The Naked Truth/Jamala Rogers
Unpacking the Burden of Air Travel Safety
The U.S. airline industry has taken a page out of the Too Big to Fail book used by corporations like Goldman Sachs and General Motors. After the banking crisis of 2008 and subsequent government bailouts, corporations like GS enjoyed mega-profits. They rewarded their shareholders with record bonuses while taxpayers got the bill. The same scenario is happening with the airlines.
During the pandemic, the industry received over $50 billion to avoid bankruptcy because people were staying at home. The airlines got multiple payouts from the same public trough as we did — the American Rescue Plan Act. Most of us were so focused on the crumbs we would receive from ARPA, we didn’t see what the phat cats were getting out of the deal.
The losses of the airlines were temporary. They recovered, and their stocks soared nearly 200 percent. Executives received stocks and bonuses to add to their need-to-be criminal compensation packages. For example, Delta’s CEO had a total compensation package of $12.4 million in 2021. Scandalous.
The airlines, like the other corporate bloodsuckers, always cry broke. If the government doesn’t listen, they threaten bankruptcy. These companies insist on taking minimal risks but demanding maximum profits.
The justification for special treatment is that safety is their utmost priority and they must save jobs, the latter being a winning message for decades. So, labor unions and consumers tighten their collective belts to make concessions to benefit the companies. In the case of the airlines, they have reciprocated that sacrifice by keeping employee wages relatively flat. Passengers get increased fares, tighter seat spaces and a bag of peanuts.
During the holiday travel season, Southwest Airlines alone cancelled nearly 17,000 domestic flights. The airports were pure chaos. While the airlines pointed the finger at extreme weather conditions, a look at where the profits go reveals a more transparent situation. An outdated infrastructure came last on the list of what would get SWA’s attention.
Its projected loss due to the holiday cancellations and mandatory reimbursements to passengers will climb to about three quarters of a billion dollars. About $400 million of that is the revenue loss from cancellations. The remaining is reimbursements of actual passenger losses and incentives to smooth consumers’ ruffled feathers. It will be singing the blues all the way to the bank.
Weather has nothing to do with the systems failure of the Federal Aviation Administration. The failure of the industry to invest in its infrastructure and the failure of the Congress to fully fund the FAA is creating an unsafe travel environment for passengers and flight crews.
Criticism of Congress has been deflected to Transportation Secretary Pete Buttigieg. It is demanding answers when they know damn well the problems predate Buttigieg. Congresspeople have been well informed about the FAA’s struggle to get adequate funding for essential technological upgrades. They also are the same body who approve the agency’s budget.
Over the last twenty years, we’ve clearly seen who the beneficiaries are for government bailouts. Taxpayers have shouldered the risks and absorb the payouts. Taxpayers shouldn’t have to carry the burden that belongs to the government and to the industry. It’s time for these two powerhouses to stop the finger pointing and work together to make air travel safe and reliable for the taxpaying public.