Airlines boosted lobbying as pandemic spread

$9.5 million spent last quarter, coinciding with passage of a federal aid package, was $1.6 million more than the same period in 2019

An American Airlines aircraft sits at a terminal at Ronald Reagan Washington National Airport on March 17, 2020.  (Caroline Brehman/CQ Roll Call file photo)
An American Airlines aircraft sits at a terminal at Ronald Reagan Washington National Airport on March 17, 2020. (Caroline Brehman/CQ Roll Call file photo)
Posted April 23, 2020 at 3:00pm

Major passenger airlines spent about $9.5 million on lobbying last quarter, coinciding with the passage of a federal aid package in the wake of the coronavirus pandemic. That was $1.6 million more than the same period in 2019, according to an analysis of quarterly lobbying reports.

The reports cover Jan. 1 through March 31, when the COVID-19 pandemic caused airline ridership to drop steeply. Delta reported Wednesday it lost $534 million during the quarter, its first quarterly loss in more than five years.

It was also the period when Congress began working in earnest on a roughly $2 trillion spending bill that included $61 billion in federal grants and loans for airlines. President Donald Trump signed that bill into law on March 27.

That bill included $25 billion in loans and $25 billion in grants for passenger airlines, $4 billion in loans and $4 billion in grants for cargo airlines and an additional $3 billion for airline contract workers.

[10 airlines agree to terms for federal grants to save jobs]

The Treasury Department announced Monday it had finalized funding agreements with Allegiant, American, Delta, Southwest, Spirit and United Airlines and is continuing to work on agreements with Alaska, Frontier, Hawaiian, JetBlue and SkyWest. In all, the airlines represent nearly 95 percent of U.S. airline capacity.

Treasury also Monday began disbursing the first payments to airlines, giving $2.9 billion in initial payments to airlines approved for the grants. It has yet to begin issuing the loans.

While not all of the airlines that received federal aid incurred major lobbying expenses last quarter, the major players spent millions. American Airlines alone spent $1.4 million on lobbying, which is slightly higher than what it paid in 2019 and consistent with or lower than what it paid in 2018 and 2017. 

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The company hired outside lobbying firms including Arent Fox LLP, Chesapeake Enterprises and Hannegan Landau Poersch & Rosenbaum Advocacy LLC. Adding in the cost it incurred with outside firms, the airline spent about $2.1 million — slightly less than the $2.175 million it spent in total in 2019.

American announced April 14 that it would receive $5.8 billion from the $29 billion airline Payroll Support Program, including $4.1 billion in grants and $1.7 billion in loans. The company expects to separately apply for a loan of $4.75 billion.

Delta Air Lines, meanwhile, spent $1.24 million last quarter on its own in-house lobbying — a significant jump from 2019 when it spent $820,000 during the first quarter. This year marked the first year in at least five when the company spent more than $1 million on in-house lobbying.

Outside support

Like other major companies, Delta employed outside support as well. In all, the company spent $1.67 million on lobbying during the first quarter of 2020, an increase from the $1.25 million total it spent on lobbying during the first quarter of 2019. The company has agreed to take $5.4 billion in aid under the Payroll Support Program, including a 10-year, low-interest loan of $1.6 billion and $3.8 billion in grants.

United Airlines last quarter spent $1.34 million on its own in-house lobbying efforts, up from the $980,000 it spent on lobbying in 2019 but down from 2018 when it spent $1.47 million during the first quarter. The airline employed the services of five outside lobbying firms, including the Duberstein Group, Cornerstone Government Affairs Inc., and Forbes-Tate, spending a total of $1.56 million on lobbying in the first quarter of 2020, up from $1.294 million in the first quarter of 2019.

The airline plans to take about $5 billion from the federal grant program, with $3.5 billion of that direct grants and $1.5 billion in the form of a low-interest rate loan.

Airlines for America, the major industry group for the airlines, spent $1.92 million on lobbying during the first quarter of the year, which is more than it spent during the first quarter during each of the past five years. In 2019, it spent $1.27 million on lobbying. With outside firms, the organization spent a total of $2.36 million in the first quarter of this year, an increase as well from the $1.7 million total it spent on lobbying last year.

Smaller airlines have also weighed in, albeit spending thousands, rather than millions, on lobbying. Southwest Airlines spent $420,000 on lobbying last quarter alone but a total of $570,000 counting outside agencies, up from $410,000 overall during that quarter last year. 

Budget carrier Allegiant Air spent $40,000, employing Akin Gump Strauss Hauer and Feld. That spending level is consistent with past years. 

JetBlue Airways spent $470,000 on lobbying itself but spent a total of $510,000 counting outside help. And Hawaiian Airlines spent $240,000 last quarter, according to the reports, while Alaska Airlines spent a total of $482,400, including $390,000 from its own in-house efforts.

Boeing spending down

Boeing, the troubled airplane maker which spent much of 2019 embroiled in controversy over its handling of the 737 Max, spent less on lobbying in the first quarter of 2020 compared with previous years. In 2020, it spent $3.08 million in-house on lobbying, down from 2019 when it spent $3.33 million and 2018, when it spent $3.68 million. 

Total lobbying efforts were also down. The company spent $3.9 million total on lobbying this quarter after spending $4.29 million during the first quarter of 2019.

The most recent coronavirus package included a $17 billion pot of loan money that many believed was designed to shield the aircraft manufacturer, but Boeing CEO Dave Calhoun has expressed reluctance over accepting any loan money that would allow the government to take equity in the company. The company is reportedly awaiting guidance from the Treasury Department about conditions and requirements for the relief.