The CARES Act was meant to support the U.S. airline industry. It seemed like a bad idea at the time. I argued that government should be the last place airlines looked for money and that shareholders and creditors should take a hit before taxpayers. This month American and United have announced billions in new raise. The federal government, if it had any role, should certainly be lender of last resort not first resort.
Nonetheless at least 287 airlines have gotten bailout funds. The Act wasn’t sold as a way to support Rite Bros Aviation or Guardian Helicopters. Alexander Nazaryan has background on another surprising recipient: Omni Air International which has been awarded $67,071,357.
They’re a profitable ‘deportation airline’ operating charter flights for the Department of Homeland Security, and before securing the $67 million bailout they were awarded a new $78 million Defense Department contract for “international charter airlift services.”
Omni Air has charged the federal government exorbitant prices for “high risk” deportation flights for Immigration and Customs Enforcement, the federal agency tasked with addressing the plight of millions who live within the United States without proper documentation. The expense was related to the unwillingness of airlines other than Omni Air to conduct such flights.
Omni Air Operating Flight For Air Canada in 2019, Credit: Brand03 via Wikimedia Commons
The carrier has been paid as much as $1.8 million to deport 163 people – they’re able to charge $11,000 per passenger because they’re one of the only airlines willing to be a part of these flights.
Omni Air says they “employ[..] more than 800 people.” Funds had not yet been awarded as of May 12, and were awarded funds by June 15. Let’s assume they received the award June 1, meaning covering 4 months of payroll. That’s an average of $83,750 per reported employee, or an annualized cost of $251,250 per employee. And the airline makes money.
It’s unclear why Omni Air received so much support, though some have speculated that significant campaign donations (the President even made a campaign stop at Omni Air’s parent company in 2016) could have played a role. Either way it’s unexpected, but not surprising, that the CARES Act airline bailout is used in part to subsidize administration immigration policy.