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Chair of House coronavirus oversight subcommittee asks cargo airlines to return $630 million in aid

''Congress intended for these taxpayer funds to save jobs, not to provide windfalls to thriving businesses,'' wrote Representative James Clyburn, chairman of the Committee on Oversight and Reform subcommittee on the coronavirus crisis.
''Congress intended for these taxpayer funds to save jobs, not to provide windfalls to thriving businesses,'' wrote Representative James Clyburn, chairman of the Committee on Oversight and Reform subcommittee on the coronavirus crisis.Michael A. McCoy/Associated Press

WASHINGTON — The chairman of a House subcommittee overseeing coronavirus relief has asked four cargo airlines to return $630 million in federal aid, saying that unlike struggling passenger airlines, their businesses appear to be booming and don’t need help from taxpayers.

Representative James Clyburn, a South Carolina Democrat, wrote to the leaders of Atlas Air, Kalitta Air, Western Global Airlines, and Amerijet International late Monday, asking them to justify receiving help from the government given their reported financial success in recent months.

''Congress intended for these taxpayer funds to save jobs, not to provide windfalls to thriving businesses,'' wrote Clyburn, chairman of the Committee on Oversight and Reform subcommittee on the coronavirus crisis.

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In recent weeks, Congress has been weighing whether to provide passenger airlines more aid under the Payroll Support Program that Congress created in March. The carriers continue to struggle as the coronavirus pandemic persists and they have shed tens of thousands of jobs.

But the program also set funds aside for cargo companies, which are not household names and have found unexpected success during the pandemic.

As passenger airlines have cut flights, there is less space for cargo in the bellies of their jets, which caused rates for airfreight to skyrocket in the spring. As Americans do more shopping online to avoid stores, demand for freight has grown.

The four cargo airlines did not immediately respond to requests for comment on Clyburn’s letter.

The largest recipient of the aid was Atlas Air, which operates planes for Amazon. (Amazon founder Jeff Bezos owns The Washington Post.) The airline was approved for $406 million under the payroll program, split almost evenly between grants and loans from the Treasury Department.

Since hitting a low in mid-March, the company’s stock price has roughly quadrupled. The company’s chief executive has said its success has exceeded his team’s expectations.

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''The company’s financial success suggests that Atlas Air did not need taxpayer funds to help retain its workers,'' Clyburn wrote. ''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.''

Atlas has passed on some of its success to its employees, announcing a 10 percent pay increase for pilots in May. When it was approved for the coronavirus aid, the company said it would use the money to ''protect our workforce of highly skilled employees in the wake of this pandemic.''

A separate federal loan program for aviation companies, also created as part of the government’s relief efforts, was only available if applicants could not get credit elsewhere. But no such provision was included in the section of the law creating the payroll grants.

In addition to the money under the Payroll Support Program, which was dedicated to aviation companies, at least one of the cargo airlines also received a loan under the government’s Paycheck Protection Program, which was designed to prop up small businesses. Western Global received a loan of $5 million to $10 million in the small business program, on top of the $34 million in the payroll program.

A special inspector general who is also overseeing the coronavirus relief money has questioned whether that kind of double-dipping is appropriate.

Clyburn’s subcommittee has also been investigating airline contractors that appear to have laid off employees shortly before being approved for the payroll grants, something the law allows, but which lawmakers say is deeply unfair.

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