Here Are The High Costs of the Airline Bailouts

Major U.S. airlines have received more than $50 billion in grants in multiple rounds of taxpayer-funded bailouts during the pandemic. As travel begins to rebound and the stock market cruises to record highs, Andrew asks in his latest column: Was the rescue worth it?

The good news: The bailouts probably saved as many as 75,000 jobs and kept the airlines from declaring bankruptcy.

The bad news: Taxpayers probably overpaid, with the original grant of $25 billion implying that each job cost the equivalent of more than $300,000. (That price grew with subsequent bailouts.)

throw money at everything these days, and the Fed’s stimulus kept the credit markets open.

  • U.S. airlines were able to issue more than $30 billion in bonds last year, in some cases backed by their loyalty programs.

  • Boeing and Carnival Cruise Line also raised billions in debt from private investors.

We’ll never know what would have happened without the bailouts. The airlines say the government grants were crucial: As American Airlines put it, they “saved thousands of airline jobs, preserved the livelihoods of our hard-working team members and helped position the industry to play a central role in the nation’s recovery.”

  • There are conditions attached to the rescues, including halting share buybacks and limiting C.E.O. pay. But other things, like stock warrants issued to the government, are worth a small fraction of the grants the airlines received (unlike the majority equity stake that the government took when it rescued G.M. as part of its bankruptcy in 2009).

The debate about the appropriateness of the bailouts is just beginning, Andrew writes. “After the banking crisis of 2008 led to bailouts, the recriminations began when firms like Goldman Sachs had a banner year in the aftermath — and paid bankers record bonuses.” Will the same thing happen to the airlines?

Uber will classify British drivers as “workers.” The ride-hailing service’s decision will entitle more than 70,000 drivers to a minimum wage, vacation pay and access to a pension plan, but stops short of making them employees. It comes in response to a British Supreme Court ruling last month.

Wall Street firms plan for in-office workers. JPMorgan Chase expects summer interns in New York and London to work at the office. And Ralph Schlosstein, the co-C.E.O. of Evercore, told Bloomberg Television that he hoped to have some summer trainees “at least be partly in the office.”

its process for reviewing deals involving drug makers, following an investigation by Representative Katie Porter, Democrat of California, into the impact of consolidation. It’s the latest sign of the Biden administration’s stance on antitrust.

Treasury Department opens a racial equity review. It will examine its policies in an effort to ensure economic fairness, a priority of Treasury Secretary Janet Yellen. The review will be led by Adewale Adeyemo once he is confirmed as deputy Treasury secretary.

The buyer of Jeffrey Epstein’s Manhattan mansion is revealed. Michael Daffey, a former Goldman Sachs executive, paid $51 million for the residence after racking up big gains on Bitcoin.

Amalgamated Bank, the New York-based lender with a history of supporting progressive causes, plans to announce this morning that it will endorse H.R. 40, legislation calling for a federal commission to study the lingering effects of slavery — and the merits of providing reparations.

The lender came to support the bill after racial justice protests last year. Lynne Fox, Amalgamated’s chair and interim C.E.O., told DealBook that the protests convinced the bank’s leaders that they needed to address structural racism with “systemic changes” to society. The bank, which has $6 billion in assets, has previously embraced policies that it said would help reduce gun-related violence.

  • H.R. 40, named after the federal government’s promise to give freed families “40 acres and a mule,” was first proposed over 30 years ago. Its current lead sponsor is Representative Sheila Jackson Lee, Democrat of Texas, and its 169 co-sponsors are all Democrats. (President Biden has endorsed forming a committee to study reparations, but he has not committed to signing the bill should Congress approve it, which isn’t assured.)

A bank’s support is symbolically important, Ms. Fox said: “We acknowledge — and I think others in the financial industry need to acknowledge — the deep-rooted connections between the American financial sector and the slave economy.” Bank executives have noted that their firms’ histories have included financing slaveholders, and admitted more recently to racial discrimination against employees and customers. Lenders are under increasing pressure to promote racial equity, including by shareholders.

  • For her part, Ms. Fox declined to criticize other lenders directly. “We don’t see ourselves as judging other institutions’ conduct,” she said. “Talking is a good first step. We look forward to when other concrete steps are taken.”

Amalgamated has moved to address racial equity within its walls, Ms. Fox said. Those steps include reviewing wage policies, forming an employee-led committee to review policies and practices, and providing antiracism training. In its statement endorsing H.R. 40, Amalgamated pledged to do more: “We believe the commission created through H.R. 40 is an important first step towards achieving racial justice. The work shouldn’t stop there.”


the addition of LeBron James as a co-owner of Fenway Sports Group — the owner of the Red Sox, the English Premier League’s Liverpool soccer club and more — grabbed headlines yesterday, an investment in the group by RedBird Capital Partners may be more noteworthy.

RedBird paid $750 million for an 11 percent stake in F.S.G., at a $7.3 billion valuation. That’s a huge gain for F.S.G.’s existing leaders, John Henry and Tom Werner, who paid just over $1 billion for the Red Sox and Liverpool. It will bring on board Gerry Cardinale, the head of RedBird and a former Goldman Sachs deal maker.

The funds could help the group make big purchases. The Boston Globe reports that F.S.G.’s wish list includes an N.F.L. or N.B.A. team, as well as a sports betting company.

Mr. James is getting a 1 percent stake in F.S.G. without paying a dime, Axios’s Dan Primack reports. The Times notes that the N.B.A. star already had a relationship with F.S.G.: Its affiliate, Fenway Sports Management, gained Mr. James’s global marketing rights in a 2011 deal that gave him a stake in Liverpool.

  • Mr. Primack, an avowed Boston sports fan, notes the “certain amount of sacrilege” involved: Mr. Cardinale was a top adviser to the Red Sox’s archrivals, the New York Yankees, and Mr. James grew up a Yanks fan. But that’s business.


Work woes may hasten a manager’s demise, according to an academic study on C.E.O. stress, aging and death. The research found that anxiety at work affects an executive’s longevity and looks, and there’s a lesson for all workers, Marius Guenzel of Wharton, one of the authors, told DealBook.

entering and exiting office, showing the aging effects of a very stressful job.

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His Ancestors Were German Kings. He Wants Their Treasures Back.

“It is not just about family history, it is German history,” he added.

Prinz von Preussen’s great-great-grandfather, Kaiser Wilhelm II, was the last emperor of Germany and by far the richest man in the country before World War I. After Wilhelm abdicated in 1918, he retained substantial wealth: At least 60 railway wagons carried furniture, art, porcelain and silver from Germany to his new home in exile in the Netherlands. The kaiser and his family also held onto substantial cash reserves and dozens of palaces, villas and other properties.

But after World War II, the Hohenzollerns’ forests, farms, factories and palaces in East Germany were expropriated in Communist land reforms, and thousands of artworks and historical objects were subsumed into the collections of state-owned museums.

Prinz von Preussen’s claim for restitution was first lodged by his grandfather after the fall of the Berlin Wall, when thousands of Germans took advantage of new laws allowing them to seek compensation and restitution for confiscated property. Officials assessed it for more than 20 years before negotiations with the family began.

If Prinz von Preussen pursues the case in court, success could hinge on how much support his great-grandfather, Crown Prince Wilhelm, gave to the Nazis in the 1930s. Under German law, if a court deems someone lent the Nazis “substantial support,” then their family is not eligible for compensation or restitution of lost property.

The crown prince hoped that Adolf Hitler would reinstate the monarchy, and wrote him flattering letters. He defended Hitler’s anti-Semitic policies and wore a swastika armband in public. If a court were to agree that Crown Prince Wilhelm’s support for Hitler was “substantial,” then Prinz von Preussen’s claims would be dismissed.

Prinz von Preussen said his great-grandfather had “recognized this criminal regime, and it very quickly became clear that he didn’t have the moral fortitude, or courage, to go into opposition.” But he questioned whether that amounts to “substantial” support, adding that this was a “question that has to be cleared up by legal experts.”

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