus containment and vaccine
rollout, and our collective work to position the pilot
workforce and the airline industry for a successful rebound, we
are cautiously optimistic about recovery. With continued
leadership from Congress, we can make certain that the United
States and its passengers and cargo shippers can count on a
strong pilot workforce now and in the future.
Thank you.
[Mr. DePete's prepared statement follows:]
Prepared Statement of Captain Joseph G. DePete, President, Air Line
Pilots Association, International
On behalf of the Air Line Pilots Association, International (ALPA),
I want to thank you, Chairman Larsen and Ranking Member Graves, for
inviting me to testify on COVID-19's effects on U.S. aviation and the
flightpath to recovery. My name is Captain Joe DePete, and I serve as
the president of ALPA. ALPA is the largest airline pilot union in the
world, as well as the largest nongovernmental aviation safety
organization in the world, with a history of safety advocacy spanning
90 years.
The airline industry is notoriously fickle. In good times, it is
conspicuously cyclical and asset heavy, burdened by the vicissitudes of
fuel expenses. Yet, in early 2020 the industry was in the midst of a
banner year. Collectively, U.S. scheduled passenger airlines posted
their 10th consecutive year of profitability, and passenger travel,
both domestically and between the U.S. and abroad, was at all-time
highs. Crucially, pilots and other airline personnel, who have
historically borne a disproportionate share of industry burdens, were
finally reaping the benefits of this success and stability, with
employee wages and benefits at last recovering from post-9/11 carrier
bankruptcies and the Great Recession. All the while, employment rose to
more than 458,000 full-time equivalent employees in early 2020, an 18-
year high. With the industry on firm footing, industry growth and
employee morale looked to continue apace.
COVID-19's shocking arrival in the United States shattered this
trend, as passenger volumes suddenly plunged 96 percent, demand for air
travel virtually disappeared, and much of the nation shut down to
mitigate virus transmission. This crisis is like nothing the industry
has seen before. The speed, magnitude, and duration substantially
dwarfed the financial fallout of the industry after the tragic events
of 9/11, which primarily affected domestic and transatlantic markets
rather than the entire globe. Fortunately, Congress responded
immediately with the most proworker industry relief package in the
nation's history through the Coronavirus, Aid, Relief, and Economic
Security (CARES) Act's Payroll Support Program (PSP).
The Payroll Support Program
In the modern era, every congressionally authorized industry or
company-specific relief package has, intentionally or otherwise,
resulted in harm to employees or to their collectively bargained
contracts and rights. From the 1979 Chrysler bailout to the
restructuring of the so-called Big 3 automakers and, most notably, the
post-9/11 airline relief program, employees and collective bargaining
have been either major targets or collateral damage in such efforts.
For example, after 9/11, Congress passed the Airline Transportation
Safety and Stabilization Act (ATSSA), which provided cash, loans, loan
guarantees, and insurance--among other tools--to help stabilize the
airline industry under the auspices of the government-run Air
Transportation Stabilization Board. The law contained no employee
protections, as the carriers who were able to access assistance paid
off their shareholders while essentially no money flowed through to
frontline employees. Ominously, the Board used its credit instruments
to wrest disproportionate wage and benefit concessions from workers,
effectively entering the government into private sector collective
bargaining to change labor contracts. The improperly drawn package was
a major failure, dangerously intervening in collective bargaining and
haphazardly distributing loans. Ultimately, most carriers went bankrupt
in the ensuing years, with massive attendant employee harm.
Borne of this experience, ALPA and our labor allies worked with
this Committee to completely change this antiworker dynamic through the
PSP. The program is a three-legged stool in which collective bargaining
is walled off from government interference, financial aid is
exclusively subscribed to employee payroll and benefits, and strong
furlough prohibitions maintain employment. As a result, despite the
worst year in airline history, roughly 83 percent of employees remain
in the industry; pilots and other personnel have ensured the continuity
of vaccine distribution and travel; and a broader economic fallout,
including to knock-on industries, has been blunted. Importantly, if not
for this unprecedented program, the airline industry would be in
tatters; this hearing would instead be about industry bankruptcies,
devastating challenges to cargo and passenger throughput, and the
potentially hundreds of thousands of unemployed pilots and other
airline employees who would be unable to respond to eventual demand.
ALPA, our labor allies, and the airline industry owe this Committee,
its members, staff, and the rest of Congress an incredible debt of
gratitude for the PSP and its successors. It has been a lifeline to
workers, communities, and the economy. It shows the power of worker-
centered industry relief and should serve as a template moving forward.
Industry and Employment Outlook
While the PSP has been an invaluable success, the industry remains
in a precarious position. U.S. carriers posted huge losses in 2020, as
revenue dropped by 62 percent and demand remains down by about 64
percent. Currently, we do not expect to see meaningful profitability in
the passenger airline industry to return until at least 2022. For these
reasons, we are deeply appreciative of the ongoing efforts of this
Committee to include a third round of PSP in the American Rescue Plan
Act of 2021. ALPA members at numerous carriers, in addition to the tens
of thousands of notices sent to employees at other airlines, have
received WARN Act notices of impending furloughs beginning on March 31.
We estimate current employee payroll for the passenger industry at
approximately $3.7 billion a month based on industry filings, with
adjustments made for returning employees per the recall provisions of
the PSP 2. PSP 2's precedent-setting provisions for recalling
furloughed employees are succeeding, with the Bureau of Transportation
Statistics reporting a December increase of 12,000 employees returning
to payroll, suggesting a trend as the data lag and implementation of
the recall continues. As such, the $14 billion in PSP 3 funds should
last until approximately August; however, given the potential for
increased demand and profitability later in the year, we hope the aid
lasts through the program's scheduled September 30 date.
While the industry is on firmer footing, the economic dangers posed
by COVID-19 remain. Three ALPA carriers have shut down as a result of
the pandemic, causing incredible hardship for our members, their
families and other airline employees. Historically, airlines have
grossly abused the bankruptcy process with the consent of the courts,
despite there being clear evidence that Congress never intended for
this outcome. As just one example, after 9/11, 50 air carriers sought
protection from the bankruptcy code. Because of the courts'
misapplication of the law, airlines were able squeeze $83.5 billion in
wage and benefit reductions, the dissolution of nearly every defined
benefit pension plan, and in some cases dictate 50 percent pay cuts and
7-year contracts in order to cement long-term employee losses. These
draconian cuts were grossly disproportionate in substance and duration,
far outlasting the immediate need to successfully reorganize, and did
not reflect economic circumstances. Prior to COVID-19, these wage cuts
were just beginning to recover while benefits did not. To prevent any
replay of this, it is long past due for Congress to reform Chapter 11
of the bankruptcy code to protect airline collective bargaining
agreements and retirement plans to prevent further judicial perversion
of congressional intent. Specifically, we call on Congress to pass the
bicameral Protecting Employees and Retirees in Business Bankruptcies
Act of 2020.
Pilot Availability and Training Capacity
Central to the rationale for the PSP is keeping pilots and other
mission-critical employees available to respond quickly as demand
returns to the industry. Pilots cannot simply return from unemployment
to operate airline aircraft; they are subject to recency training
requirements and medical approvals, and security clearances. Further,
returning pilots from furlough or an inactive status triggers a
complicated reallocation of labor, as employees are redistributed
across aircraft types and even between captain and first officer
ranks--all of which requires extensive training and, in some cases,
moves to different bases. These frictional costs are expensive, and if
you are an airline, the last thing you would want in the midst of the
largest downturn in the history of the industry is not being able to
fully satisfy a recovery in passenger demand because you cannot train
pilots fast enough.
Right now, dismal long-term booking commitments and the near
absence of business travel demand is leaving some carriers with too
little certainty to reactivate and retrain furloughed or otherwise
inactive pilots. Thus, pilot training may potentially serve as a
constraining variable to an accelerated recovery in passenger demand.
ALPA is closely monitoring the demand for pilot services, and we plan
to help get pilots back into training as soon as necessary. Getting
furloughed and inactive pilots fully qualified ahead of an accelerated
demand curve will help mitigate the impacts from any potential
chokepoints in the training process and ensure the speediest return to
service.
Health and Safety
Airline pilots have been on the front lines of fighting the
pandemic--and still are today. Since the beginning of the crisis, ALPA
members at passenger and cargo carriers have been transporting
essential workers, personal protective equipment, and other supplies
and are now flying the vaccine from manufacturing plants to locations
across the United States and around the world. At the same time,
airline pilots are working to keep supply chains open and stabilize our
industry to help stop the spread of the virus and ensure our industry
continues to contribute to the recovery.
The COVID-19 crisis has forced our industry to continually adapt to
and mitigate aviation risks and hazards, and the continuous, iterative
process has helped make air travel safe. In collaborative partnerships
with Federal agencies, airline and aviation unions, aircraft
manufacturers and other nonaviation entities, the industry has
developed and implemented policies and procedures to provide multiple
layers of protection to ensure the traveling public is safe and
confident about travel. In order to ensure capacity to provide a fully
functioning air transportation system, the aviation industry has worked
together with federal agencies to obtain exemptions from certain
aspects of training, extensions for medical certification, and an
increase in the required altitude when crewmembers must don oxygen
masks when one pilot is on the flight deck.
The process has not always been simple or easy. Dating to early
2020, ALPA was one of the first organizations to call for a federal
mask mandate and related mitigations to stop virus spread and help
restore confidence in air travel. It was clear that masks mitigate
transmission, the Federal Aviation Administration (FAA) possessed the
statutory authority and responsibility to issue clear and mandatory
guidelines, and noncompulsory standards were confusing and
insufficient. While carrier policies eventually were implemented,
coordinated government leadership and support was necessary to set
clear standards and help crewmembers swiftly handle noncompliant
passengers before any potential in-flight issues arise. We are thankful
the Biden Administration immediately issued the Executive Order on
Promoting COVID-19 Safety in Domestic and International Travel to
finally and formally provide long-overdue leadership and certainty for
the industry, passengers, and employees. Mr. Chairman, I also want to
thank you for your leadership and your support for precursory
legislation, like the Healthy Flights Act, and long-term, strategic
planning bills, such as the National Aviation Preparedness Plan Act,
which are crucial to this success as well as future industry
preparedness.
Industry Mitigation Tools and Strategies
As a globally interconnected industry with leisure, business, and
cargo demand exposure, the industry has previous, relevant experience
with health events and crises that have enabled aviation to quickly
implement or get ahead of pharmaceutical interventions. From the
implementation of mask wearing and hygiene protocols to airflow
management and filtration, the industry has quickly responded to COVID-
19 to ensure air travel remains operational, safe, nimble, and
responsive to passenger and cargo needs.
Filtration Systems
Through the use of ventilation, filtration, and outflow, the
airline industry is able to create a healthy cabin environment on
aircraft. With manufacturers building ventilation systems that
recirculate cabin air on commercial aircraft since the 1980s, the
industry has had considerable time and experience to perfect such
systems prior to COVID-19. As a result, the environmental control
systems that filter the airflow on aircraft use hospital-grade High-
Efficiency Particulate Air (HEPA) filters that are capable of
eliminating pathogens and are effective against viruses and bacteria.
Similarly, the use of aircraft outflow valves, which control the
pressure inside the cabin, to the maximum extent possible ensure our
aircraft are continuously resupplied with fresh air every 90 seconds to
2 minutes.
A November 2020 Harvard Aviation Public Health Initiative study
supports the positive effects that HEPA filters have in aviation. The
study notes that air travel is as safe as--or substantially safer
than--other routine activities, such as grocery shopping. One reason is
because the air exchange rates are higher on aircraft versus many
indoor occupied spaces, meaning that the air supplied to the cabin is
recirculated multiple times through the HEPA filter.
Activities to Ensure Continued Safe Travel
Recognizing the importance of data, at the onset of the pandemic
ALPA implemented a Data Action Report program to specifically collect
reports on COVID health, security, training, and jumpseat concerns.
These reports allowed ALPA to use a data-driven approach to identify
for the FAA, TSA, and airlines where changes were needed. Following the
initial reports, ALPA saw dramatic improvements in airlines' compliance
with government guidelines.
The FAA has developed several iterations of a Safety Alert for
Operators (SAFO) on COVID-19. This SAFO provides guidance for airlines
related to aircraft airworthiness and crewmember and passenger
protections during operations. Each iteration of the document has been
developed in close coordination with the Centers for Disease Control
and Prevention. The FAA and industry, in an effort to ensure the
aircraft environment is adequately cleaned, sanitized, and disinfected,
worked within the nonprofit public-private partnership RTCA Special
Committee (SC-241) to develop guidance on the benefits and hazards of
disinfecting products and procedures for their use. The result was RTCA
DO-388 guidance around chemical and nonchemical disinfection of
aircraft for use by aircraft operators and service providers to make
air travel safe during this and any future pandemics.
Similarly, the International Civil Aviation Organization (ICAO), on
March 9, 2020, established the ICAO Council Aviation Recovery Task
Force (CART) tasked to identify and recommend strategic priorities and
policies. CART focused on three areas: coping with COVID-19 challenges;
ensuring aviation operations are facilitated in a safe, secure, and
sustainable manner taking into consideration evolution of the pandemic
and decisions by public health authorities; and finally, building a
more resilient aviation system in the longer term. ICAO CART work
continues to be updated as we learn more.
The aircraft manufacturers have also been working on their own
COVID initiatives. Boeing has developed its ``Confident Travel''
initiative, while Airbus has developed its own ``Keep Trust in Air
Travel'' program to provide passengers and crews a safe and healthy
travel experience. ALPA has been communicating and coordinating with
both manufacturers throughout the pandemic and both were instrumental
in the work accomplished by the RTCA SC-241.
Research Related to Disease Transmission in Aircraft
In total, governmental sources and industry information show that
mitigations in place have been effective. U.S. Transportation Command
supported by Defense Advanced Research Projects Agency, Boeing, and
United Airlines conducted one of the largest aircraft aerosol
experimental tests to date. The study concluded that when masks are
worn, aerosol exposure of particles exhaled by a passenger into the
breathing space of passengers sitting next to them showed a minimum
reduction of 99.7% of aerosol exposure. Similarly, data published by
the International Air Transport Association shows that of the 1.2
billion airline passengers who traveled since the beginning of 2020,
only 44 cases of in-flight COVID-19 transmission have been reported. In
fact, the vast majority of cases occurred before face coverings were
universally required.
Domestic Testing
Given the evidence of the safety of the airline industry, we are
appreciative of the Biden Administration's thoughtful approach to
travel, as provided in the mask mandate executive order and by the
decision to forgo unnecessary and likely complicated domestic testing
requirements. Testing provides only a snapshot at one point in time,
and such a requirement would likely create meaningful logistical
challenges and divert testing from more obviously necessary public
health priorities. Additionally, with domestic departures approximately
17 times greater than international, the likely drop in air travel
would be substantial. For example, since the international travel
restriction went into effect, there has been a 47 percent reduction in
the volume of tickets sold. A drop of similar magnitude in domestic
ticket sales would precipitate a real crisis for industry employment.
COVID-19 Vaccines
ALPA urges Congress and the Administration to recognize the
essential role of airline pilots in the supply chain. Flightcrews have
already been deemed essential workers by the Cybersecurity and
Infrastructure Security Agency. It is critical that, following the
initial distribution, which has been mostly complete, airline pilots
are provided priority access to the vaccine as well. Ensuring this
prioritization will allow the logistical component of transporting the
vaccine to continue unencumbered.
International Challenges
While operations have continued to improve domestically,
internationally our members continue to face significant challenges.
Each country during the pandemic has created its own rules and
policies, which has proved to be very difficult for airlines and crews
to manage. For example, our crews who have flown through Hong Kong have
faced uncertainties every time they layover. Crews are tested upon
entry, and if they test positive, they are sent to a hospital or taken
to an open bay facility at the Asia World-Expo, which has been
described as deplorable. COVID-positive pilots have also been placed in
the hospital settings in which they are locked in a room with another
COVID-positive individual, although they were asymptomatic. The rest of
the flightcrew are detained in substandard government quarantine
facilities for in excess of 24-48 hours. Efforts to evacuate these
crewmembers through an air ambulance have proven in many cases to be
unsuccessful. Some of our members who have tested positive have been
detained for more than three weeks. Work must continue to ensure that
U.S. citizens are able to be safely evacuated from anywhere in the
world and not be subjected to these unacceptable conditions. The U.S.
government needs to intercede on behalf of these airline pilots who are
transporting critical health supplies and vaccines to help the world
recover.
Conclusion
ALPA stands by as a committed, willing partner as we continue to
chart a path through the pandemic. We appreciate your recognition of
the unique and critical role played by pilots and all airline workers
to safely maintain our air transportation system, support our national
economy, and position the industry for a seamless rebound when demand
returns. Thank you for the trust you place in us and your commitment to
preserving our industry and its workers.
Mr. Larsen. Thank you, Captain DePete. I want to recognize
now Mr. Peter Bunce.
You are recognized for 5 minutes.
[Pause.]
Mr. Larsen. Mr. Bunce, you need to unmute yourself.
Mr. Bunce. Chair Larsen, Ranking Member Graves, Chair
DeFazio, thank you for letting me be with you today. We have
talked previously about the aviation industry being one large
ecosystem. And all working together, we can solve problems for
the entire industry. The fortunes of what happens on the
commercial side impacts those in business and general aviation
greatly, especially our very fragile and interconnected supply
chain.
When we were all together a year ago, we couldn't have
anticipated that some of our manufacturing facilities would be
shuttered for over a month as we worked on the local
restrictions. And when we were able to bring workers back, we
had to pivot, like we read about they did in World War II. Like
the auto industry pivoted to making aircraft, we pivoted to
making PPE gear, ventilator equipment, things like that
because, basically, the supply chain was so disrupted that we
didn't have the parts and pieces that we needed to either fix
aircraft on the maintenance side of the house, or build new
ones.
So what did that translate to? That was, according to our
sister manufacturing association, about a 110,000-member job
loss in this very highly skilled workforce that I know Ms.
Krause and some of the work that was done with the GAO
recognized how unique our aerospace workforce is, and how we
cannot have these workers leave to other industries because of
their very specific skill set.
How it affected us and business in general aviation is
every one of our aircraft segments were down last year. We just
reported on the numbers last week. Whether it is piston,
turboprop, jet airplanes, or on the rotorcraft side, piston and
turbine and rotorcraft, everyone was down. And that translated
to about a $5 billion decrease in revenue, in billings, during
2020.
And during this whole time, the health and safety of our
workers within our factory and those in our supply chain have
been first and foremost. So we have had a lot of innovative
workforce actions within our factories that we have been able
to bring back some production to be able to separate workers,
put them on teams, spread out the shifts, and be able to have
them work safely at their workstations together.
When we look at what the Government can do to help our
industry, there are several things. And the first I would like
to start with, to compliment Chair Larsen and the work he has
done with Representative Estes in being able to advocate for
this 50/50 cost share, to help us bring back some of those
workers, or not lay off, continue to lay off other workers, and
have this cost share partnership translate to being able to
make sure that those workers do not filter over time into some
other industry, and bring them off of unemployment so they have
the healthcare that we offer. So we are in strong support, and
we thank this committee very much, and the House for passing
that, and we hope that the Senate does, as well as
reconciliation.
On the level of Federal agencies, we are very complimentary
of what the FAA has done with video inspections and different
work-arounds that have happened during the pandemic that have
actually allowed us to keep business functioning. But we do
need the DOT to help us by allowing the FAA to have some of the
regulatory roadblocks and backlog that filtered up to DOT
during the last administration now get pushed back down to
where the expertise lies within the FAA to be able to allow us
to have the regulations to be able to build product. Versus
other industries, we have to have regulations to be able to do
things in aviation because of just the safety concerns that are
involved. So that would be of tremendous help to us.
In addition, the National Interest Exception is a program
that is administered by the Federal Government, and we have
asked the FAA--and they have been very helpful with us--to be
able to get all of the disparate views that the State
Department takes at different embassies around to allow foreign
nationals to come to the U.S. and train. We know we do the best
pilot training in the world, also maintenance training in the
world, and we need to facilitate them coming here to get that
training, but also to accept new production aircraft that we
put out.
And in the sustainability arena, we have got great efforts
going on with sustainable aviation fuel. Congress can help us
out with bio or blending credit that supplements the biodiesel
tax credit. And I know we can talk about that later.
And then, Chair Larsen, you were talking about this new
area of aviation that I think is just as exciting as the dawn
of the jet age must have been in urban air mobility. And we are
very complimentary of what Representative Davids has done,
along with Ranking Member Graves, to be able to push this new
legislation forward which will coalesce Federal agencies.
So I look forward to your questions.
[Mr. Bunce's prepared statement follows:]
Prepared Statement of Peter J. Bunce, President and Chief Executive
Officer, General Aviation Manufacturers Association
Chair Larsen and Ranking Member Graves, on behalf of the General
Aviation Manufacturers Association (GAMA) and its member companies,
thank you for convening this hearing today which will be vital to
understanding the impact of the COVID-19 pandemic on the aviation
industry and what policies and initiatives can be undertaken to foster
the recovery of business and general aviation manufacturing companies
and maintenance providers.
We look forward to working with you, House Transportation and
Infrastructure Chair DeFazio and Ranking Member Graves, members of the
House Aviation Subcommittee, and the membership of the committee at
large, on issues of critical importance to the future strength of our
nation's aviation and transportation system.
I want to state the deep appreciation we have for this Committee
and Congress for taking actions to support the aviation industry during
this crisis.
GAMA represents more than 120 of the world's leading manufacturers
of general aviation airplanes, rotorcraft, engines, avionics,
components, and related services and technologies. GAMA members are
also providers of maintenance and repair services, fixed-based
operations, pilot and maintenance training, and aircraft management.
Additionally, GAMA represents companies in the emerging sector of
advanced air mobility, which includes the development of vertical take-
off and landing aircraft as well as electric propulsion and autonomous
systems for civil purposes. GAMA companies have facilities in 47 U.S.
states and 15 countries. A recent economic impact study determined that
the general aviation industry supports $247 billion in economic output
and 1.2 million jobs in the U.S.\1\
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\1\ General Aviation's Contributions to the U.S. Economy, 2018
Price Waterhouse Coopers Study on behalf of Aircraft Electronics
Association (AEA), Aircraft Owners and Pilots Association (AOPA),
Experimental Aircraft Association (EAA), General Aviation Manufacturers
Association (GAMA), Helicopter Association International (HAI),
National Air Transportation Association (NATA), and National Business
Aviation Association (NBAA), February 19, 2020
---------------------------------------------------------------------------
I appreciate the opportunity to highlight the impacts this pandemic
has had on the aviation manufacturing and maintenance sectors. In
addition to detailing the impacts, I would like to depict what can be
done in the near-term and long-term to mitigate these effects and lead
to a broader recovery in these sectors. I hope to portray the ways we
can work with this Subcommittee, the Administration, other
policymakers, and stakeholders to facilitate the sector's rebound,
recovery, and reinvigoration through technological innovation and
investments in sustainability.
At the outset, I also want to make it clear that GAMA recognizes
these impacts go far beyond our critical sector of the aviation
industry. We appreciate and respect the work of all our partners in the
aviation ecosystem. Previously, I have stated before this committee
that a crisis for one part of this industry typically has implications
for all--unfortunately the COVID-19 pandemic has reinforced this
assertion. Throughout this process, GAMA has supported efforts by all
these aviation sectors to mitigate the effects of the pandemic.
The Pandemic Impacts on Manufacturers, Maintenance Providers, and
Training
Prior to the pandemic, the outlook for the industry looked
encouraging, particularly given that in 2019 piston airplane and
business jet shipments reached decade highs.\2\ The future of the
industry looked even more promising, given ongoing development and
innovations in manufacturing methods, aircraft design, avionics,
automation, and propulsion systems.
---------------------------------------------------------------------------
\2\ General Aviation Manufacturers Association 2019 Databook,
General Aviation Manufacturers Association, March 2020
---------------------------------------------------------------------------
Last week, GAMA released its 2020 year-end report of the shipments
and billings of general aviation aircraft.\3\ As expected, the COVID-19
pandemic negatively impacted general aviation and stifled the
industry's growth. The value of aircraft deliveries decreased by 16%
from 2019. Each segment of the industry suffered losses, some more than
others. Piston airplanes fared the best as they only saw a 0.9% decline
in shipments and a 7.3% decline in billings. Turboprop airplane
deliveries saw a 15.6% decline in shipments and a 17.7% decline in
billings. Business jet deliveries saw its lowest production since the
great recession with a 20.4% decline in shipments and a 14.4% decline
in billings. Preliminary civil-commercial turbine helicopters saw a
16.9% decline in shipments and a 16.2% decline in billings. Piston
helicopters saw a 20.7% decline in deliveries and a 21.2% decline in
billings. Despite the pandemic-related setbacks, the industry is very
resilient, and we remain optimistic given the talent and strength of
our phenomenal workforce and the history of industry leaders and its
employees responding to challenges.
---------------------------------------------------------------------------
\3\ GAMA Announces 2020 Year End Aircraft Billing and Shipment
Numbers, Press Release by General Aviation Manufacturers Association,
February 24, 2021
---------------------------------------------------------------------------
In the U.S., aviation manufacturing, maintenance and repair
operations were deemed essential, enabling many to continue at some
level of production throughout the shutdowns. Companies rapidly
implemented a wide range of health and safety protocols in accordance
with local, regional, and national level guidance. Unfortunately, this
``essential industry'' designation did not extend worldwide, and unique
nation by nation health and travel restrictions put in place to respond
to the pandemic, including the U.S., significantly impeded global
operations, supply chains, sales, and deliveries.
Throughout the course of the COVID-19 pandemic, GAMA has sought to
understand the impacts across our broad membership. While a survey is
only a partial picture of the pandemic hardship, we thought it might be
useful to highlight some key findings for the Subcommittee:
Due to the pandemic, over 70% of the respondents had to
undertake action regarding their workforce, including pay and/or hour
reductions, furloughs and/or closure of operations. Just over half of
the respondents indicated that additional workforce measures may still
be needed, depending on the progress of relief and recovery efforts.
Nearly 50% of the respondents indicated that they had to
either limit or shut down operations due to national/regional/state/
local decisions or for economic reasons. Several respondents indicated
that international business relations were severely hampered due to
international travel restrictions.
Losses in revenue were reported by 86% of the
respondents. On average, losses tended to be estimated around 24%, with
some estimating losses as high as 50% and as low as 4%.
Nearly 70% of the respondents reported experiencing
supply chain issues, causing slowdowns in production and deliveries.
Supply chain issues appeared at the outset of the pandemic and they
have continued to persist, particularly with critical parts and
equipment.
General Aviation Supporting Communities
Our industry has a rich history of quickly pivoting and adapting to
help communities in times of crisis. Throughout the pandemic, the
general and business aviation industry has played an integral role in
the fight against COVID-19. Companies across the globe have
supplemented ongoing activities to assist with the relief efforts
through the production of masks, shields, gowns, and ventilator parts,
while others have transported medical personnel and supplies for front
line health care workers. We have also seen companies working with
their supply chain partners to provide information about financial
assistance opportunities as well as best business practices in areas
like procurement.
Key Steps for the Initial Recovery of Aviation Manufacturing,
Maintenance, and Training
As we continue to navigate the pandemic, I want to express
appreciation for FAA Administrator Dickson and the FAA for quickly
responding to immediate challenges that threatened to shut down U.S.
manufacturing and maintenance activities. For example, FAA enabled
implementation and expanded use of technology for inspections, test,
and oversight. Without these collaborative efforts, the challenges
faced by manufacturers, maintenance, and training providers would have
been compounded exponentially. It is our belief that the use of remote
technologies will have lasting benefits for the effectiveness of
regulatory oversight.
Aviation Manufacturing Jobs Initiatives
As discussed earlier, the pandemic has had a profound impact on the
workforce of the business and general aviation community. Overall, in
the aerospace industry, according to a study commissioned by the
Aerospace Industries Association (AIA), it is estimated that 100,000
workers have already lost their jobs, and 220,000 additional jobs
remain at risk of furlough or layoff.\4\
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\4\ AIA COVID-19 Road to Recovery, Avascent, Boston Consulting
Group, and McKinsey & Company for the Aerospace Industries Association,
July 31, 2020.
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Given these challenges, we are grateful for the action your
Committee took on February 11, 2021 to provide $3 billion in support
for aviation manufacturing employees as part of the budget
reconciliation package. The provision is based on legislation
introduced by Chairman Larsen and Congressman Ron Estes to create a
temporary and targeted 50-50 cost share program between government and
industry to retain, recall, or rehire aviation manufacturing employees.
The funds can only be used to support the compensation of these
employees. Senators Maria Cantwell, Jerry Moran, and Mark Warner have
worked on similar legislation in the Senate and we have appreciated the
strong bipartisan support we have received throughout Congress.
Aviation stakeholders including GAMA, AIA, the Aeronautical Repair
Station Association, and the National Defense Industrial Association
have all endorsed this framework, and the legislation also earned
strong support from the International Association of Machinists and
Aerospace Workers, which represents workers and their families.
If enacted, we look forward to working with the Department of
Transportation (DOT) and the Committee on ensuring successful
implementation of this vital program for aviation manufacturing
workers.
National Interest Exception
There is an urgent need for clear policy guidance from the
Administration confirming that the Department of State will issue the
National Interest Exception (NIE) waiver when travel by a foreign
person to the U.S. is required to support business activities of
businesses that are ``Critical Infrastructure'' (as defined by the DHS
Cyber & Industrial Security Agency), including general aviation. Many
aerospace companies have been attempting to handle these situations for
the past year with mixed results and inconsistent interpretation and
application.
Clear and workable guidance will help reverse a growing concern
about the lack of proficiency training for foreign pilots operating in
U.S. and global airspace, supporting the safety of U.S. state of design
aircraft, and avoiding further economic damage to the U.S. aviation
industry and its highly skilled workforce. Given the type of economic
activity being undertaken, combined with the required COVID-19 testing
and related safety protocols, this presents an extremely low risk to
public health.
The types of activity of activity which will be supported by such
policy guidance include:
The delivery of new aircraft and continued safe operation
of aircraft manufactured in the U.S. requires initial pilot type
training and regular recurrent training of pilots and maintenance
personnel (as required by U.S. and international aviation safety
regulators). This training is primarily conducted at facilities located
in the U.S., including for foreign nationals, who purchase and operate
U.S.-manufactured aircraft.
Aircraft are routinely flown to the U.S. for maintenance.
Flightcrews and maintenance technicians travel to the U.S. as
passengers to pick up aircraft after maintenance is complete or observe
maintenance activities performed on their aircraft. Travel restrictions
have impacted the ability of aircraft owners worldwide to get their
aircraft maintenance and safety checks completed at U.S. maintenance
facilities.
The worldwide export of aircraft manufactured in the U.S.
requires the travel of small groups of foreign nationals to the
manufacturer to inspect, take delivery, and fly the aircraft back to
the country in which the airline or operator is based.
The use of NIE is essential to maintaining aviation safety during
the challenges of the pandemic. Appropriately tailored safety protocols
can help ensure that foreign travelers pose an extremely low risk to
public health, especially since the number of travelers is relatively
low. The current travel restrictions are having a significant negative
impact on U.S. general aviation given the importance of international
customers to U.S. manufacturers, and maintenance and training
providers.
Regulatory Review and Implementation of Key Priorities
Actions taken in recent years have put in place procedural
requirements for rulemaking and guidance that impose additional layers
of bureaucratic review and substantially delay the FAA's issuance of
regulatory guidance critical to aviation innovation and safety
enhancing technologies in aircraft and equipment. It is essential that
DOT and FAA work together to improve the effectiveness and efficiency
of procedures to issue regulatory documents in such a way that the
authority for review and approval rests once again with the appropriate
technical and safety expertise at FAA. Achieving a more effective and
efficient process for the FAA to promulgate new and updated guidance
and accept consensus standards for compliance will encourage safety
improvements in aviation, keep pace with rapidly evolving technology,
and spur innovation while also providing the regulatory framework for
industry recovery through new products coming to market.
Opportunities and Investments for the Future
As the general aviation industry looks to the future, there are key
areas that need leadership and collaboration from both industry and
government. Making these investments now will strengthen the industry
as it emerges from the pandemic and moves forward.
Sustainability
Our industry's commitment to sustainability is a long-standing one.
In 2009, general aviation industry leaders established the Business
Aviation Commitment on Climate Change. The goals of this commitment are
threefold: 1) improve fuel efficiency 2% per year from 2010 to 2020; 2)
achieve carbon neutral growth from 2020; and 3) reduce CO2 emissions
50% by 2050 relative to 2005.\5\
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\5\ GAMA and IBAC Joint Position on Business Aviation Tackling
Climate Change, General Aviation Manufacturers Association and
International Business Aviation Council, 2009
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To meet these goals, GAMA members have led the way for many years
in designing, developing, testing, and manufacturing airframes,
engines, aircraft components, and materials which produce improvements
in fuel efficiency. Our members will continue to make upgrades to
manufacturing processes and facilities including ones powered by clean
energy as well as by using more sustainable materials.
The Environmental Protection Agency's (EPA) adoption of the first
ever CO2 emissions standards for aircraft developed at the
International Civil Aviation Organization (ICAO) was an important
milestone. The standards will contribute to environmental progress,
help ensure all global manufacturers have the same efficiency rules and
affirm the centrality of multilateral collaboration in making these
decisions. We ask the FAA to move forward in developing regulations
this year to enable the certification of aircraft meeting these global
standards.
Our industry remains committed to investing and developing new
technologies to help reduce emissions. Congress can assist through
robust funding of Research and Development (R&D) efforts for FAA's
Continuous Lower Energy, Emissions and Noise (CLEEN) Program as well as
the National Aeronautics and Space Administration's (NASA) Aeronautics
programs which will help accelerate the development of new aircraft and
propulsion technologies.
GAMA, along with other industry leaders, is also promoting the
increased production, distribution, and uptake of Sustainable Aviation
Fuels (SAF) given its potential importance in meeting the aviation
industry's climate commitments. In the past two years alone, GAMA and
other associations worked to promote the use of SAF through events in
the U.S. and Europe and by publishing a comprehensive SAF Guide.
Individual GAMA members have been using SAF in daily operations
including flight-test programs, offering initial tanks to be filled
with SAF for delivery, and announced agreements with fuel producers to
establish a permanent supply of low emission fuel at key business
aviation airports.
Despite these initiatives, SAF supply is currently inadequate to
meet the growing demand and the price of SAF is still significantly
more expensive than conventional jet fuel. Congress can take several
steps to promote the wider production and distribution of SAF for
aviation through a SAF Blender's Tax Credit and other financial
incentives. Strong research and development funding for the FAA's
Aviation Sustainability Center (ASCENT), which is exploring ways to
produce sustainable aviation fuels at commercial scale, would also be
welcomed.
Advanced Air Mobility
As we recover from the pandemic, we need to consider areas of
opportunity that can add jobs and a renewed enthusiasm to the aviation
sector. Advanced Air Mobility (AAM) is an emerging sector of the
aviation industry which uses electric airplanes and electric vertical
take-off and landing (eVTOL) aircraft to transport passengers or cargo
at low/medium altitudes in urban, suburban, rural, and regional
environments. This next frontier of aviation will facilitate better
transportation options, advance environmental sustainability, and
foster sustainable transportation, generate increased economic
activity, and support natural disaster and emergency response services.
While the industry is working with the FAA on aircraft
certification and initial flight operations to ensure safety, AAM
stakeholders are also focused on addressing physical and digital
security issues; leveraging existing infrastructure and facilitating
targeted and coordinated investment; and supporting initiatives to
achieve and build public awareness of the economic, transportation, and
environmental benefits of AAM.
Given the potential of this industry, we want to commend U.S.
Representatives Sharice Davids and Garret Graves for introducing H.R.
1339, the Advanced Air Mobility Coordination and Leadership Act, which
will ensure the federal government is effectively engaged and
coordinated internally with industry and other stakeholders to support
the evolution of AAM. This bill authorizes the Secretary of
Transportation to establish an interagency working group to plan for
and coordinate efforts for the advancement of operating AAM aircraft.
The working group will be tasked to review and make recommendations for
the federal role in the AAM sector, beyond the initial critical stage
of aircraft certification and operations which FAA is currently
working, with a focus on economic and workforce opportunities,
potential physical and digital security risks and mitigations,
infrastructure development, and maturing AAM aircraft operations and
concepts past initial operations. It will help leverage critical
expertise and resources through the government to maximize the
potential of this vital and exciting industry sector and take it to the
next level.
We hope that other Committee members will join Reps. Davids and
Graves in this effort and look forward on other initiatives to advance
this exciting new and transformative industry.
Global Collaboration and Aviation Safety
As we move forward, international regulatory cooperation will be
even more important in raising the level of aviation safety and dealing
with challenges like the pandemic. The U.S.-European Union (EU)
bilateral and other arrangements are global cornerstones of
international aviation safety cooperation and focus on promoting and
improving safety and addressing potential hazards in the exchange of
aviation products, parts, repairs, maintenance, and pilot training. We
must ensure that these agreements continue to work effectively. There
is increasing European Union Aviation Safety Agency (EASA) involvement
in validations to re-review or recertify the FAA's work, particularly
in areas focused on system safety assessment and human factors. The FAA
is also increasing involvement on EASA validations in these same areas.
These actions comply with procedures under the US-EU bilateral for
involvement in safety critical and new/novel design or technologies.
However, regulators must ensure that such involvement focuses only in
these areas to the extent necessary to resolve technical issues and
build confidence in their respective safety systems in accordance with
the bilateral agreement. It is essential that this involvement does not
migrate to all validation activities, which would squander safety
resources and add unnecessary costs and delays to the process. Despite
any public rhetoric, at the working certification directorate level,
there is a good relationship and strong commitment between the FAA and
EASA for continued cooperation and collaboration under the EU-US
bilateral. GAMA and our member companies will continue to work with
FAA, EASA and regulators globally to facilitate safety cooperation for
the safe and effective certification of aviation products.
Conclusion
I appreciate the opportunity to testify today on the impact of the
pandemic and what can be done to recover and build back the industry.
Your Committee and Congress is already taking steps to spur this
recovery and we are grateful for those efforts. We also look forward to
working with you, in a bipartisan manner, to address these
opportunities, and to build a stronger and more sustainable aviation
community. Thank you, Chair Larsen, and Ranking Member Graves for
convening this important hearing and for the other members who are
participating and giving us their valuable time.
Mr. Larsen. Thank you, Mr. Bunce, I appreciate that.
And now I turn to Mr. Lance Lyttle.
You are recognized for 5 minutes, and we will note you are
speaking on behalf of the American Association of Airport
Executives. Lance?
Mr. Lyttle. Good morning. Thank you, Chair Larsen, Chair
DeFazio, Ranking Member Sam Graves, and Garret Graves, and
subcommittee members for the opportunity to testify today.
While my testimony today highlights the unprecedented hardship
that aviation continues to face during the pandemic, I am proud
of the incredible efforts undertaken by our industry to keep
passengers and workers safe and healthy, and to restore
traveler confidence.
Clearly, the passenger and revenue declines have been
historic at airports of all sizes, nationwide. Revenues and PFC
collections are already off by more than $20 billion, with tens
of billions in additional losses projected. At the same time,
the airport's fixed costs remain, and the pandemic has required
investments in enhanced public health. In response, SEA and
other airports have taken steps to cut costs where possible.
This includes pay freezes, hiring freezes, and project
deferrals.
However, the levers that can be pulled are relatively
limited. That is where carriers and the other Federal
assistance have been critical. I can honestly say that we would
not have been able to continue our operations and serve our
customers without that significant and timely Federal support.
Businesses at airports have been significantly impacted,
and SEA has taken decisive actions to help. We have deferred
rent and fees, renegotiated leases, and accelerated payments to
airlines to help with cash flow. We are grateful that Congress
has provided critical direct airport concessions relief.
I remain incredibly optimistic about our future and believe
airports will emerge even stronger and more resilient than
before, thanks to the help that this subcommittee and Congress
has provided over the past year. Over the last year, airports
have taken meaningful steps to enhance public health. A new
Harvard study found that the probability of being infected at
an airport is very low because of the consistent and impressive
commitment airports have made to reduce the risk of
transmission.
At SEA, we have increased cleaning, added hand sanitizer
stations throughout the terminals; we have invested in
innovative technologies for touchless travel, installed
protective barriers, and contracted for traveler testing
services. We also mandated mask wearing, airportwide, since
last spring. Our goal at SEA is to prepare for and accommodate
our passengers with 21st-century customer service. This
includes improved facilities and new technologies to enhance
airport experience. We are also committed to continuously
enhanced health protocols.
Further investigation about the widespread use of health
passport is worth additional discussion, as well. We deeply
appreciate House passage of the American Rescue Plan, including
additional relief for airports, airlines, and airport
concessionaires. Moving forward, let me highlight a few
additional areas where we hope to partner with you.
First, coordinate with us to prepare for and respond to
public health emergencies such as through the National Aviation
Preparedness Plan Act.
Second, resist new travel restrictions or domestic testing
requirements, which we believe are unworkable and would impact
the industry's ability to recover.
Third, restore customer confidence in air travel, which
includes communicating broadly about our efforts to keep
travelers healthy.
Fourth, maximize positive impacts of aviation industry,
such as scaling sustainable aviation fuels, supporting small
and diverse businesses, increasing workforce development, and
continued noise mitigation efforts.
Finally, I urge Congress to pass a comprehensive
infrastructure bill. It may seem strange for me to talk about
upgrading and expanding airports after a 60-percent passenger
decline. But when passenger levels inevitably return, we want
to be ready to accommodate them, especially if upgraded
facilities designed for touchless technologies and additional
room for social distancing continues to be required.
Specifically, Congress should provide a path to sustainable
airport investment through a long-overdue adjustment to the
Federal cap on local PFCs.
Members of the subcommittee, we are in the midst of
challenging times. But with your continued support, I believe
we can emerge even stronger than before. Thank you for the
opportunity to testify.
[Mr. Lyttle's prepared statement follows:]
Prepared Statement of Lance Lyttle, Managing Director, Seattle-Tacoma
International Airport, on behalf of the American Association of Airport
Executives
Chair DeFazio, Ranking Member Graves, Chair Larsen, Ranking Member
Graves, and members of the subcommittee, thank you for your leadership
during the coronavirus pandemic and for inviting me to testify at this
hearing on ``COVID-19's effect on U.S. Aviation and the Flightpath to
Recovery.'' It is an honor for me to be back with you today.
My name is Lance Lyttle, and I am the Managing Director of the
Seattle-Tacoma International Airport (SEA). I am appearing on behalf of
the American Association of Airport Executives (AAAE) in my capacity as
the Association's Federal Affairs Committee Chair. AAAE is the world's
largest professional organization representing individuals who manage
and operate at more than 850 public-use commercial and general aviation
airports.
It is quite appropriate for me to be speaking to you today on this
topic before Chair Larsen's subcommittee because we are both tied
closely to this pandemic in so many ways. In mid-January of last year,
a man returned from a trip to Wuhan, China through our airport, and
traveled to his home in Chair Larsen's district--becoming the first
confirmed case of COVID-19 in the United States. None of us could have
prepared for such an event or known what was to come, but it is truly
amazing to realize that we are now more than a year later and still
struggling through the devastating impacts of this pandemic on the
aviation industry, the country, and the world.
Prior to the pandemic, SEA was the 8th busiest airport in the
United States based on passenger volume and the 19th busiest cargo
airport in the country. At full capacity, SEA is the 9th biggest
employment center in the State of Washington with over 19,000 employees
contributing $22.5 billion in total business revenue. We also support
an ecosystem of many other businesses--from airlines and
concessionaires to taxis, hotels and warehousing.
Today, I look forward to providing you with a perspective on not
only the unprecedented challenges the pandemic has created for airports
but also the incredible efforts undertaken by SEA employees and their
peers throughout the country to keep passengers and workers safe and
healthy and to restoring traveler confidence in aviation. While my
testimony today makes clear that airports and our partners across the
aviation industry continue to face significant hardships in the wake of
the pandemic, I also want to emphasize that I remain incredibly
optimistic about our future and the coming recovery.
We will survive and rebuild in no small measure thanks to the help
that this subcommittee and your colleagues in Congress have provided to
airports over the past year. The CARES Act and the Coronavirus Relief
and Recovery Supplemental Appropriations Act have provided a critical
lifeline that has allowed SEA and other airports to weather the storm
of the past year.
Airports are grateful for the funding in those two coronavirus
relief bills and for the additional funding to support our airport
tenants and concessionaires. We also deeply appreciate the additional
funding that the Transportation and Infrastructure Committee approved
as part of the pending budget reconciliation legislation. Chair Larsen,
this much-needed assistance will allow airports to not only maintain
our operations but also support our tenants and partners as we work
toward recovery, and we thank you, Chair DeFazio, and other committee
members for your strong support.
Like my colleagues at SEA, the men and women who work at our
nation's airports care deeply about this industry and are committed to
working with you to chart a path forward. This industry survived the
terrorist attacks on 9/11, it survived the Great Recession in 2008 and
2009, and I am convinced it will come out of this pandemic even
stronger and more resilient than before--with better knowledge, better
training, improved facilities, enhanced public health measures, and a
stronger working relationship between government and industry that will
help us overcome future challenges.
How the Coronavirus is Impacting SEA and Other Airports
The pandemic is continuing to have a devastating impact on
airports, our concessionaires, our airline partners and the entire
aviation system. But we have seen signs of gradual improvement over the
last six months. With the acceleration of the coronavirus vaccination
rate and falling case counts, SEA saw its highest passenger volumes
since the start of the pandemic over this most recent President's Day
holiday. Of course, new variants and a resurgence of coronavirus cases
could slow progress, but I think we're headed in the right direction.
The Dramatic Drop in Passenger Levels: Passenger levels declined
dramatically after the pandemic hit early last year. On April 14, 2020,
fewer than 88,000 passengers traveled through security checkpoints
nationally--a 96 percent reduction from the same date in 2019 and the
low point during the pandemic. In fact, that month represented the
fewest passengers through SEA since 1967.
We have seen a gradual uptick in the number of passengers traveling
through our nation's airports since then. The Transportation Security
Administration (TSA) screened more than 1 million passengers on several
days during the past few months. But the agency also reported less than
469,000 passengers on January 27--the lowest number of travelers in six
months.
Even with increased holiday traffic at the end of last year,
passenger levels in November and December were significantly less than
the same time period in 2019. According to the Department of
Transportation's Bureau of Transportation Statistics (BTS), passenger
levels were down almost 61 percent in November and about 62 percent
December of 2020 compared to the same months in 2019. Overall,
passenger levels nationally were down 60.1 percent in 2020, and 61.3
percent at SEA specifically. The last time our annual passenger numbers
were this low was in 1994--26 years ago.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
International Traffic Craters: International traffic has fared even
worse during the past year. After experiencing slight gains in January
and February of last year, international traffic all but evaporated due
to COVID-19 and travel restrictions. According to BTS, the number of
international passengers on U.S. carriers dropped more than 99 percent
in April 2020 compared to the same month in 2019.
The holidays helped to boost international traffic somewhat toward
the end of the year. But the number of international passengers on U.S.
carriers still declined from 9.5 million during the month of December
2019 to 3.2 million in the month of December 2020--a 66 percent drop.
Even after you factor in positive numbers in January and February,
international traffic for the full year in 2020 was down more than 70
percent compared to 2019.
SEA experienced a similar decline with our international passenger
traffic--down 76.1 percent in 2020. The dramatic drop in international
traffic has had an enormous financial impact on SEA and other gateway
airports that traditionally welcome large numbers of international
passengers throughout the year.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Negative COVID-19 Testing Requirements: The fragility of
international travel became even more evident in the fall of 2020 when
new and more infectious coronavirus variants began to emerge in the
United Kingdom, South Africa, and Brazil. These variants prompted new
international border closures and additional testing requirements for
international travelers.
Many countries, including the United States, prohibit the entry of
non-citizens unless they are traveling for essential business, have
proof a negative COVID-19 test result within a certain window of time,
and/or quarantine for an extended period of time. These requirements
tend to be inconsistent from country to country and change frequently,
resulting in confusion for international travelers.
The Centers for Disease Control and Prevention (CDC) on January 12,
2021 announced an order requiring all air international passengers
arriving in the United States to ``get tested no more than 3 days
before their flight departs and to present the negative result or
documentation of having recovered from COVID-19 to the airline before
boarding the flight.'' This order went into effect on January 26. We of
course fully support efforts to defeat the pandemic and take necessary
precautions to reduce the spread of dangerous new COVID strains, but
these efforts have real world consequences on the economics of our
industry.
Similar Declines in Airport Revenue: With unprecedented reductions
in domestic and international travel, fewer passengers mean
significantly lower revenues from aeronautical and nonaeronautical
revenue and from Passenger Facility Charge (PFC) collections. Airports
Council International--North America (ACI-NA) estimates airport losses
of at least $40 billion from March 2020 through March 2022: $23 billion
in the last year and $17 billion in the year ahead.
Airports have responded by cutting costs where they can. Among
other things, airports have closed or consolidated non-essential
facilities; instituted hiring, pay, and benefit freezes; reduced travel
and training budgets; limited expenses to only those deemed essential;
and deployed energy saving initiatives.
The loss of revenue is also having an impact on construction
projects, with some airports having to resort to delaying or canceling
projects. According to the FAA, airports collected less than $1.3
billion revenue from PFCs last year, a 66.2 percent drop from the more
than $3.6 billion that airports collected from PFCs in 2019.
SEA generated approximately $350 million less revenue in 2020 than
in 2019, and we faced millions of dollars in increased expenses as we
implemented new health and safety measures. To compensate, we cut costs
by reducing our 2021 budget by 10 percent and froze the hiring of 103
full-time equivalent positions.
We also tried to assist our airline partners by accelerating cost-
sharing payments to help with cash flow, reducing our airline
settlement to close to zero and lowering landing fees. In fact, overall
airline costs will be lower in 2021 than in 2020, despite the new
expenses that SEA will incur from opening two major new facilities this
year. Again, I can honestly say that we would not have been able to
continue our operations and serve our customers without the incredibly
generous and timely federal support that we received in the last two
coronavirus relief bills.
A number of airports have also taken steps to assist the businesses
that operate at their facilities, including concessionaires. We
recognize that our tenants are key to the airport experience for our
customers, and that it is significantly more expensive to replace a
concessionaire than it is to help sustain them during this difficult
period. At SEA, we have taken decisive actions to support these
businesses, including deferring rent and fees and adjusted leases. We
are incredibly grateful to our Congressional delegation and other
leaders in Washington, DC for including airport concessionaire relief
in both the last relief bill and the American Rescue Plan. This funding
will allow us to provide rent and minimum annual guarantee relief to
our airport partners.
Airports Making Significant Investments to Keep Passengers and
Employees Safe
As I mentioned earlier, airports have also made significant
investments in public health enhancements over the last year to protect
workers and passengers at their facilities, and to restore confidence
in air travel. These measures include cleaning and sanitization
improvements, such as better worker training and the utilization of UV
technology, self-sanitization applications, and electrostatic sprayers;
HVAC and air filtration upgrades; social distancing floor stickers,
signage and announcements; and the deployment of touchless technology.
Airports have also been active in encouraging the use of masks
throughout their facilities.
SEA is proud of the work we have done to ensure the health and
safety of travelers through our airport. We launched our FlyHealthy@SEA
program, a series of operational changes and communications efforts in
partnership with our airlines and tenants. As part of that effort we:
Doubled down on cleaning at SEA with frequent
disinfection with medical-grade cleaning products;
Secured accreditations for cleaning practices;
Required passengers, visitors, and workers to wear face
coverings in the public areas of SEA in spring 2020, well before the
federal mask mandate went into effect;
Added over 280 hand sanitizer stations throughout the
terminal;
Invested in a wide variety of innovative technologies for
seamless, contact-free travel;
Installed nearly 650 plastic protective barriers that
buffer interactions between travelers and airport employees;
Displayed 8,000 signs to remind passengers of physical
distancing; and
Opened an on-site COVID-19 testing location for non-
symptomatic travel testing needs.
AAAE has partnered with the Global Biorisk Advisory Council (GBAC)
to encourage airports to pursue and achieve the GBAC STAR Facility
Accreditation. This performance-based designation helps facilities
establish a comprehensive system of cleaning, disinfection, and
infectious disease prevention, which relies on GBAC's comprehensive
training on protocols, correct disinfection techniques, and cleaning
best practices for biohazard situations like the novel coronavirus.
Sixty-three airports participate in GBAC, and 27 airports--including
SEA--have received GBAC STAR accreditation.
These and other efforts at airports are having a marked impact. On
February 11, Harvard's Aviation Public Health Initiative issued a
comprehensive report about the risk of coronavirus transmission in
airports. Researchers found the probability of being infected at an
airport is very low because of the ``consistent and impressive
commitments'' airports are proactively making to reduce the risk of
disease transmission between passengers, employees, concessionaires,
contractors, and visitors.
These multi-layered strategies cited by Harvard include enhanced
cleaning and frequent sanitization efforts; the adoption of various
means to ensure proper distancing (e.g., floor decals, barriers,
signage, communication); the use of masks or face coverings throughout
the facility; upgraded ventilation and air handling systems;
investments in touchless technology; and other innovations to protect
traveler and worker health and improve the airport experience.
The Harvard report made clear that there is no one-size-fits-all
approach that works in all instances, given the nature of the virus and
the complexity and diversity of airports across the country. SEA and
other airports are committed to using these and other protective
mitigation efforts to continue to ensure passengers and workers are as
safe as possible.
Coronavirus Relief Bills: Providing a Lifeline for Airports in the Near
Term
Chair Larsen, I would like to thank you and your colleagues for
quickly passing the CARES Act in March and the Coronavirus Response and
Relief Supplemental Appropriations Act in December. Considering the
dramatic drop in passengers and revenue over the past year, both bills
are providing a lifeline to airports, concessionaires, airlines,
aviation workers and so many others in the aviation industry.
Airports are truly grateful for the federal assistance during these
unprecedented times. We realize that the $12 billion that Congress has
already approved for airports and concessionaires is a significant
investment. But those crucial funds have made the difference in our
ability to maintain operations, support our tenants and partners, and
play our essential role in helping to lead a sustainable and equitable
economic recovery.
As you know, airports often rely on bonds to help finance critical
and costly infrastructure projects. Airports at the end of 2019 held
$107 billion in debt, and they had $7 billion in debt payments due in
2020 with little revenue coming in. Funding in the two coronavirus
relief packages included welcome flexibility to allow airports to use
those federal funds to pay for debt service and to ensure that airports
did not default on their bonds.
At SEA, we have focused our CARES Act funding on debt service
payments because we believe it is the best way for our airport to meet
its current obligations and maximize benefits to the airport in the
short-term. It also allows us to maintain our competitiveness in the
bond markets so that we will be able to invest in future projects to
build our capacity when air travel returns.
We also decided that the most prudent use of our CARES Act dollars
was to split them over a two-year period, especially since additional
federal relief was uncertain at the time. We did not want to use up all
of our grant dollars in 2020 and then find ourselves unprepared for any
unexpected coronavirus impacts this year. I should also point out that
the FAA established a reimbursement program in which airports must
incur an expense and submit receipts before drawing down funds; this
system creates a reimbursement delay because airports submit
reimbursements based on payroll cycles, debt payment cycles, and
accumulation of various other expenses. As a result of the
reimbursement mode, the FAA asked airports to map out a multi-year plan
for how they intended to use their CARES Act allocations.
We have already spent approximately 77 percent of our CARES Act
grants and have budgeted the remainder for this year. We are in the
process of reviewing the newly released FAA guidance on the December
relief package and plan to make decisions very quickly--particularly in
order to help our tenants who are struggling to keep their doors open.
Looking Forward: Significant Challenges Remain
It's unclear how long the coronavirus crisis will last, when
passenger levels will return to pre-COVID levels, or the time it will
take for airports and airlines to get back to the ``new normal.'' Based
on our previous experiences after 9/11 and the Great Recession, we
expect the road to recovery will take years rather than months. It will
also take substantial investment during the uncertain transition
period.
I am optimistic on the long-term outlook for airports and the
entire aviation industry. In the near term, however, the significant
financial challenges that airports continue to face coupled with a
great deal of uncertainty surrounding COVID-19 could make the road to
recovery rocky and unpredictable. The spread of more contagious
variants could also slow progress and increase calls for travel
restrictions and quarantines.
Moody's on December 1, 2020 highlighted some of the challenges that
airports and our airline partners face in the year ahead. Its 2021
outlook points out that ``enplanement recovery remains uncertain
because of the potential for renewed travel restrictions or weakened
consumer demand as COVID-19 cases increase.''
The rating agency predicts that enplanements could be down between
55 to 75 percent in the first half of the year compared to 2019. With
so many unknowns, Moody's acknowledges that the outlook for the year is
``highly uncertain.'' But it is slightly more upbeat for the rest of
the year and estimates that enplanements will be down between 40 to 60
percent in 2021 compared to the pre-pandemic levels in 2019.
``Worsening virus spread in much of the U.S. poses threats to the
nascent travel recovery in the first half of 2021 before any potential
widespread vaccinations in the second half of the year,'' Moody's
noted. ``Lower passenger volumes will reduce nonairline revenue at U.S.
airports and also put further credit stress on U.S. airlines.''
The report, which the rating agency published before Congress
passed the last coronavirus relief package and before the recent
decline in coronavirus cases, also underscores the intense financial
pressures on large hub airports with significant numbers of
international travelers. Moody's indicates that ``large hub airports
with normally high international and business traffic will struggle the
most in 2021 and will exhaust CARES Act grant allocations.''
Between new testing requirements for international travelers,
ongoing travel restrictions, vaccine shortages and the spread of new
COVID variants, we have revised SEA's 2021 passenger projections down
to between 30-40 percent of 2019 levels in 2021. This is still an
increase from 2020, but we have a long way to go to return to pre-COVID
passenger levels.
Yet, as I mentioned earlier, I feel confident that those passenger
levels will ultimately return, even if it takes 3-5 years. Despite
ongoing health concerns, tightening corporate travel budgets and the
impact of new videoconferencing technology, people want to travel, to
see friends and family, to explore the world and to build personal and
professional connections that a computer screen will never truly be
able to offer.
Flightpath to Recovery: Recommendations to Further Assist Airports and
Our Industry Partners
I have stated several times already how deeply appreciative we are
of the support we have received over the last year from Congress and
our other federal partners. It is truly amazing how well we have
weathered the storm, compared to how bad it could have been, and thank
you again so much for your ongoing commitment to our industry. However,
there are some additional investments and policies that we ask you to
consider as we continue to work together to rebuild aviation and
restore confidence in air travel.
Key Areas of Support in The American Rescue Plan of 2021:
Providing Additional Funding to Help Airports Respond to
COVID-19: AAAE, ACI-NA, and airports around the county have been urging
Congress and the administration to approve additional relief to help
airports through the coronavirus crisis during the next year. As the
pandemic continues, airports face new operating demands and growing
strains on their outstanding debt as they make major investments in
public-health improvements and establish distribution hubs for the
COVID-19 vaccine. These added costs, plus their reduced revenue, has
created budget nightmares for airports that put some in significant
financial peril. Many airports have exhausted their initial CARES Act
funding.
Getting more federal funds out the door and into local
communities as quickly as possible will ensure airports can continue to
keep airport staff employed, respond to new operational demands, afford
debt service on their bond payments, and maintain their critical safety
and security projects. We are grateful that the Transportation and
Infrastructure Committee recently approved $8 billion for airports and
concessionaires as part of the American Rescue Plan Act that lawmakers
are currently debating. That proposed funding level will go a long way
to ensuring airports and concessionaires have the resources they need
to help offset some of their expected revenue losses and to continue to
combat COVID-19.
Extending the 100% Federal Share: I would also like to
thank the full committee for taking steps to eliminate the local match
requirement for capital projects funded from the Airport Improvement
Program (AIP). This is a big issue for airports of all sizes and
especially smaller facilities that often rely on PFC revenue to help
pay their local match. The CARES Act included $500 million to cover the
local match requirement for those AIP projects funded in FY20, and the
American Rescue Plan includes slightly more than $600 million to
eliminate the local match requirement for AIP projects funded in FY20
and FY21. With traditional revenue sources so low, it is exceptionally
challenging for many airports to come up with a local match during the
current crisis. I urge Congress to maintain the 100 percent federal
share language as part of the coronavirus relief package that lawmakers
are currently debating.
Continuing to Assist Concessionaires: Airport
concessionaires have experienced severe financial losses during the
past year. As I mentioned, SEA and other airports have been trying to
help our partners by providing relief from rents and minimum annual
guarantees during the pandemic. The previous coronavirus relief package
included $200 million to help airport concessionaires during these
challenging times, and the budget resolution includes an additional
$800 million with a focus on small businesses.
Extending the Payroll Protection Program: Airports
strongly support provisions in the American Rescue Plan that would
extend the Payroll Support Program for the airline industry.
Specifically, the package includes $14 billion to extend the PSP
through September 30 for airline workers and another $1 billion for
contractors.
Helping Small Airports and Small Communities Impacted by COVID-19:
Preserve Small Community Air Service: With the decline in
passenger levels, carriers have reduced or eliminated commercial air
service to small communities during the pandemic. Continuing support
and increased funding for the Essential Air Service and Small Community
Air Service Development Programs are more critical than ever to ensure
that people in small communities and less populated areas have access
to the national airspace system.
Provide Additional Assistance to Help Nonprimary
Commercial Service and General Aviation Airports Impacted by COVID-19:
There are approximately 3,000 nonprimary commercial service and general
aviation (GA) airports throughout the country that play a key role in
our aviation system. The last two coronavirus relief packages included
$145 million to help those smaller airports during the pandemic. Those
funding levels are a welcome step in the right direction. But we urge
Congress to do more to ensure that the thousands of nonprimary
commercial service and GA airports--including those that traditionally
have significant operations--have the resources they need to respond to
the pandemic.
Help Airports that Participate in FAA Contract Tower
Program: I would like to thank members of this subcommittee for their
longstanding support of the FAA's Contract Tower Program, which
enhances aviation safety at 257 airports around the country. I would
particularly like to commend Representatives Julia Brownley and Rodney
Davis for recently introducing the CONTRACT Act, a bipartisan and
bicameral bill that would address staffing challenges at contract
towers by making it easier for retired federal controllers to continue
working at contract towers. When the COVID-19 recovery takes off, it
will be more important that we ensure that contract towers are fully
staffed with experienced and highly qualified controllers. I urge the
Transportation and Infrastructure Committee to approve this commonsense
approach.
Recommendations Impacting our Federal Partners and Other Opportunities
to Aid Recovery
Finally, I would like to share some thoughts on ways that we can
partner with you and the federal government on key policies and
programs to bring back aviation to pre-COVID heights, and to help us be
even more resilient, sustainable, and impactful than before.
Ensuring our Federal Partners Have the Resources They
Need: I am optimistic that we will begin to see many more travelers as
the vaccination rate continues to increase. It is critical that the TSA
and U.S. Customs and Border Protection (CBP) have the staffing and
resources they need to accommodate additional passengers when travel
begins to pick back up. I am encouraged by TSA's recent announcement
that it plans to hire 6,000 Transportation Security Officers (TSOs) by
this summer. We need to ensure that there are enough well-trained TSOs,
passenger screening canine teams, CBP officers, and innovative
technologies to handle pent-up demand expeditiously to prevent long
lines at security checkpoints and international arrival halls.
TSA and CBP have faced substantial declines in their user fee
revenues due to the steep decline in travel. For example, CBP estimates
a $2 billion user fee shortfall in 2020 and 2021. These fees account
for 40 percent of the resources used to hire and train CBP officers
that work at airports and other ports of entry. Similarly, the aviation
security fee passengers pay as part of their ticket covers about one-
third of TSA's expenses. We cannot afford to have steep spending
reductions to either of these agencies just when travel begins to
rebound. Looking forward, we ask members of this subcommittee to work
with your colleagues on the Appropriations Committee on ways to ensure
that airports are as fully staffed as possible.
Helping Airports and other Stakeholders Prepare for
Public Health Emergencies: Chair Larsen, I would like to thank you and
Representative Don Beyer for introducing the National Aviation
Preparedness Plan Act. Your bill (H.R. 884) would require the Federal
government to consult with airports, airlines, and other aviation
stakeholders on ways to help prevent the spread of communicable disease
outbreaks in the aviation system. The coronavirus pandemic has made
clear that this type of commonsense and collaborative approach, which
you first proposed in 2015, is long overdue. Better coordination
between the federal government and aviation stakeholder would help make
our nation's aviation system safer for passengers and workers alike.
As I mentioned previously, we have implemented a wide range of
new FlyHealthy initiatives at SEA. But the lack of consistent,
enforceable national protocols throughout the entire air travel system
has led to confusion and missed opportunities. It is imperative that we
capture and incorporate the lessons from COVID-19 into federal
guidance, and the Port of Seattle looks forward to working with you,
DOT and other federal agencies to complete this important work.
I would also like to emphasize the need to continue to focus
on ensuring access to vaccines and personal protective equipment (PPE)
for aviation workers. I realize that the vaccine issue is largely up to
state governments, but states like Washington have not yet prioritized
critical frontline transportation workers for vaccination. Hopefully
this issue will be addressed as supplies quickly increase, but your
attention to this important need is very welcome.
Restoring Confidence in Air Travel: Our goal at SEA is
not just to get back to 2019 traveler numbers, but also to be even
better prepared to accommodate our passengers with 21st century
customer service. To us, that goal means improved facilities; new
technologies to smooth and speed the airport experience; and a
permanent commitment to enhanced health protocols. It also means
renewed efforts to restore customer confidence in air travel, which is
a mix of the actual steps we take to keep travelers healthy as well as
communicating those steps to our customers. It will take an industry-
wide effort to share information, data and studies about the
effectiveness of our work to keep travelers healthy and safe, and we
welcome the opportunity to partner with Congress and the federal
government on that work. Further investigation about the widespread use
of a health pass is worthy of additional discussion as well.
Avoiding Domestic Testing Requirements and Other Domestic
Air Travel Restrictions: As you know, the CDC has been considering a
widescale domestic pre-departure testing requirement. We appreciate
that many members of the committee have been critical of this proposal,
calling it ``impractical and unworkable.'' Airports agree and believe
that such a requirement does not make sense and would have lasting
economic repercussions on the aviation industry--just as Congress and
the administration are trying to find ways of assisting the industry.
At a time where the number of cases is declining, face mask usage is
mandatory, the number of people vaccinated is growing, and U.S. airport
and airlines have instituted extraordinary precautions to ensure air
travel is safe during the pandemic, we were gratified to learn that CDC
decided in mid-February that a domestic pre-flight testing requirement
did not make sense ``at this time.'' We urge the committee to continue
to communicate to the Administration your concerns about moving forward
with a domestic pre-departure testing requirement or any other domestic
air travel restrictions.
Investing in Our Nation's Infrastructure: Chair Larsen,
almost four years ago to the day, I testified before this subcommittee
and discussed the need to provide airports with the tools they need to
fix aging facilities and accommodate rising demand. During that session
I described the importance of the AIP and the need to raise the
outdated federal cap on local PFCs.
I reiterate that message again today and urge you and your
colleagues to pass a comprehensive infrastructure bill that will help
airports prepare for the eventual return of passenger levels. It may
seem strange for me to be talking about upgrading and expanding airport
facilities after a year of 60 percent passenger declines, but now is
actually the perfect time to invest in our nation's infrastructure.
Building back better will support good-paying jobs and fix our
crumbling infrastructure at time when interest rates are exceptionally
low. As I have stated, we believe deeply that passenger levels will
return to 2019 levels, and we want to be ready to accommodate them when
they do--especially if upgraded facilities designed for touchless
technologies and additional room for social distancing continue to be
required.
With guidance from leaders on the committee, the House took a
great first step last year when it passed H.R. 2, the Moving Forward
Act. If enacted into law, this proposal would go a long way toward
helping airports pay for critical infrastructure projects in the years
ahead, while focusing on resiliency and lowering greenhouse gas
emissions.
The House-passed bill proposed to increase the annual
authorization level for the traditional AIP program to $4 billion. It
also called for providing airports with up to $4 billion in
supplemental funding every year and much-needed flexibility to allow
airports to use those funds for PFC-eligible projects such as terminals
and debt service.
We deeply appreciate the provisions in the bill that would
increase federal funding for airports in the near term. However,
adjusting the outdated and arbitrary PFC cap would create a
sustainable, long-term funding source to help pay for critical capital
projects when there may not be enough federal funding to go around.
At SEA, we will celebrate the opening of two of our biggest
capital projects in 2021: our new International Arrivals Facility and
our modernized North Satellite. Despite the unexpected disruptions
caused by the pandemic, we are thrilled that these projects are coming
on-line after years of hard work and more than $1.5 billion in
investment.
In the immediate term, these facilities will give us the space
we need to offer more physical distancing during the pandemic. These
projects will also provide SEA with additional capacity when passenger
levels begin to rebound. We were already overcapacity in 2019, and we
simply cannot wait for a full recovery of passenger levels to start
planning for the future.
Part of our future plans include our Sustainable Airport
Master Plan (SAMP). The SAMP near-term projects (NTP), including a new
multi-billion terminal project, are a blueprint for changes that we
need to make at SEA to accommodate future demand; the NTP are currently
undergoing federal environmental review, and I'm pleased to report that
we will release our draft environmental assessment this year. However,
considering the significant declines in PFC revenue due to COVID-19 and
our other cash flow challenges, we will need to find new ways to fund
these projects.
Increasing Environmental Sustainability: In terms of
environmental sustainability, we are proud of our goals to become a
carbon-neutral airport, and we have been leading innovators on
everything from pre-conditioned air at all of our gates to
electrification of ground service equipment and transitioning our
ground transportation buses to renewable natural gas.
But our biggest environmental initiative is our goal is to
fuel every flight out of our airport with at least a 10 percent blend
of Sustainable Aviation Fuel (SAF). We believe that full implementation
of SAF has the potential to lower our airport's carbon footprint by as
much as 80 percent, which is why we strongly support provisions in the
Moving Forward Act that call for investing in SAF.
SAF is a proven fuel alternative that is safe and plug-in
ready. Now we must work together to figure out how to scale this
industry so that SAF is plentiful and affordable. We believe that the
federal government can help speed this outcome with infrastructure
investments in refining, blending and pipeline facilities; support for
farmers and other feedstock producers; incentives like a $2 per gallon
blenders' tax credit; and other market-making efforts--such as
increased utilization by the U.S. Department of Defense.
Enhancing Airport Communities and Shared Economic
Prosperity: Finally, we want to be sure that we are maximizing the
benefit of the airport to the community. At SEA, we have been
particularly focused on increasing our women and minority owned
business participation, whether it be for dining and retail
concessions, construction projects or janitorial contracts. Our 2019
Diversity in Contracting report shows that we're making progress on
this front, but there is still much more that we can and must do.
Similarly, we believe that we can do more to help people from a wide
variety of backgrounds gain the skills to join the aviation workforce.
Finally, we want to make sure that businesses and residents near the
airport are thriving, whether it be through helping attract more
travelers to stay in nearby hotels or continuing to invest more in
residential noise insulation and air quality improvements. We welcome
opportunities to work with Congress to find new ways to achieve these
goals.
Chair DeFazio, Ranking Member Graves, Chair Larsen, Ranking Member
Graves, and members of the subcommittee, thank you for inviting me to
participate in today's hearing. I look forward to working with you as
we continue to respond to the coronavirus crisis, make our facilities
as safe as possible for passengers and employees, and turn our
attention to recovery.
Mr. Larsen. Thank you, Mr. Lyttle.
And before I introduce Mr. Ed Bolen I just would note,
without objection, our witnesses' full statements will be
included in the record today.
So without objection.
So I now recognize Mr. Ed Bolen for 5 minutes.
Mr. Bolen?
Mr. Bolen. Well, thank you, Chairman Larsen. I appreciate
the opportunity to be here today representing the National
Business Aviation Association.
As everyone on this committee knows, business aviation is
the use of general aviation aircraft for business purposes. In
the United States, thousands of companies rely on business
aviation to get products and people where they need to be when
they need to be there. Business aviation is an industry that
generates an enormous amount of jobs and economic development.
It is an industry that helps foster productivity and
efficiency. It also flies humanitarian flights. And during the
COVID crisis we have flown an enormous amount of personal
protective equipment and COVID tests.
Two thousand twenty has been an epically challenging year
for our industry. At times, business aviation flights were down
as much as 75 percent. Even today, at Teterboro, gateway
airport for New York, flights are down 50 percent. But
oftentimes, when things are at their worst, we have an
opportunity to demonstrate our best. And I think that
ecosystem, that aviation ecosystem that my colleague, Pete
Bunce, talked about, has been on full display during the COVID
crisis.
Congress' prompt action with the CARES Act was essential in
providing critical help to our industry. Your investments
allowed us to retain pilots, technicians, and other
professionals in the aviation industry. You helped us find ways
to come together and operate safely in a rugged environment
that at times included ATC Zero operations. In short, we have
come together to find our way forward consistent with our value
of safety.
We are determined to not just survive this crisis, but to
emerge stronger. On-demand air mobility, the ability to move
people where they need to be when they need to be there, is one
of America's great strengths, and we hope to emerge stronger.
The COVID crisis gave us a view of the abyss, but we are
focused on a vision for the future, a vision for the future
that includes enhanced sustainability.
As my friend, Pete Bunce, said, we are focused on
sustainable aviation fuel. It gives us an opportunity to
dramatically reduce our emissions footprint. It is an
opportunity for us to find a way forward together with
Government help, including a blender's tax credit.
We are also working hard to bring new technologies to
reality, to receive the benefit of new propulsion systems,
hydrogen propulsion, electric propulsion, hybrid propulsion. We
need an infrastructure that is capable of sustaining these
operations, taking the magnificent airport infrastructure that
we developed during World War II, and building for the future,
creating the type of charging stations and operational
environments that will allow the Advanced Air Mobility
operations to thrive.
We also know that it is important for us to continue to
invest in our human infrastructure, to be able to attract the
best and the brightest, and that makes a requirement that we be
diverse and we be inclusive. I know this committee has been
supportive of PSAs to attract people to our industry. It has
been supportive in the FAA Reauthorization Act at creating a
Women in Aviation Advisory Board that NBAA is proud to have two
members of its board of directors serve on.
It is imperative: for us to realize the future, we have to
be diverse, we have to be inclusive, we have to be sustainable,
and we have to take advantage of the technologies that are
working their way through the certification system. And we need
to create an operating environment that can get us there.
We are grateful for the leadership that has been
demonstrated by this committee, by this Congress, and by the
FAA to help us through a challenging time. But we want to set
our sights forward. And we want to realize the full potential
of aviation, moving forward. Thank you.
[Mr. Bolen's prepared statement follows:]
Prepared Statement of Edward M. Bolen, President and Chief Executive
Officer, National Business Aviation Association
Chairman Larsen, Subcommittee Ranking Member Graves, and members of
the Subcommittee on Aviation thank you for holding this hearing to
discuss the significant challenges business aviation is facing due to
the COVID-19 pandemic and how we are progressing on our path to
recovery. On behalf of the National Business Aviation Association
(NBAA) and our 11,000 member companies, we appreciate the opportunity
to testify at this critical hearing.
The United States general aviation industry, including business
aviation, supports 1.2 million jobs and $247 billion in economic
impact. Across the country, thousands of small businesses that generate
$77 billion in labor income are facing unprecedented challenges due to
the pandemic. In addition, the companies that utilize business
aviation, 85% of which are small and mid-sized businesses continue to
face significant challenges.
Beginning in late February 2020, the GA industry began to suffer
significant impacts due to COVID-19 related travel restrictions and
shutdowns. During the depths of the pandemic last spring, GA aircraft
operations dropped by an unprecedented 75% based on an analysis of
FlightAware data. These substantial declines continue for our industry
due to a sharp decline in business travel.
This severe and unprecedented reduction in flight activity had
devastating consequences from fixed-based operators (FBOs) to
maintenance shops, charter operators, and GA airports. For example, the
U.S. aircraft maintenance industry has lost 50,000 jobs, and more than
80% of companies have seen revenue declines compared with 2019. At
Hutchinson Regional Airport (KHUT) in Kansas, operations suddenly
dropped by 80% last spring, and fuel sales declined by nearly 90%. The
airport provides $20 million in economic impact to the community, and
many of its small business tenants took out loans to survive.
At Teterboro Airport (KTEB) in New Jersey, a critical business
aviation gateway, GA aircraft operations dropped by more than 65% in
June 2020. Through the end of last year, fuel sales and operations were
still down 50% from pre-pandemic levels. Teterboro supports nearly
5,000 jobs and generates more than $1 billion in economic impact, so
these sharp reductions directly impacted families, small businesses,
and the local community.
Despite these unrelenting challenges, the GA community continues
its commitment to COVID-19 relief efforts. While the commercial
airlines serve only about 500 airports, GA can reach more than 5,000
airports and communities, providing a critical link for pandemic
relief. For example, GA pilots are flying COVID-19 test specimens from
rural medical facilities to labs, cutting the wait time for results in
half. In Vermont, business aircraft transported 600 test specimens a
day to laboratories through a partnership with local hospitals.
One of the largest U.S. laboratories, Quest Diagnostics, relies on
a fleet of 23 business aircraft to transport specimens to its labs
across the country. The diverse fleet includes Beechcraft Baron piston
twins and Embraer Phenom 100 light jets that can access a wide variety
of GA airports. With the demand for COVID-19 testing, the company used
its fleet and focused on logistics to increase efficiency and provide
much-needed testing capacity.
More recently, organizations such as Patient AirLift Services were
again able to provide volunteer medical flights and free patient air
transportation with new COVID-19 safety protocols. As we continue to
emerge from the pandemic, GA stands ready to expand our humanitarian
efforts, use our connections to small communities to assist with
vaccine distribution and perform other missions to help communities
across the country.
CARES Act Provided Much-Needed Relief
We applaud this Subcommittee's continued leadership in providing
targeted relief for business aviation as we recover from the pandemic.
Your work to quickly pass the CARES Act last March provided a critical
lifeline for our community, and we continue to access relief programs
today. Leading up to the CARES Act passage, NBAA worked with members of
the Subcommittee to make sure that GA commercial operators were
eligible for the same relief programs as the major airlines. Thousands
of small air charter operators that do not have access to capital
markets were in desperate need of relief, and thanks to your
leadership, the Payroll Support Program (PSP) passed as part of the
CARES Act covered GA commercial operators.
In addition to PSP, many of our members are still in business
today, thanks to the Paycheck Protection Program (PPP). Along with your
quick action on Capitol Hill, we applaud the dedicated employees at the
Department of the Treasury, Small Business Administration, and other
agencies that rapidly stood up these relief programs and worked with
our members to answer questions in real-time.
While the vast majority of PSP funds provide critical support to
the major airlines, many GA commercial operators received support that
kept their businesses going and prevented layoffs. Early on in the
program, we worked with the Treasury Department to develop streamlined
requirements for small air carriers, most of which requested less than
$10 million in support. These requirements protected taxpayers while
recognizing that small air charter operators often do not own any
aircraft and do not have access to capital like the major airlines.
There are hundreds of stories about how PSP and PPP preserved GA
jobs, but innovative charter, fractional, and aircraft management
operator Airshare in Lenexa, Kansas, demonstrates the importance of
these programs. Before the pandemic, Airshare was doing well, with
around 200 employees and 50 GA aircraft. However, last March, the
company realized the scale of its challenges and took decisive actions
to adapt its business to ensure it could retain all of its highly
skilled workforce. However, since business travel is a significant
focus of Airshare's operations and immediately declined by almost 90%,
the company needed additional relief.
Reasons behind the decrease in business travel are varied, but
companies that own and operate business aircraft to transport their
employees also feel the impact. For example, OFS, a family-owned
furniture manufacturer headquartered in Huntingburg, Indiana, that
operates a King Air 200 and King Air 350 turboprop, experienced
significant business travel disruptions. In a typical year, the company
flies more than 1,500 potential clients to its headquarters. The COVID-
19 pandemic has profoundly impacted the company, with sales been down
by more than 25%. Although OFS has been able to cut its expenses and
adapt, flight operations have been virtually shut down due to travel
restrictions and business challenges since March of last year.
With assistance from the PSP and PPP programs, charter fractional,
and aircraft management operator Airshare did not layoff any employees
and is looking towards the future. While there has been a recovery from
the pandemic's depths, the company is still experiencing a sharp
decline in business travel which is clouding the future.
In addition to connecting small towns and communities, air charter
operators often perform critical and complex missions to transport
human organs for transplant. For example, around 30 to 40% of the
business for Ventura Air Services, a charter operator located at
Republic Airport (KFRG) in Farmingdale, New York, involves transporting
organs. When the pandemic hit, demand for other on-demand flights
quickly declined, and Ventura struggled to retain the highly skilled
workforce needed to perform organ transport flights. With support from
PSP and PPP to get through the crisis, the company continued to perform
its critical missions and is currently adding two additional aircraft
to its charter certificate.
Unfortunately, many air charter operators are continuing to face a
decline in business travel, so we appreciate PSP and PPP's extension
through the Consolidated Appropriations Act of 2021 to provide
continued relief. While our members understand challenges for the
Treasury Department in administering PSP, we have experienced
significant delays in the second round of funding. Although many large
airlines have received the relief, small operators are still waiting,
and we respectfully request that this Subcommittee works with Treasury
officials to expedite the process.
Along with charter providers and small businesses, FBOs provide a
diverse range of services from aircraft fueling to maintenance at GA
airports and have been negatively impacted by the pandemic. Many of
these are family-owned businesses, like Epps Aviation located at
DeKalb-Peachtree Airport (KPDK) in Atlanta. Founded in 1965 by Georgia
aviation legend Pat Epps, the company has grown to around 150 employees
at DeKalb-Peachtree, which is one of the top ten GA airports in the
country.
Beginning last March, Epps experienced a significant decline in
traffic at the airport, which has still not recovered to pre-pandemic
levels. Revenues declined by nearly 60%, and fuel sales which are a key
driver of revenue were down 30%. The company obtained PPP relief,
allowing it to maintain its highly skilled workforce, but they remain
very concerned about the decline in business travel, which makes up 70%
of their traffic.
Thanks to your actions, many GA businesses have avoided layoffs,
but the future is uncertain, and additional relief may be necessary.
For example, operations are still down significantly at Charles B.
Wheeler Downtown Airport (KMKC), a key GA airport in Kansas City that
supports nearly 700 jobs. At New Orleans International Airport (KMSY)
and King County International Airport--Boeing Field (KBFI) in Seattle,
general aviation traffic continues to be down by 30%. The ongoing
reductions in business travel and the potential for additional COVID-
related restrictions creates significant uncertainty for our community,
and we appreciate your consideration of future GA relief needs.
For example, NBAA and a broad coalition of GA groups have requested
a temporary suspension of aviation fuel taxes to incentivize demand.
Congress temporarily suspended the 7.5% tax on commercial air
transportation but did not take similar action for the non-commercial
GA fuel tax. As you consider additional relief measures, we believe
that temporarily suspending the GA fuel tax remains an important
policy. For small airports and FBOs that rely on fuel sales for a
significant portion of revenues, the suspension of non-commercial fuel
taxes would help reduce costs for operators, provide longer-term
relief, and be consistent with commercial aviation policy.
In addition to relief for operators, we applaud Committee Ranking
Member and House GA Caucus Co-Chair Sam Graves' leadership in
championing dedicated relief for GA airports. Under the CARES Act and
Consolidated Appropriations measure, GA airports received $145 million
in relief, allowing them to continue operating safely through the
pandemic.
Regulatory Challenges During the Pandemic
For every NBAA member, safety is the number one concern that drives
all aspects of the flight operation. This commitment includes careful
compliance with FAA-mandated training events, medical examinations, and
other regulatory requirements. However, early in the pandemic, we
realized there were significant health and safety barriers to complying
with these regulations.
Working with the FAA, its dedicated staff, and the entire GA
community, we developed Special Federal Aviation Regulation (SFAR) 118.
This regulation is a comprehensive, safety-driven set of mitigations
that reduced the risk of COVID-19 exposure while providing additional
time to meet FAA requirements. The innovative regulatory approach
facilitated needed relief while ensuring continued compliance with
essential standards. Tens of thousands of pilots and hundreds of
operators benefitted from this risk-based, collaborative approach that
allowed the industry to adjust and implement additional safety measures
without compromising standards.
The temporary relief granted under SFAR 118 will expire on April
30, and we appreciate the FAA's willingness to offer this relief. The
FAA has indicated it will consider additional measures depending on how
recovery from the pandemic proceeds. We understand the Subcommittee's
interest and support of SFAR 118 and will keep in close communication
on any future relief needed over the coming months.
Concern over Future Restrictions
Through leveraging relief opportunities and adapting business
models, business aviation continues to be incredibly resilient during
the pandemic. With airlines cutting service to many small communities,
like Dubuque, Iowa, and Lake Charles, Louisiana, we have been able to
fill part of the void and provide a potential travel option. This
possible new business is helpful, but we remain concerned that future
restrictions or COVID-19 testing requirements could be harmful.
Regarding domestic testing for air travelers, we believe that
current testing protocols will not support on-demand flights, which are
a vital part of business aviation's value proposition. NBAA members
often fly to support critical infrastructure such as telecommunications
networks and hospitals, meaning that delaying travel 24-48 hours to
comply with potential COVID-19 testing requirements would have
significant negative consequences. We support reasonable and science-
based recommendations to control the spread of COVID-19 but urge a
focus on improving the availability and turn-around time for testing
before further discussions on this issue.
During the initial discussion of the domestic aviation testing
requirement, we appreciated Chairman DeFazio's leadership in raising
questions about the feasibility and effectiveness of such a
requirement. Recently, it appears that the administration has paused
its discussions on this policy, and we thank the Committee for its
continued engagement.
GA Priorities for the Future
The remarkable development of effective COVID-19 vaccines provides
a potential path forward for business aviation, even as we continue to
deal with day-to-day pandemic-related challenges. With that in mind, we
are looking to the future with a focus on advanced technology,
sustainability, and diversity. This positive future will bring our
country closer together and generate high-skill, good-paying jobs right
here in the United States.
In a recent Deloitte study, the market for advanced air mobility
(AAM) is estimated to reach $115 billion annually by 2035, with the
potential to create nearly 300,000 jobs. Since at least as far back as
World War II, we have been able to leverage an incomparable
infrastructure of airports, airspace, technologies, and personnel to
bring commerce and humanitarian services to over 5,000 communities. On-
demand AAM provides a path for the U.S. to maintain its position as the
world leader in civil aviation, and there are significant opportunities
for GA and our talented workforce to fly people and products where they
need to be when they need to be there. To that end, NBAA actively
supports numerous FAA working groups tasked with integrating AAM
operations into the National Airspace System and looks forward to
continued collaboration with the agency.
To realize the full potential of AAM, including congestion relief,
a reduced environmental footprint, and enhanced mobility, we must look
towards the next generation of infrastructure needs. As this Committee
considers infrastructure investments, we respectfully request that
future investments for AAM operations are considered in terms of
eligibility for funding and programs.
For example, as Congress reviews infrastructure grant programs such
as BUILD, consideration should be given to multimodal investments that
include AAM. Although funding through these programs might not be
needed today, AAM companies are nearing aircraft certification, meaning
that we should take advantage of this historic discussion on
infrastructure to make forward-looking changes that position us for the
future.
In addition to the sustainability benefits of AAM, GA is committed
to reducing the environmental footprint of existing flight operations.
Increasing the availability of Sustainable Aviation Fuel (SAF) is
critical to achieving the aviation industry's goal of carbon-neutral
growth from 2020 and a 50% net reduction in CO2 emissions in 2050 as
electrification is not yet an option for many types of aircraft.
As a ``drop-in'' fuel, biomass-based SAF can be safely used in any
turbine aircraft and is blended with conventional jet fuel. Studies
indicate that SAF has the potential to reduce lifecycle greenhouse gas
emissions by 80%. However, to achieve this potential, the fuel must be
widely available at a competitive cost.
NBAA and a broad coalition of airlines, fuel producers, and
industry groups believe that a $2.00 per gallon SAF blender's tax
credit over 10-years would spur increased production. This credit would
encourage fuel producers to invest in additional capacity, increasing
the supply of SAF and driving down costs for operators. The existing
$1.00 per gallon biodiesel tax credit does apply to some SAF pathways
but will expire in 2022. While the biodiesel credit is helpful, its
limitations and limited duration do not provide the long-term
incentives needed to boost SAF production. Should the $2.00 credit
become law, SAF would no longer qualify under the existing biodiesel
credit.
Recently, the House Select Committee on the Climate Crisis and the
Atlantic Council endorsed the need for a targeted incentive to assist
with overcoming the challenges of increasing supply and availability of
SAF. To achieve those goals, we hope to see the introduction of
legislation on the $2.00 per gallon blenders credit in the coming
months and look forward to working with the Subcommittee on building
support for this important policy.
While we understand this is not in the Subcommittee's jurisdiction,
we want to underscore the importance of immediate expensing, also known
as bonus depreciation, passed as part of the Tax Cuts and Jobs Act.
This pro-growth tax policy allows taxpayers placing qualifying property
into service, including business aircraft, the ability to deduct the
full cost of their investment in new and used equipment in the first
year of operation. Businesses can then deploy that capital to make
other investments and grow their operations. In talking with aircraft
brokers and manufacturers, we know that immediate expensing
incentivizes aircraft purchases, leading to U.S. manufacturing jobs.
Unfortunately, starting in 2023, taxpayers will no longer be able
to deduct the full cost of capital investments, and the incentive will
end in 2027. The Tax Foundation has found that making full immediate
expensing permanent would result in more than 170,000 additional full-
time jobs. That is why NBAA supports legislation like the ALIGN Act,
introduced in the last Congress by Senator Toomey and Representative
Arrington to make immediate expensing a permanent part of the tax code.
In the areas of diversity and the aviation workforce, we continue
to leverage NBAA's ability to bring together the GA community to make
advancements. With leadership from Chairman Larsen and Congressman Don
Young, we look forward to re-introducing the Promoting Service in
Transportation Act during this Congress. This legislation would
authorize the Department of Transportation to develop a series of
broadcast, digital and print public service announcements to promote
career opportunities and increase diversity in the transportation
workforce.
Through these public service announcements, we will raise awareness
of careers across all transportation modes, including aviation. There
will also be synergies with efforts to grow the STEM workforce and
related educational opportunities. While momentum around the future
STEM workforce is vital, aircraft pilot and aviation technician careers
are often not considered by students. That is why the legislation is
critical, as it will help address these challenges by building linkages
between STEM programs and the significant career opportunities for a
diverse group of pilots and technicians.
At our virtual events over this past year, and when we return to
live events, NBAA offers targeted educational programs by providing
student-focused programming to educate young people about the many
business aviation career opportunities. Utilizing our events to
introduce a diverse group of students to business aviation allows us to
build networking opportunities and expand a dedicated mentoring
program--all of which create valuable connections between students and
industry professionals.
During Black History Month, we featured stories of NBAA members
that are using their careers and connections to their communities to
increase diversity. For example, our members are reaching students of
color through innovative programs like teaching middle school students
how to fly and race drones. Through organizations such as the
Experimental Aircraft Association and its Young Eagles program, the
Organization of Black Aerospace Professionals, and its Aviation Career
Education Academy, NBAA members volunteer their time and skills to
build a more diverse business aviation industry. NBAA looks forward to
partnering with the Subcommittee on similar initiatives around
diversity, equity, and inclusion.
NBAA is also honored to have two of our Board members serving on
the U.S. Department of Transportation's newly formed Women in Aviation
Advisory Board. The purpose of this group is to recommend strategies to
encourage women to pursue aviation careers. The board also identifies
opportunities for education, training, mentorship, outreach, and
recruitment of women in the aviation industry. We thank this
Subcommittee for creating this advisory board and other groups that
promote diversity and the aviation workforce through the FAA
Reauthorization Act of 2018.
In closing, the COVID-19 pandemic has brought unprecedented
challenges for business aviation and the entire GA community; however,
it has also demonstrated our resiliency and critical importance to
thousands of communities. From delivering test specimens to providing
humanitarian flights, our industry continues to be a vital part of
relief efforts. We thank members of this Subcommittee for recognizing
the critical importance of business aviation when considering relief
measures, and we look forward to continuing those discussions over the
coming months. While there are certainly challenges on the horizon, we
are optimistic about the future and thank this Subcommittee for its
continuing commitment to all aviation industry sectors.
Mr. Larsen. Thank you, Mr. Bolen, for your comments. And I
think that your last comments really wrap up--maybe one of the
themes coming out of today will be that, although we are not
out of the woods, there is some light there at the end of the
tunnel. There are some opportunities to start thinking about
the future of aviation, very different than what we would have
been talking about even 6 months ago. And we still have work to
do to get through the pandemic.
I would just remind people to mute, please. Everybody mute.
Thank you very much. I appreciate that.
So I now recognize Members for 5 minutes. I will start by
recognizing myself, and my first question is for Ms. Krause.
Also, I would recommend the Members to not ask questions
generally of the panel, but to ask directly to panelists. It
just makes it easier to manage the question time because of the
technology.
So my first question is for Ms. Krause. It is about the
national aviation preparedness plan.
Since 2015, following your agency's recommendation to
create a national aviation preparedness plan to ensure all
levels of Government, airlines, airports and frontline aviation
workers are better equipped, we still don't have one.
Representative Beyer and I have introduced H.R. 884 to direct
the DOT to create a national aviation preparedness plan. Could
you elaborate on the GAO's recommendation for such a plan, and
what new issues should be addressed since your recommendation
was released, Ms. Krause?
Ms. Krause. Hi, this is Heather.
No, we also agree and, as I have said in my opening
statement, urge Congress to take action to require DOT to
implement a plan.
I think the COVID-19 pandemic illustrated some real
challenges with coordination and communication. And a plan
would, in designing one, you would want one that is scalable,
adaptable, and has training built in, as well, so that you are
prepared for future communicable diseases.
I think it also allows airlines and airports individual
preparedness plans to align up with that national plan and have
a more coordinated response.
Mr. Larsen. Great, thank you. And again, it is H.R. 884, if
any Members are interested in cosponsoring that bill sponsored
by Representative Beyer and myself.
Mr. Bunce, you mentioned the Aviation Manufacturing Jobs
Protection Act, which is a bill that Representative Estes and I
cosponsored, and which Chair DeFazio helped get language in the
reconciliation bill for its implementation; the idea being that
we could ensure, in the long term, we have an aviation supply-
chain workforce to call upon when the recovery comes. Can you
elaborate a little bit more on your comments with regards to
the job losses in the supply-chain industry, and what is needed
to bring them back, Mr. Bunce?
Mr. Bunce. Thank you, Chair Larsen. That supply chain, as I
mentioned, is global in nature. So, even if we come back in the
United States and are able to have some of our suppliers
working, you know the entire industry has transitioned to just-
in-time parts and pieces because of the quality of our delivery
companies in this country. Around the rest of the world it is
not quite the same. And our supply chain is very fragile, in
that a lot of these countries have had lockdowns. And as you
get further and further down the supply chain, that then
ripples through the system.
So what we have found lately is that our demand for
aerospace products is actually forecast--is not only forecast,
but we have orders that are extremely robust. But we have had
to stretch out the delivery times, the anticipated delivery
times, because of the fact that the supply chain is still very
disrupted. So think about if airlines aren't flying, all that
cargo that is below the floor is not able to be delivered. And
we know that a lot of our cargo functions that are done by air
are completely full with consumer goods, and goods that are
ordered off of the big online stores. So we also have a
capacity constraint, because we just don't have enough airline
capacity in the air around the globe to move those parts and
pieces. So that then translates to the loss of these jobs.
And with this legislation that you have helped us with, we
can retain some of those workers, or bring back some of those
workers in this cost share and get them off unemployment. And
by that means we can keep them from filtering to another
industry, because their skills are very precious to aerospace.
Mr. Larsen. Yes, thank you.
So I have about 45 seconds left. Mr. Lyttle, could you
address the issue of concessionaires at the airports, and the
impact this has had on the folks who are running the shops at
the airport, and what you are doing to assist them? And you
have about 30 seconds, sorry.
Mr. Lyttle. Thank you for that----
Mr. Larsen. Your----
Mr. Lyttle [continuing]. Mr. Larsen. Concessions at the
airports rely heavily on passenger traffic coming through the
airport. And passenger traffic significantly declined. We had a
61-percent decline in traffic. So our concessions community has
suffered with the pandemic.
What we have done, we immediately responded by providing
relief, both rent and relief, and we did that twice during the
pandemic. And this allowed many of our concessionaires,
particularly the small and minority- and women-owned
businesses, to actually weather the storm and survive through
the pandemic. And we are hoping that we will get additional
relief with the next CARES package coming out, so we can
continue to provide this type of support and relief for our
concessionaires here at the airport.
Mr. Larsen. Thank you. Thank you. With that I will turn to
Representative Graves of Louisiana for 5 minutes.
Mr. Graves of Louisiana. Thank you, Mr. Chairman. I would
like to ask Mr. Lyttle, and perhaps Mr. Calio. There has been
talk about a national preparedness plan. But I think, at this
point, looking more toward a recovery plan might make the most
sense. As discussed, we have carried a number of actions to try
to help to sustain the capacity through this pandemic.
So, again, Mr. Lyttle, Mr. Calio, if we were to talk about
a national recovery plan, what would those metrics look like in
your eyes, in terms of moving toward an actual recovered
industry?
Mr. Larsen. Mr. Lyttle, go first.
Mr. Lyttle. OK. National recovery plan, I think the first
thing that we would have to do is to ensure that we do
everything as an industry to ensure that we restore traveler
confidence. I think, with all good intent, the airlines are
doing something, the airports are doing everything in their
best effort, as well. And I think, though, we have to have a
coordinated approach. So we have to have, for example, the
Government participating with the airlines, participating with
the airport to have a collaborative and coordinated approach to
do everything within our power to restore customer confidence.
So at the airport, for example, we will be doing the hand
sanitizer stations, we will make sure we have social
distancing. And the airlines, for example, will have mask
mandates, et cetera. But I think we have to have a coordinated
approach where--for example, the mask mandate is a very good
example of that.
We have to also ensure that we collaborate with the CDC, as
an example, and the FAA, and the Department of Health to not
implement measures such as the one that was recently being
discussed, whereby--we are looking at, for example, providing
or requiring testing for domestic travel. Because that, I
think, would not meet the requirements or the intent, but it
would actually devastate the industry. And I think we need to
really collaborate more so--the CDC, as an example--to
understand exactly what the impact will be on the travel
industry.
So, in my opinion, I really think we need to have a
coordinated approach, where it is the Federal Government, the
airlines, the airports that has a single plan, a single
approach, similar to right after 9/11, where it was obvious
that----
Mr. Graves of Louisiana. OK, Mr. Lyttle, I am running out
of time. I want to make sure we have an opportunity to get to
Mr. Calio.
Mr. Calio, could you give a quick answer? I have got a
couple more questions.
Mr. Calio. Yes. First of all, public education is
important. That is why we went to Harvard and worked with the
airports and with other airlines and manufacturers, everybody
in the industry. That education has to continue and spread.
We have to continue to create confidence by maintaining
what we put in place to keep our passengers safe and the flying
public safe. And that goes across the board. And I would
recommend to everyone, look to the recommendations in the
Harvard report.
Basically, we have got to rely on science and data, in
terms of opening the markets and going forward, and we have got
to continue the partnership with the Government that we have
had over the last 12 months, and make sure that whatever gets
put in place is based on science and data, and will not have
unintended consequences.
Mr. Graves of Louisiana. Thank you, Mr. Calio.
Captain DePete, there have been comments or questions
about--and I mentioned in my opening statement--about whether
pilots were feeling, I guess, rusty, as a result of the
decrease in flights and passenger travel. Could you speak to
that a little bit?
Do you or your members have concerns about that, and could
you talk about what you all are doing to help address that?
Mr. DePete. Sure. Thank you, Ranking Member Graves.
First off, I just want to say you helped solve that problem
for us with the PSP. It has been--to say it is a historic
lifeline, that it was a critical bridge to recovery, I mean, it
is inherently a plan towards recovery you already built, and I
thank you all for that.
In terms of the training, I am fully 100 percent confident
in the ability of our pilots. Here at ALPA, training is just
ingrained in us. It is in our DNA. And so we have been working
with all the stakeholders, with our companies, with our
regulators to ensure that the training is consistently up to
date as we bring these airplanes back awake, as we get into
recovery. We have already got a plan in place to deal with
that.
The changes that we have had in our training have evolved
over the many years since 1931, since the Air Line Pilots
Association was first formed.
But I will say this: everything good that happens in
aviation is a result of collaboration. I think Nick said it, Ed
Bolen has said it. We came together as a team, and----
Mr. Larsen. Captain DePete, you need to wrap up.
Mr. DePete. Oh, OK, sorry. I will just finish with that. I
can't overemphasize the importance of PSP to remedy that
situation.
Mr. Larsen. Thanks.
Representative Graves?
Mr. Graves of Louisiana. Thank you. Mr. Chairman, on June
2nd, Ranking Member Sam Graves and I requested GAO conduct a
study to survey the aerospace stakeholders on COVID relief and
recovery. We asked the GAO to have the preliminary results
ready by March 2021, and the GAO will be discussing those
results today, Chairman Larsen, and I ask unanimous consent to
enter the request letter into the record.
Mr. Larsen. Without objection.
[The information follows:]
Letter of June 2, 2020, to the U.S. Government Accountability Office
from Ranking Members of the House Committee on Transportation and
Infrastructure and Subcommittee on Aviation, Submitted for the Record
by Hon. Garret Graves of Louisiana
Committee on Transportation and Infrastructure,
U.S. House of Representatives,
Washington, DC, June 2, 2020.
Hon. Gene L. Dodaro,
Comptroller General of the United States,
U.S. Government Accountability Office, 441 G St. NW, Room 7000,
Washington, DC 20548.
Dear Comptroller General Dodaro:
On March 27, 2020, the President signed the Coronavirus Aid,
Relief, and Economic Security (CARES) Act (P.L. 116-136) into law to
address the COVID-19 public health emergency. This law, among other
things, establishes loan and payroll assistance programs for air
carriers and the aviation industry, which are administered by the
Department of Treasury (Treasury) in coordination with the Department
of Transportation (DOT).\1\ As the Committee on Transportation and
Infrastructure oversees the implementation of the CARES Act, and more
importantly, considers the potential for additional assistance for the
aviation industry, we are interested in having the Government
Accountability Office (GAO) obtain information on the effectiveness of
the CARES Act and in receiving your recommendations for possible
further actions by Congress, Treasury, and/or the DOT.
---------------------------------------------------------------------------
\1\ CARES Act, Pub. L. 116-136 (2020).
---------------------------------------------------------------------------
As you know, the CARES Act provides a significant amount of
assistance in the form of loans and payroll assistance to the aviation
sector. CARES Act loans and loan guarantees include $25 billion for
passenger air carriers, repair stations, and ticket agents; $4 billion
for cargo carriers; and $17 billion for businesses critical to national
security.\2\ The CARES Act aviation payroll assistance program makes
available $25 billion to passenger air carriers; $4 billion to cargo
air carriers; and $3 billion to airline contractors, including
caterers, baggage handlers, and wheelchair pushers.\3\
---------------------------------------------------------------------------
\2\ Id. at 4001 et. seq.
\3\ Id. at 4111 et. seq.
---------------------------------------------------------------------------
Given the amount of aviation-specific assistance provided, the
desire to ensure taxpayer value on any investment made, and the depth
of the impacts of COVID-19 on the aerospace sector, we are requesting
that GAO survey aerospace stakeholders to gather lessons learned and
recommendations to assist in the recovery efforts. We would like to
hear from a wide range of stakeholders including aviation labor,
airlines, airports, general aviation users, drone operators, commercial
space companies, and part 135 operators. Therefore, we request that the
GAO conduct a survey of aerospace stakeholders, and gather input from
aerospace experts on the following questions:
1. What are stakeholder perspectives on the effectiveness of the
CARES Act loan and payroll assistance programs? What do they believe
was effective and what could have made the programs more effective?
2. What are stakeholder perspectives on actions that need to be
taken by the aerospace sector as it turns to COVID-19 recovery?
3. What are stakeholder perspectives on key issues to consider for
any potential future actions by Congress, Treasury, or the DOT to
assist in the recovery effort?
We appreciate your attention to this request. Should you have any
questions or need additional information, please contact Holly Woodruff
Lyons with the Subcommittee on Aviation staff.
Sincerely,
Sam Graves,
Ranking Member, Committee on Transportation and Infrastructure.
Garret Graves,
Ranking Member, Subcommittee on Aviation.
Mr. Graves of Louisiana. Also testimony from the American
Car Rental Association into the record for the hearing, as
well.
Mr. Larsen. Without objection.
[The information follows:]
Statement of the American Car Rental Association, Submitted for the
Record by Hon. Garret Graves of Louisiana
The Board of Directors and members of the American Car Rental
Association (ACRA) respectfully submit this statement to the Aviation
Subcommittees' hearing on ``COVID-19's Effects on U.S. Aviation and the
Flightpath to Recovery.'' ACRA asks that this statement be included in
the official record of the hearing.
ACRA thanks you--Chairmen DeFazio and Larsen and Ranking Members
Sam Graves and Garret Graves--for convening this important hearing.
ACRA's members look forward to working with you and your staff as our
industry--and the nation--moves toward recovery from the most
economically devastating crisis ever faced by the nation's airport
ecosystem--an ecosystem in which car rental companies play an essential
role.
ACRA recently wrote to U.S. Department of Transportation Secretary
Pete Buttigieg urging him to form an ``Aviation Recovery Commission''
to coordinate the recovery of the entire airport ecosystem--from
airlines to caterers to airports to airport concessionaires such as car
rental companies--from the massive, negative financial impacts of the
COVID-19 pandemic. ACRA respectfully asked that a representative of the
American car rental industry be named to that Commission. ACRA
encourages the bi-partisan leadership of the House Transportation and
Infrastructure Committee to support the creation of such a commission
and to consider action on recommendations made to Congress from the
commission.
The American Car Rental Association
The American Car Rental Association is the national representative
for over 98% of our nation's car rental industry. ACRA's membership is
comprised of over 300 car rental companies, including all of the brands
you would recognize such as Alamo, Avis, Budget, Dollar, Enterprise,
Fox, Hertz, National, Sixt and Thrifty. ACRA members also include many
system licensees and franchisees, mid-size, regional and independent
car rental companies as well as smaller, ``mom & pop'' operators. ACRA
members have almost 2 million registered vehicles in service in the
United States, with fleets ranging in size from one million cars to ten
cars.
The Impact of the Pandemic on the Car Rental Industry
The COVID-19 pandemic and its impact on domestic and international
air travel has hit the car rental industry as hard as any industry in
the United States. The following statistics graphically summarize that
impact:
Car rental company concession fees paid to airports in
2020 were down 66 percent ($1.97 billion in 2019, $654 million in
2020), according to data collected by the Federal Aviation
Administration;
Car rental company concession fees paid to airports are
17.4 percent of non-aeronautical revenue at airports, according to the
FAA;
Car rentals at airport locations (which represent
approximately 50 percent of all car rentals each year in the United
States) in 2020 were down between 50 and 90 percent, depending on the
location;
ACRA members laid off or furloughed approximately 60,000
individuals in 2020--approximately 38 percent of the industry's U.S.
workforce;
Two of the nation's top five car rental companies in
terms of fleet size sought protection under Chapter 11 of the
bankruptcy code in 2020 and other smaller ACRA members have taken
similar actions; and,
In 2019, ACRA member companies purchased one of every
eight new cars sold in the United States, or 1.74 million vehicles;
this number dropped to 811,000 in 2020 (a 55 percent decline); while it
is too soon to forecast accurately the 2021 numbers, new car purchases
by ACRA members may be reduced significantly in 2021--causing economic
ripple effects through the entire U.S. economy.
Federal Relief to Date for ACRA Members
Four major COVID-19 relief bills have been enacted into law in the
last 12 months. With respect to the airport ecosystem, the vast
majority of economic relief included in these laws were directed at
airlines and their employees and airports. Some ACRA members have been
able to access the Paycheck Protection Act (PPP)program for small
businesses initiated by the CARES Act in 2020. On paper, the $600
billion Main Street Program (MSP) from the CARES Act should have
provided relief to larger car rental companies, but the Federal Reserve
Board made less than $4 billion in MSP loans to medium and large
businesses--none of them to ACRA members--and Congress defunded MSP in
December 2020.
The Coronavirus Response and Relief Supplemental Appropriation Act
(CRRSAA) enacted in December 2020 provided that $200 million of the $2
billion in airport grants in CRRSAA be used to provide rent and minimum
annual guarantees (MAGs) relief for airport concessionaires, including
car rental companies. ACRA has worked with the Federal Aviation
Administration (FAA) on the implementation of the concessionaire relief
program and commends the care and speed exhibited by FAA in
implementing the program.
The CRRSAA also included a $2 billion grant program for
``transportation service providers'' (knows as ``CERTS'') for which car
rental companies are eligible--but as of the date of this letter
neither DOT and the Department of the Treasury have provided guidelines
to implement the CERTS program. Car rental companies are regulated
directly by the National Highway Transportation Safety Administration
(NHTSA) in several ways, including a federal law prohibiting ACRA
members from renting vehicles with open safety recalls. As a result,
ACRA has a strong interest in seeing the CERTS program implemented
quickly and in a manner that provides an opportunity for ACRA members
to apply for CERTS grants.
President Biden's COVID recovery proposal, passed on February 27,
2021 by the House of Representatives as the American Rescue Plan (ARP)
(H.R. 1319) includes an additional $800 million in concessionaire rent
and MAG relief funding recommended by this Committee. ACRA members
large and small express their sincere appreciation for the support the
members of this Committee have demonstrated for airport concessionaires
in the past several months.
While ACRA applauds the larger concessionaire allocation included
in ARP, our members hope that in a final bill sent to President Biden
will follow the same approach adopted in CRRSAA so that the full $800
million is devoted to concessionaire rent and MAG relief--no matter the
size of the concessionaire. The CRRSAA approach has proven
comparatively easy for both the FAA and airports to administer and
provides more certainty to both large and small concessionaires based
on the revenues they contribute to our nation's airports.
Post-Pandemic Recovery
As President Biden and this Committee look toward post-pandemic
recovery for the airport ecosystem, ACRA believes that an Aviation
Recovery Commission that includes all of the major stakeholders in the
airport ecosystem will provide an excellent and productive forum for
government, industry and other stakeholders to come together on
consensus solutions and recovery plans. ACRA's members are the largest
non-aeronautical contributors to the financial health of our nation's
airports and must be included in such a commission.
If members of the Committee or your staff have questions or need
further information on ACRA and the American car rental industry,
please do not hesitate to contact Greg Scott, ACRA's Government
Relations Representative.
In advance, thank you for your attention to the information in this
statement.
Mr. Graves of Louisiana. Thank you, Mr. Chairman.
Mr. Larsen. And before I call on Chair DeFazio, just a
heads-up that Representative Perry and Representative Davids
will follow Chair DeFazio. So Perry and Davids prepare, and the
Chair recognizes Chair DeFazio for 5 minutes.
Mr. DeFazio. Thanks, Mr. Chairman.
Mr. Calio, as you noted, there are studies that show, if
adjacent passengers are wearing masks on a plane, that the risk
of transmission is very low. Have you heard from the airlines
since the Biden administration adopted a mandatory rule, and
are the airlines making announcements regarding that rule? Have
compliance complaints and problems abated?
Mr. Calio. Yes, Mr. Chairman, they have. As you know, we
supported the Federal mandate to back up what we were trying to
do. It puts it in a different perspective, and it has been very
useful, and for--you know, in personal experience--and I know
you have been flying a lot, as well--the quality of the
announcements has gotten better. I think the quality of the
enforcement has become easier, because it gives the flight
attendants and the pilots another tool to talk to people who,
as I think you put it earlier, like to put the lollipop in
their mouth or sip on a bottle of water for 6 hours. And other
passengers don't like that. So it has made a material
difference.
Mr. DeFazio. Yes, I wish Mr. Dickson had had the
initiative, when we asked--about a year ago. But anyway,
thanks.
Mr. Lyttle, how about airport compliance after I made the
request with Mr. Thompson to TSA? Do you feel that airport
compliance is going well?
Mr. Lyttle. Yes, and particularly at our airport, we are
way above 95 percent compliance. And, from what I have heard in
discussion with the other airports within the industry,
compliance is extremely high. And people are, in general,
adhering to the mask compliance. There are a few outliers, but
that is very rare.
Mr. DeFazio. Great. And Mr. Calio, your airlines have been
attempting to begin voluntary contact tracing. How is that
going with the legal issues and CDC?
Mr. Calio. We are still in the nascent stages, Mr.
Chairman, but it is going well. We think it is necessary and
can work, as long as there is an understanding between us, CDC,
and CBP about what it takes to make the program operate. And
providing uniform standards in place, further information, and
working out the privacy concerns, we think it will be very
helpful to opening up international markets.
Mr. DeFazio. OK, thank you. I am going to go off topic for
a second.
Mr. Bunce, I have been in touch with the new administration
regarding the misguided steps of the FCC on the C-Band auction,
which could lead to RF interference. You know, we might have a
few planes falling out of the sky, but, hey, people are going
to have faster access to streaming movies on their cell phones.
So would you expand on that just briefly, and how critical you
think it is that we have some action restricting that?
Mr. Bunce. Absolutely, Chair DeFazio. Thank you for helping
us call this to the attention of the FCC. Unfortunately, they
weren't listening in the last Congress.
And what we are asking for is some very comprehensive
testing to the impacts, particularly to rare altimeters. We use
those a lot, both in helicopters and in fixed-wing aircraft.
And if you recall back to the LightSquared issue that we had
many, many years ago, interference with the GPS, this is just a
follow-on to that.
And we all know spectrum is precious, and we all know it is
valuable, and we want this country to be very forward-leaning
with 5G technology and that, but for the safety of the flying
public and all of us that do fly, we have got to ensure that
our equipment is not negatively impacted.
The FAA used to have a very robust frequency spectrum
manager, who basically was the great authority. After a
retirement and over time, that has kind of diffused into multi-
offices within the FAA.
And so we are asking just for some very robust testing to
be able to help us prove that we are not going to have problems
with the altimeter equipment.
Mr. DeFazio. Great. Maybe we should suggest to FAA that
they appoint a point person on this very critical issue, and
really get their act together, so we can make a case to a more
receptive administration and FCC. Thank you, Mr. Chairman.
Mr. Larsen. So noted. Thank you, Chair DeFazio. I now
recognize Representative Perry of Pennsylvania for 5 minutes.
Mr. Perry. I thank the chair.
Mr. Calio, at one point the Federal assistance to airlines
was to be contingent upon the airlines agreeing to fully offset
carbon emissions by 2025--so that is 4 years--and reducing
their own carbon emissions by 25 percent by 2035, and 50
percent by 2050. Now, in my view, this appears to be the
convenient legislative opportunism to re-regulate or refashion
the airline industry in the wake of the pandemic that you
raised concerns about in your testimony.
So the one question is, or the first question is, if the
Federal assistance was contingent upon such nonpandemic
factors, how would it have impacted the ability of the airlines
to weather the crisis?
And would such a framework have impacted the number of
employees able to keep their paychecks and health benefits over
the past 12 months?
Mr. Calio. Thank you, Mr. Perry. We think it would have
negatively impacted the number of employees that we could keep
on. We didn't think it had any place in COVID relief
legislation that was designed to keep employees on the payroll,
in which all the money was going directly to employees. And
there is a place for everything, but putting these kinds of
provisions--important, in some ways; extraneous in others--on
that legislation would have had a negative impact.
I would point out that we were able to successfully fend it
off because the flight attendants, the pilots, the machinists,
the airlines all agreed that this legislation was about keeping
people's jobs, not about trying to make advances on the
environment, which I have to point out airlines have been doing
for years to a significant degree, and continue to do today.
Mr. Perry. And I agree with your answer. Now let me
continue on.
Your testimony asks Congress to refrain from adopting
punitive policies ``that will otherwise cause harm to our
debilitated industry,'' noting that ``doing so will only
hamstring our ability to recover and undermine the basic
underpinnings and purpose of the relief provided to our labor
workforce.''
According to the Bureau of Transportation Statistics, fuel
costs are one of the largest, most variable airline expenses,
representing between 15 and 20 percent of total expenses. Now,
given this large share of airline expenses, it would seem that
punitive policies impact the price of jet fuel, and would have
particularly devastating effects on the airline industry.
Industry analysts are projecting that President Biden's
policies to restrict domestic oil production will put
inflationary pressures on the price of crude oil. Indeed, the
WTI crude prices have already increased since the Biden
administration imposed a moratorium on new oil and gas leases,
translating into higher fuel costs for airlines.
At the most extreme end of a potential hydraulic fracturing
ban, as President Biden has called for in the campaign trail,
it is projected to more than double the price per barrel of
crude oil. Even less extreme options, such as extending the
existing moratorium on new Federal drilling leases, would lead
to a significant increase in crude oil prices over time.
So alternatively, the imposition of a low-carbon aviation
fuel standard or some other alternative aviation fuel
requirement would misallocate airline resources to higher
priced fuels, leading to higher overall fuel costs for
airlines. These just mandates out of thin air, while the
industry is not prepared to deal with or provide that low-
carbon fuel standard.
So the next question, can you expand upon the reasons why
these policies would be contradictory to the purpose of the
significant amount of relief this committee has provided to the
industry during the COVID pandemic, specifically focusing on
the impact such policies would have on the airlines' ability to
repay the debt incurred during the COVID pandemic, keeping
existing workers on the payroll, and offering low-priced ticket
options, as well as keeping existing services level?
Mr. Calio. Mr. Perry, obviously, fuel costs and labor costs
are our two most important items. We are sensitive to any
variation in those prices. If prices of fuel are lower, we can
do better, flying more people and all of that. So we watch what
is going on.
I am not sure that I am capable of forecasting what is
going to happen, but anything that works to the detriment of
keeping people in the air and keeping our employees on, has an
impact. And we are at a--we, the airline industry and the
aviation industry as a whole--are at a sensitive stage right
now, a fragile stage. So, we are hoping that people will look
at the impact of whatever they do, not only on the industry,
but on the traveling public.
Mr. Perry. I certainly thank the gentleman, and I yield
back the balance.
Mr. Larsen. Thank you. Before I recognize Representative
Davids, just a heads-up for Representative Mast and
Representative Titus--they will be next after Representative
Davids from Kansas, who is now recognized for 5 minutes.
Representative Davids?
Ms. Davids. Thank you, Chairman. Well, I think today's
hearing shows us just how important and wide-ranging the
impacts of the aviation industry has on our country and the
world. And, as the Representative from the Third Congressional
District in Kansas, I have to tout that Kansas is the proud
home of a very skilled aviation workforce, and that is
throughout the supply chain, including companies like Garmin,
Thales, Selex, Spirit AeroSystems, the list goes on; I only
have a couple of minutes.
I am really excited, as we look at this flightpath forward,
about the prospects of burgeoning new sectors. And we heard
that mentioned earlier during the hearing, particularly around
Advanced Air Mobility, both because of the tremendous potential
for new manufacturing in this country in places like Wichita,
Kansas, and the potential to operate with low or zero
emissions. And I am hoping that the bill that was also
mentioned earlier that I am co-leading with Ranking Member
Graves, H.R. 1339, will help set the foundation for how the
Federal Government can help work with and promote Advanced Air
Mobility.
So I think one of the things I would like to hear about,
Mr. Bunce, you discussed the importance of the international
safety cooperation under aviation bilateral agreement. And you
also expressed a bit of concern about how validation programs
are working. And I was hoping you could share with the
subcommittee a little bit more detail around what your concerns
are, and how this impacts your membership, specifically.
Mr. Bunce. Thank you, Representative Davids. Our lifeblood
is to be able to validate products across the globe, and we
have bilateral partnerships that we have established to trust
the safety competencies of Europe, Brazil, and Canada, and very
soon probably the U.K., as they stand back up their
authorities.
But when it bogs down--and we know there is going to be a
natural reaction to all of the certification scrutiny that
happened over the last year. But what is happening is
specialists on all the authorities are now diving into things
that are not new and novel, and that they actually trusted each
other previously. And what that does is it just really hampers
the ability to deliver product across the globe.
And so what we have got to do, collectively, is we have got
to build back that trust and confidence between the world's
leading authorities, so that they can basically trust each
other's work. And once we get that going again--because right
now, our pathway for validation has been stalled, and we were
seeing very good improvements up until 2020. And so this has
been a setback, and we have got to work very diligently to
bring it back to what it should be.
Ms. Davids. Thank you, I appreciate that.
And then I guess I wanted to kind of switch over to a
little bit--when it comes to the pilot preparedness--and I know
the requirements, the safety requirements, and that sort of
thing that Captain DePete, that you had mentioned. I am curious
about, just going forward, how you view some of the
requirements that we are hearing about, and what somebody like
myself, who is not a specialist, should be thinking about, and
questions that I should be asking when I have the chance to sit
down with folks from, let's say, the CDC or other public health
professionals who are trying to come up with what we need to do
to get people comfortable with flying.
Mr. DePete. Well, thank you. Thank you, Representative
Davids, for the question.
You know, airline travel remains the safest form of
transportation known to humankind in the history of humankind.
When you think what we have accomplished--and we have all done
it by collaborating, I keep hitting on that. And it is no
different here.
We have adopted a layered approach to handling the COVID
crisis. I wish that there were earlier interventions on the
part of Government to help us along, but when that didn't
happen, we joined all together, and we created what we think is
a really good series of mitigations.
And when you look at possible transmission, say, in the
instance of a virus, it is very--I mean, out of 1.2 billion
flights--and this was prior, now, prior to masks being
mandated--there were very--I mean, like, a minute number of
transmissions. So we have done a remarkable job, and our
industry has done a remarkable job of instituting new
technologies. We have worked with----
Mr. Larsen. Captain DePete, I need to ask you to wrap.
Mr. DePete. OK, thank you. I am sorry.
Ms. Davids. Thank you, Chairman.
We will talk more about it, Captain. I yield back.
Mr. Larsen. Thank you.
Representative Mast from Florida, you are recognized for 5
minutes.
Mr. Mast. Thank you, Chairman.
Mr. Bunce, I don't have a question for you. I just wanted
to say please tell Megan and Ashley that I say hello. For those
of you that don't know, he has two daughters that have done
absolutely yeoman's work in helping injured servicemembers
recover from their injuries. So just a truly patriotic family.
I appreciate your work. Say hello to your daughters for me, if
you would.
I want to go to Mr. Calio and Mr. DePete for a couple of
questions here. And this is a little bit of a general question.
You touched on it just briefly, Mr. DePete, saying you wish
there had been some interventions earlier. And I look back at
what some other agencies have said, such as the World Health
Organization, advising against any sort of travel, or trade
restrictions, at one point. And I would ask you guys to go
back, just go back exactly 12 months, so that we can look
forward for the next time that something like this happens--God
forbid it should ever happen again.
Could we have prevented the distrust by traveling
passengers to want to get on an airline?
Could we have prevented the businesses not having people
travel around the country or the world?
Could we have prevented the $54 billion a year loss, if you
do the math on what you were saying, $150 million a day, $54
billion a year.
What could have actually been done? Could that have been
prevented, or only limited to some degree?
I would ask you two to espouse on that a little bit, if you
could, for----
Mr. DePete. Thank you for that question, and a very
important one. Yes, I absolutely would say yes. And that is why
we support the National Aviation Preparedness Act. We did it in
the 116th Congress. We are doing it again in the 117th, when it
is, hopefully, reintroduced, because it is important for us to
look back and see what we have learned and debrief this as we
go forward.
However, let me just say this. Without a standardized set
of guidelines, it was very confusing, in my estimation, and the
view of the Air Line Pilots Association, for the flying public.
Right? Having one clear standard, I think, would have allowed
us to build trust early, OK?
And there was a lot of confusion. There was a lot of
confusion, politically, about wearing a mask, and all these
other associated problems that we dealt with. So the answer to
your question is a most definite yes.
And I think we will be able to do a debrief, once this is
said and done and recovery is complete, and I think we will all
be able to learn from it through collaboration and
coordination. Thank you.
Mr. Mast. Mr. Calio, I heard you speak. If you want to take
about 30 seconds or a minute, I do have a few more questions,
but please respond if you----
Mr. Calio. Yes, I think we could have done better. There
was a lot of confusion. It was a new issue, a new pandemic, so
that is understandable in that regard. But right now, we are
still sorting through that.
We have so many different standards within the United
States and across the world that somehow we need to focus on
how to standardize this, so people are not confused about where
they can go, what they can do when they get there, and how the
rules apply. And that is a current problem. And we have to be
prepared for that in the future, so we can avoid it, but we
also need to sort through what is going on right now.
Mr. Mast. Yes, thank you, sir. And I would go back to both
of you on this.
Now, there has been a lot of talk about requirements for
testing, and I have heard various groups speak out against
this. However, as you talk about this patchwork that exists
around the country and largely around the world, whether pilots
are being detained, or crew being detained for quarantine or
other things, there are some airlines right now that are
running apps--I believe Qatar, Emirates, a few others that are
running apps right now--to verify whether passengers had a test
or a vaccine.
Now, let me go on record as saying I do not think that
these should be requirements at all for travel, a test or a
vaccine. But with some airlines running apps to track whether
this has occurred, and talking about standardization at the
same time, what do you see going on, in terms of the potential
of a push for that across the aviation industry, which I do not
want to see?
Mr. Calio. I think it is something that we are looking at,
Congressman, in an effort to open up markets and give people
the freedom to fly. We have some of our members looking at
apps. We have a set of criteria, which I will be happy to share
with you offline, about if there is going to be such a thing,
what kind of standards have to apply and how you would do it.
All of these things are looking at limited timeframes in
order to, again, deal with the current pandemic and to open
markets so that people feel safe and are able to fly.
Mr. Mast. Thank you, Mr. Chairman.
Mr. Larsen. Thank you. Before I move to Representative
Titus, a heads-up--the next two after that will be
Representative Van Duyne and Representative Payne.
I recognize Representative Titus for 5 minutes.
Ms. Titus. Thank you, Mr. Chairman. I appreciate the
hearing.
Mr. Calio, it is nice to see you back in front of the
committee. It is good to see you, have you here. You have
talked about how domestic travel is having a relative recovery.
Businesses and the industries and attractions are all adapting
to the COVID protocols. But international travel remains
anemic, due to the restrictions here in the U.S. and abroad.
Just in my district alone, international travel is down 93
percent from January of 2020. And I don't have to tell you how
devastating that is to the economy.
We know that, although international travelers make up a
small percentage of the market, when they come, they stay
longer and they spend more. So it is important. We are moving
into a new phase of the recovery now, as the vaccines roll out.
Places are opening up, the hospitality is advertising, ``Come
back, we are back.''
At some point, the international travel restrictions are
going to ease, but I think we still have a public relations
problem with international travel. We have had 4 years of a
President who has alienated our allies and our business
partners, trading partners, and then totally botched the COVID
recovery. And now we are left here with a bad reputation and
the worst death rate in the country.
So I wonder about things like Brand U.S.A. That was created
over a decade ago as a public-private partnership, and it has
been very effective. I wonder if you could talk about that
partnership, and also maybe some of the other ideas that your
organization and the industry have in order to bring back
international travel once we get over this situation with the
virus.
Mr. Calio. Thank you, Congresswoman. And it is good to be
before the committee again. I am looking forward to the time
when I can do it in person again.
International travel is lagging terribly. And as you know,
that is probably the most profitable part of our business. And
so we have tried a number of things in terms of looking at
testing, looking at contact tracing. We are working with the
travel industry, in general. We are all working together to try
to bring it back, to let people know that, at the appropriate
time, it is safe to come here, and that you should come here.
That again gets back to, though, this patchwork,
internationally. We are in close touch with our partners in the
EU. And within the EU there are all these different standards.
So it is going to take all of us, with an education process,
going forward and making people feel welcome.
Ms. Titus. Thank you, and I think it is a challenge, so let
us know how we can help with that, and see if we can't beef up
Brand U.S.A. and other programs like that to get that message
out.
Mr. Calio. Thank you.
Ms. Titus. Thank you.
Mr. Bunce, I would like to ask you about general aviation.
In Las Vegas, we depend a lot on general aviation. A lot of
people come there for pleasure, or for business--or did. You
mentioned in your talk that your sector is trying to be more
responsive to your contributions to global climate change.
One of the things that we have found, unfortunately, is
kind of a chicken and an egg problem. The manufacturers will
create a product that uses alternative energy, but then on the
ground we don't have the infrastructure for refueling or
recharging. I wonder if you could discuss what role things like
sustainable aviation fuel and electric airplanes are playing,
and if you have established a symbiotic relationship.
Mr. Bunce. Representative Titus, you called it exactly. As
we look out to the future--and reality gives us the fact that
we will not have large cabin aircraft running on electric any
time soon. NASA just released a picture of an aircraft about
the size of a Q-400, so a large turboprop, and they are saying
about 2035.
So, if we are looking at larger aircraft, business jets and
turboprops, but then on--in the commercial side, we have to
have sustainable aviation fuel. And that is why your help in
being able to spur supply for this product is very important.
As Mr. Calio mentioned, the airlines are very price-
susceptible to that price of fuel. Our sector, in business
aviation, there is a big effort right now on corporate
responsibility and sustainability. So there is very high
demand, and we are able to--although we use a small percentage
compared to the commercial airlines, we are being leaders in
the demand for this product, because we know our future is tied
to being able to fly sustainably.
And so we are seeing a push in Europe. We are seeing a push
in the U.S. Demand is high, but supply is just not there, and
that is where this----
Mr. Larsen. Mr. Bunce, if you could, wrap up, please.
Mr. Bunce. That is why that blender's credit is very
important to us.
Ms. Titus. Thank you.
Thank you, Mr. Chairman.
Mr. Larsen. Thank you. I want to recognize Representative
Van Duyne from Texas, a new member of the full committee, and
this being her first Aviation Subcommittee hearing.
Welcome to the subcommittee.
Ms. Van Duyne. Thank you very much, Chairman Larsen and
Ranking Member Graves, for holding this necessary hearing
today.
The district I represent, Texas' 24th Congressional
District, is home to DFW Airport. It is also home to American
Airlines. And right outside the district is Southwest Airlines,
having the largest number of aviation employees in any district
in the country. DFW Airport is also the number-one economic
driver for the State, and it became the busiest airport in the
world during the pandemic. But make no mistake, COVID-19 still
wreaked havoc on it.
Two thousand twenty was the worst year for the DFW Airport
in more than three decades. The 40 million passengers who
traversed the airport last year were the fewest since 1985, and
when planes aren't taking off and landing at the airport, it
isn't just airline carriers being affected. The entire
ecosystem supports the airport, but feels the pain, from the
mechanics to the service workers, to the small businesses that
depend on high passenger volume.
And obviously, through no fault of their own, the aviation
industry is hurting. And while the stop-go solutions Congress
has enacted during the pandemic have been helpful, the only
long-term solution is opening the skies back up for business.
I am thankful for our witnesses being with us today, and I
hope we can work together on this committee to support and not
harm the industry as it rebuilds after this horrific pandemic.
Over the last several years, Government regulations have
really helped erode the passenger experience. We have all seen
videos over time of families, coming back from Orlando and
having screaming kids that are kicked off the plane because
their 2-year-old won't wear their mask. People have a choice to
travel. And if it is painful, they are going to decide not to
do that.
Mr. Calio, I am going to ask you. What effect do you
believe that mandating flight attendants to enforce constantly
changing pandemic requirements has had on these recovery
efforts?
And do you believe adding additional policing requirements,
such as mandatory testing, will help or hurt the recovery
efforts?
Mr. Calio. Mandatory testing was an easy one,
Congresswoman. That would be devastating to the domestic
market.
In terms of enforcing the face mask requirements, we think
it is a necessity. And the videos that you see really represent
a very small portion, a minute portion of what actually goes on
in day-to-day flights. And there is a lot to every story. I
can't speak to each one of those, but we do know that it is
important for all of our passengers to uniformly enforce the
face mask requirement.
Getting back to mandatory testing, we are doing it in an
effort to--because it is scalable, currently, on an
international level. But if it were to be imposed on a domestic
basis, it would bring the market to a flat halt.
Ms. Van Duyne. What do you believe is an approximate
timeline for a full return to normalcy for commercial airline
passengers and passenger capacity and revenues?
Mr. Calio. I would be in high demand if I could actually
answer that.
[Laughter.]
Mr. Calio. But as one of my board members--in fact, Gary
Kelly from Southwest--said to me the other day, we can plan,
but we can't forecast. And what he means is the forecasts have
all been wrong. It depends on so many different variables. Yet
the airlines have to plan.
So, you know, you are likely to see, probably, an excess--a
number of seats in the market over the summer, in case people
do come back. But if they don't get filled, that exacerbates
the--I mean, we are thinking--we are hoping that there is going
to be a significant uptick by the end of the summer and
throughout the fall. We are not going to see anything close to
2019, we don't think, until 2023 or 2024. We would like to see
it earlier.
You know, we need also--and part of that--leisure travel,
domestically, will come back first. We need the international
travel that Congresswoman Titus talked about to come back, and
we need business travel to come back, where people will go
again and sit down and cut a business deal face to face.
Ms. Van Duyne. Excellent. Thank you very much.
Mr. Calio. Thank you.
Ms. Van Duyne. Mr. Bolen, like you, I am very concerned
about the future of health-related regulations for airlines. In
the full committee's markup on the budget reconciliation bill,
I was proud to sponsor an amendment that didn't----
[Audio malfunction.]
Mr. Larsen. Mr. Bolen, could you mute until the question is
over? We are just getting some feedback out of your microphone.
Thank you very much.
Ms. Van Duyne. Thank you. In the full committee's markup on
the budget reconciliation bill, I was proud to sponsor an
amendment that didn't allow funds in the act to go towards a
program mandating that passengers provide a negative COVID test
before domestic air travel.
What are some other regulations we should be worried about,
both in the short and long term?
Mr. Bolen. Well, I think that is a good example where we
were looking at a requirement that was really not something
that we have an infrastructure to address. And so I think,
going through this entire process, we have been working on
things that we can do together, ways to move forward with that
layered approach that Captain DePete talked about. So we are
learning as we go.
But I think it is important, when it comes to mandates and
requirements, we make sure that we have an ability to actually
go through with that. And that is why I think the testing
requirements [inaudible] the domestic level are so important.
Ms. Van Duyne. All right. Thank you very much.
I yield back the balance of my time, Mr. Chairman.
Mr. Larsen. Thank you. And next I will recognize
Representative Payne from New Jersey.
Representative Payne, you are recognized for 5 minutes.
[Pause.]
Mr. Larsen. Yes, Representative Payne, you are recognized
for 5 minutes.
Mr. Payne. Thank you, Mr. Chairman. I apologize.
[Pause.]
Mr. Larsen. Sorry, Representative Payne, are----
Mr. Payne. Let's see.
Mr. Larsen. Yes.
Mr. Payne. Yes, hello?
Mr. Larsen. OK, great. Go ahead, yes. Five minutes.
Mr. Payne. Thank you, sir.
Mr. Calio, I am deeply concerned about the pandemic's
effects on the workers at my district's Newark Liberty
International Airport. These workers depend on the Payroll
Support Program during this historic decrease in air travel
over the past year.
I am pleased that we have taken several steps to extend the
PSP since the pandemic began, including funds in the American
Rescue Plan that we passed last week. Can you please share with
us how PSP has allowed companies to avoid massive layoffs?
And what steps can we take to guarantee the money continues
to support workers?
Mr. Calio. Congressman, thank you. Again, PSP, we believe,
is the most successful provision in the CARES Act. It has done
exactly what it was intended to do: it has kept workers online
and on the payroll. That means they are not collecting
unemployment, they are paying taxes, paying Medicare taxes, as
well as Social Security. The program has worked as intended.
You know, if anything, if it could work better, it ended up
being 70 percent grants, 30 percent loans. So it covered--you
know, in the first tranche it covered probably about 70 percent
of the airlines' costs and keeping their employees online.
The simplest thing to do is have the Senate pass the
extension. It will keep people online again until September
30th, and it will avoid many, many layoffs. It is, again,
successful at keeping people working and avoiding a lot of
furloughs and layoffs that otherwise would have had to happen
because of where demand is.
Mr. Payne. Thank you.
Mr. Lyttle, as you know, many of the workers that are
employed by the airport and not one of the airlines, they can
be forgotten when talk about financial support and job
protection is spoken of. What specific supports are necessary
for all the people who work at the airport and not just the
airlines' employees?
Mr. Lyttle. Thank you, Representative Payne. The industry,
aviation industry, lost about $23 billion last year, and we are
forecasted to lose $17 billion this year.
The CARES Act monies that were afforded to us allowed us,
for example, to provide relief to our concessionaires at the
airport, but not only the airport concessionaires. That allowed
us to provide relief to the airlines, to taxi operators, to all
the concessionaires, basically, at the airport, rental car
companies, et cetera. That allowed them not to have to lay off
any employees or to provide furloughs for a lot of the
employees.
So it is critical that we continue to get this type of
support so we can provide this relief to the other tenants here
at the airport, because our survival actually depends on their
survival, as well. So we lost about $350 million last year, and
without the CARES Act we would have had to lay off people at
our airport, as well, which, throughout the entire 2020, we did
not have to do any layoffs.
Mr. Payne. Thank you. And I would just like to remind my
colleagues that this PSP program, really, it does benefit
passengers, but it is there to benefit the working people at
the airports. And let's continue to make sure that everyone is
considered during this pandemic, and not just the airline
workers, but everyone at the airport.
With that, Mr. Chairman, I will yield back.
Mr. Larsen. Thank you, Representative Payne. And I have got
to tell you, not everyone can pull off a bow tie with a golf
shirt, but you certainly can, sir.
Two announcements: First off is that, in order, we will
have Representative Stauber, Representative Brown, and
Representative Balderson; and the second is, although votes
have not yet been called, there was a note that votes would be
called sometime between 11:30 and 11:45. Just a heads-up for
the committee folks.
So with that I will recognize Representative Stauber for 5
minutes.
Mr. Stauber. Thank you, Chair Larsen, thank you, Ranking
Member Graves, for holding this hearing.
You know, there are some concerns that that I have. And one
of them is the CDC still recommends that people delay travel as
much as possible.
And then there is the Department of Defense study that
found--in quotation marks--``overall exposure risk from
coronavirus is very low''--end of quotation--and that you would
have to sit next to a COVID-positive passenger for 54 hours to
get infected with airborne COVID-19.
Since this pandemic I have had the privilege to fly several
airlines and out of my hometown of Duluth, Minnesota. I fly
Delta. And I can tell you that I feel very, very comfortable,
and not only in the airports, in the smaller airports that I
frequent, but also boarding the plane.
I think the airline industry has done a real, real good job
under difficult circumstances to make sure that the passengers
and those feel safe. And I can say that it has been almost a
year now, and I think the airlines have been put in a difficult
spot, but coming out of it. And I appreciate all the
professionalism that you have shown.
The HEPA filters, for example, these are the same filters
that are in our hospital surgical rooms. And I think that it is
important that we recognize the advancement made in not only
aviation safety, but aviation air quality, as well.
I would like to just make a comment to the fact--and this
is to Nick. I will ask the question in just a moment, but I
also want to add that, as Governors across the State, when they
shut down their entire States, and the flying is limited or
stated to delay your flying, that is also an economic hardship
for those aviation workers. My colleague just mentioned the
workers at the airports and the airlines, they get laid off. So
there is a double whammy effect. You get laid off, you lose the
income. So that is putting two negative things that happen. You
get laid off, economy bad, you lose your income.
And I think that it becomes a public health crisis, in that
the secondary effect of a shutdown is poverty. So we have two
crises going on, not only COVID, but the poverty, because you
are taking their livelihood away, the ability to make a
paycheck, which we call paycheck justice.
I will say this to Nick. I just want to ask you something,
and I may have talked to you before about this--and others. The
wearing of the masks is extremely important while you are
flying. Under the Americans with Disabilities Act and/or
certain medical conditions--I am just going to give you an
example. If you had a child who, for instance, has Down
syndrome, a lower functioning child. Let's say the family goes
on vacation, and the child can't wear this mask continuously
because of the disability. How would most airlines respond to
that, and how many cases has this happened?
Because I am reading that sometimes with babies or
whatever, or younger children can't keep them on. But can you
tell me, if there is a disabled individual on the flights, how
would you handle that?
Mr. Calio. Thank you, Congressman. All of our members
operate in their own way, they all operate within the
guidelines that the Government has provided. We are in the
midst of a pandemic, and we hope that it is not going to go on
forever.
But again, the members make their own determinations, and
it is based on the science of mask-wearing, and what they can
do. But there are guidelines from the Government, and we stay
within those guidelines as we make a determination about who
should and who should not wear a mask.
Mr. Stauber. How about somebody who has a medical issue
that actually can't put the mask over--let's say they have
asthma, or something. Would the airlines association request
that they not fly, or would there be any type of
accommodations?
Mr. Calio. Again, that is up to individual members. But for
right now, I think many are saying that they should not fly.
And the reason is because we have to protect the health of all
our crews and all of our passengers. And the determination is
that you need to wear a mask.
There is also an aspect of it where other passengers get
upset if somebody is not wearing a mask.
Mr. Stauber. Thank you, Nick, and thanks for all the good
work.
And I yield back.
Mr. Calio. Thank you very much, I appreciate it.
Mr. Larsen. Thank you. I recognize Representative Brown of
Maryland for 5 minutes.
Mr. Brown. Thank you, Mr. Chairman. I want to thank our
panelists for bringing your experience, your knowledge, your
perspectives and observation to this committee today.
Captain DePete, I have a question for you. In your
testimony you mention--this is your written testimony--that
``central to the rationale for the PSP is keeping pilots and
other mission-critical employees available to respond quickly
as demand returns to the industry.'' You say that ``pilots
cannot simply return from unemployment to operate airline
aircraft; they are subject to recency training requirements and
medical approvals and safety clearances.''
As a former Army pilot, I certainly appreciate and
understand the idea, the concept of diminishing skills, and
that time away from the cockpit can contribute to just that,
and put at greater risk both pilot and crew and passengers in
flight operations. So, Captain DePete, when a pilot is
furloughed, how does that impact their ability to get back on
the job once they are rehired? Kind of share with us a little
bit about sort of diminishing skills, and why we need to keep
pilots and aircrews flying.
Mr. DePete. Thanks for the question, Representative Brown.
Good to see you again. Great question.
Thankfully, we can say that, through the hard work of this
committee, with PSP, you have made that pretty easy for us. We
haven't really had to deal with that too much. But, you know,
if March 31st goes by and we don't have a solution, we may be
looking at more of a problem there.
But however, the way the training works and the
certifications work is that, the longer you are out, right, the
more the training is required to come back in. However, saying
that, the training is exactly the same. You will be 100 percent
ready to go and do it again. I mean, we train to the very
highest standards.
But I think that is the important thing to realize, is
that, if we want a rapid recovery, it is so important that we
get this next installment of the PSP so that we don't have to
deal with those kinds of issues. Because the longer it takes to
spool up, if we are faced with an accelerated curve here pretty
soon, as we begin getting into recovery, we want to be ready
for that.
And I would say just ask yourself one question. If it
wasn't for the PSP, and it wasn't for a healthy airline
industry, what would COVID have really looked like? It was bad
enough. But could you imagine if we didn't have the PPE, the
ventilators, we didn't have those supplies coming in, moving
healthcare workers left and right, and saving the holidays for
people to be able to ship things, and food on shelves. I mean,
it would have been disastrous.
What I am trying to say, Representative Brown, is you did a
great thing, and the committee needs to be rewarded for that.
Hats off to you.
Mr. Brown. Well, thank you. Thank you for your response.
Let me go over to Mr. Calio.
In your written testimony you mention that U.S. airlines
have implemented multiple layers of measures aimed at
preventing virus transmission aboard the aircraft. You also
outlined a number of those today, including strict face
covering requirements, preflight health forms, enhanced
disinfection protocols, and hospital-grade filtration systems.
Can you talk a little bit about the challenges that the
airlines are facing in sort of implementing those safeguards
and those measures?
What has that experience been like?
Who is primarily responsible for implementing those, and
what has been the response from the flying public?
Mr. Calio. I guess I would start at the end, Congressman
Brown. The response from the flying public has been very good.
We all know that some people don't like to wear masks, but the
visibility of the enhanced cleaning procedures has been very
well received. Knowledge about the HEPA filters has been
extraordinarily well received, because most people didn't know
that, or didn't understand that.
And, you know, it takes more for us. It takes more--you
know, using our employees more. It maybe takes a little longer
to turn an airplane around. But these are all measures that we
view as worthwhile, because of what they are producing in terms
of the health and safety of our passengers and our crews.
And like I said earlier, we have leaned very heavily into
the science. And any decision that is made is based on data and
science. When we engaged this Harvard study, we made sure it
was independent. That wasn't always easy. But they made some
recommendations about ventilation during boarding and
deplaning. We all now do that now, what they recommended.
In terms of how we board and how we deplane, we are
trying--behavioral comes into that, because you can tell people
to, you know, deplane by the row, but you still have people who
want to get up and knock you over to get off the plane first. I
can tell you that from personal experience, I am not that big a
guy.
So at any rate, it takes a lot more effort, but they are
not going away. They are going to be in place forever, because
they made the flying experience better and safer.
Mr. Brown. Thank you.
And thank you, Mr. Chairman. I yield back.
Mr. Larsen. Thank you. I recognize Representative Balderson
for 5 minutes.
Mr. Balderson. Mr. Chairman, thank you very much.
Thank you for our guests joining us today. My first
question is for Mr. Bolen.
How are small business owners and operators recovering from
the pandemic, and how does their recovery look, going forward?
Mr. Bolen. Well, I appreciate the question very much,
because, as I said before, 85 percent of the companies that
rely on business aviation are small and mid-sized companies.
And our infrastructure is often in small towns, individual
airports. And so it is a very fragile infrastructure.
But the PSP program has been enormously important to us,
the ability to keep general aviation airports with some degree
of operational revenues coming in, the opportunity to keep
aviation professionals who we have invested heavily in for
their training, to keep them active, all of that has been
fundamental to our ability to survive the COVID crisis.
Going forward, though, we need business travel to come
back. We need the economy to be strong. And we are hoping that
the steps that we are taking now can get us there.
Mr. Balderson. Thank you very much, Mr. Bolen. My next
question is for Mr. Calio.
Mr. Calio, thank you for being here. We have previously
discussed the ongoing pilot shortage in the United States. Even
with the pandemic-related downturn airlines have faced in the
last year, Boeing predicts North America will need over 200,000
new pilots by 2039. Do your member airlines remain concerned
about a shortage of pilots and maintenance technicians?
Mr. Calio. Thank you, Mr. Balderson. Right now, I would be
candid and say that our main concern is survival. And the pilot
shortage is not what it was, given the number of flights that
are in the air.
Hopefully flying comes back, and it will be, and there is a
number of steps that have been taken and are being taken to
ensure that that pilot supply is plentiful, and that is
reaching down to schools and educating people about the
advantages of becoming an airline pilot or a machinist. These
are really good, good-paying jobs with really good benefits.
And they last a long time. Our average pay, all the way down
the line, for all of our employees, is higher than most other
industries.
I guess I would make kind of a comment that one thing that
Congress could look at is, if you can get a student loan to
become an accountant, why can't you get a loan, or why can't
the Government back someone who wants to be a pilot? Pretty
simple matter. Right now, it doesn't exist. So that may be
something we can talk about that would help ease that pilot
shortage, going forward.
Mr. Balderson. A followup, how can the Federal Government
and your airlines work together to ensure there is a pool of
qualified individuals in the aviation industry in the future?
And I think you just brought up a great point.
Captain DePete, I would also--if you could extend your
thoughts on that same issue, since Mr. Calio gave a really good
thought.
Mr. DePete. Sure. Thank you, Representative Balderson.
No one is more invested in the future of the profession
than the Air Line Pilots Association. We have a professional
pilot development group that consists of our leadership,
membership, and education committees. We have various LOAs with
schools around the country to encourage people to come into the
profession. And we are constantly building and protecting the
profession to make sure that it is a profession that people
want to come to. Because when we talk about the word
``shortage,'' I think we need to ask ourselves a little
question as to, when this is all said and done, as to why.
Where are the choke points for that happening?
When you look at what goes on in the smaller carriers right
now, there is a tremendous amount of turmoil there. We have
lost ExpressJet, we have lost Compass, we have lost Trans
States. It is a very unstable entry point into the industry. So
we think we need to really tackle some of the bigger issues as
to what the real reasons for the shortage are.
And then now, when we do get--how am I doing on time? OK.
When we do get the recovery going, I think, with all the people
who took voluntary outs to help their fellow pilots and
companies to survive, we will need to look at that question.
But together with what we are doing with professional
development, our diversity and inclusion efforts here at the
Air Line Pilots Association, I think we will be in pretty good
shape.
Mr. Balderson. OK, thank you very much.
Mr. Chairman, I yield back.
Mr. Kahele [presiding]. Great. Thank you, Mr. Balderson.
The Chair now recognizes Mr. Stanton for 5 minutes.
Mr. Stanton. All right, thank you very much, Mr. Chair.
Thank you to each of the outstanding witnesses in today's
hearing.
In my home State of Arizona, the COVID-19 pandemic has had
a major negative impact on two key economic engines for our
State and region: Phoenix Sky Harbor International Airport, as
well as Phoenix-Mesa Gateway Airport. After a year in which Sky
Harbor had a record 46 million passengers, boardings in 2020
dropped by more than half. We haven't seen that level of
boardings in over 30 years.
March is typically one of the busiest months in Sky Harbor.
Yet with many major events delayed, or with limited attendance,
recovery continues to be slow. Fewer passengers, of course,
means less revenue from concessionaire sales and revenue from
parking, as well as fees from companies operating at the
airport. Just to break even in this challenging time, the
airport must reach 80 percent of the passenger boardings it had
in 2019.
Even with the support provided to Sky Harbor and other
airports under the CARES Act and the December COVID relief
package, the airport has had to significantly trim costs,
reducing its operating budget by $30 million this year and next
in anticipation of sustained revenue losses.
In addition, Sky Harbor has placed on hold 80 percent, or
$800 million worth of capital projects that were planned for
the next 5 years. This not only delays much-needed
infrastructure improvements, but thousands of potential
construction jobs, as well.
Similarly, Phoenix-Mesa Gateway Airport has seen passenger
boardings plummet, concessionaires operating on half capacity,
and infrastructure projects delayed.
I have a question for Mr. Lyttle.
Mr. Lyttle, let's talk about infrastructure at airports for
the moment. Can you discuss the importance of the additional
airport funding in the American Rescue Plan to support current
and future infrastructure projects at your airport and at
airports across our country?
Mr. Lyttle. Yes, thank you. The additional funding that we
are hoping that we will get from the American Rescue Plan is
going to go a long way to help us. We have a significant amount
of debt service. These are fixed costs, debt service and
operating costs, not only at my airport, but airports across
the industry. We are really looking forward to getting,
hopefully, that additional $8 billion for the industry.
We still have infrastructure, major infrastructure
projects, that we are undertaking right now. Even at my airport
we have $3.7 billion worth of construction. And we expect that
traffic will return. The industry has always been resilient,
and we know that it might take longer for this one, but traffic
will come back, and we have to make sure that we have the
facilities in place in order to accommodate the traffic that is
coming back.
And so the American Rescue Plan additional funding that the
airports will be getting will be sorely needed for us to
continue our operations.
Mr. Stanton. Thank you very much, and a quick question for
Mr. Calio.
As more COVID vaccines are administered, governments around
the world are exploring the use of digital health passports to
encourage travel and facilitate a return to normalcy.
Congressmember Mast asked a similar question, but I wanted to
follow up on that. What are your thoughts about a digital
health pass, and what necessary safety elements need to be in
place before current travel restrictions are lifted?
Mr. Calio. Thank you. We think that verifiable testing and
vaccination data is critical to the return of travel. We do
believe that there are principles that should be applied across
the board to make this workable and protect the rights of
passengers.
We would be happy to brief the committee on where we stand
on this, because we have laid out a series of elements that we
think ought to be in place to make these health passports both
workable and as easy on passengers as possible.
Mr. Stanton. OK, we will look forward to following up with
you.
Mr. Calio. We will do that.
Mr. Stanton. And there may be an opportunity for you to
brief this committee, because I think digital health passes
provide some optimism about speeding up the process of
returning to normalcy in the industry.
I yield back.
Mr. Kahele. OK, mahalo, Mr. Stanton. The Chair now
recognizes Mr. Nehls for 5 minutes.
Mr. Nehls. Thank you, Chair. My questions or comments are
really geared towards Mr. DePete.
And I want to thank you for what you do, representing the
59,000 members in the airline industry. Your comments regarding
this committee, this subcommittee, and the support that you
have received with the PSP program, this is all about a
partnership and doing everything we can to keep the airline
industry and the American people flying.
My comments or questions are more geared to your written
testimony as it relates to international travel. And in your
written testimony you talk about some of the airline employees,
whether they are pilots or crewmembers. You reference Hong
Kong, and the horrible conditions, the substandard conditions
in some of the hospitals where the pilots that have tested
positive for COVID are locked in some of these hospital rooms
with other patients in deplorable, substandard--government
orders for days, one of the employees being detained for 3
weeks. And you mentioned in your written testimony that you
believe that the Government should intervene or do something
about this, and I wholeheartedly support that idea, that when
American citizens--when your members, employees are in foreign
countries, and they test positive for COVID, that we should try
to find a way to help get those people safely evacuated back to
the great U.S. of A.
It is not only those that have tested positive for COVID,
but some of the stories I am hearing regarding employees that
are flying into foreign countries. An example--I am hearing
stories about, you know, Tokyo and Seoul, where the pilots and
crews are being escorted to their hotel, and then they are
locked in their hotel. And it can be for days, because these
layovers could be 3, 4, or 5 days.
Even worse, I have heard a story--and whether--it is
Sydney, Australia, where police are escorting the crew and the
pilots to a hotel. They are locked in their hotel room without
the key, and they can't leave their hotel room. And I can't
imagine what it would be like to be in that condition for 3 or
4 days, knowing that you are eventually going to have to take
the flight back.
How has this type of treatment overseas affected your
members? Has it affected the morale, or maybe operations?
Are you seeing more employees saying, ``I am calling in
sick, there is no way I am going back to Sydney, Australia''?
If you could, help me with that. And what can we do to help
you?
Mr. DePete. Thank you, Representative Nehls. That is a
great question. And it is a problem. And you laid it out quite
well.
Upon entry of our crews, say, for instance in Hong Kong,
for example, they are administered a test. If they come up
positive, they are put in Asian World Expo Center for an
unlimited time, mixed up with other people who are COVID-
positive. If they are in close contact with somebody who was
COVID-positive, they are brought to Penny's Bay, another type
of facility like that.
There are often times that we have heard from our crews
that the conditions are deplorable. I have pictures of them
that you just wouldn't believe.
In addition, if there is additional testing necessary, they
are now drawing blood from these pilots, several vials, often,
in a day.
This strikes at the very heart and the dignity of work. And
in terms of the effect on the pilots' morale, it has a
deleterious effect. I mean, our pilots are now--every time they
start to let down and enter the airspace, they are wondering if
they are coming home again. And we do need help. We have been
talking to our carriers to try to work out a solution. The
solution is to just stop the layovers in Hong Kong, in that
specific instance, until the situation improves. And we could
use the help of the committee, for sure. We can use the help of
our carriers to consider that, as well.
But hopefully, in this new administration, we are looking
for a glimmer of hope in this situation, because these are the
very people who put themselves in harm's way to make sure that
those PPE, ventilators, and healthcare equipment came back to
us. So we do need the help, and I appreciate the question. I
appreciate that.
Mr. Nehls. Thank you, Mr. DePete, for that answer. And you
have my attention, and I hope you have the attention of the
other members of this committee. But thank you for being with
us today.
Mr. Kahele. OK, thank you. The Chair would now like to
recognize Mr. Lamb for 5 minutes.
Mr. Lamb. Thank you, Mr. Chair, and thank you to all the
witnesses for joining us today. I want to start quickly, if we
could--and I apologize if you covered this while I was off--the
issue of vaccinations for frontline airport workers, in
particular the TSA.
I am aware that, at least in Pittsburgh International,
where I represent, most of them have not had the opportunity to
be vaccinated. I don't know if the picture looks different
around the country, but, given the amount of contact that they
have to have every day, and their importance to our national
security--are you aware of how that process is going, overall,
and anything we can do to speed it up, besides just increase
the vaccine amount, which we, of course, are trying to do?
And that is just a question for any witness that can tell
us about progress or challenges.
Mr. Calio. OK, Congressman, I will take a crack at that.
TSA workers are, obviously, essential workers. They ought
to be frontline, in terms of getting the vaccination, in our
view, just as we believe that pilots and flight attendants and
machinists should be, as well, because it is all part of an
ecosystem. And it would be good to lend some rationality to who
is and who is not a frontline worker. Given the demand for
vaccination, you can understand the problems, but we do believe
that we could do better, that the TSA workers ought to be
frontline, as should our crews.
Mr. Lamb. I agree. My hope is that, with the addition of
Johnson & Johnson now, TSA in particular will be prioritized,
the way the teachers are in some States that are getting those
additional vaccines.
My other main question--and there may be a couple of you
that want to address this--is the area that I come from,
represent, we still have a lot of steelmakers, a lot of people
who split their business between defense work and aerospace
work. And they have seen a big drop-off, obviously, in
aerospace orders in the past year. My question is, I know that
we have done a lot to try to support the payrolls of the
airlines, to try to support the operations of the airports.
Have we done enough to help companies continue to stimulate
demand in aerospace manufacturing?
So to get orders of replacement parts and maintenance back
online, to get new aircraft back on line, have we done enough
there, or is there more that you think we can do to help that
part of the steel and manufacturing industry recover?
Mr. Bunce. Well, Representative Lamb--this is Pete Bunce--I
will start. I think if we can get through the reconciliation
process, this Aviation Manufacturing Jobs Protection Act that
Chair Larsen and Representative Estes has championed--and I
know we have good sponsors in the Senate, as well--that will
help a lot. Because anyone in that supply chain will be able to
qualify to help bring back those workers. And that is really
important. As you pointed out, that supply chain stretches all
the way down to raw materials. And once you qualify as being on
a certified aviation product, you would qualify for this
assistance. So it is very important.
Mr. Lamb. Thank you. Yes, I agree, that is a great piece of
legislation by Chairman Larsen, and I hope we can get it
through.
Mr. DePete. Representative Lamb, this is Captain DePete. I
didn't get to my mute button, but would you mind if I just
added my opinion----
Mr. Lamb. Please.
Mr. DePete [continuing]. About your first question? It gets
back to what I just described internationally. The very pilots
who are tasked with bringing the vaccine home for us, and
charting the path towards recovery, are not prioritized to get
the vaccine in such a way. They should be higher, to protect
the integrity of the effort to get it out to the public.
So it is just something to consider. I never could quite
understand how pilots being tasked with doing that are not able
to be prioritized in higher priority to get the vaccine.
Mr. Lamb. Yes, I agree that it is a big problem, and my
hope is it is going to be fixed as the administration continues
to add millions of doses a week that are being shipped out. But
we will definitely keep our focus on it.
Thank you all for testifying today, and I look forward to
working with you going forward.
Mr. Chair, I yield back.
Mr. Larsen [presiding]. Thank you, Representative Lamb. The
Chair recognizes Representative Massie. But before he is
recognized--I am sorry--Delegate Norton and Representative
Fitzpatrick will follow Representative Massie. Representative
Massie is recognized for 5 minutes.
Mr. Massie. It looks like my buttons--OK, it is just not
illuminated. Thank you, Mr. Chairman.
I want to offer this cautionary tale for anybody who is
considering the misguided policy of requiring testing before
boarding a plane domestically. I have some constituents who
went to Cabo San Lucas. And before returning back to the United
States, pursuant to the Executive order that went into place on
January 26th, they took a COVID test. They were asymptomatic.
They tested positive for COVID. They took another test. They
took a third test after waiting some time. The family failed
all three tests, and so they were told to quit testing and to
wait 14 days.
Now, this is a family who was able to do that. So they
decided they would wait 14 days, and then try to board the
flight back to the United States. But they couldn't get a
doctor in Mexico to sign off on that. And the airline requested
that they get a doctor to sign off on the fact that they had,
pursuant to CDC guidelines, been quarantined for 14 days. So
they flew to Tijuana, walked across the border to the United
States, got on an airplane in San Diego, and then returned to
Kentucky.
Now, not every family or student or employee could afford
to do that, but that is the kind of chaos that would ensue, I
believe, if you had some kind of testing required for domestic
flights. So I hope we don't do that. And I hope that some kind
of common sense prevails in the face of this January 26th
Executive order.
Mr. Calio, do you have any ideas for how we could clarify
that Executive order, or implement it so that, if it is going
to be in place, it could be more workable?
Mr. Calio. Well, the order that is in place is for
international testing, and I know you are using it in
international, but, you know, we support the international
testing requirement. It is a means of opening up borders and
making everyone feel, including the governments, more secure.
But I think the patchwork of requirements makes it very
difficult and very uneven in its application, and that is one
of the things we talked about earlier in the need to try to get
a handle on that, so that these kind of situations do not
occur.
Mr. Massie. Got it. Thank you. I hope there is not too much
enthusiasm for this ``immunity passport'' as a requirement for
traveling, because I think you made a good case here today that
the likelihood of transmitting or receiving COVID on an
airplane is less than being in a supermarket. So if you are
going to make the case that you need this kind of passport for
an airplane, then you are basically trying to make the case you
need it everywhere, and I think that is misguided, especially
since the CDC says that the vaccine doesn't necessarily imply
that you won't transmit the virus, or have any sort of
immunity. So I hope we abandon that idea, as well.
Mr. Lyttle, I want to ask you about the effect of indoor
dining bans on concessionaires at airports. Our Governor saw
fit to ban indoor dining for awhile. And yet you have
passengers who are in airports--it is not like they have a
choice that they could go home and eat--who couldn't eat. The
solution in that case was sort of ridiculous, it was to move
the chairs and tables outside of the dining area and into the
common area, and then to serve the airport passengers, and that
they would eat it out in the common area. Long story short,
nobody was going home, or not dining.
Can you talk about the effect the indoor dining bans have
had on the concessionaires who are already in an extreme
hardship due to COVID, Mr. Lyttle? And maybe some solutions.
Mr. Lyttle. Yes, thank you. The ban on indoor dining has
been devastating. Thankfully, we are back to 25 percent right
now.
And what I think the States, for example, need to
understand is that dining within an airport is different than
dining outside. Indoor dining actually helps with social
distancing because, what you are doing, you are actually
providing an additional space within the restaurant for people
to social distance. If you do not have indoor dining, but you
are still selling food and beverages, then everybody actually
congregates at the hold room area, and it is very hard to
social distance. So because you are in an airport, you are
confined. You can't go somewhere else, as if you are outside.
And I think the States really need to understand that the
airport dining and retail is really different from outside.
So it is really devastating when you actually stop indoor
dining, but it also defeats the purpose, because we are not
able to do social distancing, because you have taken away a
substantial portion of the airport that we actually need to
facilitate social distancing.
Mr. Massie. Thank you. And I hope the Governors will listen
to you. I think the ban on dining is ridiculous to start with.
And if it is meant to discourage people from congregating at
restaurants, and the only place you can eat in an airport is at
a restaurant, then it is going to discourage people from
flying.
Mr. Larsen. Thank you.
Mr. Massie. I yield back to the chairman. Thank you.
Mr. Larsen. I recognize Congresswoman Holmes Norton for 5
minutes.
Ms. Norton. Thank you, Mr. Chairman, and I appreciate this
hearing on COVID's effects on airline travel. And my questions
are worker-oriented.
My first question is for Captain Joe DePete. I was
concerned and actually a little surprised at the increase in
pilot errors in the past few months. Now, I know it is
important to keep pilots employed, and to keep them trained.
Before COVID, what were the training requirements for pilots,
and have there been any changes in the flying time requirements
since the pandemic?
Or how would you account for the increase in pilot errors,
Captain DePete?
Mr. DePete. Thank you, Representative Norton, for that
question. You know, I had not seen the same statistics come
across, other than a few anecdotal comments in the press from
time to time.
However, we have the highest training standards in the
world, which has led to the safest national airspace ever known
in the history of aviation. We are the envy of the world, and
we have done that through constant examination, through a
massive data collection that has allowed us to actually almost
have a risk----
Ms. Norton. Have there been any changes since the----
Mr. DePete. No, ma'am.
Ms. Norton [continuing]. Since the pandemic in training at
all?
Mr. DePete. No. Qualifications, ma'am, remain the same. And
we are working with our carriers right now to ensure that we
get the timely training we need, since there is less flying
going on at the moment.
This is of highest priority for us is to maintain our
currency. And it is by law, I mean, it is by regulation that we
have to maintain our currency. So----
Ms. Norton. So the pilots are flying the same number of
hours each week? I mean, they are not flying as often.
Mr. DePete. Right.
Ms. Norton. Now, how many hours would a typical pilot fly
each week or each month?
Mr. DePete. Well, they are flying less, overall, but they
still have to meet the mandatory requirements of our recency of
experience, so many takeoffs and landings in a given time
period within 90 days. And it is up to the carrier to ensure
that the training takes place, and they meet those recency
requirements, or else we go uncurrent. So----
Ms. Norton. Well, you say you haven't seen the data we have
on pilot errors increase in the past few months.
Mr. DePete. Right.
Ms. Norton. I am going to ask the chairman to send you the
data we have----
Mr. DePete. OK.
Ms. Norton [continuing]. So that we can have an explanation
of why there would be an increase in pilot errors, particularly
with fewer people flying at this time.
Could I ask you another question, Captain DePete?
Mr. DePete. Yes, sure, yes.
Ms. Norton. I noticed in your testimony you touched briefly
on the power of worker-centered industry relief, and said that
was more important than corporate trickle-down relief that has
been employed in previous crises. So I wanted you to elaborate
on that.
Would you mind sharing in greater detail why you think it
is important to keep the workers affected by this crisis front
and center?
Mr. DePete. Yes, ma'am. I would gladly--and I will just
start right there, because I know that the investment in the
workers, in keeping aviation healthy, is the pathway to
recovery.
And to just juxtapose what it was before PSP, if you recall
back in 9/11, the devastating effect that that had on the
industry, when there wasn't a worker-forward, PSP-type package
like the CARES Act provided initially, and the subsequent PSP
payments, but the--back then, it was the Airline Transportation
Safety Stabilization Act that formed a stabilization board. And
the result of that exclusively being aimed at the industry and
not at workers resulted in 50 bankruptcies and givebacks from
workers--$83\1/2\ billion, including the very retirement
security of many of those workers.
So it was a colossal failure, and that is why I have to tip
my hat to this committee to say that PSP is, without a doubt,
the most historic worker-forward, critical bridge to recovery.
I think it showed great thought and planning. And it is the
road, because if we do not have a healthy----
Ms. Norton. Could I get one more question in?
Mr. DePete. Yes, ma'am.
Ms. Norton. I was very concerned about what I read about
traffic levels.
Mr. Larsen. Congresswoman Norton, that is 5 minutes. If you
want to ask the question, and we will take the answer----
Ms. Norton. Yes. Actually, it is for Ms. Krause.
Mr. Larsen. Unfortunately, we will have to take the answer
for the record. So you can ask the question, we will take the
answer for the record.
Ms. Norton. OK, so let me get the question in, then. She
testified that the levels may not occur--and I think this is
very important, if this committee could find out--that traffic
levels may not occur until 2023 or later. I think this
committee needs to know how she came to that notion. We see
already the progress that has been made--and that is 2 years
from now for traffic levels in air travel. And I think this
committee needs a response to that question. If you would
submit that question to Ms. Krause, I would very much
appreciate it.
Mr. Larsen. Thank you very much. We will do that.
Ms. Krause, you have that question for the record.
And with that we will now move to Representative
Fitzpatrick, followed by Representative Garamendi and
Representative Burchett.
Representative Fitzpatrick, you are recognized for 5
minutes.
Mr. Fitzpatrick. Thank you, Mr. Chairman, for calling this
very important hearing. Thank you for the panelists, for your
time. My first question is for Captain DePete.
Sir, I recently reintroduced H.R. 911. Congress had
previously passed this legislation that--Congress passed a
requirement for the installation of secondary barriers on new
aircrafts, and my bipartisan bill seeks now to make all
commercial passenger aircraft have this important safety
measure. Are secondary barriers still a necessary security
tool, in your opinion?
As you know, sir, this was one of the 9/11 Commission
recommendations [inaudible].
Mr. DePete. Representative Fitzpatrick, thanks for that
question. And thank you for your leadership on this issue over
the years. I know you see the value of this.
And, yes, we are extremely frustrated at the lack of
progress. It is ever more important that we have secondary
barriers to preserve the reactionary gap when that door is
opened, to protect our flightcrews and the folks on the
airplane. PIC has the responsibility for the safe and secure
conduct of our flight.
And when you consider that this was in the FAA
Reauthorization Act of 2018, 115-254 was the Public Law, and we
still--I remember being part of this re-examination to take a
look at it again, where they basically started with, well, what
do we mean by a secondary barrier? That is how bad it got.
My hope is that--I think there are many that share this
frustration--with this new administration, we can urge them to
move forward and get this taken care of. I mean, it is a long
time coming. Thank you.
Mr. Fitzpatrick. Thank you, Captain DePete. And secondly,
regarding the PSP, I am a big believer in the program and
extending it. And if you, sir, could just state for the
record--we may have covered this ground, but I want to make
sure it is on the record----
Mr. DePete. Sure.
Mr. Fitzpatrick [continuing]. You know, how this program
has helped and benefitted your pilots.
Mr. DePete. Well, it has helped us by having a worker-
focused effort for payroll and benefits to keeping people
connected with healthcare and off the unemployment insurance
rolls, supporting and contributing still to the economy, and
providing a pathway to recovery. Because there is no recovery
without a healthy airline industry. And PSP, like I keep
saying, it was just a historic lifeline, not only for workers,
but for our country.
Mr. Fitzpatrick. Thank you, Captain. Thank you for all you
do to keep our airways safe. We appreciate your work, sir.
One last question for Mr. Calio.
Sir, if you could, also for the record talk about the PSP
program, and what it has meant to the airline industry on the
whole.
Mr. Calio. Thank you, Congressman. The program was and is
an unmitigated success. It allowed us to keep our workers on
payroll. As Joe has indicated, it kept them out of the
unemployment lines, paying taxes, spending money, and, most
importantly, up to date and ready to help the recovery.
The flightpath to recovery is going to require airline
workers and airlines to be able to fly people and packages.
And, you cannot overlook the fact also, as has been mentioned
before, flying around the PPE, the vaccines, and all of that.
So the program has gone to keep people on the payroll. The
airlines were more than happy to act as the Federal
Government's and the State and local government's unemployment
office, because it was a lot better than the alternatives. And
keeping these people on and happy and employed is critical to
us, because they are the backbone of our industry.
Mr. Fitzpatrick. Thank you, sir. Thank you to our
panelists. We really appreciate all you have done for the
industry. It is always a tough job you have. It has been
especially challenging during COVID. So just know you are
appreciated.
I yield back, Mr. Chairman.
Mr. Larsen. Thank you. We are waiting for Members to return
from votes, but I want to ask if Representative Eddie Bernice
Johnson from Texas is on.
No? All right. Representative Johnson from Georgia?
All right, we will go with, then, back to the GOP side, and
Representative Gimenez from Florida, you are recognized for 5
minutes.
Mr. Gimenez. Thank you, Mr. Chairman. And I represent
Miami-Dade County, and in Miami-Dade County, Miami
International Airport is the number-one economic generator in
Miami-Dade County. It supports probably over 300,000 direct
jobs or indirect jobs. So aviation is vitally important to us.
So I have got a question for Mr. Calio.
From the height in 2019, what has been the drop-off in the
number of flights around the country, percentagewise?
Mr. Calio. Fifty percent.
Mr. Gimenez. So we are now operating around 50 percent
capacity?
Mr. Calio. No, we are actually operating at less capacity,
in terms of passengers who are flying. We are flying about 40
percent of the passengers that we did in 2019. And we are
operating at about 50 percent of the flights that we did in
2019.
Mr. Gimenez. And you expect us to be back to somewhat
normal in 2023, 2024?
Mr. Calio. We sure hope so. If it comes sooner, so much the
better.
Mr. Gimenez. OK, let's talk about--what percentage of your
passengers in 2019 were actually business travelers?
Mr. Calio. Congressman, I can get that to you. I don't have
it off the top of my head. But significantly more than we see
now. Business travel is off really substantially, as is
international travel. A lot of the international travel was
made up of business travelers. So that usually lags in past--
both after 9/11 and after the financial crisis, the business
travel lagged leisure travel in coming back.
Mr. Gimenez. Do you think that with--look, what we are
doing right now, normally you would be sitting in this Chamber,
but you are not. Do you see a significant drop-off in business
travel just because the COVID-19 has changed the way that we do
business? Do you see that as having an impact on the airline
industry?
Mr. Calio. Potentially, it can. Our hope is that it won't,
because I think a lot of people--I personally think a lot of
people still like to do business face to face. There is a lot
of Zoom fatigue going on right now. And so I think that
business travel will come back, it is just going to take time.
Mr. Gimenez. Let's get back to international travel. At
MIA, the airport that is in the county that I represent, 50
percent of the air travel is international in nature. When do
you expect that to start to come back?
Mr. Calio. That depends on what happens with vaccinations
and quarantines and international testing. Right now, we still
face this patchwork. As I mentioned earlier, you can't get the
countries within the EU to agree with the European Commission.
We have our own--we are trying to do bilaterals to encourage
people to go ahead and fly.
You know, you have got to be able to fly somewhere and then
have something to do and somewhere to stay. The notion you are
going to fly and spend 7 to 10 days in a hotel without being
able to go out is not very conducive to making the trip. So it
remains to be seen.
Again, hopefully, as we get the virus under control, as
vaccines ramp up, things will get better. But we can't forecast
when. We do expect it is going to be some time.
Mr. Gimenez. Is the airline industry doing something on an
international basis to try to get some sort of international
accords on getting back to normal, what it would take for
international travel to resume again from country to country?
Say, does the United States have something with the European
Union?
I know, you told me right now, they are a little bit
disjointed. Is there any way that we can help to try to unify
this, and try to get a concerted strategy on how to get
international travel started again?
Mr. Calio. Well, the administration has been a willing
partner, Congressman, and working on the testing and on health,
for the vaccine requirements. And we think that is--starting, I
guess, you know, you have--you need to start small, and that is
on a bilateral basis, which we have done with the U.K.,
Germany, the Netherlands, so far, among others. And we are
going to continue on that basis.
And that is a matter of we, as the U.S. airline industry,
are working with individual countries. We are working with the
European Commission, and we are working with our Government. A
concerted effort on the part of all those governments to work
together to open up those markets safely is what is actually
needed.
Mr. Gimenez. And how can you accomplish that?
Mr. Calio. Apparently, slowly. I would like to say
otherwise, but it takes a lot of work because everybody is
making their own decisions. It is just like within the United
States, there are multiple jurisdictions with multiple
quarantine requirements. There has to be a look at the whole
picture. It is very difficult when----
Mr. Gimenez. Thank you very much. I am out of time, and----
Mr. Calio. OK, sir.
Mr. Gimenez [continuing]. I yield back.
Mr. Calio. Thank you for your questions.
Mr. Larsen. And thank you, Representative Gimenez, and I
wish every Member would respond like that to a gavel. I
appreciate it.
Mr. Gimenez. I try to follow the rules, sir.
Mr. Larsen. I think we are still waiting for folks to come
back from voting, but I believe Representative Van Drew from
New Jersey, his camera is on. If Representative Van Drew is
available----
Mr. Van Drew. I am, I am here.
Mr. Larsen. Great, Representative Van Drew, you are
recognized for 5 minutes.
Mr. Van Drew. Thank you, Chairman. COVID has decimated
America's aviation industry. We, as a Nation, must make robust
upgrades to airports and aircraft across the country. We must
adapt to COVID and build a stronger air travel system that is
more resilient to all communicable diseases. This process must
be led by the industry, but the Federal Government has an
important role to play in establishing clear, national
standards.
My Health Smart Air Travel Act establishes a program that
will have the Federal Government work with industry
stakeholders to test technologies, identify best practices, and
clarify policies so that we can modernize air travel. My
legislation has been carefully crafted and has broad industry
support. If enacted, it will ensure worker safety, restore
consumer confidence, and put American aviation on the pathway
to recovery. I will be reintroducing the Health Smart Air
Travel Act in the coming weeks. I urge my colleagues to support
this legislation in a bipartisan way, and to get us flying
again.
To Director Krause, Director Krause, in your testimony you
say several airports you interviewed told you that they expect
a range of new technologies and processes to be implemented
across the air travel experience to make flying safer for the
public, some of which could benefit from Federal Government
evaluation and Federal Government support. Would a Federal
program designed around partnering with industry stakeholders
to develop, test, and evaluate public health risk mitigation
technologies in airports and aircraft help address the needs of
the airports that you previously interviewed?
Ms. Krause. Thanks for the question. Yes, we spoke to a
number of airports, and they are pursuing or considering and
implementing a number of different technologies, a lot of
touchless options, biometrics, UV disinfection, as well as
different ventilation systems. It is important that these
technologies be evaluated and tested to ensure their
effectiveness, and also their risk mitigation effectiveness, as
well.
You know, we are looking--to your question on the Federal
role, we have some work ongoing for this committee, looking at
DOT and FAA's role in supporting aviation or any research
improving safety for the air travelers, as well as getting a
sense of what R&D has been done, what R&D is needed, and what
is FAA's capacity to support that research.
Mr. Van Drew. OK, thank you very much.
Chairman, I yield back.
Mr. Larsen. Thank you, Representative Van Drew. Again, we
are still waiting for Members to come back and have that
opportunity to ask questions, so I will formally go into a
second round of questions, because there are a few things I
want to get asked on the record.
First off for Ms. Krause, Congresswoman Holmes Norton asked
a question earlier about the assumptions that GAO used to come
up with its 2023-2024 timeframe for return to travel. Could
you, for the record, discuss those assumptions now?
Ms. Krause. That is based on a number of forecasts that we
have seen. And that is really, when you talk about 2023-2024,
that is to get to the prepandemic levels of 2019. A lot of that
is driven by--I mean, certainly there has been some promising
trends when it comes to domestic travel in some of those leader
markets.
But the big driver, as other panelists have discussed, is
really on the international travel and business travel, and
when that is coming back. And there are a number of factors
that play into that, different nations' public health responses
and increasing public confidence in making those types of
trips.
Mr. Larsen. Thank you.
Mr. Calio, a question for you. There was a report that CEOs
of several U.S. air carriers recently met with Gina McCarthy,
the head of the National Climate Task Force, and other key
administration officials to discuss your industry's efforts to
combat climate change. We had some questions earlier about that
issue, but what priorities do you think the A4A members,
carriers, share with the current administration on reducing
emissions in the aviation sector?
And when I ask about the priorities, I don't necessarily
mean goals. I guess I am focused more on the actions that you
would share, Mr. Calio.
Mr. Calio. Thank you. Thank you, Mr. Chairman. We have a
sustainability climate as a very, very significant priority. We
have for many years. We have made great progress over the last
30 years, but we realize there is more progress to be made.
What is interesting is that we have our board meeting
actually this week, our March board meeting. And last year in
March, March 2nd or 3rd, we had a half-day retreat with all of
our board present, and spent the entire afternoon talking about
our position on climate change, and what more we could do.
Within a couple of days, the results of that retreat didn't go
out the window, certainly, because our members have continued
to work, as have we, but survival became a priority.
We are refocused. We have, like I said, our board meeting
this week. A very significant amount of time is going to be
set. We did have that meeting last week. We thought it was a
good meeting. Everybody is on the same page. And, as we told
the administration, we want to be part of the solution, and we
want to work with them.
Mr. Larsen. Just to follow up on that, the EU has set some
pretty aggressive goals on sustainability in aviation. Would
your industry consider those efforts in Europe a challenge, a
threat, or a folly, or something in between?
Mr. Calio. I am having a little bit of difficulty spooling
up exactly what they have done, Mr. Chairman. So, if I may, can
I get back to you on that?
Europe has been very aggressive, and--I am going to be
really candid--in many ways they don't value air travel perhaps
as much as we do, because of the distances between countries.
So they have often pushed forward without consultation with the
industry. And I think whatever you put in place ought to be
something that you think can work and can be achievable.
Mr. Larsen. Yes, thank you.
Mr. Bolen, on the theme of sustainability and thinking
about future recovery, you touched on this in your comments, as
well as your written comments, about the role that Advanced Air
Mobility plays in addressing issues of congestion and so on.
Could you expand on that a little bit, and why that is
important to you all, as NBAA, Mr. Bolen?
Mr. Bolen. Well, certainly mobility, that ability to get
people and products where they need to be, when they need to be
there, is fundamental to our Nation's transportation system,
and fundamental to our economy.
I think there is a lot of excitement about the vehicles
that utilize electric propulsion, hybrid propulsion, and
perhaps hydrogen propulsion. I think the opportunities there
require us to look at our infrastructure, which is a very
strong airport infrastructure with over 5,000 public-use
airports in the United States, but recognize that we want those
to be available to accommodate future uses, and that includes
air mobility aircraft, but it also includes ultra-long-range
aircraft flown halfway around the world, consistently doing so
in a more sustainable way and perhaps even at supersonic speeds
in the future.
So there is a lot of technology coming to the market. I
think we have an infrastructure we can build on, but we want to
make sure that we are building an infrastructure for the
future.
Mr. Larsen. Thank you very much. I will just ask if there
is another Member on the GOP side available.
Apparently, no. OK, then I am going to recognize for 5
minutes Representative Kahele from Hawaii.
Representative Kahele, you are recognized for 5 minutes.
Mr. Kahele. Thank you so much, Chair, and I really
appreciate, Chair, you holding this committee today. My
question is for Captain DePete, and it expands on Captain
DePete's testimony and also previous questions from other
Members that I don't want to repeat again. And it touches on
the Payroll Support Program.
Because of the efforts of this committee and the previous
Congress and what they have done for the industry, we have
avoided mass furloughs and mass layoffs of the aviation
industries, and specifically members of ALPA and the almost
60,000 pilots that work for our U.S. domestic carriers.
Now, many of those pilots have been able to keep their jobs
and continue to receive their paychecks and their healthcare
benefits for them and their families, and avoid extended leaves
of absence or times when they wouldn't be able to fly because
they have been granted a leave from the company. And obviously,
from Mr. DePete's testimony, he talked about how difficult it
is to bring a pilot back, to get them requalified, to get their
security clearances, their badging, their currency, to get them
flying again. And so the best thing we can do is continue to
keep them with the company and on the payroll.
But what ends up happening is PSP allows airlines to do
that. But for the last, let's say, 9 to almost 12 months, many
of those pilots who have continued to stay on the payroll
haven't been able to fly. A small percentage of them have
continued to fly, but many of them have not continued to fly,
and have either maintained basic currency in a simulator or
through their annual recurrency training requirements.
So my question is what can we do to ensure that pilots that
are on the books, continuing to be employed, but are unable to
fly because we are just not flying airplanes, how can we, as a
Congress, work with the industry to keep these pilots current
and, more importantly, proficient?
We know consistency is key to flying. You can't just get in
a plane, after not having flown for a period of time and not
lose some of those specific skills and training that we have.
And so my question is for Captain DePete, what can we do for
those pilots and the thousands of them across the country who
are not flying, and are slowly losing some of those critical
skills and technical skills that they have in the cockpit?
Mr. DePete. Thank you, Representative Kahele. And it is
great to see you in the seat. Congratulations, again. Great
question.
We hear from our pilots all the time about this. And ALPA
is, as you know, actively involved in working with our carriers
because, obviously, the training houses right now are pretty
full, as we deal with the reshuffling as a result of some of
the early outs that were taken.
But we believe that as pilots, we are probably our own
worst critics, right? We always want to stay at the top of our
game. There is no substitute for the minimum of two well-
trained, experienced, well-rested pilots out there. But you are
right, there are a lot of pilots who reach their own personal
limit to say, you know what, I need to get back in the
simulator again, or, I need to go out on a line, maybe with a
line check airman again.
And we have been working through our training council. We
have a training council that actually has input from all our 34
airlines. And we are working with our carriers to ensure that
any pilot who wants to do more than just the normal check rides
that we get, but wants to do more for proficiency, has access
to be able to do that. So that is one of the areas, and we
would like the support for that.
Mr. Kahele. Great. Yes, like you said, Captain DePete,
sometimes those three takeoff and landings every 90 days just
doesn't cut it. And if we can get in the simulator more, or we
can get a little bit more training, that will help. The most
important thing for all of our airlines and America's aviation
infrastructure, and that is safety.
[Pause.]
Mr. Larsen. The gentleman yields back?
Mr. Kahele. Thank you, Chair.
Mr. Larsen. Thank you. So with that, I think that is a
great way to end this hearing on COVID-19's effects on U.S.
aviation and the flightpath to recovery.
I want to thank the panelists today, just for the sheer
numbers of Members who were interested in participating. It
shows that we have a keen interest on ensuring continued
support for aviation and aerospace industry recovery. Recovery
is multifaceted. It is likely to occur faster in some areas of
aviation and the aerospace industry than in others, which means
that we will need to continue to pay very close attention to
the industry and to the women and men, importantly, who work in
that industry.
As well, we were able to discuss some of the future of
aviation and what might be some of the next steps that we will
need to take to be supportive of continuing job growth in this
industry. And that is likely to be a subject of a future
hearing, as well.
So with that, no further questions from the Members?
Seeing none, I want to thank the witnesses again for your
testimony. Your comments have been informative. They have been
very helpful.
And I ask unanimous consent that the record of today's
hearing remain open until such time as our witnesses have
provided answers to any questions that may have been submitted
to them in writing.
I also ask unanimous consent that the record remain open
for 15 days for any additional comments and information
submitted by Members or witnesses to be included in the record
of today's hearing.
Without objection, so ordered.
And with that, the subcommittee now stands adjourned.
[Whereupon, at 12:49 p.m., the subcommittee was adjourned.]
Submissions for the Record
----------
Prepared Statement of Hon. Sam Graves, a Representative in Congress
from the State of Missouri, and Ranking Member, Committee on
Transportation and Infrastructure
Thank you, Chair Larsen and Ranking Member Graves, and thank you to
our witnesses for being here today.
The COVID pandemic over the last year has had widespread and long-
lasting effects, including a significant shutdown of the U.S. economy.
Today's hearing will focus on the pandemic's impact on the aviation
industry, what recovery will look like, and how Congress and industry
can best support that recovery.
Fortunately, it does appear that things are improving.
But, as all of us are painfully aware, the country is still dealing
with the pandemic, and air travel remains below last year's levels.
Congress, in a bipartisan effort, authorized $113 billion over five
different legislative packages to support different sectors of the
transportation industry to ensure that workers stay on the job and that
businesses stay afloat.
This assistance included relief totaling $60 billion for airlines,
airports, and aviation contractors.
While Government assistance has been important to helping the
aviation industry through this historic pandemic, recovery will take a
significant amount of self-help and adjusting to the new, post-COVID
realities.
Many analysts believe that there is pent-up demand for travel. I
couldn't agree more.
We have all been shut in for a year now, and I am hopeful that with
the increasing levels of vaccinations, the public will become
comfortable with traveling again this summer.
That will be key in the overall pandemic recovery.
I am interested in hearing about what our witnesses think the
industry's recovery is going to look like, what efforts they are making
to remain resilient, and how we can work together towards a fast, but
safe recovery in the coming months.
Thank you, Chair Larsen. I yield back.
Prepared Statement of Hon. Steve Cohen, a Representative in Congress
from the State of Tennessee
Thank you, Chairman Larsen and Ranking Member Graves, for putting
together this important hearing, and thanks to all the witnesses for
being here today.
The aviation industry has been devastated by the significant
decline in air travel because of COVID-19, and our Committee has
responded to resuscitate the industry, providing billions of dollars in
aid.
As we begin to look at the flightpath to recovery, though, I
believe it is critically important that we not overlook the industry's
consumer: the flying public.
Since the start of COVID-19 lockdowns, U.S. airlines' de facto
policies have been to waive change fees and offer or extend vouchers. I
believe that this has been woefully inadequate.
Millions of Americans will no longer take trips they booked in good
faith. Conferences, conventions, weddings, graduations, and family
reunions were canceled, not postponed.
In this economic crisis, consumers need the cash they extended to
airlines, which have sat on more than $10 billion in interest-free
loans for more than a year (in addition to taxpayer-funded relief).
Existing USDOT refund regulations are insufficient and contain
numerous loopholes.
For instance, a refund is only issued when a person's flight is
cancelled or significantly changed, not when an individual cancels
because of COVID-19 concerns.
Even worse, Consumer Reports' analysis of ten U.S. airline vouchers
found nine different policies. The language is confusing, hard to find
and often contradictory.
And due to the federal preemption clause in the 1978 Airline
Deregulation Act, the USDOT and Congress provide the ONLY protections
for air travelers. State legislatures, state attorneys general, and
even state courts cannot intervene on behalf of consumers.
Last Congress, I introduced the Cash Refunds for Coronavirus
Cancellations Act with Senator Markey and Representative Underwood.
Our bill would offer full cash refunds for all cancelled tickets
during the coronavirus pandemic, regardless of whether the airline
cancelled an entire flight or the passenger cancelled their individual
ticket.
COVID-19 has not gone away--many people are still hesitant to fly
and should not be punished or have their money withheld to protect
their health and safety.
It is clear that we need to continue working on this issue.
Prepared Statement of Hon. Michelle Steel, a Representative in Congress
from the State of California
Thank you, Chairman, Ranking Member, and the witnesses today.
Orange County is home to some of our Nation's greatest community
colleges, including Orange Coast College (OCC), located in Costa Mesa,
CA.
OCC has numerous distinguished opportunities for post-high school
graduates to obtain a cost-effective degree and find employment
thereafter.
This college, located in my District, has many career-advantage
programs in aviation including fields in aviation maintenance
technology, aviation science, and airline travel careers.
Unfortunately, our students, in general, have been struggling
during COVID-19 to finish school and find employment opportunities.
To help students complete their credits and graduate in ample time,
as the Chairwoman of the Orange County Board of Supervisors, I helped
reopen OCC's career advantage programs, especially in academics
pertaining to aviation.
I have continued down this path with my colleagues in Congress to
ensure our schools safely reopen so our students have the proper tools
and resources for long-term success.
With this in mind, colleges like OCC, are continuing to diversify
its career cluster programs.
Gaps in the aviation workforce need to be addressed and additional
partnerships between industry and educational institutions are
necessary to ensure our students are on the right flightpath for
success.
I look forward to working with my colleagues in this subcommittee
and the aviation community to ensure our businesses have the
opportunity to grow and this includes bridging the skills gap.
Statement of Faye Malarkey Black, President and CEO, Regional Airline
Association, Submitted for the Record by Hon. Rick Larsen
The Regional Airline Association (RAA) thanks the U.S. House of
Representatives Committee on Transportation and Infrastructure,
Subcommittee on Aviation for holding the hearing titled, ``COVID-19's
Effects on U.S. Aviation and the Flightpath to Recovery.'' RAA submits
this statement for the record to inform the Committee on the status of
the regional airline industry, share with it the actions the industry
is taking to safeguard our crewmembers, passengers, and support
partners in response to the COVID-19 pandemic and highlight some of the
actions we believe will be critical to preserving air service to our
nation's smaller communities.
At the beginning of 2020, US regional airlines employed nearly
70,000 workers and operated about 40 percent of our nation's
departures. Most importantly, regional airlines provided the only
source of scheduled, commercial airline service to more than two-thirds
of our nation's airports. Without regional airlines, these airports
would lose their connection to the global air transportation network.
Before the onset of the global pandemic, regional airlines had moved
from a period of industry contraction into a period of growth, and by
the end of 2019 were operating more departures and carrying more
passengers than ever before. Alongside this regional airline industry
growth, smaller communities were gaining or restoring air service. This
is not surprising, as the health of regional airlines and that of the
small communities they serve is closely interconnected. Unfortunately,
regional airlines are among the many businesses the pandemic has hit
especially hard, and as a result, small community air service is at
risk.
On behalf of our membership, I want to thank this Committee, along
with the Senate Commerce, Science, and Transportation Committee and
House and Senate party leaders for their leadership in providing over
$75 billion in relief for air carriers in the Coronavirus Aid, Relief,
And Economic Security (CARES) Act and the Consolidated Appropriations
Act, 2021. Additionally, we are grateful that H.R. 1319, American
Rescue Plan Act of 2021, contains $15 billion for air carrier and
contractor worker support. To date, such funds have played a key role
in helping to preserve jobs and support air service.
We particularly appreciate this Committee's support during the
initial design of the CARES Act, in ensuring regional airlines could
access payroll support grant programs. This crucial support has been a
lifeline for tens of thousands of regional airline workers. The
program, which came in the form of payroll assistance, has helped
regional airlines meet the critical priorities of protecting their
workers and maintaining safe connectivity for smaller communities.
However, some carriers, including several regional airlines, saw a
substantial portion of those grants turn into surprise loans, which
they must repay. This means carriers surviving the pandemic will emerge
weaker on the other side, with strained resources. Additionally, most
regional airlines still have no access to programs outside of PSP to
support their operating costs. Although the CARES Act created another
program to meet this need--the Air Carrier Loan Program--most regional
airlines were unable to use that program. Regional airlines' unique
business models, which involve long-term, fixed contracts with major
air carriers, limit the ability to generate excess cash flow to
extinguish debt. Additionally, many regional airlines lease or sublease
equipment and do not have substantial unencumbered assets with which to
collateralize loans. Despite this Committee's clear directive to
protect small community air service, the Department of Treasury (USDT)
declined to utilize its authority under the CARES Act to make unsecured
loans so that smaller carriers could participate. For these reasons,
most regional airlines were unable to access the Air Carrier Loan
Program to help save their businesses. Unfortunately, five regional
airlines ceased operating last year under the pandemic's influence and
without the ability to access the more diverse range of support
accessible to larger air carriers. This inequity, which threatens small
community air service and has decreased competition, has yet to be
addressed.
At the same time, business harm continues under the pandemic. Last
month, Airlines for America, the trade association for the major
airlines, announced that for the week starting January 31st, revenue
from airline bookings was down 82 percent compared to the same week in
2019. Where major airlines lose revenue through decreased passenger
bookings; regional airlines lose revenue through reduced block hours.
Block hours is industry parlance for how much an operator's aircraft
are being utilized on behalf of their partner. When block hours are
down, revenues are way down. In 2020, regional airline block hours
plunged to a nadir, with some carriers down 90 percent. Although block
hours were ticking back up more recently, carriers saw additional sharp
decreases as the virus surged in December and beyond. In addition to
reduced block hours, the same routes are now less efficient and more
costly to operate. With fewer passengers traveling, regionals are being
called upon to take extraordinary measures to tailor supply to demand
more precisely than ever. The dynamic schedule swings that characterize
the current market come with a heavy labor and cash toll; airlines are
paying higher crew costs while seeing reduced aircraft utilization.
Aircraft are not making money when they are on the ground waiting for
the next tranche of passengers, or when they are being repositioned
from one airport to another, which is costly.
The regional airline industry has been one of the hardest hit
segments of air carriers during the pandemic. RAA members specialize in
serving smaller communities that lack the passenger volume to support
sustainable air service by larger airlines. Regional airlines serve
these communities by partnering with larger carriers to help them reach
passengers they could not otherwise serve, using smaller aircraft that
are rightsized for markets with fewer passengers. These smaller markets
happen to have some of the thinnest margins. There are far fewer
passengers over which to amortize demand fluctuations or cost
increases. This is why small community air service can be fragile and
these markets are often hardest hit when network carriers are forced to
retract service. Unlike large carriers, the vast majority of regional
airlines are not publicly traded, and their business practices have
more in common with a small business than a large multinational
company. Most regional airlines do not have access to expansive outside
lending while they wait for additional aid. Furthermore, small carriers
who do not file reports with the Department of Transportation pursuant
to Part 241 received underfunded payroll support awards under the CARES
Act relative to larger air carriers due to inequitable criteria applied
to their award calculation. As a result, small carriers have had to
make do with less aid for longer than their much larger counterparts.
We are grateful that other inequities in assistance have since been
partially addressed; however, more action is needed. We are
particularly grateful to this Committee's support, though the
Consolidated Appropriations Act, 2021, in directing a technical
correction to the Payroll Support Program (PSP), to address the
inadvertent underfunding of certain small carriers, which occurred when
a more limited calculation formula was applied to smaller carriers than
to larger carriers. Under the CARES Act, small air carriers who did not
file with DOT pursuant to Part 241 were directed to exclude certain
salaries and crew benefit information that were included in the
standardized calculation of PSP awards of larger air carriers who filed
with DOT pursuant to Part 241. As a result of this calculation
discrepancy, smaller air carriers were underfunded in initial PSP
awards, relative to larger carriers. The Consolidated Appropriations
Act, 2021 contained a technical correction to align air carrier
compensation award calculations with the exact standards and criteria
applied to air carriers who report to DOT pursuant to Part 241 and
provided a true-up provision for carriers who were undercompensated
under the previous calculation discrepancy. Unfortunately, the
shortfall still remains because the prorate that was subsequently
applied by the Department of Treasury to the PSP2 awards was applied to
this correction. Under the American Rescue Plan Act, this shortfall
will finally be fully addressed. Your staff worked tirelessly and
closely with RAA to advance this solution, and we are deeply
appreciative of your efforts to ensure regional airlines can more fully
support their workforce.
Given the risk to small community air service, we are very grateful
for the Committee's continued support of small community air service
during the pandemic through supplemental investments in the Essential
Air Service (EAS) and Small Community Air Service Development Programs.
Additionally, the inclusion of minimum air service requirements in the
second COVID relief package helped to ensure that small communities
were not completely disconnected from the country's air transportation
system. We likewise appreciate the Department of Transportation's
thoughtful implementation of these minimum air service guarantees,
balancing community needs and carrier health. Lastly, we appreciate
your including eligibility requirement waivers for FY2020 and FY2021,
to ensure that EAS communities experiencing passenger decline under the
pandemic need not fear being removed from the program due to
circumstances outside their control.
Department of Treasury's Administration of the Payroll Support Program
Recognizing that harm has touched families, businesses and
communities throughout the pandemic, RAA strongly supports the proposal
for additional payroll aid through the American Rescue Plan that the
Congress is currently considering. Simultaneously, we have substantive
concerns with the Department of Treasury's current administration of
PSP that is today jeopardizing the full recovery of a number of
regional airlines. One enormous problem ongoing to this day is USDT's
lack of communication and persistent delay in providing PSP2 payroll
awards to small regional carriers--some of whom have had no
communication from Treasury in over eight weeks despite filing well in
advance of the early application deadline. Under the Consolidated
Appropriations Act, 2021, USDT had ten days following the December 27th
enactment to make initial payments to air carriers. The deadline for
early consideration applications was January 14th. Prior to the
deadline, the Department was in contact with twelve large carriers to
ensure that their applications were processed as quickly as possible.
On January 15th, the Department approved $12 billion in assistance to
employees of these twelve large passenger carriers and dispersed $6.1
billion in initial payments.
While we are appreciative and grateful for the Department's quick
processing of these applications to support the workforce of these
carriers, RAA is deeply concerned that as of the writing of this
statement, over 150 carriers and operators have not received their
awards. Four of RAA's members have had either very minimal or no
contact with the Department about their application and do not know
when or if they will receive their awards. Because of this, these
carriers have been unable to sufficiently plan their business
operations. As this hearing takes place, some airlines have hundreds of
employees still waiting to be recalled. Others, who have managed to
avoid furloughing employees to date, have no choice but to contemplate
furloughs because of this delay in relief. It is deeply inappropriate
that the assistance made available to other carriers has not yet been
made available to them. Many of the carriers facing these circumstances
are the same carriers who were initially undercompensated under the
first round of relief. These same carriers are now experiencing
untenable delays to their second round of funding, rather than the
correction Congress intended. Overall, the rollout of PSP2 awards marks
a notable departure from the Department's approach under the CARES Act,
where it prioritized awards to small air carriers because they viewed
them as the most vulnerable to the financial impacts and disruptions
caused by the pandemic.
RAA believes that the Department has a very small window of time to
speed up its awards processing or they risk doing further harm to small
carriers. As you know, the American Rescue Plan Act contains a third
PSP extension, and the Congress appears to be on a path to pass this
third COVID relief package by mid-March. Under the legislation, the
Department will have effectively until the end of March to process all
PSP3 payments, which are entirely based on the PSP2 amount awarded to
air carriers. However, if the Department has not finished awarding all
PSP2 payments, PSP3 awards will be delayed for some, which could
further imperil these small carriers' financial health. Given the
dramatic decline in passenger air travel over the last year, small
carriers do not have the cash reserves to support their full payroll
for a prolonged period without assistance. RAA asks the Committee to
communicate to the Department of Treasury the urgency of processing any
remaining PSP2 awards immediately and, upon passage of the American
Rescue Act Plan by Congress, processing all PSP3 awards before the end
of March.
Lastly, utilizing discretionary authority granted to it under the
CARES Act, the Department of Treasury imposed an additional condition
on the payroll support awards for large carriers, which required
carriers to provide financial instruments for compensation in the form
of an unsecured loan for a portion of the PSP1 and PSP2 awards above
$100 million. In short, carriers must pay back a portion of their award
even though the carrier acts as distributor of the aid to its eligible
employees, excluding corporate officers. While we greatly appreciate
the appropriate exclusion of small regional airlines from these
requirements, the categorization erroneously captured a few regional
airlines because of the size of their payroll and subjected them to
disadvantageous conditions of aid. However, unlike other large
carriers, these regional airlines do not issue tickets or derive
revenue directly from passengers. RAA's position is that the warrant
requirement is completely counterproductive to the recovery of the
industry and its workforce; carriers have taken on large amounts of
debt in response to the pandemic and the industry has not yet achieved
a breakeven cash flow. The Department's decision to add to this debt
burden will only serve to further delay the industry's economic
recovery and the return of air service and employment levels to those
reached prior to the pandemic. Accordingly, RAA is very disappointed
that the House Financial Service Committee turned this discretionary
condition into a mandatory requirement as part of the American Rescue
Plan Act. We hope that we can work with the Congress in the future to
ensure that the warrant requirement does not impede the industry's
recovery and the growth of our workforce after the pandemic abates.
Small Community Air Service
RAA deeply appreciates the Committee's support of small community
air service throughout the pandemic. While regional airlines provide
valuable service to communities of all sizes, 409 U.S. 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 and are only served by regional airlines. While larger
cities, with historically high yield, higher density traffic may be
confident that air service will return with widespread vaccinations,
those US airports served exclusively or primarily by regional airlines
are vastly more vulnerable. 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, according to Delta Airport Consultants.
The resource strain detailed above imperils air service to smaller
communities moving forward. Historically, some markets may not have
survived on their own but as part of the whole they brought value. In
strong years, these marginal routes could survive if they supported the
network overall. Under today's unparalleled resource strain, decisions
are likely to turn on highest, best use. This means marginal markets
are exposed to higher risk with faster consequences than before. A
review of historical trends ratifies this concern. According to the DOT
Working Group on Small Community Air Service, between 2007 and 2016, as
the industry grappled first with the Great Recession and next with
workforce shortages, the impact on air service was sharply uneven
between small and large communities. The Working Group found that non-
hub and small-hub airports saw departures reduced by a factor five
times worse than reductions at large hub airports. During the same
period, smaller communities lost more than 31 percent of their
scheduled departures and more than 50 airports lost scheduled air
service altogether.
Thus, the Committee's inclusion of Section 4005, Continuation of
Certain Air Service Language in the CARES Act and Sec. 407, Minimum Air
Service Guarantees in the Consolidated Appropriations Act, 2021
prevented many small communities from completely losing air service
during the pandemic. Air service data drawn from the period between the
expiration of the Continuation of Air Certain Service Agreements
associated with the CARES Act and the start of the Minimum Air Service
Agreements associated with the Consolidated Appropriations Act, 2021
offer a glimpse of what might have taken place if the Committee hadn't
insisted on the protection of small community air service. Four
communities in Destin, FL; Morrisville, VT; Worcester, MA; and Meyers
Chuck, AK completely lost air service during this short period. We
further believe that the full impact of these air service drawdowns was
substantially muted by the ongoing extension negotiations at that time,
which influenced ticketing carrier decisions.
RAA understands that language related to Minimum Air Service
Guarantees is not included in the American Rescue Plan as part of the
PSP extension because of the legislative drafting limitation imposed by
budget reconciliation and are aware that the Transportation and
Infrastructure Committee and the Senate Commerce, Science, and
Transportation Committee believe the Department of Transportation can
utilize its existing authority under the Consolidated Appropriations
Act, 2021 to extend the air service commitments until the end of
September 2021 to align with the third PSP extension under the American
Rescue Plan Act. Absent an extension of the service guarantees, many
communities not presently EAS-eligible are at risk for total air
service loss without intervention. While RAA does not advocate for
hold-in policies, we firmly believe no community should face the
economic peril of losing all scheduled air service due to the pandemic.
As you know, The Federal Aviation Administration Modernization and
Reform Act of 2012 (P.L. 112-95) provided that for locations outside of
Alaska and Hawaii to remain EAS-eligible, they must have participated
in the EAS program at some time between September 30, 2010, and
September 30, 2011. This decision to restrict the EAS program could not
have contemplated the air service risk communities would face in
recovering from a global pandemic. RAA therefore urges the Committee to
support expanding EAS eligibility to at-risk communities that would
otherwise meet EAS program criteria but are restricted from the program
by virtue of non-participation during the aforementioned dates. We
envision this expansion as a temporary measure until market conditions
stabilize.
Furthermore, as part of the FY2022 appropriations process, we hope
that Members of the Transportation & Infrastructure Committee will
continue to demonstrate strong support for the EAS and SCASDP programs
by urging the House Appropriations Committee to include full funding in
the FY2022 Transportation, Housing, and Urban Development
Appropriations Bill. These programs are vital to protecting small
community air service, which is severely threatened by the sustained
drop in passenger air travel demand caused by the pandemic. Lastly,
Congress should continue to urge DOT to work with carriers who
participate in the EAS program to ensure flexibility and responsiveness
in light of cost increases and plummeting revenues that impact
underlying, fixed contracts.
Commitment to Health and Safety
Regional airlines have continuously taken 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 issued 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 coverings to uphold the overall
safety and protection of the travelling public and crew members, which
regional airlines initiated as airline policy and continue to support
as a federal mandate.
RAA continues to facilitate member airline discussions, through our
Councils and Committees, and sharing of information and best practices
related to upholding the health and safety of employees and passengers.
Further, RAA believes the utilization of crucial safety programs and
systems in place today, namely through Safety Management Systems (SMS),
allow airlines to quickly assess emerging and changing safety and
health risks and implement mitigations using a data-driven approach.
Airlines utilized existing safety programs such as the Aviation Safety
Action Program (ASAP) to collect safety information directly from their
employees and added COVID risk categories to their complex safety risk
matrix to analyze and reduce those risks. RAA and our member airlines
are key stakeholders in the national safety programs such as the
Commercial Aviation Safety Team (CAST) and the Aviation Safety
Information Analysis and Sharing (ASIAS) program. Recognized globally,
CAST is particularly well-suited for advancing solutions given the
broad participation and collaboration in the program by air carriers,
manufacturers and employee groups who empower the industry to meet the
urgency of emerging safety issues.
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. Further, 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
ask the Committee to view RAA as a resource as you consider proposals.
Our team stands ready to assist and share our ideas, expertise and
insights.
Mitigating Pandemic Harm to Supply of Commercial Airline Service
While it may seem surprising to discuss a potential shortage of
airline pilots at a time when the industry is still contemplating tens
of thousands of furloughs, we do expect the pilot shortage to return as
a limiting factor during recovery. In fact, today's furloughs stand to
worsen matters. If the Committee will recall, following the September
11th attacks on the United States, industry furloughs at that time
correlated to reduced interest in the professional pilot career path.
The resulting sharp decrease in new student pilots entering the
pipeline meant far fewer eligible pilots were entering the career path
than were needed, especially as a large complement of baby boomer
pilots began to reach mandatory retirement age. While the pandemic has
driven a temporary reprieve in the pilot shortage, a national crisis
impacting the perceived attractiveness of airline career paths could
deter another generation from the pilot profession, making the shortage
worse when it returns.
The actions taken by this committee to protect aviation workers,
and in support of healthy airlines, will help ensure the industry
remains attractive to future generations. Additionally, today's lull in
hiring presents an opportunity to open up education opportunities for
pilots, including many who have been dramatically underrepresented in
the flight deck and today cannot afford or finance training. RAA is
backing legislation to make the pilot profession more accessible
through the provision of additional federal financial aid to students
seeking pilot training. Today, the cost of pilot education and training
is higher than the available federal student aid dollars, which
effectively reserves the career path for those with access to private
wealth or capital. RAA has been working with lawmakers on the relevant
House and Senate Education committees and anticipates legislation will
be introduced this Congress. Given this Committee's jurisdiction over
aviation and interest in the matter, we ask for your support. By
shoring up outreach efforts and ensuring the pilots we reach can access
the education and training for the profession, we can welcome new and
more diverse aviators into the profession for generations to come.
Conclusion
Thank you for your leadership in securing the vital assistance
needed by carriers in response to the COVID-19 pandemic over the past
year. Your actions have stabilized the financial health of our
country's aviation system and have ensured the preservation of our
workforce so that we are in a position to support our country's
economic recovery. As vaccination levels increase and passengers return
to air travel over the course of the year, regional airlines will
continue to treat the safety and health of our customers and
crewmembers as our top priorities. We look forward to working with you
to make sure we can continue to keep small community air service
healthy and supported.
Thank you for this opportunity to provide comments.
Statement of the Travel Management Coalition, Submitted for the Record
by Hon. Rick Larsen
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Dear Chairman Larsen and Ranking Member Graves:
The COVID-19 pandemic has been nothing short of devastating to the
aviation industry. Congress has rightly recognized this, appropriating
$42 billion in relief directly passenger airlines and their
contractors, as well as $12 billion for airports. And while the CARES
Act authorized the Department of Treasury to provide loans to travel
agents and others dependent upon aviation, the program authorized
failed to meet the needs of eligible businesses that lack hard
collateral or could not forecast future growth due to the pandemic.
As a result, travel management companies--companies that help
businesses and individuals manage complex global travel needs--have
seen revenue drop by some 95% and continue to live off debt. Congress,
as it prioritizes vaccine distribution, COVID treatment, and other
mitigation measures, such as masking requirements for air travel,
should work with President Biden's administration to:
Support electronic verification of international
arrivals' negative COVID-19 tests;
Examine risk-based, scientifically-supported alternatives
to blanket quarantine requirements and countrywide travel restrictions;
and
Join the global community in adopting ``health
passports'' and establishing internationally-recognized standards for
vaccine and testing verification.
Since the outset of the COVID-19 pandemic, the U.S. air travel
industry has worked closely with the federal government to formulate
and implement an array of public health protocols to ensure the safety
of the air travel experience. By applying an extensive, multi-layered
set of biosafety measures, including enhanced cleaning, optimized
ventilation, and masking requirements, the risk of COVID-19
transmission has been reduced to the extent that the World Health
Organization (WHO) has acknowledged that air travel is safe, a
conclusion supported by Department of Defense research.
Moreover, aviation industry leaders continue to pursue federal
policy ideas that will reduce the human and economic cost of the
pandemic, which is why we have persistently advocated for international
testing requirements supported by a standardized, electronic-based
verification framework. The Centers for Disease Control and Prevention
(CDC) January 12 Order is a significant step, but implementation
measures must be taken to guarantee that testing labs are able to send
travelers' results electronically, via a QR code or similar function,
directly to appropriate authorities. Relying on paper copies for COVID-
19 (or vaccine) results is simply not scalable and is subject to fraud.
Given the complexity and dynamic nature of this crisis,
economically-impactful policy measures should be continuously
reevaluated. When more effective, less disruptive, and scientifically-
supported measures become available, they should be quickly adopted in
place of defunct measures. Blanket quarantines and country-wide travel
restrictions must be reexamined accordingly.
A year into the pandemic, quarantine measures in the U.S. continue
to hinder the recovery of the air travel industry, as they frustrate
travelers and run counter to the purpose of travelling for business or
leisure. These blanket quarantines are in place, despite the WHO's
recommendation that asymptomatic travelers should self-monitor for
symptoms, rather than be required to undergo quarantine, and CDC's
acknowledgement that vaccinated individuals do not need to quarantine.
Similarly, countrywide travel restrictions were an effective tool to
curb the early spread of the pandemic, but they are now far too blunt
an instrument, especially since COVID-19 test and vaccine accessibility
is continuing to expand worldwide.
To be clear, we do not expect all quarantine and travel bans to be
lifted tomorrow, but the federal government should have a plan in place
to lift these restrictions once established benchmarks or goals are
achieved. The status quo of indefinite restrictions and ad-hoc
decision-making is exacerbating our industry's financial plight and the
job security of our workforce.
Furthermore, the future of air travel depends on the ability of
governments to confidently determine the COVID-19 health status of
travelers, which is why countries around the world are adopting health
passports. Health passports are mobile platforms that enable travelers
to demonstrate their receipt of a COVID-19 vaccination or negative test
prior upon arrival at airports. The U.S. should join the international
community in this effort, which we believe is essential to global
economic recovery.
We are entering an exceptionally critical point in the pandemic,
and urgent, risk-based thinking is needed from the federal government.
Millions of American jobs and the $2.6 trillion American travel
industry hang in the balance.
Although some of the policy measures outlined above are
traditionally executive branch considerations, the House Committee on
Transportation and Infrastructure can play an important role in
advancing them, both legislatively and politically. We look forward to
working with you and stand ready to assist in any way we can.
Letter of March 2, 2021, from Scott Kirby, Chief Executive Officer,
United Airlines, Submitted for the Record by Hon. Rick Larsen
United Airlines,
233 South Wacker Drive,
13th Floor-WHQLA,
Chicago, IL, March 2, 2021.
Hon. Peter DeFazio,
Chairman,
2134 Rayburn House Office Building, Washington, DC.
Hon. Sam Graves,
Ranking Member,
1135 Longworth House Office Building, Washington, DC.
Hon. Rick Larsen,
2163 Rayburn House Office Building,
Washington, DC.
Hon. Garret Graves,
2402 Rayburn House Office Building,
Washington, DC.
Dear Chairman DeFazio, Ranking Member Graves, Chairman Larsen, and
Ranking Member Graves:
Thank you for holding today's hearing entitled, ``COVID-19's
Effects on U.S. Aviation and the Flightpath to Recovery.'' As you know
well, the aviation industry was among the first to be impacted by the
COVID-19 pandemic. Recognizing the devastating impact and the
importance of the industry's workforce, the service we provide and our
role as a driver of the economy, Congress acted quickly and in a
bipartisan way to approve the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act), which enabled the industry to survive the
most disruptive crisis in commercial aviation. We are very grateful for
the CARES Act and its Payroll Support Program (PSP) that provides much-
needed relief to aviation workers. We are also very grateful for the
extension of the successful PSP and support its further extension
through September 30. While the financial path ahead for the industry
is challenging, we are confident that with strong government and
industry collaboration, innovative approaches to health and safety and
a commitment to improving our nation's infrastructure, we can and will
be able to provide service, jobs and significant economic contributions
once the pandemic is behind us.
United is committed to the safety of our customers and our
workforce. In response to the pandemic, United launched our CleanPlus
program. Teaming up with Clorox and experts at the Cleveland Clinic, we
are putting cleanliness, health and safety at the forefront of the
passenger experience and redefined our cleaning and disinfection
procedures at each step of a passenger's journey. United also led the
industry in requiring passengers and crew to wear masks onboard the
aircraft and in the airport as a vital aspect of our layered approach
to safety. Other highlights include using HEPA filters on United
aircraft that circulate the air and filter out 99.97 percent of
airborne particles. United is the first and only airline to maximize
ventilation systems by running the auxiliary power on mainline aircraft
during the entire boarding and deplaning process. We also deploy
electrostatic sprayers to disinfect the aircraft cabin--floor to
ceiling--before departures.
United's response to the pandemic also includes supporting the
transport and delivery of the COVID-19 vaccine. In fact, United was the
first airline to safely transport the first delivery of Pfizer and
BioNTech's COVID-19 vaccine into the U.S. Through a combination of
cargo-only and passenger flights, United has transported more than 401
million pounds of freight, which includes 87 million pounds of vital
shipments, including 7 million COVID-19 vaccines, medical kits, PPE,
pharmaceuticals and medical equipment. We also provided free
transportation for more than 2,900 first responders and medical
professionals to areas in need.
United continues to lead and innovate as we respond to the pandemic
and the disruption it has brought to the industry and our customers.
One example is our new ``Travel-Ready Center''--a new, digital solution
where our customers can review COVID-19 entry requirements, find local
testing options and upload any required testing and vaccination records
for domestic and international travel, all in one place. United is the
first airline to integrate all these features into its mobile app and
website, and the first airline to voluntarily collect contact tracing
data for both international and domestic passengers in partnership with
the Centers for Disease Control and Prevention (CDC). We are also
committed to providing top-level service to our customers during this
uncertain time, and United was first among U.S. global airlines to
permanently eliminate change fees on all standard economy and premium
cabin tickets for travel within the U.S. In addition, now any United
customer can fly standby for free on a flight departing the day of
their travel regardless of the type of ticket or class of service.
We believe accurate and reliable testing is essential in safely
restoring global travel and promoting our recovery. We believe pre-
departure testing is an important tool that can open access to global
markets in lieu of existing quarantines and travel restrictions. That
is why United is leading numerous pilot programs and investing in
testing and digital data health management solutions. United launched
the world's first free transatlantic COVID-19 testing pilot for
customers; was the first U.S. airline to launch a COVID-19 testing
program for customers traveling on United from San Francisco
International Airport to Hawaii; and introduced customer COVID-19
testing from Houston to Latin American and Caribbean destinations.
As we focus on our recovery from the pandemic, United remains
committed to operating the safest, most efficient, and most sustainable
airline. We are encouraged by the bipartisan interest in an
infrastructure bill and the Administration's Build, Back, Better Plan.
We look forward to working with Congress and the Administration to
modernize air traffic management through the Next Generation Air
Transportation System (NextGen) to improve aviation fuel usage and
efficiency. United remains focused on health and safety while ensuring
that our company's priorities and future growth are managed in a
sustainable and responsible manner. United has pledged to reduce
greenhouse gas emissions by 100 percent by 2050 through industry-
leading investments in carbon capture and sequestration technology and
the use of sustainable aviation fuel--a first among airlines. We are
committed to continue making Diversity, Equity and Inclusion a
cornerstone of our culture--including through our new Aviate Flight
School to establish the next generation of aviators--and making
meaningful contributions in the communities we serve.
We are grateful for your support and interest in aviation and our
workers during this immensely challenging time. As Congress works
toward full public health and economic recovery, please know that
United Airlines is ready to support your efforts.
Sincerely,
Scott Kirby,
Chief Executive Officer.
Appendix
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Questions from Hon. Garret Graves to Heather Krause, Director, Physical
Infrastructure, U.S. Government Accountability Office
Question 1. What kinds of long-term adjustments is the industry
implementing to adapt to the new reality of a post-COVID world?
Answer. Based on our ongoing audit work reviewing the effects of
the pandemic on the aviation industry, we have found that many industry
stakeholders are still in the process of responding and adapting to the
COVID-19 pandemic; however, some of the changes they are making in
response to the pandemic are likely to be longer-term. For example,
some representatives told us their airports are installing touchless
technology--such as elevators with foot controls--and making
improvements to their heating, ventilation, and air conditioning
systems. In addition, according to representatives from one credit
rating agency, airlines are likely to use fewer employees to provide
services in the future due to the implementation of contactless
technologies such as those at check-in and bag check. Representatives
from one repair station operator told us that large repair station
operators are likely to diversify their customers and offerings moving
forward in an effort to reduce the economic risks they might face due
to disruptions in the aviation industry, such as possible future
pandemics.
Looking forward, as we noted in our statement, the federal
government is exploring the use of digital health passports for use in
international travel, but the standards, solutions, and information
security issues for such digital health passports or other measures are
not yet defined. Representatives from one airport association told us
that airports are beginning to consider how they will integrate health
passports into their operations, and that a number of airports have
been working with airlines on the implementation of these passports.
However, it is not yet clear if health passports or other proof of
vaccination or COVID-19 testing will be a temporary or longer-term
solution. Twenty-seven travel industry associations recently urged the
White House COVID-19 Recovery Team Coordinator to partner with them to
develop federal guidance for temporary COVID-19 health credentials.
Question 2. What kinds of assistance, outside of financial aid, can
Congress and/or the Federal government provide to help in the
industry's recovery effort?
Answer. Various industry stakeholders have expressed opinions about
how the federal government could help the industry recover, such as
implementing policies to improve the public's confidence in the safety
of air travel. For example, representatives from two airlines we spoke
with told us that policies and assistance that increase the public's
confidence in the safety of air travel, limit travel restrictions, and
boost the economy would all support recovery and increase the demand
for travel. Officials from a credit rating agency also told us that any
action that increases the public's propensity to fly--including COVID-
19 testing programs, alleviating travel restrictions, or better
targeting travel restrictions through testing corridors--would be
beneficial. As noted in our response above, 27 travel industry
associations recently urged the White House COVID-19 Recovery Team
Coordinator to partner with them to develop federal guidance for
temporary COVID-19 health credentials that cover both testing and
vaccinations.
We noted in our hearing statement that airlines, airports, and
other aviation businesses responded to reduced demand for air travel
by, in part, reducing their labor costs through measures including
early retirement and voluntary separation programs, voluntary unpaid
leave, freezing non-essential hiring, involuntary furloughs, and
layoffs. Representatives from an aviation manufacturer told us that key
skill sets could be lost as businesses reduce employment and skilled
workers migrate to other industries. Given concerns about the
availability of a highly-skilled workforce to support an eventual
industry recovery, mechanisms other than financial assistance such as
worker retention incentives, aviation workforce retraining, and efforts
to strengthen the pipeline of new applicants for careers in aviation
manufacturing and maintenance, among others, could help prepare the
workforce to be ready as air travel demand returns.
Question 3. How much interest was there from aviation businesses in
the CARES Act loan program, and what has GAO observed with
implementation and use of this program?
Answer. Treasury received 193 applications from aviation businesses
for the loan program--102 from air carriers, 41 from repair stations,
and 50 from ticket agents. The demand from aviation businesses,
excepting cargo air carriers, exceeded the amount available for loans.
As we reported in December 2020, the Department of the Treasury
(Treasury) prioritized evaluating applications from the 10 largest air
carriers, and some of these carriers we spoke with felt Treasury's
implementation of the program fit their needs.\1\ However, outside the
largest airlines, we found that other businesses that applied generally
found the process to be frustrating, notably the program's long
implementation timeline and Treasury's decision to encourage some
applicants to apply to the Main Street Lending Program before
continuing to pursue a Treasury loan. As we stated in December 2020,
Treasury viewed itself as a lender of last resort but did not state
this view in published documents. These challenges contributed to
relatively fewer loan agreements being closed with these smaller
businesses. Treasury executed 24 loan agreements with aviation
businesses under the program that totaled $21 billion of the $29
billion available--7 with large passenger air carriers, and 10 with
other air carriers, 5 with repair stations, and 2 with ticket agents.
---------------------------------------------------------------------------
\1\ GAO, Financial Assistance: Lessons Learned from CARES Act Loan
Program for Aviation and Other Eligible Businesses, GAO-21-198
(Washington, D.C.: Dec. 10, 2020).
---------------------------------------------------------------------------
We also found that while Treasury's design and implementation for
the loan program were generally consistent with internal control
standards, there were lessons that can be applied to future emergency
lending programs. These lessons include setting and communicating clear
program goals and timelines to better align lender and borrower
expectations.
Question 4. In your interviews of aerospace stakeholders, what was
the most creative or ``outside-the-box'' response to the pandemic
shared with your team?
Answer. During our ongoing work, a few industry stakeholders have
shared examples of their ideas and efforts to bring in new revenue or
assist suppliers during the period of reduced passenger demand. For
example, representatives from some airlines told us they flew cargo on
board empty passenger planes to help meet the increased demand for air
cargo transportation. One passenger airline also added a network of
cargo-only flight options. Representatives from one airport told us
they had discussions about using closed long-term parking lots to show
drive-in movies. Representatives from two aerospace businesses
discussed efforts they made to help companies in their supply chain,
while also protecting themselves from possible supply chain
disruptions. For example, representatives from one business told us
they worked with suppliers to accelerate purchase orders to ensure
their business would have sufficient materials on hand to continue
production without interruption. The representatives also told us they
organized webinars to explain to companies in their supply chain how
those companies could apply for federal assistance such as Paycheck
Protection Program loans.
Question 5. In your written statement, you indicated that
``Congress could consider some additional near-term steps to preserve a
minimum level of service to small communities until the airline
industry more broadly recovers.'' What steps do you believe Congress
should consider in order to help small communities maintain air service
through and after this crisis?
Answer. In the near term, Congress should consider any steps to
address service reductions stemming from the pandemic. The impact of
the COVID-19 pandemic on the airline industry is likely to lead to
further elimination in service to small communities, especially if
minimum service obligations expire before the industry fully recovers.
Near-term measures to maintain air service could include providing
additional funding for Essential Air Service (EAS) and the Small
Community Air Service Development Program (SCASDP), or subsidizing
greater use of Part 135 unscheduled service, such as air taxis, to
companies providing service in small communities without scheduled
service; however these measures could require additional
appropriations.
In the longer term, service declines to small communities have
grown over the last two decades despite assistance provided through EAS
and SCASDP.\2\ DOT reported in 2017 that over 50 communities had lost
all scheduled air service since 2007 and another 150 communities were
at risk of losing all or nearly all service.\3\ Determining the steps
needed to address the long-term issues with small community air service
may involve a complete reexamination of how small communities are
connected to the national transportation system. Subsidizing air
service to only a handful of communities has not only grown more
expensive, but also less effective. Other solutions, such as
nonscheduled air service and bus or shuttle service, should be
evaluated for their efficiency and effectiveness.
---------------------------------------------------------------------------
\2\ The Consolidated Appropriations Act, 2021 appropriated
approximately $165 million for EAS and $10 million for SCASDP to remain
available until expended.
\3\ Department of Transportation, Report of the Working Group on
Improving Air Service to Small Communities (Washington, D.C.: May 9,
2017). According to the report, smaller communities lost over 31
percent of scheduled departures, 17 percent of seats, and 13.4 percent
of total connectivity from 2007-2016.
Question 6. During your survey and interviews of stakeholders, was
there any concerns raised with how the U.S. Treasury Department was
implementing the COVID relief laws? How was communication with
stakeholders? Was there any difference between how smaller and larger
businesses were being treated through the application process?
Answer. In our reviews of the two programs authorized by COVID
relief laws and administered by Treasury--Section 4003 Loan Program and
Payroll Support Program (PSP1)--we found concerns with how Treasury
implemented the programs. Specifically, stakeholders were concerned
about the slow pace of each program's roll-out and awarding of
assistance, quality of Treasury's guidance, and lack of consistent
communication from Treasury. In response to these criticisms, Treasury
officials stated that Treasury faced an unprecedented challenge of
standing up a new financial assistance program in a condensed time
frame. Treasury officials also said that they published email addresses
where applicants could direct questions and notified applicants if
there was an update on the status of an application.
Treasury officials acknowledged that they prioritized larger
businesses, namely the largest passenger airlines, in implementing
these programs. Generally, larger businesses' applications were
processed faster and they had more direct communication with Treasury
staff. Smaller businesses' applications faced longer processing time
and did not have the same access to points of contact within Treasury
to answer questions or address concerns. We will continue to monitor
Treasury's implementation of the Payroll Support Program extension
(PSP2).
Question 7. What, if any, actions are airlines and airports taking
to prepare for a future pandemic? Have any airlines or airports started
implementation of GAO's recommendations for a pandemic preparation
plan?
Answer. Our prior work has shown that airports and airlines have
individual plans to respond to specific emergencies, including disease
outbreaks, whereas the federal government lacks an overall plan to
coordinate and respond to disease threats. Specifically, as we reported
in December 2015, all of the 14 airports and three airlines we reviewed
had plans for responding to communicable disease threats from abroad.
However, the United States lacked a comprehensive national aviation-
preparedness plan aimed at preventing and containing the spread of
diseases through air travel.\4\ We concluded that the absence of a
national plan undermined the ability of the public health and aviation
sectors to coordinate on a response or to provide guidance to airlines
and airports and recommended that the Department of Transportation
(DOT) work with relevant stakeholders, such as the Department of Health
and Human Services (HHS) and the Department of Homeland Security (DHS),
to develop a national aviation-preparedness plan for communicable
disease outbreaks.
---------------------------------------------------------------------------
\4\ GAO, Air Travel and Communicable Diseases: Comprehensive
Federal Plan Needed for U.S. Aviation System's Preparedness, GAO-16-127
(Washington, D.C.: Dec. 16, 2015).
---------------------------------------------------------------------------
While the DOT agreed that a plan is needed, as of March 2021, no
such plan had been developed. Since our report, DOT has maintained that
because HHS and DHS are responsible for communicable disease response
and preparedness planning, respectively, these departments should lead
any efforts to address planning for communicable disease outbreaks,
including for transportation. GAO maintains that DOT is in the best
position to lead a multiagency effort to develop a national aviation-
preparedness plan and that such a plan is critically needed. In absence
of progress to develop a national aviation preparedness plan, we urge
Congress to take legislative action to require the Secretary of
Transportation to work with relevant agencies and stakeholders to
develop such a plan.\5\
---------------------------------------------------------------------------
\5\ GAO, COVID-19: Opportunities to Improve Federal Response and
Recovery Efforts, GAO-20-625 (Washington, D.C.: June 25, 2020).
---------------------------------------------------------------------------
Questions from Hon. Mike Gallagher to Heather Krause, Director,
Physical Infrastructure, U.S. Government Accountability Office
Question 8. Is GAO concerned about the speed at which Treasury is
processing Payroll Support for air carriers? Per the Treasury's
website, as of 2/25 there are 320 applications and they have only
processed and reached agreement with not even half of them. In January
alone, they only processed 12--all of which were larger carriers who
were set to receive some of the largest awards. These delays have
really put a lot of pressure on small carriers like AirWisconsin which
is headquartered in my district. Even Captain DePete admits in his
testimony that three ALPA carriers have shut down as a result of the
pandemic. All three of those carriers were smaller regional type
carriers. These type of carriers can't afford unnecessary delays in
processing the Payroll Support. https://home.treasury.gov/policy-
issues/cares/preserving-jobs-for-american-industry/payroll-support-
program-extension-payments
Answer. Industry associations representing smaller businesses that
applied to PSP have raised concerns about the speed with which Treasury
reviewed applications and awarded funds through PSP1 and more recently,
the Payroll Support Program extension (PSP2). We have also noted these
concerns in our prior work on PSP1. For example, in September 2020 we
reported on some actions industry associations said their members took
while their PSP applications were under review.\6\ These actions
included that some members furloughed and laid off employees, and in
one case, filed for bankruptcy after applying for PSP funds. We will
continue to monitor concerns related to Treasury's implementation of
PSP2.
---------------------------------------------------------------------------
\6\ GAO, COVID-19: Federal Efforts Could be Strengthened by Timely
and Concerted Actions, GAO-20-701 (Washington, D.C.: Sept. 21, 2020).
Question 9. Does the GAO think that the PSP2 funds are on track to
be fully distributed by then? Now that will likely be extended as a
result of the most recent relief package (assuming it passes the Senate
and is signed into law), but Treasury doesn't get all of PSP2 out until
sometime in April, then that will likely cause further delays with
PSP3.
Answer. As noted above, stakeholders have raised concerns about the
speed with which Treasury reviewed applications and awarded funds for
PSP1 and PSP2. For PSP1, Treasury started to award funds in late April
2020 but did not finish awarding funds until mid-October 2020. Treasury
officials said they must balance the need to award funds quickly with
the need to ensure all statutory requirements are met. We will continue
to monitor the pace of awards and any concerns related to Treasury's
implementation of PSP2, and we will provide an update on PSP2
implementation in our late March report on the federal response to the
COVID-19 pandemic.
Questions from Hon. Steve Cohen to Nicholas E. Calio, President and
Chief Executive Officer, Airlines for America
Question 1. Will A4A members issue refunds to consumers who had to
cancel travel due to the COVID-19 emergency?
Answer. Since the onset of the COVID-19 pandemic, airlines have
worked with customers regarding their individual travel needs and have
done so in strict accordance with all federal laws and regulations.
Specifically, on the issuance of refunds, according to Department
of Transportation (DOT) data, eleven U.S. passenger airlines issued
$12.84 billion in cash refunds in 2020, which constituted a 72 percent
increase from $7.46 billion in 2019 and amounted to nearly 20 percent
of airline revenues.
While individual policies vary from carrier-to-carrier, A4A member
carriers are committed to working with every customer to address his/
her circumstances.
Question 2. For nearly a year, the airlines have been holding on to
Americans' money--if they aren't able to travel again and/or need that
money for other purposes, why should airlines be holding on to those
funds?
Answer. U.S. airlines are routinely issuing refunds in accordance
with all federal laws and regulations and, as the DOT data shows,
eleven U.S. passenger airlines issued $12.84 billion in cash refunds
last year alone. These refunds are also on top of billions of dollars
of travel credits issued to customer's e-wallets.
Question 3. Some travelers are seeing vouchers nearing their
expiration dates--will A4A members commit to ensuring that no vouchers
expire for as long as the pandemic emergency is ongoing?
Answer. Individual air carrier business decisions are subject to
strict antitrust laws and as a trade association we have no insight
into those type of specific business decisions. However, based on
publicly issued statements and airline website reviews, while policies
and details vary carrier-to-carrier, all A4A passenger carrier members
have issued voucher redemption extensions allowing flexibility well
into the future.
Airlines will continue to evaluate their respective policies and
work with each and every customer to address their travel needs.
Airlines continue to strive to make all aspects of the travel
experience positive for their customers, including voucher utilization.
Questions from Hon. Garret Graves to Nicholas E. Calio, President and
Chief Executive Officer, Airlines for America
Question 1. What role do you see these sustainable aviation fuels
playing in the industry's recovery and future?
Answer. Prior to the pandemic, even as we transported a record 2.5
million passengers and 58,000 tons of cargo per day, U.S. airlines
contributed just 2 percent of the nation's greenhouse gas (GHG)
emissions. As the U.S. airlines recover from the devastating COVID-19
crisis and help restore travel across the U.S. and around the world, we
know our customers and our country want that recovery to be an
environmentally responsible one--and so do we.
Sustainable aviation fuel (SAF) can play a key role in our efforts.
To date, our members' keen focus on fuel efficiency has accounted for
the vast majority of the industry's emissions savings. Indeed, they
have dramatically improved fuel efficiency and reduced GHG emissions by
investing billions in fuel-saving aircraft and engines, innovative
technologies like winglets (which improve aerodynamics) and cutting-
edge route-optimization software. As a result, U.S. airlines have
improved their fuel efficiency over 135 percent since 1978, saving over
5 billion metric tons of carbon dioxide (CO2), which is equivalent to
taking more than 27 million cars off the road on average in each of
those years.
But recognizing that improving fuel efficiency with today's
petroleum-based energy supply can only take us so far, A4A and our
members have been helping lead the effort to develop and deploy SAF,
which could be a game-changer in terms of aviation's output of GHG
emissions while supporting U.S. jobs and enhancing U.S. energy
independence and security.
Through initiatives such as the Commercial Aviation Alternative
Fuels Initiative (CAAFI), a public-private partnership we co-founded
(in 2006) and co-lead with the Federal Aviation Administration (FAA)
and other stakeholders, we have established rigorous processes to
ensure that SAF is safe and environmentally beneficial. Although we
have made significant progress in advancing the SAF industry,
substantial challenges remain in scaling up cost-effective supply. At
present, SAF is available in the U.S. (and globally) in extremely
limited quantities. The U.S. Environmental Protection Agency (EPA)
reports (under the Renewable Fuel Standard program) that 2,428,369
gallons of neat (100%) SAF were produced in the U.S. in 2019, which
compares to the 21.516 billion gallons of conventional jet fuel used by
U.S. airlines in 2019--thus indicating that SAF comprised just over
0.01% of the nation's total jet fuel supply that year. On top of this,
the SAF that is available is 3-5 times more expensive than conventional
jet fuel.
The aviation industry and would-be SAF suppliers are on the cusp of
creating a viable SAF industry, but government support is needed in the
near term 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
fuels programs and for public-private initiatives with SAF projects
such as CAAFI, FAA's Continuous Lower Energy, Emissions & Noise (CLEEN)
program, and the FAA-led Center of Excellence for Alternative Jet Fuels
and the Environment. Moreover, after years of providing tax incentives
and other support to ground-based alternative fuels (in some cases
reaching back into the 1970s), Congress should establish SAF-specific
tax incentives and SAF-specific loan guarantee and grant programs to
support our efforts. By working together and across the fuel supply
chain, Congress can support our efforts to further address GHG
emissions, while allowing commercial aviation to continue to serve as a
key contributor to the U.S., global, regional, and local economies as
we work to recover from the devastating impacts of the COVID-19 crisis.
Question 2. Are you finding that most passengers are cooperating
with your airlines' COVID policies?
Answer. Yes, last spring, major U.S. airlines voluntarily
implemented face covering requirements for passengers and employees as
a critical element of the multiple layers of protection that A4A
carriers have employed to mitigate risk of transmission and protect
travelers and crew. Carriers have been vigorously enforcing those
policies. Any passenger who does not comply can be prohibited from
flying that airline for the duration of the pandemic. Thousands of
passengers have been barred to date. Fortunately, an overwhelming
majority of passengers comply with the requirements.
However, to address the small population of passengers who simply
do not want to comply, we supported a temporary facial covering mandate
on interstate modes of travel. The temporary federal mandate has
strengthened our flight crews' ability to enforce requirements with the
goal of achieving universal compliance. We appreciate the government
and industry collaboration on these issues.
Question 3. In your written testimony you state, ``PSP [Payroll
Support Program] could be used as an example of a government program
that works.'' Can you explain why you believe the bipartisan Payroll
Support Program has been so successful?
Answer. PSP is an example of a government program that works
because it has effectively met the goals and intended purpose of the
program--to preserve aviation jobs. The PSP is, as the CARES Act and
subsequent extensions clearly state, financial assistance provided to
eligible air carriers that is ``exclusively for the continuation of
payment of employee wages, salaries, and benefits'' for employees
defined as individuals at those carriers that are not corporate
officers. More simply, airlines serve as a pass through of PSP funds to
airline workers.
The program also has the downstream benefit of helping federal/
state/local income tax revenues, along with Social Security and
Medicare tax contributions. The program also helps avoid billions of
dollars' worth of unemployment claims at both the state and federal
level. Finally, the PSP also supports multiple billions 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.
Question 4. In your written statement you wrote, ``With the reality
of a pandemic now painfully apparent, boardrooms, workers and investors
will all expect even stronger airline balance sheets than before,
allowing these companies to tap capital markets fully and swiftly in
the future--without depending on federal assistance--while avoiding
extreme distress and painful cuts for employees.'' In what way will
this new reality change what ``recovery'' looks like for major
airlines?
Answer. While the passage of time will provide much more clarity,
we believe the new reality will manifest itself in many ways,
including:
100 Year Flood Events. Airlines will rethink how they
manage balance sheets broadly, and cash specifically, to withstand a
future crisis of the unprecedented magnitude of COVID-19. Before 9/11,
the rule of thumb was to keep 10-15% of trailing 12-month revenues in
the form of cash. Post-9/11, that rose to 20-25%. It has yet to be
determined what the right metric is, let alone the right amount, but it
is certainly something that will be seriously evaluated.
Credit Ratings. Creditworthiness will likely be more
important than ever, as carriers who enjoy better ratings are generally
able to borrow larger sums of money at lower interest rates. Liquidity
will be examined in close conjunction with creditworthiness. Having too
much liquidity on the balance sheet is an inefficient way to run a
business but having too little can put companies at undue risk of
bankruptcy. Coming up with the right balance will be an important
consideration moving forward as the major rating agencies assess
financial health.
Sustained Profitability. One important and simple
solution to recovery entails giving airlines the freedom to right their
own ships--to allow them to achieve sustained profitability, with
meaningful margins--over an entire business cycle--rather than
consistently trailing the U.S. average. Allowing the marketplace to
work will be essential to mitigate future risk.
Question 5. What do you mean by the phrase ``do no harm'' in the
context of COVID pandemic recovery?
Answer. While the PSP program has been a tremendous success for our
employees and their livelihoods, during the CARES Act and subsequent
PSP extensions, many proposals were put forth on extraneous issues that
were punitive and legislatively opportunistic attempts to rehash broad
policy questions or re-regulate our industry at its most vulnerable
time in history.
With vaccinations increasing and the travel sector showing modest
progress toward a recovery period, it is important policy makers
understand that even if passenger traffic rebounds in the near term, it
will take air carriers years, not months, to pay off the massive amount
of debt they have accumulated over the course of the pandemic. We are
on a long road to recovery.
`Do No Harm' means we respectfully request that policymakers
refrain from adopting punitive policies such as tax or fee increases or
onerous rules and regulations that will otherwise cause harm to our
debilitated industry. Doing so will only hamstring our ability to
recover and undermine the basic underpinnings and purpose of the relief
provided to our labor workforce. This crisis was not caused or brought
on by the airlines and should not be used for convenient legislative
opportunism to reregulate or refashion what was a highly competitive
and burgeoning well-paid job creator prior to the pandemic.
Question 6. Do your member carriers remain concerned about a
shortage of professionally trained aerospace workers? If so, how can
the Government and industry work together to ensure we do not lose
sight of this issue during COVID and COVID recovery?
Answer. The industry is still concerned about workforce challenges
and continues to work with coalition partners to find solutions to
address workforce issues and expand diversity. Prior to the pandemic,
the industry had embraced an outlook done by Boeing, showing a demand
for 739,000 new maintenance technicians, 763,000 new civil aviation
pilots over the course of the next 20 years, amongst others. While
COVID-19 may impact those calculations, provided traffic comes back to
pre-pandemic levels there will be undiminished concern.
Government and industry continue to work together through
apprenticeships, scholarships and recruiting. Much of this work is done
at the secondary education level. We believe expanding education
opportunities and exposure to aviation professional careers at the K-8
level will help close the gap. Industry, along with Federal, State and
local governments should be encouraged to provide opportunities such as
shop classes, where kids can learn at an early age that they can work
with their hands and enjoy it.
Continued work at the secondary level is also necessary, expanding
unsubsidized federal student loan aid to cover costs associated with
flight education and training programs at accredited institutions of
higher education would be a good start to providing the broader
educational opportunity needed to meet sector specific challenges.
Questions from Hon. Garret Graves to Captain Joseph G. DePete,
President, Air Line Pilots Association, International
Question 1. Several media articles have identified that at least a
dozen pilot flying errors and mishaps since May 2020, have at least
been in part attributed to pilots being out of practice due to the
pandemic. Aviation experts and representatives have acknowledged that
when pilots are inactive for several months, their skills and
proficiency deteriorate. How accessible is recurrent training to pilots
should they not feel confident in their skills/feel they have gotten
``rusty''? How accessible is this training to returning pilots?
Answer. ALPA safety representatives along with FAA and airline
safety representatives have been monitoring safety reports submitted at
each airline as well as nationwide ``aggregate'' reports available
through CAST and ASIAS. We have been monitoring for adverse trends
since the start of the pandemic and are confident that the U.S. airline
aviation system remains safe. During the start of the pandemic airlines
have increased access to and use of simulators for pilots to maintain
landing currency as well as maintaining proficiency in flight
procedures and flying skills. There are functions, operations and
controls across the system to ensure a high level of safety to which
pilots are critically and intrinsically linked. The most notable safety
feature on any aircraft is the presence of at least 2 highly trained,
skilled, and well rested pilots on the flight deck.
Question 2. How has the pandemic affected the pilot shortage issue?
How is this issue to be addressed in the recovery?
Answer. Since the start of this pandemic and the resulting loss in
demand for passenger travel, ALPA has had 3 airlines cease operations,
causing thousands of pilot furloughs. These furloughed pilots add to
the number of excess pilots who were already available for airline
employment. Looking ahead, we reiterate that no one is more invested in
a strong, well prepared pilot pipeline than the Air Line Pilots
Association. To that end, we are committed to breaking down barriers
and ensuring the piloting profession represents the diversity of
America.
Question 3. In your written testimony you state that ``industry is
on firmer footing,'' This is welcomed news from such a major labor
group. To what do you attribute the ``firmer footing?''
Answer. Because of the recent stimulus packages--the American
Rescue Plan and the CARES Act PSP extensions--we are seeing a better-
than-expected economic outlook. Coupled with the high level of efficacy
of the vaccines and the accelerating rate of vaccinations around the
world, we are seeing an uptick in personal travel as well as small
improvements in the level of business travel. As a result, many
carriers are projecting to be cash burn neutral by this Summer.
Question 4. How has ALPA worked with aircraft manufacturers
throughout the pandemic?
Answer. The cleaning and disinfecting procedures and standards
developed has been a very collaborative process not only between ALPA
and the manufacturers but also airlines and government.
Question 5. You stated that the U.S. government needs to intercede
on behalf of airline pilots who are transporting critical health
supplies and vaccines to help the world recover. How can the U.S.
government be most helpful?
Answer. Airline pilots are frontline workers in transporting PPE
materials, medical professionals, and the vaccine itself.
Unfortunately, airline pilots are not considered frontline workers as
far as vaccine priority in every state, despite our work in every state
and across the world. Congress should reiterate pilots' critical role
in helping recover from the pandemic to encourage priority vaccine
access as frontline employees.
Questions from Hon. Garret Graves to Peter J. Bunce, President and
Chief Executive Officer, General Aviation Manufacturers Association
Question 1. What kinds of long-term adjustments is the industry
implementing to adapt to the new reality of a post-COVID world?
Answer. In light of the pandemic, our companies took significant
action to protect their workforce. Additionally, our companies are
taking the initiative and developing technologies which will have a
long-term impact on the aviation industry. These include:
Developing touchless technologies at airports to help
screen travelers quickly and safely.
Modifying aircraft to carry vaccines in extremely cold
storage;
Implementing ways to sanitize and clean without impacting
the airworthiness of the aircraft. This includes using machines to mist
disinfectants that kill viruses but do not harm finishes and avionics
throughout the aircraft fuselage;
Research into new disinfection methods for the cabin--
looking at thermal and other non-abrasive chemicals that do not erode
or destroy fixtures;
Implementing clean air ionization systems that provide
clean air while continually sanitizing aircraft surfaces throughout the
flight; and
Looking at more touchless and anti-microbial surfaces,
which are in bathrooms today, and looking at other high-touch areas as
well.
Question 2. In your written testimony, you state that ``[s]upply
chain issues appeared at the outset of the pandemic and they have
continued to persist, particularly with critical parts and equipment.''
Can you describe in greater detail what the issues are and why the
pandemic had such an impact from your perspective?
Answer. Nearly 70% of the respondents to a recent GAMA survey
reported they are experiencing supply-chain issues, which is causing a
slowdown in production and deliveries. While supply chain issues
appeared at the outset of the pandemic they have continued to persist,
particularly with critical parts and equipment. The aviation supply
chain, which is vast in nature, is important given aircraft often
involve numerous parts, platforms, and systems. If a supplier needs to
be replaced, it could be a lengthy process given FAA certification of
the new supplier's product may be required. GAMA companies have worked
extensively with suppliers to provide information about programs like
the payroll protection program as well as providing procurement and/or
other business advice.
Question 3. In your statement you discuss the FAA's use of remote
technologies for inspections, test, and oversight. Can you describe
what these remote technologies are and how they benefitted industry and
the FAA?
Answer. The FAA has been working with industry for several years to
develop policy and guidance material that builds on past successes and
facilitates the continued safe use of remote and virtual technologies
in the performance of certain tests, witnessing, and inspections. It is
important to recognize that the use of remote technology in the
performance of tests or inspections has been used for decades (e.g.,
engine borescopes, engine test facilities, flammability tests, etc.)
and we continue to expand the scope of activities as technological
advancements offer continued opportunities.
The most common application of virtual inspections utilizes a
combination of video/audio equipment accompanied by any necessary
sensors (temperature, pressure, etc.) to transmit data to a remote
device which is most often viewed on a computer. With the advent of
higher internet speed and access, high resolution portable equipment,
availability of online digitized data, and higher data retention and
distribution parameters, certain tests or inspections can be conducted,
recorded, and transmitted remotely thereby reducing the overall
resource and financial burdens of in person tests. FAA development of
guidance documents to facilitate broader use of remote technologies was
underway prior to the COVID-19 pandemic, but it was quickly issued as
part of FAA's mitigation plan and shown to be extremely effective in
performing safety oversight activities and efficiencies necessary to
maintain operations and economic activity during a time of significant
travel restrictions. The use of remote technologies has also been
extremely important between FAA and bilateral partners such as EASA to
support continued validation activities necessary to maintain U.S.
manufacturing and export of aviation products through the pandemic. FAA
policy and guidance documents for the use of remote technologies are in
place on a permanent basis and will continue to support effective
safety oversight and efficiency improvements where appropriate.
Question 4. While not this Committee's jurisdiction, it is
important that Members understand the issue, therefore, can you explain
what the National Interest Exception (NIE) waiver is, why it is
important for the aerospace industry, what issues have arisen during
the COVID pandemic, and how Congress can help?
Answer. A number of countries have enacted border restrictions as
part of health measures implemented in response to the COVID-19
pandemic, including Canada, various European Union member states, and
the United States.
The U.S. approach to controlling borders for certain persons is
enacted under the authority of the Immigration and Naturalization Act
as it relates to restricting certain non-U.S. persons entry (so called
``212(f) authority''). In spring 2020, several Presidential
Proclamations were issued that restricted travel to the U.S. by persons
(``non-citizens'') who were physically present during the 14-day period
preceding their entry into the United States. Specifically,
Presidential Proclamations 9984, 9992, 9993, and 9996 provided
restrictions for non-U.S. persons travelling from the European Union
(Schengen area), the Republic of Ireland and United Kingdom, and
Brazil. The Proclamations provided certain exceptions including for air
crew and when in the national interest of the United States.
GAMA, in coordination with several member companies, worked to
advance a framework for travel to the United States to support aircraft
exports, maintenance, and training of aviation personnel during spring
and summer 2020. The activities involved engagements with the
Department of State (DOS) and the Department of Homeland Security
(Customs and Border Protection) which were identified as the lead
agencies for the implementation of the restrictions as well as other
agencies.
The DOS and CBP guidance helped establish several considerations
for travel to the United States including that the ``air crew''
exception may only be used by pilots entering into the U.S. while
operating the aircraft or on a ``dead head'' flight where they would
operate the aircraft out of the U.S. following arrival.
Since a number of GAMA member activities involve aviation personnel
traveling to the U.S. where the ``air crew'' criteria are not
necessarily met, attention shifted to the national interest exception
(NIE) waiver pathway in the Proclamations and entered into the U.S.
under a B1/B2 visa. The NIE waiver guidance was issued by different
U.S. Embassies on their respective websites starting in July 2020
through October 2020, and addressed travel by persons from most of
Schengen, the Republic of Ireland, and the United Kingdom. Waivers,
however, have not been available for Brazil--except for humanitarian
travel which to date has only covered two pilots involved with taking
delivery of an aeromedical equipped aircraft and A-visas (e.g.,
personnel from ANAC). (Additional guidance has also been issued by some
U.S. Embassies for certain student visas, including F- and M-
categories.)
On January 18, 2021 the country restrictions were terminated. On
January 25, however, a new framework of country restrictions was
introduced by the White House in a Proclamation on the Suspension of
Entry as Immigrants and Non-Immigrants of Certain Additional Persons
Who Pose a Risk of Transmitting Coronavirus Disease. The new
Proclamation is mostly similar to earlier restrictions but groups the
Federal Republic of Brazil with jurisdictions for which NIEs have been
provided since May 2020 and also adds South Africa. The implementation
of the new Proclamation is under the authority of the Secretary of
State, Secretary of Homeland Security, Secretary of Health and Human
Services (HHS by way of Centers for Disease Control), and the Depart of
Transportation and is specifically subject to a monthly review for its
continuation, modification, or termination.
GAMA has engaged with agencies involved with the interagency
working group responsible for the implementation of the new
Proclamations since late January, including through the FAA team that
is part of the group. Providing a pathway for foreign nationals travel
to the United States is important to the economy, but more importantly
to the safety of U.S. state of design aircraft that are operated by
foreign nationals that must be subject to training often only available
in U.S. domestic locations.
Question 5. In your written statement you expressed support for
both advanced air mobility and sustainable aviation fuels. How do you
see these new technologies changing air transportation and its impact
on the environment?
Answer. Advanced Air Mobility (AAM) represents a new and innovative
frontier of aviation. The aircraft under development for AAM use
electric propulsion, which will reduce emissions and dependence on
fossil fuels. These aircraft, such as electric vertical take-off and
landing (eVTOL) aircraft, are designed to be safer and quieter than
traditional airplanes and helicopters and will be able to transport
passengers or cargo at low/medium altitudes in urban, suburban, rural,
and regional environments. AAM has the potential to facilitate new
transportation options, create jobs and economic activity, advance
environmental sustainability and new technologies, and support
emergency preparedness and competitiveness. We want to thank you again
for your leadership in this area by sponsoring legislation to ensure
the federal government is effectively engaged and coordinated
internally with industry and other stakeholders to recognize the broad
benefits of this developing and transformative aviation sector. We are
also glad to see that a companion bill has been introduced in the
Senate by Sen. Moran and Sen. Sinema.
Sustainable Aviation Fuel (SAF) will have a significant impact on
the environment if it can be produced in quantities large enough to
meet the increasing demand. As you know, the Business Aviation industry
since 2009 has committed to a long-term goal of reducing by 50% our CO2
emissions in 2050 relative to 2005. We expect to make strides toward
meeting this goal on multiple fronts, such as newer aircraft and
aircraft engine technologies, operational and infrastructure
improvements, and some market-based measures. However, the single
greatest factor that has the potential to reducing our CO2 emissions
today is through SAF. SAF is a drop-in fuel that is safe to use and
currently available. While newer technologies such as electrification
and hydrogen show promise in reducing CO2 emissions, there is still
significant work to be done before they are brought to market in mass
quantities. Therefore, SAF plays a key role today in our sustainability
push and will continue to play a key role for many years. However, SAF
production cannot keep up with demand and we hope that Congress can
help spur the private sector investment needed through incentives such
as an aviation specific SAF Blender's Tax Credit and other efforts.
Question from Hon. Sam Graves to Peter J. Bunce, President and Chief
Executive Officer, General Aviation Manufacturers Association
Question 6. EU-US Bilateral Safety Agreement: Mr. Bunce, in your
written statement you indicate that going forward international safety
agreements will be essential to promote and improve safety and address
``potential hazards in the exchange of aviation products, parts,
repairs, maintenance, and pilot training.'' I couldn't agree more.
Recently, after seeing remarks by the Director-General of the European
Union Aviation Safety Agency (EASA) announcing a drastic change in how
EASA will review all U.S. manufactured aircraft and products, Ranking
Member Garret Graves and I sent a letter to Secretary Buttigieg urging
him to seek an immediate clarification of EASA's plans, to ensure that
EASA's plans do not violate the US-EU bilateral safety agreement, and
to unequivocally and publicly express support of and confidence in the
FAA's certification process and professionals. To date we have not
received a response. Can you share with us why international safety
agreements are so important?
Answer. Thank you for asking this very important question. As we
move forward, international regulatory cooperation will be even more
important in raising the level of aviation safety and effectively
addressing ever evolving technologies and appropriately dealing with
unexpected challenges like the pandemic. The U.S.-European Union (EU)
bilateral and other arrangements are global cornerstones of
international aviation safety cooperation and focus on promoting and
improving safety by addressing potential hazards in the exchange of
aviation products, parts, repairs, maintenance, and pilot training. We
must ensure that these agreements continue to work effectively. There
is significant coordination in establishing confidence in respective
safety certification and oversight processes and acceptance based on
experience and safety performance. Bilateral implementation procedures
focus safety authority resources and involvement in safety areas based
on risk criteria, regulatory differences and new technologies.
Our members are experiencing increasing European Union Aviation
Safety Agency (EASA) involvement in validations to re-review or
recertify the FAA's work, particularly in areas focused on system
safety assessment and human factors. The FAA is also increasing
involvement on EASA and other bilateral partner validations in these
same areas. These actions comply with procedures under the US-EU
bilateral for risk-based involvement in safety critical and new/novel
design or technologies. However, regulators must ensure that such
involvement focuses only in these areas to the extent necessary to
resolve the risk-based technical issues and build confidence in their
respective safety systems in accordance with the bilateral agreement.
It is essential that this involvement does not migrate to all
validation activities, which would squander safety resources and add
unnecessary costs and delays to the process. Any delay in the
validation and acceptance of new aviation products is a delay in
introducing the latest designs, capabilities and technologies which
most often bring safety enhancements, particularly across the broad
scope of general aviation products in commercial and private operations
for business, passenger, cargo, flight training, personal and
recreational transportation.
Despite some public rhetoric, at the working certification
directorate level, we believe there is a good relationship and strong
commitment between the FAA and EASA for continued cooperation and
collaboration under the EU-US bilateral. GAMA and our member companies
will continue to work with FAA, EASA and regulators globally to
facilitate safety cooperation for the safe and effective certification
of aviation products. We look forward to working with you on this
critical matter.
Questions from Hon. Garret Graves to Lance Lyttle, Managing Director,
Seattle-Tacoma International Airport, on behalf of the American
Association of Airport Executives
Question 1. What public health guidelines are the airports
following to keep passengers safe and healthy?
Answer. Since the beginning of the pandemic, airports have made
significant investments in public health enhancements to protect
workers and passengers at their facilities, and to restore confidence
in air travel. These investments follow guidelines issued by the
Centers for Disease Control and Prevention (CDC) on cleaning,
disinfecting, and ventilation; on ways to mitigate the virus in the
workplace; and that specifically address workforce protections for
airport personnel. In addition to CDC guidance, airports have been
abiding by guidelines issued from the Environmental Protection Agency,
the Occupational Safety and Health Administration, and the
Transportation Security Administration, as well as any public health
guidelines issued by their states or localities.
At SEA, we implemented a wide range of new FlyHealthy initiatives
based on current public health guidelines and are committed to
retaining these enhanced health protocols in the future. Specifically,
we have:
Increased cleaning and sanitization efforts, with
frequent disinfection with medical-grade cleaning products;
Secured accreditations for our cleaning practices, which
includes frequent training of our personnel on these methods;
Required passengers, visitors, and workers to wear face
coverings in the public areas of our facility well before the federal
mask mandate went into effect;
Added over 280 hand sanitizer stations throughout the
terminal;
Invested in a wide variety of innovative technologies for
seamless, contact-free travel;
Installed nearly 650 plastic protective barriers that
buffer interactions between travelers and airport employees;
Displayed 8,000 signs and stickers to remind passengers
of physical distancing; and
Opened an on-site COVID-19 testing location for non-
symptomatic travel testing needs.
Question 2. In your written statement you indicate that airports
``have seen signs of gradual improvement over the last six months.''
What improvements have you seen?
Answer. Although far below 2019 levels, enplanements have continued
to improve in recent months, generating more revenue for airports. We
have a long way to go before we get back to pre-pandemic levels. But
rising vaccination rates and declining coronavirus cases are prompting
more people to travel. The Transportation Security Administration
screened more than one million passengers for several consecutive days
in March and reached almost than 1.4 million on March 12--the highest
level since March 15, 2020. At SEA, we ended 2020 down 61% compared to
2019, but will be ``only'' down 30-40% in 2021 compared to 2019; while
this is progress, we do not expect to return to 2019 levels for at
least three to five years.
Congress also helped by passing coronavirus relief packages
including the American Rescue Plan, which included an additional $8
billion for airports. Due, in part, to increasing vaccination rates and
additional federal funding for airports, Moody's recently upgraded its
financial outlook for airports from negative to stable. Although new
variants could help contribute to another spike in coronavirus cases,
the Moody's report is another sign that the outlook for airports is
improving.
Question 3. You stated that ``overall airline costs will be lower
in 2021 than in 2020.'' What actions have airports taken to achieve
this reduction?
Answer. Airports around the country have taken numerous steps to
help the airlines and concessionaires during the pandemic. As I
mentioned in my testimony, the Seattle-Tacoma International Airport has
tried to assist our airline partners by accelerating cost-sharing
payments and by lowering landing fees. For those reasons, we expect
airline costs will be lower in 2021 than in 2020. We have also helped
concessionaires by deferring rents and fees and by adjusting leases.
Many other airports have taken similar actions to help airlines and
concessionaires during these difficult times. When the pandemic began a
year ago, Dallas Fort Worth International, Hartsfield-Jackson Atlanta
International, Orlando International, and other airports announced
their decisions to reduce or defer landing fees to help their airline
partners. We're all part of the same aviation ecosystem, and airports
are eager for airlines, concessionaires and their other partners to get
through the current crisis so we can we work together on the recovery
ahead.
Question 4. Please describe the results of the Harvard Aviation
Public Health Initiative's report on the risk of COVID transmission in
airports.
Answer. On February 11, 2021, Harvard's Aviation Public Health
Initiative (APHI) issued a comprehensive report on the risk of
coronavirus transmission in airports, after completing a ``curb-to-
curb'' study on airport operations. To understand the airport
environment during COVID, Harvard developed a questionnaire that
focused on ``airport operations in a public health emergency; screening
of passengers, visitors, and employees; cleaning and disinfection;
ventilation; physical distancing from pre-departure to arrivals;
innovations, and behavioral issues.'' A total of 25 airports, 23 within
the United States (U.S.) and two internationally, responded to the
questionnaire and a subset of these airports were interviewed. The
sample of U.S. airports reflected different areas of the country,
airport sizes, and international and domestic facilities. Seattle-
Tacoma International Airport was one of the airports reviewed.
Overall, Harvard found that the probability of being infected in an
airport was very low. According to APHI, airports made ``consistent and
impressive commitments to reduce the risks of disease transmission in
their facilities'' between passengers, employees, concessionaires,
contractors, and visitors through layered, interlinked, risk-mitigation
strategies that, when used together, can effectively control the risk
of exposure. The report highlighted enhanced cleaning and frequent
disinfection regimens; upgrades to ventilation delivery and air
handling systems (including increasing filtration efficiency); adoption
of various means to encourage physical distancing (e.g., floor decals,
barriers, signage, communication); the promotion of compliance with
wearing masks or face coverings; and the use of technology to support
contactless procedures in certain circumstances.
The Harvard report made clear that there is no one-size-fits-all
approach that works in all instances, given the nature of the virus and
the complexity and diversity of airports across the country. It
concluded that protective efforts must remain in place as air travel
volumes increase and even as more and more people get vaccinated to
reduce the transmission of this disease. SEA and other airports across
the United States are committed to continuing these protective
mitigation efforts to ensure passengers and workers are safe as
possible.
APHI also found that while information developed for addressing the
pandemic was helpful to airports, the absence of federal guidance early
in the crisis and variable state and local practices in the U.S., meant
that each airport has largely been responsible for determining its
approach to COVID-19 response protocols and the evolving science. Among
the airports surveyed and interviewed, most commented on a desire to
see greater consistency across the industry through federal
requirements, noting this would help passengers know what is expected
of them, improve passenger confidence and compliance, and enable
targeted financial investments in support of faster industry-wide
recovery.
This report was the second by Harvard to assess the risk of
transmission in air travel. The first report was issued in October 2020
and focused on the risks on aircraft. APHI acknowledged that the
airport environment is much more complex, as compared to aircraft, when
studying transmission risks and mitigation efforts.
Question 5. Have any airports sought out new sources of revenue?
Answer. Airports are always considering new ways to generate non-
aeronautical revenue, but those opportunities have been significantly
limited during the pandemic. Traditionally, airports rely on
aeronautical revenue, non-aeronautical revenue, Passenger Facility
Charges and federal funding. Unfortunately, revenue from the first
three sources declined dramatically in 2020. As I mentioned in my
testimony, ACI-NA estimates that airports are projected to experience
at least $40 billion in lost revenue and increased costs from March
2020 through March 2022. That is why airports are so grateful that
Congress stepped in and provided an influx of federal funds to help
offset some of those unprecedented financial losses.
Question 6. In your written testimony you ``urge Congress to do
more to ensure that the thousands of nonprimary commercial service and
GA airports . . . have the resources they need to respond to the
pandemic.'' How can Congress help these airports in particular?
Answer. Airports are grateful that Congress approved three
coronavirus relief packages in the past year that included funding to
help airports during the pandemic. The final version of the American
Rescue Plan, which the House approved on March 10, included an
additional $100 million for nonprimary commercial service and general
aviation airports. It also included language to eliminate the local
match requirement for Airport Improvement Program (AIP) grants in
Fiscal Year 2021. Both provisions will help nonprimary commercial
service and GA airports in the months ahead. But that is not nearly
enough to cover the needs of 3,000 airports around the country and
especially those traditionally busy general aviation airports with
significant annual operations.
Aside from providing another round of coronavirus relief funding,
Congress could take steps to help GA and commercial service airports in
the upcoming infrastructure bill and the annual appropriations process.
H.R. 2, which the House passed last year, proposed to increase the AIP
authorization level from $3.35 billion to $4 billion annually. It also
proposed to provide up to $4 billion annually in additional funds for
airports with broader flexibility. Including both provisions in an
infrastructure bill this year would help airports of all sizes prepare
for increasing operations, rising passenger levels, and the recovery
ahead.
Finally, Congress could help nonprimary commercial service and GA
airports that participate in the FAA Contract Tower Program by: 1)
increasing funding for the program in the Fiscal Year 2022 DOT
appropriations bill; 2) including funding in the infrastructure bill to
help contract tower airports repair or replace aging towers; and 3)
passing H.R. 1283, the CONTRACT Act, a bipartisan bill that would
address staffing challenges at contract tower airports. We deeply
appreciate your longstanding support for the FAA Contract Tower Program
and thank you for cosponsoring the CONTRACT Act again in the 117th
Congress.
Questions from Hon. Garret Graves to Edward M. Bolen, President and
Chief Executive Officer, National Business Aviation Association
Question 1. What kinds of long-term adjustments is the industry
implementing to adapt to the new reality of a post-COVID world?
Answer. While the COVID-19 pandemic continues to create
unprecedented challenges for business aviation, our industry is
resilient and adapting to the new normal. For example, NBAA has
developed best practices for aircraft cleaning and disinfection, which
the industry has embraced to provide passengers greater confidence when
traveling. We also developed relationships with the CDC and other
health-related agencies to provide the latest guidance on vaccines to
pilots who must ensure they meet stringent FAA medical requirements.
Air charter operators are also rapidly adapting to changes in
commercial airline schedules that have reduced service to many small
and mid-sized communities. Aircraft have been redeployed to serve new
markets, and operators are working to educate potential customers about
the benefits of business aviation. As additional customers are exposed
to the benefits of business aviation, NBAA is working to provide
educational opportunities designed for these new entrants.
Finally, with the remarkable development of effective COVID-19
vaccines we have a potential path forward for business aviation, even
as we continue to deal with day-to-day pandemic-related challenges.
With that in mind, we are looking to the future with a focus on
advanced technology, sustainability, and diversity. This positive
future will bring our country closer together and generate high-skill,
good-paying jobs right here in the United States.
Question 2. In your written statement you indicate that while you
``understand challenges for the Treasury Department in administering
PSP, [smaller operators] have experienced significant delays in the
second round of funding.'' To what do you attribute these delays and
what impact are they having on small businesses? How can this
Subcommittee help?
Answer. We applaud the dedication of Treasury employees to quickly
stand up the Payroll Support Program (PSP), which has provided
assistance to hundreds of small businesses. For small air charter
operators, the lack of a specific contact at Treasury to address PSP-
related questions continues to be a challenge. Understanding that there
are limited resources, it would be helpful if Treasury could identify a
dedicated staff person (or group) to work with general aviation
operators.
If Treasury could provide additional certainty/transparency as to
when applicants could expect PSP awards, that would be helpful. After
submitting a PSP application, there is no timeline or tracking process
for applicants to understand when awards will be issued. This
uncertainly is very challenging for small businesses that are retaining
employees with the expectation of receiving PSP assistance.
Through the Subcommittee's work with Treasury, we would appreciate
you raising the idea of a dedicated contact for small operators working
through the application process. Also, a request from the Subcommittee
for a timeline or estimated PSP award date that small operators can
consult after their application is received would be helpful.
Question 3. How would you describe ``recovery'' for your segment of
the aerospace industry?
Answer. Recovery for business aviation continues to be uneven, with
some airports still dealing with 50%declines in aircraft operations and
fuel sales. Based on our conversations with NBAA members, business
travel is still down significantly from pre-pandemic levels. There is
no consensus about what business travel will look like post-pandemic,
so while we are optimistic, there are continuing concerns.
Also, PSP continues to provide critical support for air charter
providers and other general aviation commercial operators. We
appreciate the recent PSP-extension and look forward to continuing the
discussion on future needs as we have more data on the impact of the
vaccine rollout on demand for business aviation.
Question 4. In your written statement you expressed support for
both advanced air mobility and sustainable aviation fuels. How do you
see these new technologies changing air transportation and its impact
on the environment?
Answer. Sustainable Aviation Fuel (SAF) is widely considered to
hold the most significant potential for reducing GHG emissions from
aviation. SAF reduces lifecycle GHG emissions by up to 80% compared to
conventional jet fuel. While there continue to be significant
advancements in battery technology and electric propulsion, those
options are not yet viable for many business aircraft. SAF represents
the best path to decarbonize the aviation industry as we work towards
electrification and other advanced propulsion technologies.
For shorter haul trips and in urban areas, advanced air mobility
(AAM) offers significant opportunities to reduce congestion and utilize
electric propulsion. The ability for AAM to connect passengers with
multimodal hubs and reduce congestion on the ground has the potential
to deliver significant environmental benefits. Through targeted
infrastructure and planning investments, the U.S. can be the world-
leader in AAM and its promise of zero-emission aerospace.
Question 5. Do your members remain concerned about a shortage of
professionally trained aerospace professionals? If so, how can the
Government and industry work together to ensure we do not lose sight of
this issue during COVID and COVID recovery?
Answer. We appreciate the Subcommittee's continued interest in our
aerospace workforce. For the United States to maintain its position as
the world leader in aviation, we need a growing and highly-trained
workforce. The COVID-19 pandemic has created significant challenges for
our workforce, but that does not mean we should stop planning for the
future.
We look forward to the reintroduction of the Promoting Service in
Transportation Act during this Congress. This legislation would
authorize the Department of Transportation to develop a series of
broadcast, digital and print public service announcements to promote
career opportunities and increase diversity in the transportation
workforce. Through these public service announcements, we will raise
awareness of careers across all transportation modes, including
aviation, and create excitement and interest in these careers at an
early age.
Questions from Hon. Sam Graves to Edward M. Bolen, President and Chief
Executive Officer, National Business Aviation Association
Question 6. COVID relief for small operators: Mr. Bolen, in your
written statement you indicate that while you ``understand challenges
for the Treasury Department in administering PSP, [smaller operators]
have experienced significant delays in the second round of funding.''
To what do you attribute these delays and what impact are they having
on small businesses? How can this Committee help?
Answer. We applaud the dedication of Treasury employees to quickly
stand up the Payroll Support Program (PSP), which has provided
assistance to hundreds of small businesses. For small air charter
operators, the lack of a specific contact at Treasury to address PSP-
related questions continues to be a challenge. Understanding that there
are limited resources, it would be helpful if Treasury could identify a
dedicated staff person (or group) to work with general aviation
operators.
If Treasury could provide additional certainty/transparency as to
when applicants could expect PSP awards, that would be helpful. After
submitting a PSP application, there is no timeline or tracking process
for applicants to understand when awards will be issued. This
uncertainly is very challenging for small businesses that are retaining
employees with the expectation of receiving PSP assistance.
Through the Subcommittee's work with Treasury, we would appreciate
you raising the idea of a dedicated contact for small operators working
through the application process. Also, a request from the Subcommittee
for a timeline or estimated PSP award date that small operators can
consult after their application is received would be helpful.
[all]