Airlines Urged to Refrain From Stock Buybacks as Limit Ends (1)
- Restrictions tied to pandemic-era aid program expire Sept. 30
- Democrats, unions ask airlines to focus on restoring service
(Adds comment from Airlines for America in sixth paragraph.)
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House Democrats asked airlines Thursday to avoid stock buybacks after pandemic-era restrictions end this month, saying they should focus instead on meeting growing travel demand.
Congress passed payroll support that provided about $50 billion to US aviation during the pandemic and “ensured the airlines’ ability to return to service,” lawmakers wrote to airline trade groups. The program also prohibited furloughs, required continued service, and banned stock buybacks and dividends through Sept. 30 — a deadline that Democrats and unions are now looking to avoid.
“We urge your member carriers to refrain from initiating stock buybacks when the prohibition ends,” the Democrats wrote, adding that they should do so “at least until air carriers are able to publish and fulfill schedules that meet demand; staff flights and key personnel positions appropriately; and return service to every community.”
US air carriers have struggled to manage post-Covid demand, with almost 3% of flights canceled and 21% delayed during the first seven months of the year. The lawmakers say they want any available spending to be used to restore service, not to reward investors.
Peter DeFazio (D-Ore.), chair of the House Transportation and Infrastructure Committee, led the letter sent to Airlines for America, the Regional Airline Association, and the National Air Carrier Association.
Airlines for America, which represents major carriers, said in a statement that its member airlines “willingly agreed to the onerous restrictions” of the program and are focused on accommodating the return to air travel demand.
Unions recently launched a campaign to urge airlines to stabilize the industry before buying back stock. Sara Nelson, international president of the Association of Flight Attendants-CWA, AFL-CIO, lauded lawmakers’ engagement on the issue at a hearing Thursday.
“While airlines are just now starting to make a profit, the recovery is not complete and the austerity of twenty years prior has not been corrected for airline jobs,” Nelson said in written testimony. “We can’t allow CEOs to send one dollar to Wall Street before fixing operational issues and concluding contract negotiations.”
(The Washington-Baltimore News Guild, which is affiliated with the Communications Workers of America, represents employees of Bloomberg Government.)
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