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The Big Airline Bailout

Lawmakers sent billions in generous grants and loans to U.S. airlines, but the industry’s past raises questions about what should come next.

By Miriam Li

Before taxpayers opened their wallets to bail out the airline industry, US airlines were on a spending spree, shelling out billions to enrich shareholders and c-suite executives. United Airlines spent $8.57 billion on stock buybacks between 2014 and 2019, while Delta spent $3 billion on dividends and share repurchases. In addition, Delta’s CEO, Ed Bastian, received $17.3 million in compensation in 2019 alone.

When the travel industry was decimated following the outbreak of the COVID-19 pandemic in March 2020, a national debate commenced as to whether airlines deserved a bailout at all. After decades of exorbitant stock buybacks, high CEO salaries, and what some saw as unacceptably low worker investment, many policymakers and economists were wary of spending billions to keep the industry afloat.

Ultimately, the airline industry won out as Congress signed the 2020 Coronavirus Aid, Relief, and Economic Security Act, under which U.S. airlines were eligible to receive as much as $25 billion in loans and $25 billion in grants.

Although critics lost their battle against the airline bailout, it is crucial that policymakers remember the important issues raised by this debate. Namely, airlines have spent the last decade going on irresponsible stock buyback sprees and showering CEOs with multi-million-dollar compensation packages, leaving the industry particularly vulnerable to the downturn caused by the COVID-19 pandemic. Now that taxpayers have bailed out US airlines in the magnitude of billions, it’s time to revisit proposed regulatory policies that aim to curtail the industry’s penchant for irresponsible spending.