Will a US airline bailout come with serious strings attached? – Aljazeera.com

The coronavirus outbreak is rampaging across the balance sheets of airlines around the world, as countries close borders, people shelter in place, and travel grinds to a halt. In the United States, carriers are looking to the federal government for immediate assistance to help cushion the blow that the pandemic has delivered to the industry.…

Will a US airline bailout come with serious strings attached? – Aljazeera.com

The coronavirus outbreak is rampaging across the balance sheets of airlines around the world, as countries close borders, people shelter in place, and travel grinds to a halt.
In the United States, carriers are looking to the federal government for immediate assistance to help cushion the blow that the pandemic has delivered to the industry.
Hundreds of thousands of jobs are directly on the line, the US airline trade body – Airlines for America – has said, as are millions of other jobs tied to the industry.
The White House is proposing a $50bn bailout in the form of secured loans. “No one can be blamed for this,” President Donald Trump said during a news conference on Wednesday, defending his administration’s plan to save airlines. “We went from full planes to, boom, empty.”
But many are questioning why – after an 11-year economic expansion – US carriers are not in a better financial position to weather the coronavirus storm. And a growing chorus of voices – from unions to politicians – are demanding that any bailout package airlines receive ensures that it is not just shareholders and executives who dictate how the funds are spent.
Others want industry-wide reforms to boot. But some free-market economists say the government needs to focus on the public health crisis first, and that if the airlines cannot compete, they should just be allowed to go bankrupt.
‘Uncharted territory’
An analysis by Bloomberg found that between 2010 and 2019 the biggest US airlines spent 96 percent of the money they had left over after covering expenses and capital expenditures buying back their own stock.
Stock buybacks are heavily criticised because they do nothing to boost productivity and effectively serve as stealth dividends that enrich shareholders and the pay packages of executives who are compensated in part by stock. 
As bailout talk intensifies in Washington, the blowback against buybacks is turning decidedly bipartisan.
On Thursday, Trump told reporters he would be “OK” if the $1 trillion-plus stimulus bill under discussion on Capitol Hill bans firms that receive bailouts from using government funds to buy back
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