By Linda Chiem

Law360 (May 6, 2020, 10:53 PM EDT) -- Embattled airlines and airport operators told a Senate panel Wednesday that they'll need regulatory flexibility and potentially more money to navigate what they expect will be a slow and painful recovery from the COVID-19 pandemic.

During a hearing before the Senate Committee on Commerce, Science and Transportation, leaders for industry trade groups Airlines for America and the American Association of Airport Executives painted a stark portrait of how the novel coronavirus outbreak has impacted the U.S. aviation industry and what health and safety precautions may become the new norm in air travel. But the industry groups declined to embrace any hard-line regulations or federal guidance for how to move forward with reopening the economy. 

U.S. airlines' passenger volumes are down 95% and more than 3,000 jets remain grounded, resulting in a collective cash burn that's topping $10 billion a month, according to Nicholas Calio, president and CEO of Airlines for America, which represents the nation's largest airlines.

Calio sought to reassure lawmakers that the airlines — which received $25 billion in payroll support grants and $25 billion in loans as part of the sprawling Coronavirus Aid, Relief and Economic Security Act that became law in March — have been shoring up cash and maintaining employment levels.

Sen. Maria Cantwell, D-Wash., asked if the airline industry would be receptive to the implementation of a national policy that "[doesn't] say to the flying public, 'We're going to charge you to keep the middle seat open.'" That was a reference to Frontier Airlines' announcement Monday that passengers can pay $39 per flight to have a "More Room" seat assignment that comes with a confirmed empty middle seat next to them.

"On the distancing, we're doing that now to the greatest extent possible," Calio said of airlines that are voluntarily spacing out passengers on flights and boarding passengers from the back to the front of the plane. "In the long term, that's a business model that cannot be sustained. If it costs more to fly people from point A to point B, it's a total money-losing proposition, which then means it's a job-loss proposition."

Several senators pounced on the airline industry for withholding customer refunds for canceled flights, which has prompted a number of consumer lawsuits.

"When you come to us and ask for more assistance, my mind goes back to the bailout we've just given you," Sen. Richard Blumenthal, D-Conn., said. "And now in effect you are continuing to mislead and deceive those taxpayers who've given you that bailout."

Calio said airlines are complying with U.S. Department of Transportation mandates regarding customer refunds for flight cancellations.

"If a passenger, under current law and regulation, is entitled to a cash refund, they're getting it," he said. "If they're offered a voucher instead ... it shouldn't happen. It ought to be clear to them they're entitled to a refund under current law."

However, Calio said airlines are not acting with any ill intent and that the industry is contending with "basically two bad choices here."

"Right now, negative revenue exceeds bookings so that's where we're bleeding that cash everyday," he said. "So you have one choice, which is to insist that everybody get a refund or you can drive the companies toward bankruptcies, which will happen very quickly at the rate things are going."

Airlines and airports have already ramped up their aircraft cleaning procedures and have voluntarily implemented mandates calling for all passengers to wear face masks on flights and in high-traffic areas in airport terminals. But the question remains as to whether more hard-line rules may be in order.

"No act of Congress can help the industry if it is unsafe for passengers and crew members to fly and for other aviation workers to do their jobs," said Sen. Roger Wicker, R-Miss., chairman of the committee, which is mulling over potential new regulations or standards that could "harden the air transportation sector against the possibility of future pandemics."

Hilary Godwin, dean of the University of Washington's School of Public Health and a professor in its Department of Environmental and Occupational Health Sciences, told the Senate panel Wednesday that national guidance should be made available to establish some level of uniformity and give travelers a better sense of what to expect when they fly.

She laid out a number of recommendations, including screening individuals for symptoms such as elevated temperatures before admitting them to the airport environment and requiring employees and travelers to wear face masks throughout the terminal.

Godwin also advocated for heightened "contact-tracing" procedures where airlines can keep tabs on passengers who may or may not have been exposed to an infectious disease during their travels. That means maintaining up-to-date records of passenger emails and phone numbers for every flight.

"That information needs to be more complete and more consistently gathered," Godwin said. "A lot of it is left to local jurisdictions, but we need to have a system that can have access to this really critical information."

Meanwhile, airports operators that are also struggling with obliterated passenger traffic and revenue signaled that they'll likely need more financial help, even after receiving $10 billion in the CARES Act.

"Given the significant decline in aviation activity and revenue, and the precipitous drop in [passenger facility charge] collections that help support bond payments, airports will need additional federal assistance at least as large as the initial amount provided in the CARES Act," said Todd Hauptli, president and CEO of the American Association of Airport Executives. "And, Congress must also provide billions of dollars in financial support for other parts of the aviation ecosystem — general aviation airports, business aviation, concessionaires, and other airport partners that have been significantly impacted by the crisis."

--Editing by Michael Watanabe.

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