Airline Bailout Ahead?
“Is there a federal bailout coming for U.S. airlines? For a long time, I’ve thought this idea was beyond far-fetched, with about as much basis in reality as Uncle Sam extending funds to the equally plagued news media. Airlines have been adamant that they don’t want any such rescue, and it would be well-nigh impossible to muster sympathy from a bailout-weary public tired of shoddy airline service. Everyone hates this idea.”
-Justin Bachman, BusinessWeek.com, July 9, 2009
Is the idea of an airline bailout really that “far-fetched?” A quick look at all of Washington’s bailouts ($11 trillion committed, $3 trillion invested) since the beginning of the financial crisis leads me to believe that anything is possible.
And I mean ANYTHING.
From the Associated Press’ Joan Lowy this afternoon:
The Obama administration is taking its first step toward trying to fix the ailing airline industry, mired in a severe economic slump and facing safety worries.
Transportation Secretary Ray LaHood is holding a forum Thursday to discuss the state of the industry and ways government can help provide economic stability for air carriers. The industry has been rocked by repeated crises in recent years, including the 9/11 terror attacks, the SARS virus and the current economic downturn.
“U.S. aviation is facing severe economic uncertainty and an open and frank conversation will help begin a continuing dialogue about the industry’s future,” transportation spokeswoman Sasha Johnson said.
The Air Transport Association, which represents major carriers, says airlines are offering the fewest seats to passengers as measured by available seats and distance traveled in over a decade. Airlines have shed more than 130,000 full-time jobs since 2000, and lost an estimated $33 billion over the same period. Thirteen airlines have filed for bankruptcy in the past two years.
Source:
“Obama administration seeks to fix airline industry”
Joan Lowy
Associated Press, November 11, 2009
November 13th, 2009 at 11:26 am
The number of people who have been screwed by the American car manufacturers – and were aghast at the bailouts Uncle Sam has given to GM & Chrysler, to say nothing about the ‘cash for clunkers’ boondoggle – pales when compared to the number of people who have been screwed by America’s airlines.
Few of us have any sympathy for the airlines, and a bailout to them would likely push some of us ‘over the edge.’ Given that the American public is already weary from all the bailouts, it does not appear very likely that America’s airlines will receive a bailout.
Not over my dead body, anyway…
-Mammoth
November 14th, 2009 at 10:23 am
Thanks for the comment Mammoth.
“Given that the American public is already weary from all the bailouts, it does not appear very likely that America’s airlines will receive a bailout.”
I agree with you. The Obama administration will tip-toe carefully on this issue.
Then again, never say never…