Delta Pays $8.1M Over COVID Relief Fund Misuse Allegations

Delta Air Lines has agreed to pay $8.1 million to settle allegations that it violated the terms of the U.S. Department of the Treasury’s Payroll Support Program (PSP) during the COVID-19 pandemic. The PSP, part of the CARES Act, provided financial aid to airlines to maintain payroll and avoid layoffs amid the global crisis.

According to the Department of Justice, between March 2020 and April 2023, Delta awarded compensation to some senior executives and employees that exceeded limits agreed upon under the relief program. The airline also allegedly violated the False Claims Act by falsely certifying compliance with PSP terms in its quarterly reports and failing to inform the Treasury once the breach was discovered.

The PSP placed strict caps on executive compensation as a condition of receiving government support. Delta’s settlement does not require an admission of wrongdoing but resolves the issue without litigation.

In a statement, Delta Air Lines maintained that it complied with all CARES Act requirements. “This matter involves a technical dispute over the time periods used to measure executive compensation during the pandemic,” the airline said. “We believe the claim is without merit but have chosen to settle to avoid prolonged litigation and the associated costs.”

Delta, headquartered at Atlanta Hartsfield-Jackson, was one of several major carriers to receive PSP funds during the height of the COVID-19 travel shutdown. The resolution of this case highlights the continued oversight of federal pandemic relief programs.

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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com