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COVID-19

What it means when airlines get special aid

Sabri Ben-Achour Oct 7, 2020
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Airline industry workers call for more federal aid in Federal Plaza in Chicago on Sept. 9. Kamil Krzaczynski/AFP via Getty Images
COVID-19

What it means when airlines get special aid

Sabri Ben-Achour Oct 7, 2020
Heard on:
Airline industry workers call for more federal aid in Federal Plaza in Chicago on Sept. 9. Kamil Krzaczynski/AFP via Getty Images
HTML EMBED:
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After abruptly shutting down negotiations Tuesday over the next COVID-19 relief package, President Donald Trump backtracked saying maybe some direct aid to households will happen. 

He also singled out airlines for some additional aid. 

He said he wants Congress to pass a $25 billion aid package for the airlines, and that’s on top of the $25 billion that’s already expired.   

Airlines are suffering in this pandemic, no question. But a lot of industries are struggling. So why are airlines special? 

For one, airlines are a big industry. They generate almost $2 trillion in economic activity; they employ around 450,000 people, which is indirectly tied to 10 million more jobs.  

“If we are going to jumpstart the economy, the country needs to be able to move people and goods,” said William Swelbar, a research engineer at the Massachusetts Institute of Technology’s International Center for Air Transportation. It’s a case that’s convinced lawmakers at least once this pandemic. But among critical industries, airlines also have unique clout.

“They provide service to just about every congressman’s jurisdiction,” said Richard Squire, professor of law at Fordham University. “They are able to threaten to deny service or terminate service to smaller airports.”

In fact, one of the conditions of the first airline relief package was that service not be interrupted to a long list of airports. Squire said it meant some flights flew empty, or nearly so. Airlines also spend heavily in Washington, D.C., with the hope of preserving a special status.

“Last year, the U.S. airlines spent over $100 million on lobbying,” said Samuel Engel, senior vice president with consulting firm ICF. He said that was ramped up this year

Airline employees wield influence, too, according to Tom Kochan, professor of management at MIT’s Sloan School of Management. That’s because they are heavily unionized.

“The unions join the companies in promoting and lobbying for support as well,” he said.

It’s worth pointing out, too, the government has a long history of supporting airlines. The government set prices and routes before 1978, and it was part of the Federal Aviation Administration’s mandate to promote airlines up until the 1990s. 

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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