Clyburn Calls on Cargo Carriers to Return Hundreds of Millions of Taxpayer Dollars
Washington, D.C. (October 20, 2020) – Yesterday, Rep. James E. Clyburn, Chairman of the Select Subcommittee on the Coronavirus Crisis, sent letters to four cargo carriers that received a total of more than $630 million from the Treasury Department in the Payroll Support Program (“PSP”), despite reports of the companies’ financial success during the pandemic. Congress created the Payroll Support Program to “preserve aviation jobs.” Chairman Clyburn called on the cargo carriers—Atlas Air, Kalitta Air, Western Global Airlines, and Amerijet International—either to return the money or to demonstrate that they needed the funds to keep workers on the payroll, as Congress intended.
The Chairman wrote that each of these companies “appears to have had financial success during the crisis.” He continued, “If your company did not need PSP funds to keep workers on the payroll, failing to return the funds to the Treasury would be inconsistent with Congress’s clear intent.”
The coronavirus pandemic has devastated many segments of the economy, including the aviation industry. In response, as part of the Coronavirus Aid, Relief, and Emergency Security (CARES) Act, Congress created the Payroll Support Program to “preserve aviation jobs and compensate air carrier industry workers.” Congress required that Program funds “shall exclusively be used for the continuation of payment of employee wages, salaries, and benefits,” and in exchange required recipients to “refrain from conducting involuntary furloughs or reducing pay rates and benefits until September 30, 2020.”
Congress did not intend for the funds to provide windfalls to thriving businesses. Yet at least four cargo carriers that enjoyed increased demand and revenue during the pandemic have received hundreds of millions of taxpayer dollars:
- Atlas Air received more than $406 million in PSP funds. The company’s second quarter earnings in 2020 increased approximately 300 percent over the second quarter of 2019.
- Kalitta Air received more than $161 million in taxpayer funds despite being described as a “perfect example of a company that is benefitting wildly” from the pandemic economy.
- Western Global Airlines received more than $34 million in PSP funds even though Moody’s Investors Service wrote that the company “benefitted from the increased demand for its global air cargo services” during the pandemic.
- Amerijet International received more than $30 million in taxpayer funds from the PSP despite reporting a “period of profitable growth” and expansion in 2020.
The Chairman wrote to each company: “Given Congress’s goal of preserving jobs, I urge you to return the funds or, if the money was in fact needed for this purpose, demonstrate why this was the case despite the company’s recent success.”
Click below to read the letters: