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Illustration: Sarah Grillo/Axios

The trouble with government bailouts is you never really know whether they were necessary, and that's likely to be the case with the U.S. airline industry, too.

Why it matters: One year into the pandemic, it's not clear whether the $54 billion the U.S. Treasury used to prop up airlines during the pandemic was the right move, or just an expensive gift to a politically favored industry.

  • A piece this week in the New York Times makes the case that since airline stocks are soaring, "we socialized the airline industry's losses and largely privatized the gains."
  • But the flip side is that the uniquely structured "payroll support program" helped stave off worse unemployment and kept airlines afloat so they can help jump-start the economy once the health crisis is over.

Where it stands: Investors are no doubt happy. Airline stocks are 2.5 times higher than their pandemic trough and have recovered almost all their losses. But that doesn't mean the companies are healthy.

Revenue for the top seven airlines is down 67% from a year ago, and U.S. passenger airlines collectively are burning cash at a rate of $150 million a day, according to Airlines for America.

  • They've added $60 billion in new debt over the past 12 months, and analysts say it will take years to pay down their current $170 billion debt load, limiting future growth.

Driving the news: The $1.9 trillion American Rescue Plan signed last week by President Biden includes a new $14 billion round of aid for airlines to extend paychecks until Sept. 30. That brings the total payroll support fund to $54 billion.

  • That is about the same amount that taxpayers pumped into General Motors during the carmaker's 2009 bankruptcy, but with one big difference: The government took a 61% stake in GM as part of the restructuring.
  • In the case of airlines, Treasury is demanding just 30% of the money be repaid (and taking warrants in each company); the rest is a "pass-through" grant to workers to avert layoffs.

What they're saying: Steven Rattner, former head of the Obama Auto Task Force, called the airline bailout "the ultimate corporate welfare" and said "it violates every principle we established with the auto bailout."

  • The restructuring of the auto industry, he said, was designed so that "everyone took a haircut" — shareholders, bondholders, employees, executives and even car dealers.

The other side: "This was not a bailout. This was a relief program. We had the power to focus the relief from the ground up rather than top down," said Sara Nelson, president of the Association of Flight Attendants-CWA, AFL-CIO.

  • By making sure the money was used exclusively for worker salaries — and not for stock buybacks or executive pay — the program averted layoffs that would have been more costly to taxpayers, she said.
  • That's because airline employees still paid taxes and spent money to help the economy, rather than soaking up enhanced unemployment benefits, she said.
  • Compass Lexecon, an economic consulting firm retained by Airlines for America, digs into the numbers here to back up the industry's case.

The bottom line: Air travel remains 50% below normal, but as vaccinations increase, there are growing signs of pent-up demand, which could spark a recovery as early as this summer.

Go deeper

Updated 5 hours ago - World

Death toll mounts as fighting between Israel and Hamas intensifies

Palestinian Muslims exchange wishes for Eid al-Fitr, marking the end of the holy month of Ramadan, near a razed building in the northern Gaza Strip town of Beit Lahia, on May 13. Photo: Majdi Fathi/NurPhoto via Getty Images

At least 109 Palestinians and seven people in Israel have been killed since recent fighting between Israel's military and Hamas began Monday.

The big picture: Israel began massing troops on its border with Gaza on Thursday, launching attacks from the air and ground as Hamas continued to fire rockets into Israel.

By the numbers: Where the earmarks are wanted

Expand chart
Data: House Committee on Appropriations; Chart: Danielle Alberti/Axios

The Dallas-Fort Worth area is being targeted for the largest collective earmark request in the country, according to a detailed breakdown of overall requests released by the House Appropriations Committee.

Why it matters: House appropriators are trying to balance bipartisan momentum for infrastructure investment with "pork-barrel" spending's checkered political history. The data dump is an effort to provide transparency for what are now termed "community project funding" requests.

Democrats open to user fees for infrastructure deal

President Biden sits Thursday with Sen. Shelley Moore Capito (R-W.Va.) as they discuss his $2.3 trillion infrastructure proposal. Photo: T.J. Kirkpatrick/The New York Times/Bloomberg via Getty Images

Some Senate Democrats are open to paying for a compromise infrastructure package by imposing user fees, including increasing the gas tax and raising money from electric car drivers through a vehicle-miles-traveled charge.

Why it matters: By inching toward the Republican position on pay-fors, some Democrats are bucking President Biden's push to offset his proposed $2.3 trillion plan by focusing only on raising taxes on corporations and the wealthy.