As the airline industry starts talking to lawmakers about a second bail out, airports – which got $10 billion in aid from the CARES Act – are telling Congress they want another $10 billion.
Airports will need at least $10 billion more in government assistance, matching an initial injection of cash from the CARES Act, H.R. 748 (116), industry leader Todd Hauptli told lawmakers. “I recognize it’s not popular to come up here and ask for more help, but the scale and the scope of this crisis requires it. And we are going to have to get past the sticker shock and get to ‘yes,'” he said.
The CEO of the American Association of Airport Executives suggests $10 billion is the minimum that airports want, and they don’t even come first offering to clean up corruption at airports including Atlanta, Detroit, and Washington Dulles and National and New York LaGuardia, JFK, and Newark.
The first $10 billion, which distributed funds to 3200 airports, became such a mess that some airports received 25 to 50 times their annual expenses.
The biggest payouts already went out to the biggest airports:
| Hartsfield – Jackson Atlanta International | $338,535,265 | |
| Los Angeles International | $323,636,269 | |
| Dallas-Fort Worth International | $299,199,046 | |
| Chicago O’Hare International | $294,441,928 | |
| Denver International | $269,073,999 | |
| San Francisco International | $254,780,449 | |
| Miami International | $206,949,557 | |
| McCarran International | $195,485,334 | |
| John F Kennedy International | $193,389,105 | |
| Seattle-Tacoma International | $192,133,300 |
However even Merced, California got $17 million, Garden City, Kansas got $18 million, and East Wenatchee, Washington airport (airport code “EAT”) got $18 million as well. And so did Knox County Regional Airport in Owls Head, Maine.
Johnstown, Pennsylavia’s airport which averaged about a dozen passengers a day before the pandemic got $5 million.
(HT: @crucker)
@ Gary — NO MORE BAILOUTS! Let them borrow and raise future fees to pay off the loans.
American airports are an embarrassment to the country.
where did airports profit go? If it went to shareholders then shareholders should finance/bailout airports . Airports should issues new debts or stock offering and not ask tax payers to bail them out.
Airlines should have done the same. They pay dividends to their shareholders. It’s natural that shareholders pour money into to save their investments.
As a practical matter, this is an indirect airline bailout.
@Toancito
Airports in the US are publically owned and are generally run on a break even basis.
@Johhny, considering non-airline revenues account for 40-60% of airport budgets it’s really a bailout of concessionaires, rental cars and parking lots. The problems these airports are going to have is that they’re going to have massive budget holes to reconcile so even once trace picks back up again the concern is that rates will be so high airlines aren’t going to be able to afford to bring back the volumes needed to keep rates down. It’s really a chicken and egg issue and there is no winner, just tax payers paying for these bailouts for generations
@Toancito. Most airports are so called governmental “Public Entities”. So they do not have shareholders. They issue municipal debt that may or may not be tax exempt. Sometimes they issue special payments to the local municipalities, in lieu of taxes (dividends to the municipality?). Usually they are managed by a board appointed by the municipal entity (-ies) that created them. Tax payers are not legally on the hook for such public entities; however, it would be a big blow to the municipality if the public entity went bankrupt and so many believe the municipality would have a moral obligation to assist.
There is another thing about such public authorities. They are created directly by a statue by a municipality (usually State or Local). As such, the Uniform Commercial Code (UCC) does not apply to them. The UCC means that lawsuits against a company has most likely been tested in court via that UCC. With no UCC, any lawsuit against a public entity is more or less virgin territory. Precedent from other law suits against such an authority in say the neighboring state do not apply.
It seems to me that Federal Bailout of airports is closer direct aid to the municipalities supported by the airports.
For example, the $200MM bailout of JFK mentioned above is free money for the Port Authority of New York and New Jersey (PA). The PA is run by the State of New Jersey and New York and operates all three airports, many of the bridges and tunnels between New York and New Jersey, and has many other functions. The PA is massive. A failure of the PA would be unthinkable and most municipal analysts think the States of New York and New Jersey would have to bail out the PA if necessary. [LOL: such a bailout might be approving an increase in bridge tolls.]
@ Toancito
Shouldn’t individuals and households do the same instead of seeking welfare benefits, receiving stimulus checks and receiving unemployment (shouldn’t businesses receive some of the taxes they paid)? Welfare, stimulus and Unemployment checks are no different than bailouts although they don’t have to be paid back (unlike airlines). How is that fair?
Isn’t municipal debt nice? It gives the government the opportunity to make short-term improvements at the opportunity of long-term financial peril.
It’s also up there with pensions: helping politicians create gilded retirements without ever dealing with the consequences many decades later.
Uh yeah, Jackson- if we wanted to go with stimulus on the basis of what is fair, why not look at how much has been paid by the various categories vs what they are getting back in direct grants (loans, as you point out, are likely to be repaid).
Direct payments ($1,200/person checks) – $290B; Unemployment benefits boost ($600/person) and extension – $260B. Total grants going to individuals is $550B, or about 28% of the $1.9T in individual income taxes paid per year.
PPP payments of $377B, plus business tax breaks of $280B. Total grants going to corporations of $657B, or about 231% of the $280B a year in corporate taxes paid. Note that this excludes the $500B of loans ($4-5T after the Fed gets its multiple) made via buying bonds and to large corporations- we assume that money will be paid back.
Airlines grants of $29B plus the indirect subsidy to airports of $10B and the $17B earmarked for Boeing. Compare that to the $0.7B of taxes airlines paid over the last two years and the airline grants alone comes to 8,286% of the annual taxes paid!
Clearly the socialist entities are the airlines, first and foremost, and the big corporations secondly. The distribution to the individuals is equivalent to a few month’s tax rebate…
All the CARE Act numbers come from JPMorgan’s analysis and the breakdown of taxes paid come from the Balance. I excluded payroll taxes from this analysis as those funds should go towards funding Social Security.
Airlines grants –