Do Taxpayers Support a Big Chunk of the Airline Industry?

You know the price of an airline ticket includes taxes, but did you also know even Americans who never fly are supporting US carriers through their tax dollars at work? Licensed aircraft dispatcher and USA Today contributor Bill McGee pointed this out in a recent column, making some intriguing points along the way. 

The Double Standard 

Government subsidies and airlines became a hot issue when American, Delta and United formed a partnership and asked the White House to oppose the expansion of three Gulf carriers into US markets. The carriers are Qatar, Etihad and Emirates, and those who oppose the expansion say it’s unfair to let the trio horn in the American pie since they’re state-owned and supported by their governments. 

McGee notes all airlines across the world are supported to some degree by their governments. The Big Three’s argument that they’re protecting American jobs additionally falls flat, since all three US airlines have outsourced thousands of jobs to firms outside the country. Delta even bought a stake in an airline heavily supported by the Chinese government. 

Government Support 

To a great degree, major US airlines were actually created by federal assistance. Help came from various subsidies and agreements that included: 

• The Contract Air Mail Act of 1925, which made it possible to set up the domestic routes that exist today
• The Air Transport Command and other programs during World War II that funded movement of military and civilian personnel and equipment across the globe
• Initiatives such as the Civil Reserve Air Fleet program that have granted US-based airlines numerous military contracts 

Other airline assistance has come in the form of a no-cost flight academy that has produced top-notch pilots, mechanics and other tech employees for American carriers for decades. Don’t forget all the technologies and developments that originated with the US military and were eventually delivered to commercial airlines. 

And Even More Government Support 

The government continues to use tax dollars and other funding and programs to support US carriers, with examples including: 

• The Essential Air Service program, which gives subsidies to airlines that serve rural communities
• The Fly America Act, which requires federal agencies using federal dollars to fly passengers and cargo on American air carriers
• The Air Transportation Safety and Stabilization Act, aka the post-9/11 bailout, which rapidly helped airlines get back into profitable service
• Major overhauls of airports that often involve millions or billions of funds from government agencies
• Ongoing business grants and tax credits gobbled up by many airlines across the board 

In addition to funding, the airline industry receives plenty of governmental perks, ranging from bankruptcy protection to federal preemption. The latter ensures all state consumer protection claims and statutes are worthless for passengers, who must seek any redress through federal courts. 

Overall, the American government has been veritably bending over backwards to accommodate major airlines, often at the expense of smaller carriers and, even more importantly, the passengers. Yet the Big Three still complain the playing field is not level if they’re forced to compete against state-owned Gulf carriers.