Politicians Who Supported $54 Billion in Airline Bailouts Now Pose as Industry Critics
Political criticism of Southwest's mass flight cancelations mask a cronyist relationship between government and the passenger airline industry.
One hates to see friends fight. It's therefore a little uncomfortable to watch an airline that's received billions in taxpayer-funded bailouts on the outs with politicians who actively supported those bailouts.
Southwest Airlines has been in disarray after a mix of winter storms and the company's outdated crew tracking system led it to cancel the vast majority of its flights this week. Passengers have been left stranded, with no luggage and no idea when they'll actually be able to get to their destinations.
Politicians have been eager to capitalize on the public's rage by calling for investigations of Southwest and stricter regulations of the airline industry generally.
"The problems at Southwest Airlines over the last several days go beyond weather. The Committee will be looking into the causes of these disruptions and its impact to consumers," said Sen. Maria Cantwell (D–Wash.), chair of the Senate Committee on Commerce, Science, and Transportation, yesterday.
The senator also refreshed her demand that the U.S. Department of Transportation require airlines to cover passengers' secondary costs of canceled flights like meals and hotel rooms.
Cantwell's criticism of Southwest contrasts with her advocacy of airline bailouts during the pandemic.
She supported the $25 billion in relief grants to passenger airlines that were passed as part of the $2 trillion CARES Act in 2020.
In exchange for that money, the CARES Act program required airlines to forgo forced layoffs, stock buybacks, and increases in executive compensation. They also had to provide the federal government with stock options and maintain minimum levels of service. That latter requirement led to "ghost flights" with more staff than customers.
At that stage in the pandemic, there were few opponents of federally funded bailouts of just about anything. Yet Cantwell was also an advocate for a second round of airline bailouts later in 2020 that was far less certain.
At the time, proposals for a second stimulus bill from both Democrats and Republicans didn't include additional money for airlines. But Cantwell urged lawmakers to "come back to the table" with the airline industry about another round of aid. The spending bill that eventually passed in December 2020 included $15 billion for passenger airlines.
The American Rescue Plan passed in March 2021 included $14 billion in grants for passenger airlines. Cantwell not only voted for that bill, but also authored a provision of it that extended bailout funds to manufacturing companies in the aerospace supply chain.
Altogether, passenger airlines received some $54 billion in COVID bailouts. Southwest has claimed about $7 billion of that money.
The first two bills containing airline bailouts had wide bipartisan support. The $1.9 trillion American Rescue Plan was a partisan, Democratic bill. So Cantwell has been the most vocal about both supporting airlines financially while rhetorically criticizing them, but she's hardly the only person to be in that position.
For instance, Sen. Elizabeth Warren (D–Mass.) supported all three bills containing airline bailouts. In the wake of the Southwest debacle this week, she's called for stricter anti-trust enforcement in the airline industry.
It's not obvious why Cantwell and Warren are so offended by airlines charging customers for canceled flights when they've supported taking billions from those same consumers in the form of taxes to pay for flights they didn't even want to take in the first place.
Their outrage now comes across as a little less than genuine. The investigations and regulations they're now calling for are hardly going to make taxpayers whole for the bailouts they've already paid for.
Meanwhile, this week's massive flight cancelations from are a good reminder of what a raw deal those bailouts were for taxpayers and consumers. Rather than allow the shock of the pandemic to create some needed disruption in the passenger airline industry, Congress chose to prop up a messy status quo.
The $7 billion Southwest received from three COVID relief bills allowed ineffective practices at the airline to persist. Allowing the competitive pressures to more freely do their work might have spurred some productive change within Southwest.
It's something to consider while you wait for your flight.
