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.