Jobs saved throughout the supply chain

Brown and other advocates of the bailouts also point out that the government aid saved thousands upon thousands of industry jobs. As many as 75,000 aviation jobs were saved in the United States alone, with the majority of those workers able to collect full pay throughout the downturn.

But the saved jobs were not just at the airlines. The downstream effects of the government aid benefited workers throughout the aviation supply chain: from airport workers to manufacturing and maintenance jobs.

“As aircraft flying activity results in maintenance and overhaul requirements, it meant that the airlines that received bailouts (or gained their injections of capital via the markets) could keep some of their fleet flying and continue maintenance activity,” Brown said.

Keeping maintenance and repair work running throughout the crisis, albeit at a much lower level than normal, helped buoy a global MRO aftermarket that saw revenues decline by an estimated 50 to 60 percent in 2020 and is forecast to suffer a 25-35 percent drop in 2021.

As for the OEMs, Airbus was a direct beneficiary of France’s €15 billion in financial support to the aerospace sector. Boeing turned down a direct bailout but nonetheless was buoyed by “a backdoor bailout” that allowed it to borrow some $25 billion from investors.

While hardly a cure-all for the plane-makers – Airbus eliminated 11 percent of its global workforce while Boeing has said its global staff will shrink by around 20 percent by the end of this year – the ability of the world’s biggest OEMs to weather the storm helped most larger Tier 1 suppliers do the same. Many smaller manufacturers were not as fortunate, however. Some analysts think that upwards of 20 percent of Tier 3 suppliers may not survive, pointing to the fate of Impresa Aerospace, which filed for bankruptcy despite receiving $2 million in government aid.

The Satair Takeaway

The bailouts were no panacea. And with a full industry recovery not expected until 2024, we may not have seen the last of them. Even the most ardent industry supporters can acknowledge that some of the criticisms of the government aid packages are valid. Although we’ll never know how things would have looked if governments had not stepped in, it’s a safe assumption that the airlines, and the entire supply chain that they support, would be in much worse shape if they had not been thrown a lifeline.

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How bailouts saved airlines, jobs and the aftermarket