A Plurality of Voters Support Nationalizing Bailed-Out Airline Companies
By Ethan Winter
Due to the coronavirus’s impact on its business, Boeing is asking for a government bailout. As Dominic Gates of the Seattle Times reported, “Boeing said Tuesday [March 17] it’s asking for ‘a minimum of $60 billion . . . for the aerospace manufacturing industry’ in a combination of direct taxpayer money and loans from banks backed by government guarantees.” A bailout of this size is roughly equal to the entire worth of Boeing.
Though Boeing represents a crucial lynchpin of the American aeronautics industry, the company has been ludicrously mismanaged and has delivered faulty products. Diving deep into the inner workings of Boeing, Maureen Tkacik, writing in the New Republic, paints a picture of a company whose mismanagement led to the deadly failure of the 737 Max 8 aircraft––Boeing’s best-selling plane.
Boeing is far from the only aeronautics company requesting a bailout. Airlines for America, a trade industry group, is requesting some $50 billion in federal assistance. To underscore their desperation, on Friday, March 20, the CEO of United Airlines took to CNBC to threaten that if the troubled airline company failed to receive “sufficient government support by the end of March," it would begin laying off workers.
These companies have seen a sharp drop in ticket sales. As Justin Bachman and Mary Schlangenstein noted in Bloomberg Business, “Scott Kirby, the president of United Airlines Holdings Inc., described a ‘dire scenario’ in which monthly sales would plunge 70% until the start of June, then 60% that month and 40% in July and August.” Yet what’s also become clear is that airline companies failed to plan for any disruption to their bottom line. As the reporters observe, “from 2010 to 2019, U.S. airlines spent 96% of their free cash flow, some $45 billion, to purchase shares of their own stock.” (For more reporting on how the airline industries turned ten years of profitability into near collapse, see this story in Slate by Henry Grabar.)
What is to be done about this? While many airline companies have been mismanaged as private firms, there are good reasons to bail them out: namely, to protect workers employed in these firms, and to ensure the airplanes—a critical piece of infrastructure—don’t rust on the tarmac. While some dispute whether a bailout is necessary, one solution would be to simply bring airline companies under state control, turning them into publicly owned enterprises. Numerous countries already have state-owned airlines, and Italy renationalized Alitalia in response to the coronavirus.
As part of a March 2020 survey, Data for Progress sought to test voters’ attitudes to converting bailed-out airline firms into publicly owned enterprises. Those surveyed were presented with both Democratic for the idea and Republican arguments against it. Specifically, registered voters were asked the following:
The coronavirus pandemic led Boeing and several airlines to request government bailouts. These bailouts would be roughly the entire value of the company. Some Democrats have proposed having companies bailout out with taxpayer money become publicly owned enterprises. Democrats say these companies are badly mismanaged, don't have enough market competition and abuse consumers. Republicans argue that the government can't run an airline and this will lead to mismanagement and higher costs. Would you support or oppose airline companies that require large bailouts to be publicly-run?
Overall, voters narrowly support converting bailed-out airline companies into publicly-owned enterprises (39 percent support, 35 percent oppose). Men are particularly supportive of the idea, backing it by a 10-point margin (44 percent support, 34 percent oppose). Voters under the age of forty-five are also quite receptive to the idea, supporting it by a 21-percentage-point margin (48 percent support, 27 percent oppose). Black voters also support the idea by 27 points (48 percent support, 21 percent oppose).
Responses are highly correlated along partisan lines, likely a partial result of the framing we provided, which framed the arguments using partisan labels (e.g., “Democrat” and “Republican). On the whole, Democrats are quite open to the idea of supporting it by 26 points. Conversely, Republicans oppose such a policy by 17 points (29 percent support, 46 percent oppose). Meanwhile, independents support the policy by a 3-point margin (28 percent support, 25 percent oppose), with a plurality (47 percent) unsure.
A plurality of voters support nationalizing bailed out airline companies. This is not a pie-in-the-sky idea, either. Many countries already maintain national careers, and even members of the Trump administration, such as Larry Kudlow, have floated the option of rescuing troubled firms in exchange for equity. Democrats in Washington should move decisively and call for bringing companies like Boeing under collective control, knowing a good slice of the electorate stands behind them.
Ethan Winter @EthanBWinter is a senior advisor for Data for Progress.
Edited by Andrew Mangan, Senior Editor, Data for Progress