At what point do we simply say - go ahead and fail?
I often hear that a strong airline industry is considered necessary to support many other aspects of our economy. But isn’t the economy somewhat inflated to the extent it is based upon an economically non-viable enterprise?
How large of an airline industry do we need, and at what cost?
With the government operating at a deficit, is the airline industry the best place to invest another $10 billion?
In an ideal capitalistic economy the airlines would sink or swim without any intervention from the government.
Unfortunately, with companies as large as the major US air carriers their is a ripple effect if they go under. Not only does the airline go down but the people who sell them food, fuel, airplanes, gate space, jillions of spare parts, advertising and so on will all get severly smacked.
Frankly they should be allowed to fail, a few carriers would remain and (presumably) get to a sustainable equilibrium in the industry. Politically they may not be allowed to happen. In an shaky economy with rising unemployment elected officials will generally try short term measures to prop up industries.
For my part I am undecided if that is good or not. Stimulate the economy? Good. Maintain inefficient industries with taxpayer dollars? Bad.
My wife works for a feeder airline that flies all regional jets. They are doing fine. The problem with large airlines is that they have equipment that was bought back when business was real good and they still have to make payments with decreased revenue.
One question I have is what are you going to do with all the high paid inspectors? I don’t know how much we are paying in security costs, but it has to be a fantastic amount.