Robert Reich
The biggest U.S. airlines spent 96 percent of free cash flow over the last decade to buy back shares of their own stock in order to boost executive bonuses and please wealthy investors. American Airlines alone repurchased more than $12.5 billion of its shares over the last ten years. Now, they expect taxpayers to bail them out to the tune of $54 billion.
The airline industry should not see one taxpayer dime unless the bailout comes with significant strings attached. Two of the biggest unions representing airline and aviation workers, as well as some Democratic lawmakers, are demanding limits to stock buybacks, dividends, and executive bonuses, as well as guaranteed long-term protections for workers and consumers. It would be unconscionable to hand the airline industry a multibillion-dollar blank check after years of irresponsible behavior; this bailout absolutely must include these provisions.
The biggest U.S. airlines spent 96% of free cash flow last decade on buying back their own shares. American Airlines Group Inc. -- which is not shown in the chart but is included in overall figures -- led the pack, with negative cumulative free cash flow during the decade while it repurchased more than $12.5 billion of its shares. United Airlines Holdings Inc. used 80% of its free cash flow on buybacks, while the S&P 500 Index as a whole allocated about 50% for the purpose. As the industry reels under the weight of the coronavirus outbreak corporate leaders are seeking federal assistance to ease the burden.
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