US Airlines Spent 96% Of Their Cash On Buybacks Benefiting CEOs, Now Beg For Bailout With Taxpayer Money
We are starting to see major implications of the behemoth we call COVID-19. Besides the hundreds of thousands physically affected by the coronavirus, there are also whole industries suffering great losses due to the conservative lifestyle imposed by it.
Many governments are preparing economic stimulation and bailout plans, with one particular example making headlines. A number of US airlines are demanding bailouts measured at billions of dollars from the US government, and people aren’t happy about the fact that the government is actually considering this.
A number of US airlines found “the best” time to ask for billions of dollars in government bailouts
Image credits: Whity (not actual photo)
Robert Reich, Former United States Secretary of Labor, explained that airlines do not deserve the bailout currently planned at $50 billion. He claims that in the last 10 years, the industry’s largest players—Delta Airlines, United Airlines, Southwest, and others—collectively spent 96% of their cash flows buying back their own stock. According to Reich, this was done to increase executive bonuses, artificially making themselves look good along the way.
Needless to say, a vast number of citizens and experts didn’t like this idea amid the COVID-19 crisis
Image credits: RBReich
Now, issuing bailouts to businesses isn’t a bad idea per se—it can be beneficial in keeping the economy up and running through tough times. However, it is the context that is pushing many to protest such a move, especially given that this is taxpayer money and it could be used to greater benefit if spent elsewhere.
U.S. Representative A. O. Cortez, Former Labor Secretary R. Reich and others took to Twitter in protest
Image credits: AOC
A few days before Reich’s tweet, Alexandria Ocasio-Cortez, New York’s US Representative, made the same point. She further explained that there should be added conditions prohibiting airline companies from buying back their stock if they receive a government bailout.
Reich continued that the bailout is essentially taxpayer money. Despite it being used to keep major companies (and hence the economy) afloat during the pandemic, people wouldn’t really trust airlines with this money given their track record of stock buybacks, tax dodging, and worker shafting over the years.
Reich stated that it is taxpayer money and it “should be used to bail out people, not corporations”
Image credits: RBReich
Image credits: RBReich
Moreover, he says that companies like airlines, hotels, and cruise ships should not be bailed out as they have a number of other options to finance their essential operations, including borrowing money at extremely low rates.
Reich suggests using the bailout to “bail out people, not corporations.” This should come in the form of helping workers who need income and paying medical bills, as well as helping hospital workers who are in dire need of protective gear.
Besides, Reich explained that airlines can use other sources of income—borrowing at low rates
Image credits: RBReich
Image credits: RBReich
Association of Flight Attendants President Sara Nelson also went to Twitter in support of this idea. She said that since airlines must continue with keeping up payroll and avoiding layoffs so as to make the aviation industry’s return to service smooth, she suggests payroll subsidies to be paid out directly to the workers. This would include flight attendants, pilots, airline ground workers, airline caterers, airport cleaners, greeters, security screeners, wheelchair attendants, and other airport service workers.
Association of Flight Attendants President Sara Nelson attempted to find some middle ground
Image credits: FlyingWithSara
Image credits: FlyingWithSara
This, of course, has to be done with significant conditions that would help workers and keep planes flying without allowing upper management and executives to take advantage. Besides this, she noted that planes do not have to sit idle in airports—they can be used to facilitate essential logistics during the pandemic to mitigate the costs.
Her idea was to let the government help the workers without letting the high ups take advantage
Image credits: FlyingWithSara
Image credits: FlyingWithSara
Debates are still ongoing as government officials are divided over this issue, while many experts are advising against the idea of bailing out airlines since there are bigger priorities. What are your thoughts on the issue? Let us know in the comments below!
Here are some opinions on the topic from the rest of the internet
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100% worker protections, all the way. Corporate profits aren't the backbone of the economy, workers are. And since most Americans work for small businesses (privately owned businesses that employ <50 people), small businesses need the bailouts. I say small businesses be given grants to cover the shutdown on the condition that nobody gets laid off (or anyone laid off and collecting unemployment gets rehired upon reopening). Airlines need to be nationalized, or at least revert to public utility like they were pre-Carter.
Man, f**k cruise lines. They deliberately register ships under foreign flags to avoid paying taxes, treat their employees and customers like s**t, and they have the unmitigated GALL to ask for taxpayer bailouts while most of us are out of work and terrified for our future. No, no, and f*****g NO.
Protect the PEOPLE. And, despite "Citizens United"... CORPORATIONS ARE NOT PEOPLE. Current form of the bailout bill, per my reading of it and confirmation from a US Senator? $350 M "$350 million to be available to local authorities when the virus is detected." In short, a buck a person in the US. Yep. A whole $500 M "for masks, medication, protective equipment, and other much-needed medical supplies that can be distributed directly to hospitals and local health care providers." Does any of that soundl ike it adds up to trillion or even billions? NO. Infer from there... (Source: Sen Mark Warner office, US Senator Virginia)
Actually...in the eyes of the American Justice system...Corporations ARE people. As a matter of fact, they have more rights than you and me. That's some crazy s**t. But that's how the entire American system is built. It's built with the corporation in mind. You cannot change this unless you change the entire culture and laws. And that's never going to happen. They will get bailed out.
Load More Replies... 100% worker protections, all the way. Corporate profits aren't the backbone of the economy, workers are. And since most Americans work for small businesses (privately owned businesses that employ <50 people), small businesses need the bailouts. I say small businesses be given grants to cover the shutdown on the condition that nobody gets laid off (or anyone laid off and collecting unemployment gets rehired upon reopening). Airlines need to be nationalized, or at least revert to public utility like they were pre-Carter.
Man, f**k cruise lines. They deliberately register ships under foreign flags to avoid paying taxes, treat their employees and customers like s**t, and they have the unmitigated GALL to ask for taxpayer bailouts while most of us are out of work and terrified for our future. No, no, and f*****g NO.
Protect the PEOPLE. And, despite "Citizens United"... CORPORATIONS ARE NOT PEOPLE. Current form of the bailout bill, per my reading of it and confirmation from a US Senator? $350 M "$350 million to be available to local authorities when the virus is detected." In short, a buck a person in the US. Yep. A whole $500 M "for masks, medication, protective equipment, and other much-needed medical supplies that can be distributed directly to hospitals and local health care providers." Does any of that soundl ike it adds up to trillion or even billions? NO. Infer from there... (Source: Sen Mark Warner office, US Senator Virginia)
Actually...in the eyes of the American Justice system...Corporations ARE people. As a matter of fact, they have more rights than you and me. That's some crazy s**t. But that's how the entire American system is built. It's built with the corporation in mind. You cannot change this unless you change the entire culture and laws. And that's never going to happen. They will get bailed out.
Load More Replies...
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