U.S. Sen. Roger Wicker, R-Miss., chairman of the Senate Committee on Commerce, Science, and Transportation, will convene a hearing titled, “The State of the Aviation Industry: Examining the Impact of the COVID-19 Pandemic,” at 2:30 p.m. on Wednesday, May 6, 2020. Witnesses will provide an update on the current status of the aviation industry and address challenges resulting from the COVID-19 pandemic. The hearing will also examine the implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
- The Honorable Eric Fanning, President and Chief Executive Officer, Aerospace Industries Association
- Mr. Nicholas Calio, President and Chief Executive Officer, Airlines for America
- Dr. Hilary Godwin, Dean, School of Public Health, University of Washington
- Mr. Todd Hauptli, President and Chief Executive Officer, American Association of Airport Executives
*Witness list subject to change
Wednesday, May 6, 2020
Committee on Commerce, Science, and Transportation
This hearing will take place in the Dirksen Senate Office Building 106. Witness testimony, opening statements, and a live video of the hearing will be available on www.commerce.senate.gov.
*In order to maintain physical distancing as advised by the Office of the Attending Physician, seating for credentialed press will be limited throughout the course of the hearing. Due to current limited access to the Capitol complex, the general public is encouraged to view this hearing via the live stream.
**Note: Witness list updated 5/5/2020
Chairman Roger Wicker
No part of the American economy has escaped the impact of the COVID-19 pandemic. The air transportation sector has suffered a particularly painful blow, one intensified by global travel restrictions and stay-at-home orders. Domestic air travel has declined over 95 percent compared to last year. Planes are flying with 12 passengers on average. Half of the U.S. passenger aircraft fleet is sitting idle. The air cargo sector is marginally better, but is still struggling. Just last month, demand for air cargo plunged 15 percent and transport capacity declined by one-fifth compared to last year’s figures.
Even if the global economy recovers, the future remains troubling for aviation. Demand for future U.S. air travel measured by new booking is down 97 percent year-over-year. A recent International Air Travel Association (IATA “Eye-AHH-tah”) survey showed that 40 percent of passengers plan to wait at least six months before booking a ticket – I certainly hope they will rethink that.
The situation is dire not only for airlines and their workers, but also for the air transportation sector, which relies upon a vast ecosystem in order to function. This sector includes airports and their concessionaires; maintenance and repair stations; ticket agents; fixed-based operators and other ground support contactors; and the entire aerospace industrial base. A lot of these businesses are mom-and-pop operations. Many of their workers are hourly, living paycheck-to-paycheck. I would welcome our witnesses’ comments on the current state of aviation and thoughts on the future.
Congress has recognized the importance of preserving the air transportation sector, which is critical for so many other industries and our society generally. The CARES Act included $32 billion in payroll support assistance for air carriers and contractors. Administered by the Treasury, the Payroll Support Program has prevented mass layoffs across the industry. All 13 major airlines and hundreds of regional and small carriers have signed up to participate. Billions of dollars in assistance has already been provided.
Recognizing the great need for liquidity, the CARES Act also included $29 billion in loans within the Treasury’s Economic Stabilization Fund (ESF) for air carriers, aviation repair stations, and ticket agents. Let me stress that in doing so Congress provided much-needed liquidity, not a bailout. There are strong taxpayer protection measures in the Payroll Support Program, and ESF loans must be paid back with interest. Beyond direct payroll support and loans, the CARES Act provided further relief with a tax holiday for commercial flights and passengers through the end of the calendar year.
The CARES Act also required the Secretary of Transportation to impose reasonable continuation-of-service obligations on airlines receiving assistance. Americans living in rural areas and small communities deserve continued access to air travel and cargo delivery. Finally, the CARES Act injected $10 billion into the nation’s airports to help them maintain operations and service debts.
The committee is interested in hearing the witnesses’ views on the CARES Act. We would also welcome perspectives on priorities for future potential legislation.
No act of Congress can help the industry if it is unsafe for passengers and crew members to fly and for other aviation workers to do their jobs. To that end, the committee is interested in the steps being taken to protect workers and the flying public.
The air transportation sector bears a special responsibility to prepare for, and actively mitigate, communicable disease outbreaks. COVID-19 is the latest pandemic, but it will not be the last. Air travel is the crucial element that can turn a local outbreak affecting a few into a global pandemic affecting billions of human beings. The committee would welcome the witnesses’ views on the need for new regulations or standards – at both the national and international levels – to harden the air transportation sector against the possibly of future pandemics.
I want to thank our distinguished panel for participating today and express our sincere gratitude for everything the industry is doing to help our nation weather this crisis.
I npw turn to my friend, Ranking Member Cantwell, for her comments.
Ranking Member Maria Cantwell
CANTWELL: Thank you Mr. Chairman, and thank you for holding this important hearing. I want to note that, while my colleague Senator Blumenthal is here along with me, we have six or seven colleagues who are joining us remotely, and we thank them for being part of this hearing today. The impact of the COVID-19 pandemic is fundamentally a public health crisis, but impact on the economy is global, without parallel. The coronavirus has heightened the importance, and also the vulnerability, of our aviation ecosystem. We need to connect America, its communities, and we need to keep employing people around the globe.
We have learned, just as with the Spanish flu, that this virus travels through people, and transportation routes and sectors. So we know we’re here today to talk about, what are the impacts of the virus on aviation, and what do we need to do for the future to better prepare.
On March 27th, the CARES Act was signed into law, and a historic part of the $2 million—two trillion dollar rescue package was specifically dedicating $32 billion in payroll assistance for workers, and $46 billion in loans to stabilize America’s aviation sector. We’re going to hear today from some of the witnesses to talk about that, but particularly I want to emphasize the fact that we want to hear from the Treasury office about the payroll support program, and ensuring that the CARES Act was used specifically to support payroll protection.
I also want to hear from the aviation manufacturing sector, and what this legislation has done to help us keep essential aviation workers, that are so critical for America’s competitiveness in a manufacturing economy. In particular, we want to see how the aviation sector is responding post-this COVID CARES Act legislation, but we are very concerned that when hours are being reduced of aviation airline workers, this is counter to what the legislation entailed. I will be sending a letter, along with Senators Brown and Schumer, to the Treasury secretary to clarify that mandatory or forced reductions in payroll hours is not what the CARES Act intended.
We recognize the challenges facing the industry, and we recognize the challenges in facing this disease. We know that demand has plummeted, and that airplanes are grounded and that airports have been empty. So we’re going to hear today about those challenges and about how we can keep moving forward to protect the flying public as they return.
We’re going to hear from a witness, Eric Fanning, who is going to talk about how this business was critical to national security of the aviation sector, and what we can do to continue to move forward with getting manufacturing in a safe environment.
We’re also going to hear from Mr. Hauptli about the implementation to our airports and airport systems. Clearly, they have been hard hit and impacted by the lost revenue, and the CARES Act helped deliver some resources to sustain them through this crisis.
But I especially want to welcome and hear from Dr. Hilary Godwin, the Dean of the University of Washington’s School of Public Health, and professor in the Department of Environmental & Occupational Health Sciences. While we’re focusing on the impacts of industry, we need to think about this disease and what we need to do to prepare and make our workers safe in the aviation environment. We need to listen to our scientists, like Dr. Godwin. They will tell us how best to protect workers, they will tell us how to best protect the public, and particularly in the case of resurgence.
Dr. Godwin’s expertise has played a strong and active role in Washington’s response to the coronavirus. And right now, I believe, we need multiple federal agencies, like CDC, NIH, DHS, and DOT to better coordinate information to the traveling public about the phases of reopening. We have the states and public health authorities across the country looking for leadership, to tell our aviation-traveling public what are the most necessary procedures, and how to follow them. I do not want to see a Balkanization of safety issues, where everybody has somewhat of an opinion. Or, I should say, even of the industry, I want to see a uniform standard that this is what safety in aviation requires—on the manufacturing side, in our airports, and on our airplanes.
So I look forward to hearing from our witnesses today. We need to show the traveling public that we can make aviation safe for the future. We need to discuss what those solutions look like today, and make sure that we’re enforcing public health standards and reaching those goals.
So thank you, Mr. Chairman, for having the hearing. I would—if I could—also enter into the record a letter from the Association of Flight Attendants on their testimony as it relates to the COVID package and the payroll support program, making sure that workers are not forcefully reduced in hours.
Thank you very much, Mr. Chairman.
Witness Panel 1
The Honorable Eric FanningPresident and Chief Executive OfficerAerospace Industries Association
Mr. Nicholas CalioPresident and Chief Executive OfficerAirlines for America
Dr. Hilary GodwinDean, School of Public HealthUniversity of Washington
Mr. Todd HauptliPresident and Chief Executive OfficerAmerican Association of Airport Executives