Dear readers, certain links on this website pay us referral fees to send business and sales. We value your time, money, and will not waste them. Click here to see our entire advertising policy. This page does not contain any company content. These companies have not reviewed, approved, or otherwise endorsed the content. These opinions are solely the author's.The carriers were not afraid to talk about the hardships they would face and how many jobs they would lose if they didn't get a bailout. The airlines have lost touch with their friends now that they are in recovery.Click here to book travel and sign up for a credit card. Both of these support LiveAndLetsFly.com.Add us to your Facebook or Instagram account today if you haven't already.Airline Bailout MoneyThe US Covid-19 Relief Bill allocated an incredible $1.9 trillion to bail out millions businesses across the country. The travel industry was the most affected, with airlines asking for $50 billion. $25 billion of that was approved initially.The New York Times reported on a possible bailout backlash in which American taxpayers will be subject to abuse from carriers that they have funded since their darkest hours.United Buying PlanesScott Kirby was always ready to remind us of the tens of thousands that would lose their jobs if we did not have governmental support.Matthew reported this week that United Airlines was about to announce its purchase of 200 more planes. This sounds pretty dumb for several reasons. If the airline is able to fly new routes with enough success, it may be able to pay back its investors.There are also hundreds of newly renovated aircraft available on the used market. Delta is actively looking for gently used A350-900s right now. United, like other airlines, sent large portions of its fleet into desert retirement ahead of the scheduled removal. Even though equipment could be bought at a discounted price, planes that were fit to fly in March 2020 are no longer suitable.It was like a friend comparing it to: If I borrowed $10,000 to save my family's foreclosure, and then invited you to the new room I built, would you be [mad]?" This seems like a blatant repurposing taxpayer money.Many thousands of businesses were forced to close across the country. Companies that could have used the money airlines spent to keep their operations (and their employees) afloat. All of the businesses that were destroyed by the pandemic are still in business, despite having access to United's generous taxpayer funds.Astute observers will know that these purchases are for future aircraft, so money spent today will not be relevant for purchases in the future. Although it may be true that equipment purchased at clearance prices is a better option than purchasing new equipment in the next decade, it is still a smart business move.The Price of Airfare is Ridiculously HighThe rise in travel demand is a major factor. The US has more seats and more people sitting in them than ever before in 2019, which is a major boost to travel demand. Although it is mostly leisure travelers, there are still plenty of seats available and airfare has gone up to an unbelievable level.The Payroll Support Program penalizes airlines that fly today to help them recoup their losses and make profits. Many American families were affected by the pandemic. To gouge them with ridiculously high prices after it has subsided is the best kind of thank-you that an airline can offer.Frontier Tries COVID FeeFrontier Airlines introduced a $1.59/segment Covid Recovery Charge in May. The taxpayers provided a wide range of support to the airline. American citizens helped the carrier through its worst days and they gave them a tariff on their flights as a thank-you.Wait, there's more.The airline did not owe any excise taxes on the revenue because the fee was not included in the airfare. Frontier effectively robbed two American citizens. This week, Frontier stopped charging the fee.Taxpayers pay the priceI was both pro and conscientious against the airline bailout. If there was no bailout, then the demand for travel would be justified as these businesses were willing to take on the risk and reap the rewards of the capitalist market. Travellers should now enjoy normalized rates because airlines accepted the bailout.This has not happened. Instead, the taxpayers have taken on the losses and privatized the profits within these carriers. The taxpayers will be able to reap the benefits of more successful airline stocks, as some of the money was given as stock warrants. Mnuchin was clever in this smart move for taxpayers. The US government was allowed to buy thousands of shares in American Airlines for $12, which now trades at $22/share. It remains to be seen if these gains will replace the cash investment of the American people.ConclusionThis blog had many commenters who were skeptical of bailouts for airlines that behaved badly before the pandemic. These same executives, who were navigating difficult times for the country's largest employers, would likely use the funds to benefit themselves such as stock buybacks and terminal improvements at international flights. They were correct (though they weren't specific about how these executives would respond), and I was wrong.What do you think? Are airlines expanding on the backs the taxpayers? Are they extorting taxpayers with outrageous fees and high airfare? Was the bailout needed to save jobs or was it just the natural course?
