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.
In no way am I saying that Ch. 11 was designed to benefit airlines. It is so much broader than that: it is designed to help US businesses in any industry.
You seem hung up on the "transfer of money" aspect. But if the point of contention is that government subsidies provide for unfair competition, our Ch. 11 policies do come into play. You don't even have to look outside the US to see this. AA (or more specifically, Arpey) wanted to avoid BK. But since UA/DL/NW had already restructured in BK protection, shedding loads of costs, AA was in a disadvantaged situation. They declared BK with a record amount of cash in the bank. And like the others, they emerged profitable. Not due to any revamp of the business plan, or innovative product offering; just due to lower institutional costs.
Hardly a process which falls in to the "fair competition" concept.
Yes I have read the paper to the end. It makes a good case, but like any other piece written and sponsored by authors with an ulterior motive, it is far from objective in its intent, scope, research, and presentation. As such, a true understanding of the issue requires broader thinking and a deeper level of research.
Just consider that the ME airlines are not the only airlines to receive government assistance. (for example, consider:
Subsidies: the state aid that companies would like to forget...,
The UK in airport subsidies | Environment | The Guardian) If the objection is truly over subsidies, other airlines, including numerous US JV partners would be on the list and detailed in the report. But they are not. So it is less about subsidies, and more about the success of ME carriers.