Originally Posted by
globalexpress
It's not a matter of admitting anything. I just don't buy the Chapter 11 argument. If you made a point, for example, that the 1B dollars of ATSB LOAN GUARANTEES** the US government made to some US airlines one time after 9/11 when our country was at war and when the financial market was pretty much shut down to the airlines, now you might have a point. Or when cities in the US offer revenue guarantees or other incentives for a low cost carrier, for example, to start service to their city, then maybe you have a point. I'd argue that IMO they aren't really good points, but I could see someone taking that position. Do you want me to make some more points for you, or are you going to hang your hat entirely on the whole Chapter 11 thing?
You're implying that the US Government somehow designed our nation's Chapter 11 laws to benefit US airlines and the US government transferred money from the government to the US airlines.....nah. Don't buy it. The US government didn't give American any money when they just went through Chapter 11, for example. You might not like our nation's bankruptcy laws, but that doesn't mean American, for example, was subsidized by the US government.
So I'll ask you the same question I've asked everyone else debating points in the paper...........did you even read it from beginning to end? Do you see a transfer of wealth from the US government to US airlines similar in scope and magnitude that the Big ME 3 are enjoying right now?
**unlike the "loans" provided to the ME airlines (see linked paper), these ATSB loans had terms, were paid back, and were a net financial gain to the US Treasury (i.e. us taxpayers) when it was all said and done.
To answer your question, I have read the full report. Happy now?
We've been over this before, but I guess it needs to be said again:
You just mentioned $1 billion in loan guarantees, it was actually $10 billion, but those never really amounted to anything. About $1.1 billion in loan guarantees ended up being given to 7 airlines.
It was the Grants that were given to the airlines, close to $5 billion, that would fit under the definition of subsidy. Delta (the combined NWA and DAL) received close to $1 billion in cash from the U.S. government as part of those Grants. American (the combined AA, USAir, and AWA) would be a similar amount. That's not exactly chump change when talking about subsidies.
I won't speak to Etihad and Qatar, but when Emirates gets lumped in the only thing the report could find (and that's still really unproven) is that Dubai covered a fuel hedging loss for them. The retort to that is that Emirates pays their largest shareholder (which is basically the government of Dubai) a dividend every year. It is usually in excess of $100 million to $200 million. So even if the government covered the hedging loss, it would seem they have paid it off for the most part, or will within another few years.
One of the major reasons I keep speaking up about this is that it would appear to me that everyone is missing the point. Emirates, Etihad, Qatar, Turkish, Singapore, Cathay Pacific, and quite few other airlines are certainly supported in one form or another by their respective governments. Nothing is going to change that. Those governments see the benefit of a strong airline. They see the positive economic impact on their city/country.
Union thuggery and antiquated protectionist mindsets are not going to do the U.S. carriers, or their employees, any good over the long run. The U.S. carriers, and their employees, would be better off finding ways to emulate what Etihad, Emirates, Qatar, Turkish, et. al. are doing.
Typhoonpilot