Commerce Secretary: Not Giving Airlines Another $25 Billion In Taxpayer Money Is “Punishing Them”

President Trump’s Secretary of Commerce Wilbur Ross said on Friday that not giving airlines another $25 billion, after providing $25 billion in payroll support and another $25 billion in subsidized loans, is akin to punishing them:

“The reason the White House might be receptive to a stand- alone deal is that it’s not right to punish the airlines differentially because of coronavirus,” Ross told Fox Business Network, adding: “We’ve got to bridge the airlines … bridge their employees if we can through that period” until there is a COVID-19 vaccine.

In the upside-down Alice in Wonderland world that airline lobbyists and Sara Nelson have us living in, it’s ‘punish[ing] the airlines differentially’ by not giving them more money, even as hotels, restaurants, and retailers struggle without assistance. And not being given taxpayer money a second time is considered a punishment.

Meanwhile,

  • Airlines only plan to furlough about 40,000 people
  • Yet it costs $25 billion to keep them employed for six months. Do the math and show your work!
  • There is less travel demand, so they’re going to operate fewer flights and need fewer people.
  • Airlines say this situation will last until 2024, so keeping people on payroll through March 31, 2021 does little good.

You wouldn’t buy the basic economy tickets airlines were selling, but they’re going to take your money anyway.

It’s better for the economy for people to find new ways to be productive than to get paid to stay home and not work. That’s what happened during the first CARES Act payroll support, since there were way too many employees for the number of flights being operated.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I am sorry, but no one is giving my company money to keep power and water running. We are managing the situation the best we can. The cruiselines are dealing with it, the hotel are dealing with it, so the airlines need to ” put their big boy/girl pants on” and deal with it too.

    Stop saying your administration is about free trade and against socialism and then bail out the airlines.

  2. Remember how carelessly the airlines acted after de-reg by over expanding (e.g., Braniff); overnight creation (e.g., NY Air), false attempts at business class (e.g., American), etc.? After recouping from 9-11 and the 2007-08 Great Recession, the airline industry is back at go, still failing to understand basic economic, like supply and demand.

    Rather than continuing to throw taxpayer dollars into a black hole, let the chips fall where they will for the legacy majors and their discount cousins. Why does American need to survive, when its stockholders should pay for their previous mistakes in tolerating their CEO’s misbegotten strategies? If any discount carriers lack the abilities of Southwest, let hem fall as well.

    As I am equal opportunity, Amtrak should be held to the same rules. If Amtrak cannot make it, despite requesting multiple infusions of billions and still moving to cutback daily service across its network, than let it embrace the PR swagger of their Board Chairman, to be good stewards of the billions in tax dollar funding they have snarfed-up, and just shut down. For a viable firm to pick-up the pieces, Congress must explicitly state that unlike with Amtrak, vetted competition would be welcomed, instead of chased away by Amtrak operating on the Soviet model as a government protected State Operating Enterprise (SOE).

    If Congress does not embrace the correct economic principles, than it will succeed in funding air and Amtrak to put off the inevitable only until the next crisis is upon us.

  3. Dont forget the car rwntal companies who have also slashed staffing and even Hertz is in Bankruptcy, but afaik they’re not receiving help from the feds

  4. Reminds me of the time my mom caught me smoking and sent me to my room without supper, and without $25 Billion dollars. I sure thought twice before lighting up again.

  5. Uncle Sam hasn’t given me $25 billion either, which is punishing my household and causing irreparable damage to the economy.

  6. Wilbur Ross is as relevant as a grain of sand in the Sahara desert. (same applies to all the other clowns/puppets/kooks in the WH). Everybody on earth knows they’re going to print money out of thin air and feed the grovelers. Next…

  7. It’s essentially what they’ve done for everyone. $1,200 for you, $600/wk for you, $50k PPP loan (gift) for you, PUA for you, and $25 billion for you. What do you have to do to receive all of the above? Nothing. Sit on your butt – 6ft away from others.

    Anybody else bored? Let’s get this thing rolling again. I’m with you, Gary, the people won’t innovate and push hard if they gov is just going to pay them to stay home.

  8. But yet Amtrak, government owned and operate , doesn’t get a penny
    Trains out west reduced to 3x week

    Are train passengers to be punished ?
    Food practically eliminated on 2 night trips ,,tv dinner at best

  9. A second airline bailout is just pure socialism x 2. If they go under, so be it. It is a shame the workers will lose job, but that’s no different than what has happened to employees working at restaurants, hotels, and retailers.

    Wilbur Ross is a dinosaur and as @Moe said, he is irrelevant.

  10. What makes the airlines any more important than the warehouse worker, the restaurant employees, hotels, car rentals, etc. They are estimating that 60% of all small businesses that shut down during the pandemic will close permanently. Commercial real estate is sinking faster than the titanic. While I have been able to keep my companies open during this time being determined to be essential business is about 50% or less than the same period last year. How many small businesses could be saved with $25B? A lot more than 40,000 jobs. If things don’t turn around in the next 60 days at least 25% of my employees are going to be unemployed, and if I close 1 and combine the 2 about 50% of my employees will be let go. Those jobs will probably never return. The government needs to let the airlines figure out their own problems. I don’t care if it’s 40,000 employees or 400,000 let them fail and the strong survive.

  11. Sunviking82. Although the current situation in DCA is pretty much W0X0F, you see through the fog. The current administration does not support unrestricted Socialism but the Congress obviously does. “Back in the old days” it would be rare to have uninterrupted employment by an airline as furloughs were seasonal and common. Unemployment benefits were meager and 26 weeks. Those who had a passion for the work survived.

  12. Wilbur Ross is indeed an irrelevant dinosaur and corrupt as hell. He’s owned a bank in Cyprus (or did) for years laundering Russian money. Not one bit surprising he’s a Cabinet member in the administration.

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