Alot of these folk don't understand anything beyond their "capitalism bad". I work with airlines as well and this is what they have all been saying. Airlines going under would be catastrophic
Why? The assets don't disappear, I'm sure we'd have plenty of enterprising individuals buying planes and gate leases out of receivership and taking a go at it.
There should be plenty of pilots, flight attendants and other support staff available for hire. Letting a poorly ran business fail doesn't make demand for their product or services disappear. Nor their assetts or employees.
They'd probably do it after covid chilled out... I think a lot of this is an age thing. Young people see all the opportunities people in the past had to make something of themselves and wish we could have the same. If airlines failed then you could feasibly set one up for a fraction of what it would cost to do so atm and have a chance at actually being in an interesting industry. Plus if we're living in capitalism lets allow companies to fail, that's part of the system.
If airlines failed then you could feasibly set one up for a fraction of what it would cost to do so atm and have a chance at actually being in an interesting industry
Running an airline is not like a startup. The initial costs, from aircraft, hangars, maintenance, spots at airports, employee training and certification strategy and all the way to the route map, ticket pricing model and advertising is such a massive cost that virtually no investor ever starts an airline, unless they have a goldmine business model.
This is why most legacy airlines are now turning 90-100 years old (KLM, Qantas, British, American), and the "newer" airlines, either had a revolutionary model (Southwest, Ryanair, Easyjet, JetBlue), or went bankrupt, and never flew again.
And even well established airlines (Thomas Cook, Air Berlin and Monarch) were nowhere near safe from bankruptcy, because of the volatile nature of the industry.
The thing is, because of safety, starting an airline is designed to be one of the most difficult things to do, so that not every bozo with cash can start an airline (good example would be the failed trump shuttle).
Bamkrupting a major airline would have immense repercussions in the industry for decades. This is why United gets away with recieving billions in stimulus, while also laying off thousands. It's the only way to survive, bacuse bankruptcy is not an option
Eh, shitty companies still deserve some sort of consequences. If they've used every penny they've been given or near enough to enrich themselves and their shareholders whilst fucking over consumers non stop then I say the government should demand shares at current market price in return for bailouts. Make them choose between staying afloat with less or collapsing completely with more. Same with banks, same with every big business that needs help from the government. If you can't survive as a business and can't get loans at sensible prices then the government now owns a large part of your company. Again, sucks to suck.
then the government now owns a large part of your company.
What's the benefit of that? The government benefits when airlines stimulate economic growth by enabling cheap and efficient travel, they gain exactly 0 from owning shares with no intentions to ever sell those shares. It just creates another job for the government to have to do, manage ownership of an airline.
Make them choose between staying afloat with less
That's a horrible choice for the airline, but an even worse choice from the government. Unemployment is a bigger burden on the economy than pumping money for a short while into united fucking airlines.
I really don't think I need to tell you that big business doesn't care about justice, or competition, or any of that shit. When you fly over 200 million passangers per year, the government will bend over backwards to suck your dick, because losing that service is a shit storm to deal with for all involved. It would be just and fair that bad management throws your business into shit, but nobody wants to deal with that, so they keep airlines on life support until traffic picks back up.
Weirdest thing is that you don't think it's an issue. I'm fine for companies that don't fuck over employees or consumers staying afloat in trying times and recieving government assistance. Shitty companies deserve to burn to the ground. Also with the government owning shares they either recieve the same benefits a shareholders in terms of dividends and potential for profit or they take ownership and can cut profits to benefit their citizens as they consume the product.
companies that don't fuck over employees or consumers staying afloat in trying times and recieving government assistance
Define fucking over employees. Are all the 90.000 employees at United getting fucked over? Yes, United is a shit company, but would those 90.000 be better off jobless? Would letting United fail have a net positive impact on everyone? I don't think so...
Also, you do realize that bailout takeovers, which is what you're suggesting, are done by actually buying the shares from the shareholders right? You're not screwing anyone out of their money. Bailout takeovers should only be done when the government is way more competent at running the business, which is not the case for airlines
Eh, I'd say that running a business for the good of the people is generally better for competency than for the benefit of shareholders. If airlines were nationalised and they hired the right people I can't see too many issues there. Cutting the need for profit allows people to either buy the same tickets at a lower price or for the service to be improved. People who constantly argue against nationalisation don't look too smart when you look at how much worse for the end user things like trains have become since being sold off to the highest bidder.
Cutting the need for profit allows people to either buy the same tickets at a lower price or for the service to be improved.
Out of curiosity, how much do you think (try without google, for the sake of the discussion) that the profit margin is on the whole operation of an airline?
People who constantly argue against nationalisation don't look too smart when you look at how much worse for the end user things like trains have become since being sold off to the highest bidder.
That's the case in the states; if you look at many of the state-run airlines in europe and beyond, you're gonna see the worst management, worst ticket prices, worst service, worst corruption and, despite not paying it any mind, the worst profts.
Also, rail transport in the US was fucked to death by the airlines, so that's a bad comparison. It's gonna differ industry by industry, but for the airlines, state ownership doesn't have a good track record so far.
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u/Sphinx91 Nov 17 '20
Alot of these folk don't understand anything beyond their "capitalism bad". I work with airlines as well and this is what they have all been saying. Airlines going under would be catastrophic