Commercial aviation faces an unprecedented crisis as a result of the COVID-19 pandemic. Yet hopes of government aid to keep production rates from collapsing are fading, and the consequences of this inaction could be profound. 

Many ideas have been proposed to help the commercial aviation industry ride out the worst challenge it has faced since World War II. Some have mooted a “Cash for Clunkers” jetliner production support program, similar to the one provided to the auto industry in the Great Recession, with government-supported trade-ins of older jets. Other proposals involve government-backed jetliner finance schemes. The U.S. also has considered a $17 billion support package for Boeing and its supplier base, an idea that died for political reasons and due to the company’s rejection of strings attached. 

Yet so far, most government aid to the aviation sector has taken the form of paycheck protection programs (PPP), with billions of dollars in aid to airlines. PPPs are useful for preventing mass unemployment in the aviation business. Other countries have emphasized airline employment over manufacturing sector support as well. 

But in the U.S., most of this airline aid expired on Sept. 30. While there is discussion of renewing the assistance and extending it to the manufacturing sector, political gridlock has prevented anything tangible. Even if more PPP aid is provided, it is not intended as a strategic initiative that would stabilize civil aviation output. On the defense side of the industry, the Pentagon has provided accelerated payments to suppliers via the prime contractors, but there has been no increase in topline spending. If anything, we might see a decline in defense budgets, no matter who wins the presidential election. 

There are exceptions to this government inaction. China has provided air ticket subsidies to stimulate travel demand, which will certainly help with jetliner demand. France’s government has provided a unique €15 billion ($17 billion) manufacturing aid package, with R&D support for next-generation emission-free jetliners, supplemental defense procurement and loans to industry. 

But most countries, particularly the U.S. and UK, seem unconcerned about their aero manufacturing sectors. Unlike airlines, aviation manufacturing has not really been threatened with a meltdown so far. While there have been production-rate reductions and layoffs, last year’s Boeing 737 MAX production halt makes these changes less notable. The U.S. also has a much bigger defense procurement budget, which provides some degree of insulation for suppliers. And France is a uniquely centralized aerospace player, with much of the supply chain in-country. Politicians have a harder time justifying aid when much of the cash goes to global suppliers via complicated supply chains. 

There are three likely consequences of this inaction. 

First, we could see multiple business failures in aviation manufacturing. By some estimates, 20% of the supply chain is at risk of bankruptcy or of being forced to sell. In the UK, a notable lack of government intervention raises questions about Rolls-Royce, formerly regarded as a national champion and now issuing junk bonds. In 1971, the UK government was forced to nationalize Rolls, an expensive move thought necessary to keep it out of foreign hands. It is not clear what the government would be willing to spend today if the company’s troubles become equally dire. 

Second, commercial aviation in some countries will simply be at an advantage coming out of this recession. China’s domestic airline traffic is almost back to pre-pandemic levels, in stark contrast to the rest of the world. Similarly, France’s aid package will help Airbus retain engineers, while Boeing has announced technical staff layoffs. French suppliers such as Safran and Thales will also benefit from both design work and additional defense work. 

Third, and most impactful, we could see further production-rate cuts, resulting in an even more damaged industry landscape. Right now, what might be termed organic demand for jetliners—passenger traffic and airline profits—has collapsed. Most jetliners built today are the result of something more synthetic: lessors and financiers providing the cash needed for airlines to take deliveries of jets they really do not need. Everyone involved is banking on a fast recovery that will improve this situation. 

But a lot could go wrong with that bet. So far, the finance industry and equities markets have stayed healthy. That could change. And airlines could simply conclude that air travel will stay suppressed longer than expected and stop taking delivery of new aircraft, no matter what kind of financing is offered. 

In short, if the current fragile jetliner market worsens, the U.S. and other governments might feel pressure to reconsider their nonintervention. If mass unemployment in the airline sector was unpalatable to governments, presumably they will feel the same way about mass unemployment in the manufacturing sector.

The views expressed are not necessarily those of Aviation Week.