Democrats press airlines against resuming stock buybacks
House Democrats on Thursday urged airlines to refrain from resuming stock buybacks until they overcome flight delays and cancellations stemming from a shortage of workers.
When lawmakers provided airlines with over $50 billion in relief to keep them afloat at the height of the coronavirus pandemic, they restricted them from repurchasing their own shares — a prohibition that expires Friday.
Roughly 70 House Democrats signed a letter to the top airline trade associations calling on carriers to hold off on stock buybacks “at least until air carriers are able to publish and fulfill schedules that meet demand, staff flights and key personnel positions, and return service to every community — big or small.”
Rep. Peter DeFazio (D-Ore.), chairman of the House Transportation and Infrastructure Committee, applauded the airline relief for saving the industry but criticized the buybacks during a hearing Thursday.
“Stock buybacks used to be illegal until the Reagan administration. It’s the ultimate in self-dealing. It doesn’t benefit customers. It only benefits those whose salary is tied to stock price and, of course, stockholders,” said DeFazio, who led the letter.
Airlines were forced to cut down on this year’s flight schedules and cancel thousands of flights during peak travel weekends because they didn’t have the employees to meet surging demand for travel.
Democrats have criticized airlines for furloughing workers and offering early retirements to pilots in the first year of the pandemic despite taking federal funds meant to help them retain their workforce for when Americans returned to airports.
Airlines for America, the largest industry group, estimated that federal COVID-19 relief covered 77 percent of airlines’ payroll costs, but they were still forced to make additional cuts.
“Carriers have been aggressively hiring across the industry—recruiting pilots, mechanics, flight attendants, gate agents, customer service representatives and others—to accommodate the rapid return of demand for air travel, against a challenging hiring environment and as other industries are reducing their workforce,” the group said in a statement.