Should we bail the airlines out, again?

[ksu_aviator]

UAL, AA, and US are airlines that cross the big ponds along with huge domestic route systems.

Ok, lets say for just one second UAL, AA and US all fold up and go home, take their ball with them and say they don't want to play any more. What will happen? I think its obvious, other airlines will pick up the slack. This country has a need for so many people to travel from each city to another city. As long as there is a demand there will be an airline to meet the need.

Extra security costs brought on by the US government post-9/11 (and kinda useless, you have to admit) are causing costs to go up.

True, but the government is also requiring car manufacturers to reduce the weight of cars while increasing safety. You can't do that without the more expensive composites. Does the government bail out the auto industry? NO, why? because its a part of doing business.

Obviously if some airlines can make it then the others that aren't making it aren't doing it right.

I'm a big fan of SWA right now because I do ride on them frequently. After working for a NW Airlink and seeing the service our customers got and seeing the service that SWA's customers get and then comparing the prices, its very very very obvious why so many choose SWA. True, SWA doesn't always get you exactly where you want to go, but the extra drive is worth it to save $600 or more and have the gate agent actually smile at you and answer a question. You'd never get that at NWA. It just doesn't happen.

 

[bart]

My Company was affected by 9/11 too

Where is our check? People will lose jobs if you dont give up your hard earned money to bail us out...

 

[B190Captain]

True, but the government is also requiring car manufacturers to reduce the weight of cars while increasing safety. You can't do that without the more expensive composites. Does the government bail out the auto industry? NO, why? because its a part of doing business.

The US Government bailed out Chrysler. Was that doing business?

 

[seagle]

No. Just as in nature, survival of the fittest.

 

[FutureRJPilot]

NO, if UAL, AA, and USAIR go under, Continental, Delta, and Northwest will pick up the pieces for the most part. Yes there will be a lot of unemployed people, but it will strengthen the airline industry as a whole.

 

[rightrudder]

I'm not an economist, but thinking about government financial assistance in a different way.

If a few airlines fail, there would be a loss of income tax revenue to the government due to the unemployed folks no longer earning money, the cost of paying unemployment, writeoffs for bad debt by lessors and other creditors, loss of taxes that are paid to the federal govt by the airlines for fuel, general aviation tax, security tax, passenger facility charges, etc.

The economic cost and lost tax revenue of one or two airlines failing might be greater to the government than the cost of helping them get through a very rough time. Just something to think about.

If we have 75-100 billion avail to fund this Iraq conflict, and billions of other monies to give israel, syria, turkey, egypt, etc., why not throw a few measly bones to our own good corporate citizens and help our own working american citizens keep their jobs?

 

[Publishers]

not exactly

Well not exactly. You are right to a point but the government is not receiving anywhere near the revenue that they were getting. Some of the items you mentioned will be paid by the survivor airlines. Passenger taxes as example will be paid as it is not that people will not fly nor not spend.

In the bigger scheme of things, yes those things happen but only for the short term. If there is demand, there will be some one there to fill it. If there is need for the aircraft, someone will lease or buy them and fly the passengers or freight. If there is demand, someone will employ those same people.

I don't know if we can expect our government to be in the business of bailing out someone on the basis of the facts you present.

 

[rightrudder]

Here's a portion of an article I read today:

According to White House documents, here's how some U.S. allies would benefit from Bush's budget plan, which must still be approved by Congress:

- Israel: $1 billion in direct military assistance and $9 billion in loan guarantees that could help Israel weather the economic shock of a war with Iraq. Israel had requested nearly $4 billion in direct military aid.

Under the aid package, the United States would deduct from the face value of the loan guarantees any Israeli expenditures on settlement activities in Palestinian areas.

- Jordan: $700 million in economic aid, including $250 million to address Jordan's "most pressing budgetary needs and debt service obligations." Jordan would also receive $406 million in military aid.

- Egypt: $300 million in economic grants, a portion of which may be used to secure up to $2 billion in loan guarantees. Egypt had asked for $4.4 billion in war-related aid.

- Turkey: $1 billion in economic aid, which could support up to $8.5 billion in direct loans or loan guarantees. The White House dropped plans to provide $6 billion in direct aid and up to $24 billion in loans after the Turkish parliament refused to allow 62,000 U.S. troops into the country.

- Pakistan: $175 million for border security and to buy aircraft and radar systems.

- Afghanistan: $127 million would help the Afghan government combat terrorism; $170 million would be used to train and equip the Afghan National Army; millions more would fund reconstruction efforts.

- West Bank and Gaza: $50 million in direct support to "reduce terrorism and support the peace process."

- Colombia: $34 million to combat drug trafficking and terrorist activity. "Its stability is a linchpin of stability in the region," an administration official said of the Colombian aid.

Bush's war budget will also provide $90 million to Bahrain; $61.5 million to Oman, $30 million to Djibouti, and $15 million each to Poland, Hungary and the Czech Republic.

Other beneficiaries include Romania, Slovakia, Slovenia, and the Philippines, according to White House documents.

*************************

Why is it that we will give billions of dollars in aid and loan guarantees to these "friends" many of whom have been impacted minimally, while the administration plans on begrudgingly offering a token to help our own airlines whom are in financial tailspin?

All of those items mentioned above are included in the recent supplemental war expenditure request. These are monies that are in addition to the regular aid we provide to these countries.

 

[Ralph]

Just out of curiosity...

How many airlines actually fly the international routes?

American
Delta
United
Continental?

Are there others?

 

[Publishers]

Northwest --large presence internationally and then you have like Alaska and America West too I believe doing international like Mexico.