U.S. agrees to extend US Airways financing

[Bono71]

For those of you on the east coast.

Also, anyone out there know how this type of loan/bail-out progam works? Seems like corporate welfare to me...wouldn't a truly free market let the airlines fail if they couldn't compete?

http://story.news.yahoo.com/news?tmpl=story&cid=530&ncid=530&e=2&u=/ap/20050113/ap_on_bi_ge/us_airways_bankruptcy

[Kellanved]

1. Hidden subsidies for Boeing?

:shrug:

[KDLarsen]

27. Not really..

.. US's fleet is made up of something like 50/50 Airbus & Boeing products. And then there's the Regional fleet which is Saabs & Embraers.

Now, if it was Continental that was getting a bailout, THEN you could talk about subsidies.

[Inland]

2. Apparently, the free market only applies to United

who can't get a dime of the money that Congress appropriated to bail out airlines, while US Airways is Dead Airline Walking.

[tx_dem41]

3. True....but this is where it becomes apparent that no one, on either..

side believes in a true free market. When faced with the thousands of job layoffs, disruption of service to smaller communities, and hiked-up rates that would occur as a result of the dissolution of US Airways, ALL politicians vote for the corporate welfare.

[KurtNYC]

4. Dave Barger (JetBlue) has been against these bailouts

and says so frequently.

In fact, a liquidation of US Airways could have the opposite effect: Low-fare airlines like JetBlue and Southwest could step up their already aggressive plans to expand their fleets and routes to capture its customers before its bigger rivals do. That might be easily accomplished. According to documents filed with the United States Bankruptcy Court in Alexandria, Va., yesterday, US Airways' assets include 290 gates in 14 cities, a cargo operation in Philadelphia and hundreds of slots that enable the airline to schedule flights from La Guardia Airport and Reagan National in Washington.
...
JetBlue, which begins service from La Guardia on Friday, might be a ready customer.

"If, all of a sudden, there is some real estate available, we would have to take a good hard look at it," JetBlue's president, David Barger, said.

http://www.exectravel.com/news/showmailing.asp?MailingID=110

[donheld]

Vultures always are in favor of

The demise of their prey.

[jmcgowanjm]

5. The way it works

gal/passenger/mile of a passenger jet
is the same as an
avg US car.

Any future scenario has the airline industry
collapsing, but I guess the gov't will
try nationalizing first.

That's what you're seeing now.

I correct myself, first you'll see the airlines/gov't
try to get the laborers to work for free.

[amazona]

6. you can't have a truly free market for airlines

If you think about it, you will realize that the concept is ridiculous on the face of it. It is more important to business and the long-term growth and stability of a large nation like the United States to have dependable air service. It would no doubt be nice if air service was profitable to all markets, but there is no way that this can be possible. We don't want a world where the only cities receiving air service were those where a profit could be made. "Cherry-pickers" like SouthWest and JetBLue don't provide air service to all cities.

Same as with the postal service. We can have a guarantee of profit every year OR we can postal service to everyone six days a week. It is better for the long-term health and business environment of the country if we go with the second option.

I don't think people living in such places as Charlotte, North Carolina (served by US Airways) would appreciate having all air service stopped to such a vital city.

So bail-outs are needed.

I just feel we need to be frank about the fact that airlines are taxpayer subsidized. I believe there should be a limit on what CEOs of airlines can earn, and that it should be tied to the lowest paid wage of any airline employee of that airline. Fair is fair. I am paying with my tax dollar to keep the airways moving. I want the workers to share in the bounty. Not just the CEOs. THe workers are not asking for WELFARE -- they are asking for decent pay for full-time jobs.

It makes me sick to read of airline workers taking second jobs to get by while CEOs who can't make a profit are lining their pockets to the tune of millions of dollars.

That IS unfair.

But taxpayer support of the airline industry doesn't have to be unfair and to a certain point it can even be beneficial.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

[makhno]

7. A national carrier with government-mandated price controls

Airline deregulation obviously didn't create a sustainable model for affordable air travel. The state should recognize the strategic and public interest nature of air transport, nationalize the fleets and maintain management salaries at a realistic level. Prices should be kept affordable in order to facilitate commerce.

Like you said, the taxpayer is already paying for the cost of air travel past the price of the ticket. Might as well do the right thing and end the insanity of airline deregulation/privatization.

[Bono71]

9. I don't know...air travel got a lot cheaper after the industry

was "privatized."

[makhno]

22. Like I said

The question is not whether air travel got cheaper after deregulation, but the fact that the industry cannot sustain national, full-fare operators at current price levels, especially if these operators are expected to provide a public service of sorts by serving marginal routes with low yields.

Cheap tickets don't do any good if there aren't any flights.

[DemoTex]

11. I have argued for nationalization of the airlines for years.

That was one of the reasons that I was referred to as Comrade Captain by many other airline pilots.

[Bono71]

8. Agree wirh that. n/t

[tx_dem41]

13. Your post is spot on!

Thanks.

[underpants]

25. Dergulation-hey look what it did for the airlines, energy trading and ....

communications companies

[reprobate]

33. Amazona, this used to be called 'airline regulation'.

And it guaranteed that anyone could fly at affordable, but profitable rates. The profit was low, like utilities were. It also guaranteed that the airlines maintained their aircraft so that flight safety was not endangered.

Quite simply, if you want reasonable fares, safety, and service to most cities, you MUST have regulation. Can't work without it. Never has.

[spinbaby]

10. Oh good

Now I have some chance of using those air miles.

[ncrainbowgrrl]

14. Ditto!

SO close to having enough to go on a nice vacation across the great pond!

[pokercat999]

29. We used almost all

of our 250,000 air miles on US Airways in anticipation of their liquidation. But because my wife commutes weekly by air the miles will build very quickly again. Next year maybe New Zealand in 6 years (after our next Dem president) maybe it will be safe to go to Europe.

[Patiod]

15. Used all mine for a trip in October

Was worried that I wouldn't be able to use them later.

Enjoy, but if you're coming to Philadelphia - don't check your bags!!!!!!

[KDLarsen]

28. Can't you convert them?

.. ie. move them to another Star Alliance FFP?

[Brundle_Fly]

12. oh just outsource it

already...gah

[Harry S Truman]

16. We must have...

...a cohesive national transportation policy that brings everyone - air, highway, freight rail, passenger rail and seaway intermodal -to the table. Our entire system, and state governments in the process, suffers because of complete federal (mostly Repuke) incompetence when it comes to all things related to transportation, which only consumed 70 percent of the oil we're so obsessed with.

[KansDem]

17. Public finance, private profit...

"...wouldn't a truly free market let the airlines fail if they couldn't compete?"

Sure, but that's what makes staunch "pro-business" types so hypocritical. They want absolutely no interference from government in running their businesses: no unions, no health/safety regulations, no minimum wage, etc, except that when the corporations start going tits up, the bloated CEOs want government bail outs.

Consider:
Lockhead Aircraft--$250 million in 1971
Chrysler--$1.5 billion in 1978
Savings & Loans--from 1989, $500 billion

Other bailouts include:
Agriculture
Airlines
Boeing Lease
Crusader
Defense
Economic Stimulus
Energy
Ethanol
Homeland Security
Stadium Subsidies
Terrorism Insurance
http://www.bailoutwatch.org/

I say nationalize vital industries. When you come right down to it, what's the difference between nationalized industries and private corporations (with the exception of bloated CEO salaries in the latter)?

[Bono71]

18. Generally, private companies are more efficient. n/t

[KansDem]

19. That may have been true at one time, but really...

...Does that hold true today?

Efficient at what?..Perhaps I need to know your definition of "efficient."

Customer service is in the dumps. Phone trees, anyone? My last attempt a few weeks ago to talk with a customer service representative resulted in three calls and a total wait of over an hour. How is this efficient?

Products are cheaper--not more inexpensive but cheap as in cheaply made. My VHS machine I bought 17 years ago has finally gone kaput. It definitely survived the government's "durable goods" definition (built to last 3 years or more). My DVD player I received as a gift 3 years ago now needs to be replaced. I don't think it will satisfy into the "durable goods" definition. And it can't be fixed, so I will just throw it into the trash. How is this efficient?

These are only two examples of what I've come to recognize as shoddy, crappy service and manufacturing. I experience many more on a regular basis that certainly don't fit into the "private enterprise is more efficient" propaganda of the Cold War.

And don't forget how "efficient" the private sector was at supplying our troops with body armor and other necessities. Of course, the argument could be made that they never received such requests to do so, but then, when Bush and Cheney were (s)elected in 2000, they were heralded as two CEOs from the private sector who would change things in DC (the Chimpster was even recognized as the first (p)resident with an MBA). How is what they've done considered "efficient?"

And don't get me started on health care!

[makhno]

23. It's a canard

There is nothing inherent in state ownership of a company that would make it less efficient. Just think of the state as a mutual fund that owns the company, with you, the taxpayer, as an investor in the fund.

[Bono71]

26. By definition it will be less efficient...1 example...

all employees would be government employees and would be extremely difficult to terminate (due to the concept of due process)...the government agencies in DC have entire departments of attroneys dedicated to hearing complaints against employees the agencies want to fire...this isn't a repub/democrat thing...it is just the way it works...

[makhno]

32. The way it works

I've worked with government organizations that were inefficient, wasteful, and burdened by obvious, heavy-handed, pervasive nepotism. I've also worked with government organizations run as clean as a bushido blade with a merit-based cadre - well educated, sharp and willing to put in the unpaid hours to satisfy the client.

I've also worked with private organizations that were inefficient, wasteful, and burdened by obvious, heavy-handed, pervasive nepotism. And I've also worked with private organizations run as clean as a bushido blade with a merit-based cadre - well educated, sharp and willing to put in the unpaid hours to satisfy the client.

In both the government and the private sector, the difference lies in the quality of the management cadre and associated hiring practices. The fact that federal workers may be unionized adds nothing to the equation. Worker termination for subpar performance is entirely dependent on the organizational culture, e.g.:

I've seen politically connected deadwood in both the .gov union workplace and the private sector escape waves of lay-offs unscathed. I have never witnessed federal practices that could not be favorably compared to the sloth and passivity prevalent among employees in the private sector. Frankly, my personal experience leads me to believe in an organizational theorem of workplace efficiency, rather than a broad state-owned vs. private owned position. It all depends on who is managing the place and how. Managerial efficiency with a different moral outlook, as it were.

[fedsron2us]

31. Are they ?

Well here in Britain we have had a bellyful of government sponsered privitizations and artificially introduced 'competition'. the results to put it mildly have been mixed. For example, our current privatized railway system cost more and delivers a worse service than its publicly owned predecessor. Indeed, the British government had to effectively re-nationalise the maintenance of the track because the costs of running it had spiralled out of control.

http://money.msn.co.uk/investing/Insight/SpecialFeatures/ActiveInvestor/Monopoliesnotsobad/default.asp

[BurgherHoldtheLies]

20. Do Not Resuscitate....Terminally ill. nt

[Nashyra]

21. Government bailout=no CEO paycheck

If these airlines continue to need a gov't bailout then the CEO's will need to go without a paycheck, then maybe they will just liquidate and the former workers can find other work. In the meantime all the bailouts only further desimate the health of the industry, one bankruptcy I can understand but two and having to ask your workers to work for free on days off because of major screw ups. Get out and let the market shore up the airline industry. The workers are holding on to less and less and what is transpiring is the ability for other corporations to use the example of poor business plans to do away with pensions and health benefits, it's as the federal gov't is helping to destroy these middle class jobs, the Wal-Marting of America continues.

[NewYorkerfromMass]

24. Their unions have made major concessions

they are giving up everything but their paychecks to keep the airline afloat, including, I believe, their pensions.

[mitchum]

30. Welfare queens of the sky