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Home » News » Another Massive Bailout To US Airlines While Most Workers Get Bupkis…
News

Another Massive Bailout To US Airlines While Most Workers Get Bupkis…

Matthew Klint Posted onDecember 21, 2020November 14, 2023 13 Comments

an aerial view of an airport

The US Congress has just handed US airlines $15 billion in so-called “payroll support” as part of a new $900 billion stimulus bill. The math is alarming, especially considering that many Americans actually suffering will receive a pittance.

US Airlines Benefit Greatly In New Stimulus Bill

With Congress unable to reach a deal ahead prior to November 1st on extending payroll support, airlines began a series of schedule reductions and furloughs. American and United led layoffs while Delta and Southwest laid off no workers at all. In total, about 32,000 airlines employees faced furlough.

The $900 billion stimulus package, approved on a bipartisan basis and expected to be signed by President Trump, provides a $600 check to each American while providing $15 billion to U.S. airlines.

While we are still waiting for the final text of the bill to emerge, the conditions are reportedly similar to the earlier CARES Act funding, which will require airlines to maintain pre-pandemic service to each city and bring back all employees from furlough through April 1, 2021.

Airlines had prepared to proceed without additional payroll support and acted accordingly. While the $15 billion is intended to defray payroll support for all airline employees, the only employees who will see a difference are the 32,000 who will now be offered a chance to return to work (many, by the way, have already moved on to new positions or even been re-hired by other airlines).

Divide $15 billion by 32,000 and you get $468,750 per furloughed employee for four months of pay. That works out to $1,406,250 per year! Obviously workers will not be seeing that money. Instead, the junior employees who were laid off can expect to see their normal wages and the residual be used to pad the overall bottom line.

Meanwhile, other Americans in more dire need can expect a $600 check while some who need no aid at all will also be receiving $600. Government efficiency in action…

CONCLUSION

The widespread distribution of the vaccine will help improve the prospects of the airline industry. Thus, I wonder if the focus was just wrong. Instead of providing airlines more money to maintain service and employees who are not needed, why not re-direct that money toward creating more production capacity and distribution of the vaccine, so that more Americans actually feel like flying? I see a lot of suffering in the small businesses around me. While I am very happy for airline workers who will receive a steady paycheck through April 1, 2021, this stimulus deal does nothing to solve the the underlying demand problem that is at the heart of airline woes.

Furloughed workers will be recalled, but it creates more uncertainty for them as they again anxiously await the spring to see if their life will be turned upside down again. Instead of investing this time into looking for a new and more rewarding career, they are left waiting.

Don’t buy the spin from airlines. $15 billion is not needed to save jobs that would be lost absent more stimulus funding. Delivering vaccines is profitable and not something that requires subsidies. Billions of dollars are not needed to maintain service to smaller cities. Think millions.

So congratulations airline lobbyists. You fleeced us again. At least change fees are gone…for now. Viva la corporate socialism…

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About Author

Matthew Klint

Matthew is an avid traveler who calls Los Angeles home. Each year he travels more than 200,000 miles by air and has visited more than 135 countries. Working both in the aviation industry and as a travel consultant, Matthew has been featured in major media outlets around the world and uses his Live and Let's Fly blog to share the latest news in the airline industry, commentary on frequent flyer programs, and detailed reports of his worldwide travel.

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13 Comments

  1. Ghostrider5408 Reply
    December 21, 2020 at 10:53 am

    The White House and Congress is taking a sharp left turn, it will get worse.

  2. Natha Reply
    December 21, 2020 at 10:57 am

    Seriously. Let’s reduce greenhouse emissions. Start by not bailing out airlines.

  3. Stuart Reply
    December 21, 2020 at 11:50 am

    Thank you, Matthew. Well said.

    All that money for the airlines. Can you imagine instead routing that money to increase production and distribution of the vaccine and speeding us to the finish line of this nightmare? Why has the military not been utilized for war time production assistance? For building out and manning temporary vaccination centers? For trucking the vaccine to every community? We are leaving the entire process in the hands of private industry that will require months more of waiting…all while they count the massive profits they are making off this.

    This will go down in history as a moment that science saved us, yes…but in the end our leadership failed us in not prioritizing the one and only thing that will restore our lives and businesses…getting shots in arms as fast as possible. The solution was so simple…throw every bit of this money into increasing production and distribution and use the military.

  4. Frank Reply
    December 21, 2020 at 12:28 pm

    Honestly, for $900 billion they should buy all the vaccine AND then pay everyone in the US $1,000 to just take the vaccine. You’ll get a few antivaxxers who opt out but even the most skeptical people will think, “it’s a $1,000, what’s the worst that can happen.” People may put things off if there’s nothing in it but throw some cash in front of them and they will show up.

  5. JoEllen Reply
    December 21, 2020 at 1:02 pm

    Wow, …. must be nice to be a recalled airline employee to get back to full pay (by way of the U.S. Government) and then stand around and look at each other while planes fill up with NO ONE WHO WANTS TO FLY for at least six more months. I wonder what all the loan companies, banks and landlords are thinking while they continue to not collect their rents? ….. or all the tenants who could use more stimulus money to pay their rent or put food on the table.
    I just don’t see how airline bailouts are justified…. WHY ??? ….. more people are not going to jump on planes just because the airlines have restored their employees back to work and can pay them money. So basically the government is bailing out the airlines and paying them to fly mostly empty planes to places that are also shut-down (restaurants, museums etc) and therefore people don’t want to go travel to. Is anyone here going to London anytime soon,…. Paris, Rome,…. ?? to eat at McDonalds because everything else is closed or severely limited in patronage ??

  6. WR2 Reply
    December 21, 2020 at 1:52 pm

    What?!? They got to keep their unnecessary jobs for 6 months while everyone else got laid off. This is how every “stimulus” bill works. Enrich the connected, throw some crumbs to some people, the tab picked up by everyone else. You idiots keep wanting for congress to “do something”…well this is what they do, especially now that the election is over so that the wicked witch of the west feels safe passing a bill now. Personally I’d prefer they do nothing…they do less damage that way.

    • 747always Reply
      December 21, 2020 at 10:45 pm

      Ah. It’s your Dear Leaders party which ensured that corporations were termed as people. The cognitive dissonance is strong with you.

      • cargocult Reply
        December 22, 2020 at 11:06 am

        Perhaps in your dotage you’ve already forgotten about Obama’s bailouts. And where were all the prosecutions of the so called “banksters?” Perhaps Eric Holder was too busy giving support to the nascent BLM movement by ginning up charges of racism or lying to Congress.

  7. Debit Reply
    December 21, 2020 at 2:14 pm

    I hope congress is also making the castration lists as i suggested.

    Any loser that relies on govt. Aid and has more than two kids should be immediately castrated.

  8. Dick Bupkiss Reply
    December 21, 2020 at 3:15 pm

    Hey, I resent that remark!

  9. ChuckMO Reply
    December 21, 2020 at 6:25 pm

    As an “essential” worker who has been working on-site since the mess started, I’m insulted really. I’ve received my $1200 stimulus and 3 “hazard pay” bonuses from my company which in total add up to twice the stimulus money. All that money went directly to my savings/money market accounts and sits there still. A friend of mine was laid off, as was his wife, and at one point I paid their rent so they wouldn’t fall behind. Neither are airline employees and while both are back on their feet, they could have used the money that was given to airline employees. A continuing payment of say $500 a month (on top of unemployment) to those laid off would have been much better spent than focusing on one industry. A more equitable payout scheme should have been implemented in March.

    P.S. My friends offered to pay me back, I told them Happy Birthday(s) and Merry Christmas.

  10. Jan Reply
    December 21, 2020 at 8:56 pm

    Careful @ChuckMO, you might injure yourself for patting yourself on the back too hard LOL

  11. TWA john Reply
    December 22, 2020 at 10:22 am

    All should view Tulsi Gabbard’s (CFR) video on why she was only Dem to vote against the bill. The reality is the bill has 5000 pages and Congress had only a few hours to review it. All kinds of horror was slipped in at the last minute. Both parties are two sides of the same coin. The vaccine for covid does not work, is not effective and 1 in 30 has suffered SEVERE reactions. Those mindlessly promoting this are shills or dupes for big pharma. The omnibus bill has pork for all. Loaded with foreign aid to countries that are not our friend. Funding for whacked government programs that have zero to due with any recovery of our economy. We the American People have to fix this mess. D.C. is the problem and we as a nation need to shut it down. There are no saviors that are going to help us. It is now a race for the exits with as much loot you can carry before the rood falls in. We as a People, one under God must put aside the divisions and target the real enemy. Government has nothing it has not taken from someone. Government cannot help one without hurting another. Now government has our credit cards and is on a bender to destroy the credit and futures of EVERY American. Rich will loose all, poor will become destitute. We will all be in the same bread lines. The dark winter is upon us. The solution is no longer available at the ballot box. Soon the only solution will be the ammo box.

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