B2707SST From United States of America, joined Apr 2003, 1386 posts, RR: 58
Reply 3, posted (11 years 10 months 6 days 10 hours ago) and read 3400 times:
First, such an airline might be more profitable in the sense that a government-sanctioned monopoly or cartel could squeeze more revenue out of passengers, but there would be a net loss to society. The airline's gain would come directly at the expense of passengers, plus those passengers who are unable or unwilling to pay higher fares would lose their access to air travel, which is unequivocally bad. This is what economists call a "deadweight loss."
Second, given the effectiveness of the government at running its own operations, I highly doubt that government could run the airline any better than the existing management, incompetant as they may be.
Third, nationalizing an airline in this way amounts to insulating it from its responsibilities to its customers, creditors, and stockholders. I can't think of a good reason to do this.
Finally, it's sad whenever an airline goes under, but failure is an indispensable part of the free market. Capitalism is a system of creative destruction, in which old industries are constantly being torn down and new ones rebuilt in their place. In competitive markets, companies can fail and good people sometimes lose their jobs. It may not seem fair, but the alternative is keeping inefficient and obsolete firms on life support in the name of protecting jobs. This leads to economic paralysis and stagnation, which is tantamount to curing the disease by killing the patient.
MasseyBrown From United States of America, joined Dec 2002, 6147 posts, RR: 7
Reply 4, posted (11 years 10 months 6 days 10 hours ago) and read 3395 times:
The only purpose of a national airline is to operate "strategic" routes despite the uneconomical results of doing so. If the US govt. needs a route operated, they order the USAF to do it or hire a charter operator. No need for a whole airline.
The best time to plant a tree is today. The second best time is tomorrow.
Bluewave 707 From United States of America, joined Jun 2001, 3164 posts, RR: 6
Reply 5, posted (11 years 10 months 6 days 10 hours ago) and read 3387 times:
That would be counter to the Free Enterprise system of economics that our great country was founded upon. As AWACS said above: Nothing run by the Government would be "profitable". A government-owned airline would equate to socialism, and the equal sharing of poverty.
Free Enterprise is founded on the basis that if any business is to survive, whether big or small, it's up to the ownership of the airline to do whatever it takes, without violating God's laws or man's laws, to be profitable. If the airline flies, then you know they did things right.
If it the airline sinks, then you know there were major flaws in their business plan, and the leadership and management (or lack there of).
The government is in the business of NOT generating wealth, but taking wealth away from everyone. A state-owned airline would not only be in the red, but the beauracracy would be insane. Nothing would ever get done ... Look at some gov't programs ... They would all have to get their palms (or other body parts) greased, and get their cut.
Look @ Russia in general, since the Communist gov't fell apart, it has allowed a gob of airlines to sprout up. Some like Sibir, Kras Air, and Pulkovo have flourished and are growing. Some in the Russian gov't came forward, after the fall, saying the Communist system did not work, because no one prospered.
It's all about competition and playing to WIN not just play the game.
"The best use of your life will be to so live your life, that the use of your life will outlive your life" -- D Severn
Spacecadet From United States of America, joined Sep 2001, 3993 posts, RR: 11
Reply 8, posted (11 years 10 months 6 days 7 hours ago) and read 3226 times:
I bet it would be as good as our government supported rail line.
Not clear on how you meant this, but travelling on Amtrak today is a far, far better experience than travelling on any US airline. And they lose just about the same amount of money despite having to pay for their own stations and some of their own track and infrastructure (imagine if the airlines had to buy and/or build their own airports and ATC systems, then maintain them - you think they're losing money now...).
Anyway, before anyone gets too deep into the comparison, I don't think it's really a valid one, because air travel is so much more important these days that if there *was* a national airline it would get a whole lot more passengers and a whole lot more federal funding than Amtrak does.
I don't really think it's a bad idea in theory, and there's nothing "un-American" about it - unless you think subways, public bus systems, publicly owned commuter rail systems, public highways and all the other publicly owned and operated transportation we have is also un-American. Airlines are about the only really private form of transportation we have - perhaps self-sufficient airlines are no longer any more viable than self-sufficient subway systems? At some point, transportation becomes a commodity, the fare structure can no longer support a fully private enterprise and government has to step in. It's already happening with the emergency funding the government is using to prop up the airlines in this country - I, for one, would much rather have a say in how that money is used rather than just handing over billions of dollars to a company that's already proven itself incapable of managing it.
I also don't think the government could really do any worse of a job running a national airline as most current major airline management is doing in this country.
I'm tired of being a wanna-be league bowler. I wanna be a league bowler!
SlamClick From United States of America, joined Nov 2003, 10062 posts, RR: 66
Reply 14, posted (11 years 10 months 6 days 3 hours ago) and read 3047 times:
Spacecadet you are right in saying that the railroads have to pay for their own stations and some of their own track and infrastructure. The taxpayers of Reno Nevada are having to pay to put the railroad in a trench through the city. The argument was that it was dangerous having it run at ground level, and that emergency vehicles had to wait for trains.
The truth is the suckers driving in from California were getting to the casinos 90 seconds later than they should have been and the casinos wanted to recover those lost revenues. The railroad certainly was not going to pay for it.
Back to main topic: If you had any idea how much airline revenue goes directly to governments at all levels you might not think this was such a good idea. Airlines pay all the same taxes that any other corporation pays. But before they do, they pay out "user charges" that exceed, in places, a thousand dollars a landing. Rents charged for airport properties are among the highest in the world. California just for one fascist example requires airlines to log the time they spend over the state, and on the ground within the state, and to pay property tax on the airplanes for the time spent in and over the state.
It goes on and on. Fuel consortium fees. Membership fees in merchant assocations that are required. Per Capita charges for security that is never less than a dollar or two per enplaned passenger but may be as high as ten dollars a head! As these are user charges and not taxes, there is pretty much no recourse for them. Most gets passed on to passengers but there is this foolish price war going on in airline ticket prices so the employees of the airlines can be said to be subsidizing cheap air travel.
I'd love to know how much on the dollar of the ATSB loans made to United and USAir went directly back into Government coffers without helping the airlines out of their troubles in any way.
I guess my point in this rant is this: Government IS the problem. It will never be the solution.
[Edited 2004-07-27 14:26:54]
Happiness is not seeing another trite Ste. Maarten photo all week long.
Scottb From United States of America, joined Jul 2000, 7516 posts, RR: 31
Reply 18, posted (11 years 10 months 5 days 22 hours ago) and read 2794 times:
"And they lose just about the same amount of money despite having to pay for their own stations and some of their own track and infrastructure (imagine if the airlines had to buy and/or build their own airports and ATC systems, then maintain them - you think they're losing money now...)"
I'm not sure you're very clear on the substantial burden of taxes, rents, and fees borne by the airlines by the airlines and their passengers. My next trip shows total taxes of $42.23 (federal excise tax, segment fees, PFC's, security fees) on a total fare of $152.00 (yes, I got a very good deal). Not to mention that the airline pays landing fees, rent on terminal space, taxes on jet fuel, property taxes, etc. Amtrak pays no taxes at all (in fact, it continues to suck money from the U.S. Treasury), so they sure as heck ought to be paying for some of their infrastructure.
And, in many cases, the airlines do bear the costs of providing airport infrastructure. Delta's building a new terminal at BOS, Southwest built a new terminal at ISP, Continental built a new terminal at IAH, Northwest built a new terminal at DTW, American is building a new terminal at JFK, etc. Most large airports run with no subsidy from local taxpayers; airline fees and rents cover their operating costs.
Having a "national" airline for the U.S. would be simply insane. Where would the incentive be for the airline to operate efficiently? How about motivation to provide good customer service and operate a reliable, on-time schedule? How about motivation for employees to be courteous and productive when their jobs are protected by the civil service system?
Worldoftui From Sweden, joined Aug 2007, 0 posts, RR: 0
Reply 19, posted (11 years 10 months 5 days 21 hours ago) and read 2760 times:
That would be counter to the Free Enterprise system of economics that our great country was founded upon.
I was going to say if that is so important, why are some people unhappy about letting Branson wholly own an airline that would operate domestically?
But at the risk of starting a flame war, I won't say anthing.
In answer to the original question, I have to ask another question. Why? Is there a need for one? Seems as if, certainly when it comes to running an airline, that being government run is not the way to go.