Four US cargo carriers have been asked to hand back or demonstrate that they needed more than $630m in Covid-19 support funding as part of the Payroll Support Program (PSP).

James Clyburn, chairman of the select subcommittee on the coronavirus crisis, sent letters to Atlas Air, Kalitta Air, Western Global Airlines and Amerijet International.

The chairman wrote that each of these companies “appears to have had financial success during the crisis” and added: “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.” 

Congress created the PSP to “preserve aviation jobs and compensate air carrier industry workers”.

Congress required that PSP 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.”

The select subcommittee said that Atlas Air received more than $406m while its second quarter earnings in 2020 increased approximately 300% over the second quarter of 2019.

The company has also seen its stock value increase by more than 45% since the start of the year.

“It is troubling that Atlas Air is set to receive over $406m in tax payer funds — more than any other cargo carrier — to pay the wages and benefits of its workers while simultaneously reporting record earnings,” Clyburn said in his letter to Atlas Air Worldwide Holdings chief executive John Dietrich.

“Notably, Atlas Air attributes its improved cash balance in part to “the funds we received through the Payroll Support Program available to air cargo carriers under the CARES Act.”

“The company’s financial success suggests that Atlas Air did not need taxpayer funds to help retain its workers. Given Congress’s goal of preserving jobs, I  rge 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.”

Meanwhile, the subcommittee said that “Kalitta Air received more than $161m 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 $34m 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.

And the subcommittee said that Amerijet International received more than $30m 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.”

In response, Atlas Air said and it had received the letter and plans to respond.

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