Last March, the government provided U.S. airlines a $50 billion lifeline in one of the largest industry-wide interventions in American history. The industry received a further $29 billion through the bipartisan year-end relief package and President Joe Biden’s stimulus plan. The enormous volume of support raises a question, according to a Bloomberg commentary: Was this in taxpayers’ interest, or was it a classic case of corporate welfare that primarily benefited shareholders? A careful examination of the record shows that the initial intervention during the height of the panic was certainly the best available alternative. But more recent support to an industry the government had already stabilized raises questions about the marginal return on taxpayer dollars. With airlines now adding routes as part of the broader economic recovery, it's easy to forget how precarious the future of the industry was a year ago. The general economic shock from the virus was unprecedented, but the speed and scope of the impact on the aviation industry was particularly breathtaking. More than 95 percent of demand evaporated almost overnight.
*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
