A Second Round of Airline Bailouts Would be Bad for the Industry and Consumers
Not content with one round of sector-specific bailouts, the country’s passenger airlines are lobbying Congress and the White House hard in hopes of receiving yet another infusion of taxpayers’ money.
On Thursday, The Wall Street Journal reports, the top executives of American Airlines, Southwest, and United all met with White House Chief of Staff Mark Meadows to ask for cash assistance, which they say would forestall a looming round of October layoffs.
Meadows appeared amenable to providing an additional $25 billion to the industry, which he deemed a small sum compared to the broader pandemic relief proposal that Congress is currently considering.
“I never thought I’d say $25 billion was a small number, but compared to $1.5 trillion, it’s a rather small amount of additional assistance that could potentially keep 30,000 to 50,000 workers on the payroll,” Meadows told reporters after the meeting. Meadows is the former chair of the House Freedom Caucus, which presents itself as a force for fiscal conservatism.
That sum would likely come as a clean extension of the $32 billion Payroll Support Program, which was originally passed in March as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That program, administered by the Treasury, made $25 billion in grants available to passenger carriers on the condition that they not involuntarily furlough their workers or cut wages through the end of September. They’re also obliged to run a minimum number of flights to areas they serviced prior to the pandemic.
Airlines—who saw travel volumes decline by as much as 95 percent at the beginning of the pandemic—have eagerly accepted those grants. United, American, and Delta all inked grant agreements worth around $5 billion each. Southwest accepted $3.2 billion in taxpayer-funded grants. Companies will have to pay some of this grant money back, either as cash or as stock.
The CARES Act also created a $25 billion line of credit for the industry. So far, no airline has touched that pot of money, despite an an
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