Stop me if you’ve heard this one. Most of the time, government money and other largess to a company ends up hurting rather than helping the company. Maybe Southwest didn’t make adequate investments in various systems because its management figured Uncle Sam would write checks and otherwise backstop its losses. From Gabe Kaminsky at theburningplatform.com:
Southwest Airlines, which has canceled or delayed tens of thousands of flights this holiday season, has received massive amounts in federal subsidies in the last several years, records show.
Southwest has canceled over 15,700 flights since winter weather began to affect air travel on Dec. 22, far more than any other commercial United States airline, according to records compiled by FlightAware. However, since 2020, the U.S. government has handed Southwest over $7.2 billion in taxpayer funds for payroll and operations, filings show, calling into question whether the airline has managed its resources correctly.
“Airlines continue to take our tax dollars, yet they never seem to make long-term changes that will improve the experience for customers,” Adam Andrzejewski, CEO of the financial watchdog OpenTheBooks, told the Washington Examiner. “As soon as demand recovered, there was industrywide disruption.”
“These major carriers should use profits to improve systems and position themselves to handle economic headwinds,” he added. “Until then, Congress and airlines will be addicted to subsidies.”