Coronavirus

The Federal Government Is Spending $60 Billion To Keep Mostly Empty Commercial Planes Flying Over the U.S.

Pending minimum service rules would require airlines to keep operating a certain number of flights, regardless of how little demand there is for air travel.

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It's no secret that the coronavirus pandemic has been particularly devastating for the airline industry, with the number of passengers paying to fly falling by as much as 95 percent compared to this time last year.

Air carriers' financial pain proved enough of a justification for Congress to include $60 billion in financial assistance to the industry as part of the $2.3 trillion economic relief package it passed last week.

This aid isn't without strings, however. Airlines are being asked to maintain a minimum level of service to qualify for emergency government funding. The result has been companies running nearly-empty, money-losing flights just so they can avail themselves of taxpayer support.

When Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it included $50 billion evenly divided into loans and grants for passenger air carriers. The law also empowered the Secretary of Transportation to require airlines to continue flying to locations they were servicing before March 1, 2020.

On Tuesday, the U.S. Department of Transportation (DOT) issued proposed guidance that specifies the minimum levels of service passenger airlines have to maintain to qualify for CARES Act assistance.

If an airline flew into a city at least five times a week prior to March 1, it will have to continue to offer at least five flights a week to the same city. If an airline flew into a city less than five times a week, it will have to offer only one flight per week.

This guidance allows the biggest air carriers, who flew lots of flights into lots of cities, to substantially reduce their service levels. "You can literally go from that 25 or 30 flights a day to Albuquerque down to one," one airline industry consultant told NPR.

Low-cost budget carriers who offered fewer flights are required to maintain a higher percentage of their existing service. For that reason, these low-cost carriers have been some of the biggest critics of the new DOT guidance.

Frontier Airlines, in a public comment on the new guidance, noted that it flew a total of five flights a week into four airports prior to March 1. That means the proposed DOT rules will require it to maintain 100 percent of its service at those locations. In another 10 cities, said Frontier, the DOT rules only allow it to reduce service by less than 50 percent, despite demand dropping off by more than 90 percent.

DOT's "minimum service requirement bears no realistic relationship to current reduced passenger demand," wrote the airline, adding that the order "amounts to a government edict to operate more flights with the attendant costs and burdens regardless of whether those flights are empty or have load factors in the single digits or teens. That does not make sense."

The National Air Carrier Association (NACA), a trade association representing budget carriers, argues that the new rules also do not take into account the seasonality of many low-cost airlines' services.

"By not taking into account the seasonality of air service provided by a large number of air carriers," wrote NACA, DOT's proposed minimum service requirements "would require carriers to maintain a schedule developed for the peak winter travel season into the spring travel season and beyond."

"As a result, a significant number of carriers would be placed at a competitive disadvantage vis-à-vis U.S. legacy air carriers" whose service is less affected by seasonal peaks and troughs, wrote NACA.

The proposed DOT guidelines would allow airlines to apply for exemptions, but approving those could take time, and there's no guarantee that every carrier that wants one would receive one.

NACA and the budget carriers they represent are asking that lower minimum service requirements be incorporated into any final rule.

A DOT spokesperson tells Reason that comments on the department's proposed rules are still being considered, so there's still a possibility that the budget airlines will get their proposed changes included in the final rule.

At the same time, however, members of Congress, as well as smaller regional airports, are demanding that airlines be required to maintain service at each airport they regularly fly into, not just each city. That request, if adopted by DOT, would have the effect of increasing the minimum number of flights airlines would have to fly.

While DOT hashes out a final rule, NPR reports that the U.S. Treasury Department is encouraging airlines to apply for financial aid by today, otherwise it could get delayed. The confusion over conditions for receiving financial assistance, reported The Air Current on Tuesday, is causing airlines to backtrack planned reductions in service.

The result, as countless news articles have pointed out, is airlines running ghost flights that have more airline staff than paying customers on them.

We are left in the worst possible world of businesses getting a bunch of taxpayer money on the condition that they waste it. This is central planning at its most illogical, and it's making all of us poorer.

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47 responses to “The Federal Government Is Spending $60 Billion To Keep Mostly Empty Commercial Planes Flying Over the U.S.

  1. Pilot: No passengers on this flight again? You know, I’ve always wanted to do a barrel roll in this thing…

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    2. Flight crew orgy.

  2. Let’s kill two birds with one stone and fill those empty planes with ICE detainees and fly them home. Home being Tierra del Fuego.

    1. Better, out democrat officials, DNC leadership, and mainstream, media members on those flights.

  3. If an airline flew into a city at least five times a week prior to March 1, it will have to continue to offer at least five flights a week to the same city. If an airline flew into a city less than five times a week, it will have to offer only one flight per week.

    So, according to the guidance, *every* airline will have to offer at least one flight per week into *every* city.

    Oops!

    1. At least you didn’t comment on the incorrect use of “less than”….

  4. I read an interesting bailout proposal instead of this buckets of cash business. Provide federal overdraft protection the forms of loans from the IRS, based entirely on how much was deposited into bank accounts for January and February. Possibly extend it if the lockdown continues.

    It’s a loan directly to individuals and businesses who self-select as needing it enough to pay it back within a year or two, and there’s very little room for crony corruption. It would almost certainly cost a heck of a lot less than $2.3T and be far less corrupt.

    1. “There’s very little room for crony corruption.”

      The exact reason this plan would never be seriously considered.

      1. It’d be funny if it weren’t so sad.

  5. U.S. companies are never going to have any incentive to put money aside for a rainy day if they get bailed out every time the economy takes a significant downturn. Any company so poorly managed that it doesn’t have enough cash on hand to survive a few months probably should be allowed to die.

    1. Companies like Apple that are sitting on hundreds of billions of dollars in cash are looking pretty smart right now.

    2. Said the guy who never ran his own business.

      1. Nice try. Guess again.

    3. “Any company so poorly managed that it doesn’t have enough cash on hand to survive a few months probably should be allowed to die.”

      Outside of Apple and Google keeping money offshore for tax purposes, any company which did so would be a takeover target or be sued by the stock holders.
      You don’t know what you’re yapping about.

      1. If they need an infusion of cash to make it through, they should sell stock or borrow it at market rates, however usurious they might be, not belly up to the federal trough.

        1. Thank you for changing the subject.

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    4. Yes, all companies should set aside enough cash to weather an economic downturn not seen since…ever. That would be a really efficient use of resources. Aside from the price increases required to cover that, it would remove enormous amounts of capital from other productive uses.

  6. >>maintain a minimum level of service to qualify for emergency government funding

    ordered into our houses and everyone’s fired but if these assholes can keep those Boeings in the sky even without people in them 50 billion dollars. America.

    1. wait, 60 billion dollars. set the controls for the heart of the sun.

  7. How much of this money could be recovered by ending TSA screenings?

  8. “It’s no secret that the coronavirus pandemic has been particularly devastating for the airline industry, with the number of passengers paying to fly falling by as much as 95 percent compared to this time last year.”

    When the government requires you to stay indoors, it’ll have that effect.

    1. Flights were already empty before the stay-at-home orders. People know that airplanes are petri dishes.

      1. Not anymore. Airplanes are now some of the safest places to be, since you won’t have any other passengers to infect you.

      2. “Flights were already empty before the stay-at-home orders.”

        Your cite seems to have fallen off. Let’s see it.

  9. Do you think any of the big airlines called up their Congressmen to get the rules written this way in order to drive their smaller competitors out of business?

    1. This has been one of my big fears about the aftermath of this. The smaller players in most business sectors will be the ones that never reopen. Meanwhile the cronies will emerge stronger than before because of greatly reduced competition.

      1. A corporate coup, if you will.

  10. Looking like an extension of “Essential Air Services” to the rest of the airline industry. Let the good times roll!

    https://reason.com/2011/08/08/flights-from-nowhere/

  11. How much fuel is being wasted here? What kind of a carbon footprint does and empty airplane have? There has to be a better way than this to manage the crisis? I understand the need to maintain service but this is simply silly. These airlines have sophisticated programs to figure seating and cost. Why not turn those to good use. As for small airports forget them. Any smaller air ports within a 3 to 4 hour bus ride of a hub airport should be closed for the time being. Finally this a another good reason we need a more balanced transportation networks with trains replacing short distance flights.

    1. We’re subsidizing kerosene production.

    2. An empty plane uses less fuel than a fully loaded one, but not all that much. If you calculate on a basis of emissions per passenger mile, an empty plane is a huge polluter. When you add the complete lack of need for that plane to be flying at all, the insanity is obvious.

      I’m not sure how much more rail transport would help; there would probably just be a similar program to keep empty trains running, with exactly the same results.

    3. A “network with trains replacing short distance flights” is lunacy.

      1. Interesting statement, but no real explanation. I know that the capital cost for trains would be expensive. I also think that money we spend on local spoke airports is a continuous drain. What is the purpose in having a small commercial airport when significant larger airports are 2 to 3 hours away by ground. After the 911 attack we poured a lot of money to harden local airports. I believe all that money would have been better spend on closing half the airports and creating local ground links with trains. The future for short distance travel (300-600 miles) is not planes it is trains.

        1. For starters, as you acknowledge, the cost would be “expensive”. In fact, it would be prohibitively expensive. The infrastructure cost per mile serviced is far greater than for airports and the operation cost is so high that it has to be subsidized at very high rates. Passenger rail service would be unnecessary and woefully underutilized, as it always is, compared to the cost to provide it.

          The undisputed champion of transportation in the 300-600 mile range is the highway and vehicles with capacities in the 5-55 range.

          Anywhere and everywhere in America where passenger rail exists, the highways in the same corridor, serving the same destinations, carry orders of magnitude more passenger per unit of time than the trains.

          Ignoring such repeated and obvious realities leads to ignorant ideas like “trains are part of a balanced transportation system”. Trains are as much of a balanced transportation system as pay phones are part of a balanced communication system.

  12. Someone should look into whether military planes are doing more flying right now. I’m seeing a shitload of them lately.

    1. “Someone should look into…….” On it…….

      ……… I hear there’s a shitload of ‘em.

      You’re welcome.

  13. We’re in the midst of a pandemic of STD (Squandering Taxpayer Dollars), of which there’s little hope for a cure.

  14. So I’m watching TV and there’s a Popeye’s commercial about contactless take out and delivery. Sounds good we don’t want someones germs on our fried food. And of course I recall that heart disease and stroke are the number 1 and 2 killers of Americans. So we trade short term misery for long term certainty. You are still more likely to get to old age and suffer from one of those two (and many more related illnesses) then you will ever suffer from a viral infection. And then we have the idiocy of keeping planes in the air with no customers, and funding trillions to prop up businesses we purposefully made to fail. Again, all for keeping a few hundred thousand alive. That equation does not balance no matter how much you believe a life is worth.

    1. If it saves one life….

  15. Because the last thing you want in a respiratory illness pandemic is clear skies and a decrease in pollution.

  16. Albert Einstein,s quote goes something like this: The two biggest Elements on this earth are H2O and Stupidity.

  17. Pending minimum service rules would require airlines to keep operating a certain number of flights, regardless of how little demand there is for air travel.

    There is a lot of demand for air travel. It’s just that the government has stopped people from flying. So this is a government-created problem, not an inevitable consequence of the virus, and in this case, the government really does need to take financial responsibility. This is not a bailout.

    In addition, the difference between having scaled back air travel and no air travel is qualitative; the cost of abruptly ending a government subsidized industry to which there are no alternatives would be staggering.

  18. I’m in the Phoenix area and I have an ADS-B receiver. I am seeing roughly 50% of the usual air traffic in my reception area on weekdays. Less than that on weekends.

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