Airlines Make Out Like Bandits in $2.3 Trillion Coronavirus Aid Bill

A lot of industries and individuals are suffering right now. A select few corporations are getting big bailouts.


Despite the best efforts of Rep. Thomas Massie (R–Ky.), the House of Representatives just passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act by a voice vote. The Senate had already approved the bill by a 96–0 vote on Wednesday, so it now goes to President Donald Trump's desk.

That's good news for the country's airlines, which are set to receive roughly $60 billion in financial assistance.

That includes $32 billion in cash grants to air carriers to prevent employee layoffs, with $25 billion of that going to passenger airlines and $4 billion to cargo carriers. The bill also gives $3 billion for contract workers hired by the airlines. Passenger and cargo carriers will also be eligible for another $29 billion in government loans.

Companies that take advantage of these grants and loans are forbidden from laying off workers or cutting pay through September 30 of this year. They are also barred from buying back their own stock. Executive compensation is also capped at 2019 levels.

This is pretty much everything the industry asked for. The CEOs of 10 major air carriers, including Delta, American, and Southwest, sent a letter to congressional leaders on Saturday asking for $58 billion in aid split evenly between grants and loans.

"We applaud the Administration and the U.S. Congress for reaching agreement on bipartisan legislation intended to assist the U.S. airline industry in continuing to make payroll and protect the jobs of hardworking men and women despite devastating impacts to the industry," declared Airlines for America chief Nicholas E. Calio in a statement after the Senate passed the bill. The unions representing pilots and flight attendants praised the stimulus package as well.

Less pleased is Robert Poole, director of transportation policy at the Reason Foundation (which publishes this website). He argues that airlines do not deserve special treatment.

"The airlines don't have a significant claim that they are a more vital business than railroads, trucking, all sorts of things that make the economy go," says Poole. "All the others don't have a special program."

This line of criticism has been echoed by a range of bipartisan voices. Reps. Justin Amash (I–Mich.) and Alexandria Ocasio-Cortez (D–New York) have both criticized the CARES Act giving too much away to corporations.

Amash has argued against any direct assistance to corporations, saying all aid should be given as cash subsidies to individuals.

Poole thinks loans to businesses—provided they are given at a reasonable rate of interest—are an appropriate way to help otherwise profitable firms injured by government-enforced closures and quarantines. Loans help "separate the wheat from the chaff," says Poole, by targeting aid at companies that actually have a chance of paying taxpayers back. Grants, he says, do a poor job of distinguishing between poorly managed companies that would be in financial difficulty anyway and competently run outfits that need only short-term liquidity to ride out the immediate crisis.

The coronavirus outbreak has radically upended American politics to an almost unthinkable degree. The near-unanimous passage of a $2.3 trillion economic assistance bill is evidence of that. But with corporate special interests extracting the lion's share of benefits coming out of Washington, some things still feel normal.

NEXT: How Much Is $2.3 Trillion? More Than Even Obama Could Imagine

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  1. Fuck this. If air travel is not profitable, then we need to develop more resource efficient travel, like rail/mag lev. If the airlines themselves are to blame for mismanagement, let them fail and whoever replaces them will have a very important example of what not to do.

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    2. “If air travel is not profitable, then we need to develop more resource efficient travel, like rail/mag lev”

      “Not” a leftist…

      There is no logic that says any form of terrestrial travel can be more efficient over long distances than going through the air.
      Freight transport, sure.
      But for lightweight (ie people traveling) movement over long distances, physics dictates air

      1. Yeah he’s a leftist. But he’s also a liar, so he says he isn’t.

        1. Remember when he claimed to be a special forces vet who worked with Eddie Gallagher? That was a good one. Now he claims to work in Seattle. He can’t keep the lies straight.

          The one thing I do believe is when he professed to wanting to bring illegal alien child molesters here. That actually tracks.

      2. Air travel is subject to weather. That is why in bad weather a lot of flights are cancelled and in real bad weather airplanes crash. Nowadays, unless it is international travel. you spend more time at an airport checking in and during connecting flights. I can travel from Buffalo, NY to Montreal, Canada by car in less time than it takes by jet airplane. Because of their hub system. the flights go south, Atlanta or DC, you board another plane and it goes north to Montreal. If you count the two hours for check in and waiting for a connecting flight, you actually will get there sooner by car going 65 miles per hour. Airline travel is not the cure for everything. And the bail out is not saving the airlines but indirectly saving the stock holders, who stand to loose a lot of money. Isn’t socialism, free tax payer money, great when it bails out the rich?

        1. How about Buffalo to Dallas? Still faster by car?

        2. How about Philly to Montreal?

          By air – 1 Hour 45 Minutes nonstop
          By car – 11 Hours, 45 Minutes

          By the way – cars are affected by weather, too.

        3. It’s over 1100 miles to drive from Spokane, WA to Las Vegas, NV. Or about 20 hours. It’s a out a quarter of the time investment to fly nonstop. Half that time being the actual flight.

          So no, when traveling a significant distance, flying still works better.

    3. “$100T Stimulus Package Aimed At Developing ‘Star Trek’ Transporter Technology Within 18 Months”

    4. What is the speed of fastest train in the world? It’s the Shanghai Maglev at 267 mph.

      Newark to LAX by air – 5 Hours
      By Maglev? – 12 hours.

      Efficient, my ass.

      1. I would rather spend 12 hours in a comfortable seat, be able to walk around in a wide isle and sit in a spacious toilet, rather then be packed like a sardine for 5 hours and hold my knees together so I don’t pee in my pants because all those 3 toilets made for midgets are occupied. By the way, you forgot to add the extra 2 to 3 hours at the airport to get processed by security.

        1. You’re 1 blown up rail line from the same thing.

        2. comfortable seat
          wide isle
          spacious toilet

          And you won’t find any of that on a fucking maglev train.

          1. Nope. Don’t think VW has ever taken Amtrak.

        3. “…I would rather spend 12 hours in a comfortable seat,..”

          Pay for it yourself.

        4. Just how comfortable are those trains?

    5. “…like rail/mag lev…”

      Go back to your sci-fi mags.

    6. Airlines were perfectly profitable until the government halted them from flying to Asia, then Europe, then most of South America. And then strongly discouraged or outright disallowed air travel domestically. There may be good reasons for those government actions but they had the effect of driving revenue to near zero. That’s called a “taking” and compensation is merited.

    7. There is no passenger rail system anywhere in the world – even in densely populated Europe — that is remotely profitable without massive government subsidies. Listen to yourself you dolt.

  2. But with corporate special interests extracting the lion’s share of benefits coming out of Washington, some things still feel normal.

    It would be comforting to know that even in times like these the government is still able to maintain “business as usual” – if “business as usual” wasn’t so horrific.

  3. Socialism! Hip Hip Hooray, Hip Hip Hooray!

    1. The entire week before this thing was unveiled, some of my Bernie-loving friends commented that the $1000 checks were turning a lot of people into socialists. I explained that we were going to get a huge dose of socialism, but whatever crumbs were sent to the people would be dwarfed by the corporate handouts.

      This week has been satisfying, especially with Bernie voting yes.

    2. Yes indeed, isn’t socialism great when it comes to the rescue of the rich! Ironic that Trump the chump, a hater of socialism, going as far as calling it communism, is resorting to socialism, free tax payer moneys, to save the evils of capitalism.
      Looks like the cruise line industry is also getting free money, their ships are registered in foreign countries so as not to pay US taxes. Trump is a real moron.

      1. “…Trump the chump…”

        Why do lefty ignoramuses spend half their lives thinking up ‘clever’ nick-names which embarrass 5-year-olds?

      2. That bill wa stuffed with pork by Pelosi. If there were no democrats then you could actually blame Trump.

        Maybe things will get desperate enough that people wake up and decode to finally scrape off the progressives.

  4. I can live very well without Carnival Cruises. Getting to Europe without an airplane looks to be harder.

    1. Who needs 34 types of ships?

      1. The U.S. Navy?

      2. Shipping companies?

    2. don’t fall into the trap of thinking that because some business may fold, no other businesses of that type will exist.

      our politicians have fallen into that trap because they are morons and venal.

      1. They are not morons and venal, they are doing what they were sent there to do, save the rich. All of a sudden socialism, free tax payer money is good. Isn’t socialism great when it saves the rich!

      2. You’re acting as if they’re folding due to mismanagement, when they’re folding due to direct government actions. When the feds build a road in your land they pay you. When they halt air travel to Asia and Europe they should pay the affected parties.

      3. This isn’t their failure. Why don’t we try preventing you from earning money and see how you do for awhile?

  5. I don’t think airlines should get a bailout but it is mostly the government’s fault nobody is traveling. Government has issued closed borders and shelter-in-place orders which some people follow.

    1. not necessarily. Flights were nearly empty before any of these orders to stop traveling came in. I had a friend fly to Vegas in mid Feb from Seattle. the whole plane at 8 people on it.

      You dont need government to tell you to stop traveling during a pandemic.

      1. Bullshit. I flew to Commifornia in early March. The planes were nearly full.

        1. That only proves people would rather go to California than Seattle. Not sure why you call them commies, how much stuff that is made in communist China do you buy? Hope you realize you are financially supporting a totalitarian, dictatorial communist regime, much worse than Califonia.

          1. Both places are filled with traitor progressives. Unlike other cities that are filled with Americans.

        2. That only proves people would rather go to California than Seattle. Not sure why you call them commies, how much stuff that is made in communist China do you buy? Hope you realize you are financially supporting a totalitarian, dictatorial communist regime, much worse than California.

        3. A new sock troll. How fun.

    2. The aid should be given to the people, like Amash suggests. Then, the airlines could compete to earn their profits. Taxpayer handouts enable airlines, Amtrak, and public transit providers to offer sucky services without financial consequences. The worse they are, the more handouts they get.

      1. Most people I know want the jobs they have to continue to pay them now and when the virus is over. That typically entails an employer that is t bankrupt. This isn’t that complicated.

      2. How do airlines compete when the government has largely prevented them from doing business?

  6. Reps. Justin Amash (I–Mich.) and Alexandria Ocasio-Cortez (D–New York)

    That odd place where “libertarian” and communist interests intersect.

    1. Trump signs bill with a dozen folks standing shoulder to shoulder.
      And then complains that Massie is endangering lives by expecting congressmen to do their frigging jobs per the frigging rules.
      Then lauds first responders, emts, cops, docs, nurses, etc. who continue to work under trying conditions. Since virtually all congressmen have homes in D.C. area, they could have sheltered in place except when doing business. Why were half of them not in their offices? If Joe the Butcher and Ted the TP maker can do their jobs so can these whiners in the Capitol.

      1. Yea, I like Massie’s move.
        He seems to have stirred quite a bit of ire in DC.
        Good stuff

        1. Yeah. What a genius move. He added an hour to the time it took to pass the bill. Heroic. The Republic is now safe. Moron.

    2. Someone lit the OBL signal.


  7. This is why all this “irrational exuberance” of buying into stock bubbles is entirely rational now, the moral hazard of allowing the government to backstop failure, of privatizing profits and socializing losses, means there’s literally no risk in the thing any more. Boeing has, incredibly, managed to fuck up twice as bad as GM did with both making a shitty over-priced product and having the naked greed of their executives exposed, still getting bailed out. Hell, make me head of a major corporation, and for just a fraction of what these guys were making I’ll run your company into the ground, steal the cash out of the coffee fund and rape your grandmother on my way out the door – you’ll still be just fine.

  8. This is dated. The Democrats were able to reconfigure the airline portion of the bill such that the overwhelming majority of money will go to the employees through compensation, benefits, re-hiring, and other things. And even the lesser portion that will go directly to the airlines themselves has severe limits on it: it can only be used for direct operating costs, and not for CEO bonuses or stock buy-backs, and this will be monitored by a new bipartisan panel, plus an new inspector general.

    1. Why any company would take this money with all the ridiculous strings attached?

      1. Because they have lawyers

      2. I’ve been shaking for years that the only way this stops is if we reduce the number of progressives in America.

        People better figure that out soon.

  9. It is true that the federal and state governments have largely caused the problem by mandates against travel. Should the airlines get money over other businesses? Who knows? They do provide a necessary function and employ a lot of people. The bigger question, which is taboo to discuss right now, is whether we are killing the patient with the “cure”.

    1. “…The bigger question, which is taboo to discuss right now, is whether we are killing the patient with the “cure”…”

      Even more relevant now that the “cure” is claimed to require a $2T bail-out as a “cure” for that “cure”.

    2. Why would you ask such a stupid question? You smell like propaganda.

      1. It’s a reasonable question. You’re just for all this because you get more communism.

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  11. Is anyone surprised by this? Never let a good crisis go to waste, especially when it comes to bailing out your corporate cocksuckers.

    1. Did you see the picture of Trump and his lackeys grinning ear to ear at the signing of this legislation? They literally look like the personifications of corruption and filth. It made me sick. You should find the picture. McConnell looks terrifyingly giddy.

      1. You fail to mention all the stuff Pelosi got and forced into this thing.

  12. If you think handouts to air carriers is bad, take a look at the handouts this bill gives to transit: $25 billion. That’s double the normal annual FTA budget, which is already grossly out of proportion with the value produced by transit ops!

    “Amash has argued against any direct assistance to corporations, saying all aid should be given as cash subsidies to individuals.”

    Couldn’t agree more. Individuals make better decisions than governments.

    1. We got central financial planning with the government shut-down of the economy. Now we get central financial planning to fix what the first caused. And it’s not likely the last.
      Anyone who has read the least bit of history knows exactly how well it has worked everywhere it’s been tried since 1918.
      It has failed miserably…

      1. You remind me of a broken record or a shrieking parrot.

        1. You remind me of someone who belongs face down in a landfill with his fellow travelers.

  13. Let them get private loans and put up their planes and airport slots up as collateral. Maybe they shouldn’t have used 95% of their cash for stock buybacks. Fuck em.

  14. “The airlines don’t have a significant claim that they are a more vital business than railroads, trucking, all sorts of things that make the economy go,” says Poole. “All the others don’t have a special program.”

    I’m a FedEx pilot.

    On account of reasons (for which there is no need to go into detail here) cargo airlines rely heavily on passenger airlines to get their pilots to where the planes are.

    Tomorrow morning, I have to get from Memphis to Houston.

    If I, and my colleagues to their various destinations, your supply chain collapses.

    1. Grrr.

      If I can’t get to Houston, and my colleagues…

    2. The problem isn’t this bill. Or the airlines. The problem is progressives that have made this all a hundred times worse than it needed to be. Like they always do.

      Progressives are a blown out tire. Time to dump them all in the landfill.

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  16. Neither the author nor the “expert” at the Reason Foundation have thought this through very well. The reason airlines are doing worse than rail or trucking is because airlines carry people and people are no longer allowed to travel, thanks to the government. Cargo however is still moving and has not been interrupted whatsoever. Demand is down everywhere but demand for air travel is effectively at zero. The airlines aren’t failing because of mismanagement or malfeasance. They were Doing great six weeks ago. But with zero revenue and massive fixed costs, it doesn’t take long before they’d have to lay off hundreds of thousands of people and declare bankruptcy – which means that when the virus does go away, it would take much longer for them to restart. Meanwhile the govt would be paying massive amounts of u employment. And for what? Because people dislike the optics of a “bailout”. That’s a very silly hill to die on.

    1. Hardfloor, you nailed it.

  17. When times are good, the airlines gobble up profits, and the executives get huge paychecks. Pure capitalism. When times are bad, the airlines come to the government for help, so they can keep paying those bonuses. Pure socialism. What we need is to turn it around, so that the losses of companies are not socialized. They spent the money they got last time on stock buybacks, that is, to enrich themselves without any regard for their own (lower level) employees. We should abolish socialism for the rich.

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