One hates seeing friends fight. So it’s a little uncomfortable to see an airline get a multi-billion dollar taxpayer-funded bailout while the politicians who actively supported them get out.
Southwest Airlines has been in disarray after winter storms and the company’s outdated crew tracking system caused it to cancel the vast majority this week’s flight. Passengers are stranded on the road with no luggage and no idea when they will actually reach their destination.
Politicians have been eager to capitalize on public anger by calling for an investigation of Southwest and stricter regulation of the airline industry.
“The problems Southwest has had over the past few days have been more than just weather. The committee will investigate the causes of these disruptions and their impact on consumers,” Say Sen. Maria Cantwell (D–Wash.), chair of the Senate Commerce, Science and Transportation Committee, yesterday.
The senator also reiterated her demand that the U.S. Department of Transportation require airlines to cover secondary costs passengers incur due to canceled flights, such as meals and hotel rooms.
Cantwell’s criticism of Southwest stands in stark contrast to the airline bailouts she has advocated for during the pandemic.
she supports $25 billion in relief to passenger airlines as part of the $2 trillion CARES Act of 2020.
In exchange for this money, the CARES Act program desired airline Abandon mandatory layoffs, stock buybacks and increases in executive compensation. They must also provide stock options to the federal government and maintain minimum levels of service. The latter requirement has resulted in “ghost flights” with more staff than customers.
At that stage of the pandemic, there was little opposition to federally funded bailouts of anything. However, Cantwell is also advocating a second round of airline bailouts later in 2020, which is far less certain.
At that time, the proposal second stimulus Neither the Democratic nor Republican bills include additional funding for airlines.but cantwell urge Lawmakers “back to negotiating table” with airline industry to discuss another round of aid The spending bill finally passed in December 2020 includes $15 billion for passenger airlines.
The U.S. rescue plan passed in March 2021 includes $14 billion in funding for passenger airlines.Not only did Cantwell vote for the bill, but also write One of its provisions expanded the bailout funding to manufacturing companies in the aerospace supply chain.
In total, passenger airlines received about $54 billion in COVID relief. Southwest claims about $7 billion of that.
The first two bills containing airline bailouts have broad bipartisan support. The $1.9 trillion U.S. rescue plan is a partisan Democratic bill. As a result, Cantwell has been the most outspoken of both financially supporting airlines and vocally criticizing them, but she’s not alone in this position.
For example, Sen. Elizabeth Warren (D-Mass.) supports all three bills that include airline bailouts. After this week’s Southwest Airlines debacle, she called Stricter antitrust enforcement on the airline industry.
It’s not clear why Cantwell and Warren are so mad at airlines charging customers for canceled flights, given their support for collecting billions of dollars in the form of taxes from those consumers to pay for flights they didn’t even want to take in the first place.
Their anger seems a little unreal now. The investigations and regulation they’re calling for now will make it hard for taxpayers to fully accept the bailouts they’ve already paid for.
Meanwhile, this week’s deluge of flight cancellations is a good reminder of how unfair these bailouts have been to taxpayers and consumers. Instead of allowing the pandemic’s shock to cause some necessary disruption in the passenger airline industry, Congress chose to maintain the chaotic status quo.
Southwest’s $7 billion from three COVID relief bills keeps the airline’s ineffective practices going. Allowing competitive pressure to work more freely could spark some productive changes within Southwest.
Here’s something to think about while you’re waiting for your flight.