Nationalize The Airlines
The U.S. Government should nationalize private airlines into a state-run United States Airline Corporation.
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Socialism is often radical. The term “Revolution” is used literally and figuratively, and left organizations, politicians, and activists have serious policy plans that involve significant changes to the economic and social status quo (such as my case for The American Workers’ Bank).
And while drastic change is often necessary, The Left would benefit by championing the less-radical, legislatively possible tenets of our ideology. Though seldom glorious, these policies would simply make life better for Americans. Higher quality of life is a good on its own, but would also have secondary benefits, such as courting voters, reducing greenhouse gas emissions, and curtailing rampant profiteering.
One such policy is a national, state-owned airline. We’ll call it The United States Airline Corporation.
What is the Goal of a State-Owned Airline?
The primary goal is to help Americans move around the country as pleasantly and at as low-cost as possible. Just as cities and states have public buses and trains, the United States should have a public airline. Private air travel is clearly suboptimal. It’s notoriously expensive, uncomfortable, and contributes unnecessary greenhouse gas emissions.
All these negatives stem from the same source. As the economist and Chilean Fascist Enabler Milton Friedman said in his 1970 NYT essay The Friedman Doctrine, “the social responsibility of a business is to increase profits.” Like it or not, Friedman is right. This is the guiding principle of all corporations — it’s why airlines are willing to kill the planet to keep gate spots, and the reason expired peanuts cost you $27 on Spirit Airlines.
As an alternative to private businesses, governments can enter the economy with a mission of promoting the public good, not profits. That is why I believe the United States government should run an airline that puts profit behind the goal of transporting Americans as pleasantly, eco-friendly, and frugally as possible.
How will the US Create an Airline?
First, Congress will need to charter a state-owned enterprise (SOE) to create and oversee the operations of this national airline. SOEs are corporations where a government has the full or controlling share. The U.S. has numerous SOEs in industries ranging from agriculture, to wildlife preservation, to prisons, so this isn’t a novel process. We’ll call this hypothetical corporation the United States Airline Company (USAC). The best template for the USAC is Amtrak, which oversees the nation’s public rail service. (Ideally, these two corporations would eventually merge. More on that later.)
Once the corporation is established, there are two simultaneous ways to create a national airline:
1. Build one.
2. Nationalize existing private airlines.
#1 is simple. The USAC would purchase airplanes from manufacturers, hire flight and ground crews, and operate the airline just like any other. Passengers would be able to purchase tickets online, go to the airport, and fly to their destination.
For #2, USAC could either purchase publicly traded airlines (more on that later) or wait until the air travel industry (inevitably) needs another bailout, which has already happened twice this century.
Following 9/11, Bush bailed out the industry with $18.6 billion under the Air Transportation & Stabilization Act. And when the pandemic hit, the airlines received another $54 billion as part of the government’s Payroll Support Program, with the requirement that only 26.2% of it be repaid. In short, taxpayers gave these companies $40 billion dollars. In the words of American Airlines CEO Doug Parker: “It’s not an exaggeration to say the program saved the industry.”
If in both 2001 and 2021, the Government had purchased airline equity instead of handing money to the owners, the state would’ve acquired significant equity on behalf of the American people. That equity could’ve been the foundation of The United States Airline Corporation, a superior outcome for Americans than the continuous cycle of charity-for-capitalists.
While we wait for the next financial disaster, USAC could purchase publicly traded airline stock and force a merger upon achieving a controlling share. Below are the market caps (the total value of issued stocks) of the four leading airlines operating in the United States.
Delta: $25.31 billion
American Airlines: $11.27 billion
Southwest: $26.44 billion
United Airlines: $14.48 billion
While these values may sound gargantuan, consider that the government gave this industry $72.6 billion between 2001 and 2021. That’s just $4.9 billion shy of the sum of the market cap of ALL FOUR of these major airlines.
So, instead of bailing out these for-profit companies twice, the United States could’ve diverted $5 billion from the Pentagon’s budget, purchased all four of these airlines, and merged them into a democratically accountable United States Airline that operated for the good of the people and the environment, not for profits.
The Bigger Picture
There are two reasons the U.S. state should control its air travel:
1. Americans should be able to traverse their country as easily, frugally, and comfortably as possible. (Even the staunchest capitalist can’t defend private air travel as “easy, frugal, and comfortable” with a straight face.)
2. Air travel is disastrous for the environment (contributing 2.5% of CO2 emissions) and will need to be significantly curtailed to mitigate climate catastrophe.
Only democratic control of air travel will solve these problems. Ideally, the United States Airline Corporation will be one part of a state-run transportation regime that gradually brings transportation under democratic control. The U.S. is decades behind other wealthy nations in high-speed rail, a much more climate-friendly (and in my opinion, enjoyable) way to travel. A country-wide high-speed rail network should be constructed alongside the USAC’s consolidation of air travel. Once both are in place, we can increase rail travel as we decrease air travel, preserving the environment and improving the experience.
(If there is a New Cold War, we’re losing it.)
Ideally, the distant future will see the majority of transportation, from public buses, to car manufacturing, to the Lime scooters that are impossible to look cool on, provided by the state. I’m not an advocate for a completely planned economy (at least in modernity), but I do believe that the necessities of life — food, shelter, water, transportation, education — have largely been failed by markets. Markets work when consumers have the choice to enter them. If consumers don’t have a choice (i.e., traveling to work or moving cross-country for a job), then the market isn’t “free” — it’s coercive.
Additionally, democratic, eco-friendly travel will just make life better. We’ll be able to visit our families, go on vacation, and see our beautiful country without fear of ruining the planet or getting dragged off an overbooked plane like a drunk white girl getting removed from a nightclub.
What do you think about my case for a United States Airline Corporation? Let me know in the comments below. And don’t forget to subscribe and share this article to help JoeWrote grow.
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This is a well-intentioned piece, but it's worth noting a few things here (disclosure: I have worked in aviation for over 25 years):
1. The US aviation market was fully previously regulated. Prior to 1978, the Civil Aeronautics Board essentially controlled the industry. What routes a company could fly, whether or not they could drop them, etc. If you look at, say, United's network from back then, it is completely foreign to what they fly today. There are a few vestiges of that left (see: The Essential Air Service program for small towns), but by and large, the public (ie us) have decided what routes stay and which ones go.
2. "Americans should be able to traverse their country as easily, frugally, and comfortably as possible. (Even the staunchest capitalist can’t defend private air travel as “easy, frugal, and comfortable” with a straight face."
I am saying this with a straight face. In real terms, air travel is cheaper than it used to be. Flights are more accessible, the internet has made fare transparency a thing, and it's relatively easy to get on a plane and go from Point A to Point B. Is it comfortable? I suppose that's subjective, but compared to other modes of long-haul travel, I would say yes.
3. Bailouts: The entire CARES Act can be debated, but I think it's important to note that at the time, the thought was that COVID would be relatively brief, and that travel would ramp back up. Hindsight's 20/20. It's also worth noting that the industry is a large economic driver, both at the local and national levels. There are a lot of jobs tied to aviation, and shutting it down would've had a lot of 2nd order effects (actually, it was largely shut down for some time, but the few planes that were running in early 2020 were getting healthcare workers to early hotspots, and transporting medical equipment. And, sadly, getting people to loved ones before the clock ran out.
3A. Regarding Delta's Omicron #'s; For the entire pandemic, DL has had an infection rate at/lower than the general population. Workers also share equipment and work in close quarters. With the high Rnot this variant has, it only stands to reason that those numbers would be high- and that doesn't even count those isolating due to an ill family member (or taking care of one). FWIW, it's 8000 out of roughly 75000 employees.
4. Most of the industry is already owned/run by the people. Airports are generally self-funded through passenger fees, as opposed to taxes shouldered by locals.
5. High-speed rail: It's viable in some markets, but not all. Acela began the end of air shuttles between NY, Boston, and DC. COVID has almost finished them off. You could make a good case for one running up/down California, and maybe Chicago-Milwaukee. After that, it gets tougher. If I want to go Milwaukee to Phoenix, that's not happening via rail. The distance is too great. People don't want to spend 10-20 hours getting to their destination if it doesn't involve crossing an ocean.
6. The environment. There has been a push in the industry for carbon offsets. that was met with a resounding "meh." More importantly, are advances in Sustainable Aviation Fuels(SAFS). There's certainly a long way to go, but a LOT of progress has been made in the last few years.
Just some thoughts from the other side. I'm eager to hear what others have to say.
"As the economist and Chilean Fascist Enabler Milton Friedman" This seems incredibly antagonistic for no reason Other than an easy dunk. If you're trying to make the best case for your ideas I would rather see you steel-man the person (ie take them at face value, and present their argument THEN defeat it rather then going for low hanging fruit), then straw man them. This is no different than when people say "Venezuela diet Enthusiast Bernie Sanders." It's funny and will probably get a laugh in your circle but it's not doing much to change anyone's mind, and if I'm not mistaken is that not the point of all of this?