subsidies

Tag Archives for subsidies.

You Stopped Buying Tickets This Year. Airlines Are Taking Your Money Anyway.

by Gary Leff on December 21, 2020

Dec 21 2020

You haven’t been buying airline tickets, but the airlines are taking your money anyway. $15 billion in the latest Congressional spending package goes to the airlines, a second bailout. In exchange they have to bring back workers that have been involuntarily furloughed, and can’t furlough again until April 1.

$15 billion, retroactive to December 1, will be provided to cover four months of airline payroll. That’s $375,000 per furloughed worker at an annual run rate of $1.5 million per job, perhaps the most expensive jobs program in history.

10 Reasons Airlines Are Lying About The Need For Subsidies In Order To Distribute Vaccines

by Gary Leff on December 14, 2020

Dec 14 2020

Right now there’s a stronger likelihood of a second round of airline subsidies from the federal government than at any time in the past several months. It appears that $17 billion more for airlines is included in the next scaled-down federal stimulus bill, and legislative leaders in the House and Senate plan to bundle it with must-pass funding measures to keep the government running and avoid a shut down. Now legislators have a Friday deadline.

Airlines have deployed the argument that the vaccine means they need subsidies because they’ll have to scale up operations to be prepared for cargo shipments, and even though they’d be paid to ship cargo somehow they are unable to prepare for that on their own. This is, to put it bluntly, a lie. Here are 10 reasons why.

Airline Lobby Group Warns Something Entirely Normal May Happen If Governments Don’t Fork Over Money

by Gary Leff on November 22, 2020

depressed businessman leaning his head below a bad stock market chart

Nov 22 2020

The head of world airline trade group IATA says so far governments have provided subsidies to carriers totaling $160 billion. But that’s not enough and they believe governments need to hand over more.

And what’s the terrible thing that will happen if they don’t? Something that is entirely and completely normal and happens all the time during normal times: some airlines may go out of business. That’s ok.

7 U.S. Airlines Threaten They’ll Be Unable To Ship Vaccines Without A Second Government Bailout

by Gary Leff on November 19, 2020

Nov 19 2020

The CEOs of the 7 largest U.S. airlines told Congress that unless they get a second bailout by the end of the year, don’t expect them to ship vaccines. It’s an idle threat. They’re telling their own workers they’re ready and eager for the vaccine shipping business.

Subsidizing flight attendant salaries makes no sense if you’re talking about readiness of cargo flights. And there are better ways that funneling huge unrelated subsidies to airlines to ensure a business is ready to deliver on a big commitment. Just follow the Operation Warp Speed model and guarantee the purchase of cargo capacity to allow the airlines to plan for it.

An Awkward Moment During The Delta Earnings Call

by Gary Leff on October 13, 2020

Alison Sider of the Wall Street Journal asked whether Delta supports a CARES Act extension (airline payroll support), since Delta CEO Ed Bastian hasn’t been nearly as public on the issue as others like American’s Doug Parker.

Bastian was in a tough spot.

The Dishonest “Small Cities Air Service” Argument For Another Airline Bailout

by Gary Leff on October 8, 2020

Oct 08 2020

American Airlines CEO Doug Parker pressed the case for another bailout today, saying without more government aid they’ll eliminate service to some small cities. And that’s true, but misleading.

Why Airline Bailouts Are Getting Priority In Congress Over Unemployment, Testing, And Covid Treatment

by Gary Leff on October 8, 2020

Oct 08 2020

How is it that spending on airlines, supported by both Republicans and Democrats, is what’s under consideration and nothing else. How did we get here?

Another airline bailout isn’t just something being snuck into a $2.2 trillion piece of legislation, but is the only standalone action Congress might take at this point. That may be shocking, but it also makes a lot of sense.

American Airlines CEO: After Furloughs, Even Our Crew Miss Having Young Flight Attendants

by Gary Leff on October 7, 2020

Oct 07 2020

It’s no surprise now to see him take to LinkedIn to tell the story of a flight attendant encounter, emphasizing why he sees more government subsidies for airlines as important. Only this time his argument is that his airline, which furloughed more employees than any other carrier by a wide margin, has gotten too old. Or at least that a flight attendant tells him that furloughing younger employees means they now miss the youth on board their planes.

Are Government Loans Taken By American, United Illegal?

by Gary Leff on October 6, 2020

calculating money via paper and calculator

Oct 06 2020

Government subsidized loans had different employment rules than those contained in payroll support. They didn’t specify ‘no furlough’ they talked about the employment levels that airlines had to retain through September 30. Airlines receiving loan approvals did not meet these conditions.

The Strange Incentive The Treasury Secretary Has To Push Another Airline Bailout

by Gary Leff on September 30, 2020

Sep 30 2020

When airlines gave the government a stake in their businesses, effectively partial nationalization, they created an incentive for the government to continue bailing them out to protect and grow that very stake.

Pumping in another $25 billion makes Secretary Mnuchin’s stock warrants, obtained for bailouts, look better – like he negotiated a ‘win’ for taxpayers.