Federal Aid Saved U.S. Airlines From the Worst of the Pandemic But Was It a Success?

The aviation industry was one of the single largest beneficiaries from the U.S. government’s $4.5 trillion in Covid-19 pandemic relief. Airlines received $74 billion from three measures, including the Trump administration’s CARES Act to the Biden administration’s American Rescue Plan, to shore up their balance sheets but, mostly, to keep staff on their rosters.

On the surface, the relief did what it needed to do. No major airline shut down or filed for Chapter 11 bankruptcy restructuring, though several small carriers — including Compass Airlines, RavnAir and Trans States Airlines — closed their doors. And the number of people employed by the industry stood at 709,544 at the end of May, down just 6 percent from the month before the pandemic set in, February 2020, according to U.S. Bureau of Transportation Statistics data. Nearly all of those departures were voluntary.

“I think it's an overwhelming success,” American Airlines CEO Doug Parker said when asked about the federal relief earlier in July. He cited his own carrier’s nearly 45 percent capacity growth from the first quarter to the second quarter in line with the snapback in leisure travel as an example of something made possible with the payroll support relief.

And that growth was not limited to American. Industrywide, U.S. domestic capacity jumped an impressive 35 percent from the first to second quarters, according to Cirium schedules. And compared to two years ago, it was only down 19 percent in the June quarter.

The U.S. airline recovery has made the industry as something of a poster child — at least among global airlines — of a successful aid program. Industry executives in Europe and elsewhere repeatedly look to the country as an example of how government support can allow for a rapid recovery.

In fact, industry trade group the International Air Transport Association (IATA) forecasts that the U.S. will be one of just three domestic markets globally — the others being China and Russia — where passenger numbers reco