Taxpayer help for airlines and cruise ships should require these industries to cut greenhouse gas emissions over time, letter says
Published: March 18, 2020 By Rachel Koning Beals
The nation’s major airlines have asked for $50 billion in taxpayer aid as the COVID-19 pandemic hits flight demand. Getty Images
Airlines have their collective hand out for billions of dollars in emergency aid as the coronavirus crisis obliterates the travel sector, and now select Democrats see that as an opportunity to press the major carriers, as well as cruise ships, to be better champions of the environment in exchange for help.
The nation’s major airlines, no strangers to bankruptcies and consolidation over the decades, recently asked for $50 billion in government assistance as the COVID-19 pandemic hits flight demand. The carriers, along with aerospace giant Boeing BA, -17.92% , have warned that they could soon go bankrupt without a government lift.
Read:Global airlines urgently need up to $200 billion to survive as coronavirus pushes industry deeper into crisis
Talks on Capitol Hill are complicated and ongoing, but President Donald Trump said Tuesday that “we have to protect Boeing,” the largest U.S. exporter. Boeing has said $60 billion worth of access to public and private liquidity is needed for its industry. Critics of the aid have pointed to major stock buybacks rather than investment or savings by carriers, as well as other factors.
Related:Jim Cramer praises Mark Cuban’s bailout suggestions: ‘So tired of the rich profiting from every cataclysm’
On Wednesday, eight Senate Democrats signed a letter saying that any aid to airlines (and they included cruise ships) should come with conditions requiring them to reduce their greenhouse gas emissions over time.
Barron’s on MarketWatch: Airline stocks are in a nosedive. Government aid might not help
“If we give the airline and cruise industries assistance without requiring them to be better environmental stewards, we would miss a major opportunity to combat climate change and ocean dumping,” said co-signer Sen. Sheldon Whitehouse, a Democrat of Rhode Island.
Air travel has grown as a contributor to man-made accelerated global warming. While aviation still accounts for less than 3% of global carbon dioxide emissions, those emissions are expected to triple by 2050 as tourism and travel expand, the lawmakers noted in their letter.
As such, “flight shaming” celebrities and other frequent flyers for their aviation carbon footprint has increasingly populated social media.
Airline stocks, including Southwest LUV, -8.10%, Delta Air Lines DAL, -25.99% , United Airlines UAL, -30.29% and American Airlines AAL, -25.22% , were all sharply lower Wednesday.
The cruise industry, including Royal Caribbean RCL, -19.27% and Carnival CCL, -26.82% , was not exempt from the Democrats’ attentions.
“The foreign-flagged cruise industry has a checkered environmental record and most passenger liners burn heavy fuel oil, one of the dirtiest fuels,” the senators said in the letter.
Trade group Cruise Lines International Association said in an emailed response that the pandemic poses “unprecedented times for our entire community, including the tens of thousands of small- and medium-sized businesses, many of them travel agents, who rely on the cruise industry for their livelihoods.”
They noted that the cruise industry was the first maritime sector to publicly commit, in December 2018, to reduce the rate of carbon emissions by 40% by 2030 compared to 2008. The industry has also spent $22 billion in ship upgrades to user cleaner fuels, the group said.
The nation’s major airlines have asked for $50 billion in taxpayer aid as the COVID-19 pandemic hits flight demand. Getty Images
Airlines have their collective hand out for billions of dollars in emergency aid as the coronavirus crisis obliterates the travel sector, and now select Democrats see that as an opportunity to press the major carriers, as well as cruise ships, to be better champions of the environment in exchange for help.
The nation’s major airlines, no strangers to bankruptcies and consolidation over the decades, recently asked for $50 billion in government assistance as the COVID-19 pandemic hits flight demand. The carriers, along with aerospace giant Boeing BA, -17.92% , have warned that they could soon go bankrupt without a government lift.
Read:Global airlines urgently need up to $200 billion to survive as coronavirus pushes industry deeper into crisis
Talks on Capitol Hill are complicated and ongoing, but President Donald Trump said Tuesday that “we have to protect Boeing,” the largest U.S. exporter. Boeing has said $60 billion worth of access to public and private liquidity is needed for its industry. Critics of the aid have pointed to major stock buybacks rather than investment or savings by carriers, as well as other factors.
Related:Jim Cramer praises Mark Cuban’s bailout suggestions: ‘So tired of the rich profiting from every cataclysm’
On Wednesday, eight Senate Democrats signed a letter saying that any aid to airlines (and they included cruise ships) should come with conditions requiring them to reduce their greenhouse gas emissions over time.
Barron’s on MarketWatch: Airline stocks are in a nosedive. Government aid might not help
“If we give the airline and cruise industries assistance without requiring them to be better environmental stewards, we would miss a major opportunity to combat climate change and ocean dumping,” said co-signer Sen. Sheldon Whitehouse, a Democrat of Rhode Island.
Air travel has grown as a contributor to man-made accelerated global warming. While aviation still accounts for less than 3% of global carbon dioxide emissions, those emissions are expected to triple by 2050 as tourism and travel expand, the lawmakers noted in their letter.
As such, “flight shaming” celebrities and other frequent flyers for their aviation carbon footprint has increasingly populated social media.
Airline stocks, including Southwest LUV, -8.10%, Delta Air Lines DAL, -25.99% , United Airlines UAL, -30.29% and American Airlines AAL, -25.22% , were all sharply lower Wednesday.
The cruise industry, including Royal Caribbean RCL, -19.27% and Carnival CCL, -26.82% , was not exempt from the Democrats’ attentions.
“The foreign-flagged cruise industry has a checkered environmental record and most passenger liners burn heavy fuel oil, one of the dirtiest fuels,” the senators said in the letter.
Trade group Cruise Lines International Association said in an emailed response that the pandemic poses “unprecedented times for our entire community, including the tens of thousands of small- and medium-sized businesses, many of them travel agents, who rely on the cruise industry for their livelihoods.”
They noted that the cruise industry was the first maritime sector to publicly commit, in December 2018, to reduce the rate of carbon emissions by 40% by 2030 compared to 2008. The industry has also spent $22 billion in ship upgrades to user cleaner fuels, the group said.
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