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No Airline Bailouts
Topic: Business 9:31 am EDT, Jun 17, 2004

As part of its overall strategy to emerge from bankruptcy court and restructure the company, United Airlines is hoping to get $1.6 billion in federal loan guarantees. This plan should be thwarted. United is not entitled to a form of taxpayer support that was meant to stabilize the airline industry in the aftermath of the Sept. 11, 2001, attacks. United's woes nowadays have little to do with that tragedy.

The fact that all of the old major airlines have lost money since the attacks is due to the economic slowdown, their loss of pricing power because of the Internet and competition from new low-fare carriers. ... Some of United's major competitors have been more adept at reinventing themselves ... It would be unfair for them to have to compete now with a partly subsidized airline. ...

As for the viability of the overall aviation system, there is no need for the government to be worried. And United, the nation's second-largest airline, has 16 percent of the market and tremendous assets. If it cannot deploy those assets profitably, someone else will.

... meanwhile, NYT argues for a market oriented approach to the airline industry.

To me, this is a contradiction.

No Airline Bailouts



 
 
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