When airlines initially received $50 billion in payroll support and subsidized loans from Congress in April 2020, they did so under the conditions that the airlines would not furlough workers or eliminate service to any of the cities to which they fly until September 30. Now that their obligations are expiring, the airlines are asking for a “clean extension” of payroll support – another $25 billion in exchange for continued promises not to furlough workers or suspend operations to destinations served.

In their new policy brief, Veronique de Rugy and Gary D. Leff explain why further subsidization of US airlines by American taxpayers would be misguided. The airlines, already supported by pre-COVID subsidies, also have access to private markets and the ability to declare bankruptcy. While further subsidizing airlines might be beneficial in the short term for some workers and airlines, this payroll support will only temporarily delay inevitable layoffs and prevent the airline industry as a whole from recovering faster.