Leave it to Congress to use a worldwide pandemic to line the pockets of their friends with some extra cash.
Congress recently passed the largest emergency aid bill in U.S. history – a whopping $2.2 trillion stimulus package – without a recorded vote.
Of course, the bill promises to provide some relief to struggling families and those on the front lines actually fighting the coronavirus, but the bill is packed full of stuff like $25 million for the Kennedy Center, another $50 million for museums and libraries, and of course, money for airlines.
Not wanting to lose a seat at the table, the airlines fought tooth-and-nail to get their piece of the stimulus pie…
… and ended up with hefty $58 billion dollar piece at that.
The coronavirus aid bill gave $25 billion in loans and loan guarantees for passenger airlines (cargo carriers get $4 billion).
But wait, there’s more.
Another $25 billion was given in the form of grants to allegedly pay workers – while supposedly forbidding airlines from laying them off (or furloughing employees) through September 30th.
Sure, Congress denies they are bailing out the airlines, but they are.
Airlines Hit Hard
It’s no surprise, airlines have taken a major hit from COVID-19.
From State Department travel restrictions to terrified passengers – the last place people want to be is at the airport flying through the friendly skies.
And with airlines forced to suspend or cancel flights, they are feeling the brunt of the lack of cash and facing unprecedented loss.
According to Dallas News, American Airlines plans to reduce flying by nearly 30% for April.
Delta and United are suspending flights too but not exactly working hard to give people back their money.
Holding Travelers Hostage
At first, it’s natural to want to feel sorry for airlines, right?
We get it, it isn’t their fault the coronavirus disrupted travel, but they aren’t exactly responding with grace to weary travelers.
For instance, take United Airlines – they’re actually making it more difficult for people to get their money back during a worldwide pandemic.
The Baltimore Sun reported:
“In a single week this month, United changed its policy four times regarding passenger rights when flights are altered. Pre-pandemic, if United changed a flight time by more than two hours, passengers were entitled to a full refund. But on March 7th, the same day the World Health Organization reported that there were now more than 100,000 cases of COVID-19 in 94 countries, United altered its policy to require a flight time change of at least 25 hours to receive a refund.
Amid backlash, it tried out two more policies: Refunds only if “departure or arrival time significantly changes,” whatever that means (March 10th); and refunds only if the flight is moved by more than six hours (March 12th). And then, on March 14th, the company settled on its current policy of credits — even with six hour-plus changes — until a year has passed from the original date of purchase, at which time a refund may be issued.”
Kinda makes it hard to feel sorry for ‘em, ya know?
A Necessary Evil
But, we need them.
And airlines know this and fully exploit this demand.
They’re cool to take risks because they know the government won’t let them fail.
So instead of saving their cash for a storm, they spent it on stock buy-backs.
But again, with only 4 big airlines left in our country, we need an industry.
However, rewarding bad behavior is only a temporary fix to a much bigger systemic problem.
Airlines could take some of the bailout money and work to actually refund passengers for their canceled flights – instead of issuing a “voucher” that must be used during a certain timeframe – and that’s assuming they’re still around to honor it.
And while airlines get billions of dollars to stay afloat, many Americans face unemployment due to the coronavirus pandemic and can barely afford to pay rent or feed their families.
And with so much uncertainty regarding the coronavirus and no end in sight, we can expect things to get ugly in the travel industry before they get better.
Will all the airlines survive?
Or will some take the plunge to their final death?
Only time will tell how this all plays out.
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