The Airline Oil Spin

By now most airline passengers have seen or heard of the email signed by top airline executives asking their customers to push Congress to reign in oil speculators.

“For airlines, ultra-expensive fuel means thousands of lost jobs and severe reductions in air service to both large and small communities. To the broader economy, oil prices mean slower activity and widespread economic pain,” the e-mail read.

But, many who received this email may not have realized that U.S. airlines have already received an estimated $8.5 billion in taxpayer subsidies since 2001.

In July 2008, 3 organizations based in California released a new report entitled Shortchanged: How Airlines Can Repay Taxpayers for Billions in Subsides by Improving Jobs, Security and Services.Some of the key findings of the report include:

• The airline industry has received an estimated $8.5 billion in taxpayer assistance since 2001.
• Airlines have received an estimated $8 billion in federal subsidies and $487 million in state and local subsidies in California alone.
• Even after the industry returned to profitability in 2006 and 2007, airlines continued to benefit from several of these subsidies.
• Many of the subsidies received by the industry come in the form of limits or exemptions on taxes on jet fuel.

Not A Fair Return

What do we get in return for handing handsome public subsidies to the airlines? Plummeting customer service and job quality.

Airline consumer complaints during the first 6 months of 2007 jumped by more than 50% compared to the same period in 2006, according to the Department of Transportation. The 2008 Airline Quality Rating report, released by the Aviation Institute at the University of Nebraska in June, gave the industry its lowest score in nearly two decades.

Meanwhile, airline employees have made huge financial sacrifices since 9/11. Instead of investing in their workforce, airline executives look on as their ground crew, flight attendants and pilots struggle to appease increasingly frustrated passengers. Subcontracted airline workers at major California airports, according to Shortchanged, earn less than they need to be self-sufficient for themselves and their families, and health benefits are unavailable or unaffordable for most. Wide-spread problems of inadequate trainings and staffing, consequently, often prevent workers from providing quality services to the flying public.