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Any Chance For A Airline Bailout By US Govt?  
User currently offlineSeatback From United States of America, joined Mar 2002, 756 posts, RR: 0
Posted (6 years 2 weeks 3 days ago) and read 6223 times:

Is there any chance that the government will loan airlines cash to get through, like they did after 9/11? What would be the pros and cons?

53 replies: All unread, showing first 25:
 
User currently offlineSpacecadet From United States of America, joined Sep 2001, 3609 posts, RR: 12
Reply 1, posted (6 years 2 weeks 3 days ago) and read 6213 times:

Sure, there's always a chance. The government has bailed out various private industries before, including airlines - and it doesn't matter whether there's a supposedly conservative government in place or not. (In fact, most of the big bailouts I can remember - Chrysler, the airlines post-9/11, Goldman Sachs, etc. happened under conservative governments that supposedly believe in the "free market" deciding things.)

Pros and cons? There are no pros that I can see. The airlines affected would get to limp along a little while longer before folding up their tents anyway. This is not a temporary situation they're in with these oil prices, which is the only situation in which a bailout ever makes sense.

As for cons, it would be a huge waste of taxpayer money (though what else is new?), it would bring false hope to millions of passengers and airline employees, and it would set a really bad precedent.

The money would be better spent elsewhere, like accelerating government grants for research into alternative fuels and fuel efficiency.



I'm tired of being a wanna-be league bowler. I wanna be a league bowler!
User currently offlineLAXintl From United States of America, joined May 2000, 24857 posts, RR: 46
Reply 2, posted (6 years 2 weeks 3 days ago) and read 6193 times:

I certainly hope not.


Anyhow, I dont see why one industry should receive special treatment or benefits from Uncle Sam when todays fuel and general economic malaise effects go far beyond only airlines.

At the end of the day, let the markets right themselves. If this means a couple spectacular shutdowns so be it. At the end, the strongest will survive.



From the desert to the sea, to all of Southern California
User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 10
Reply 3, posted (6 years 2 weeks 3 days ago) and read 6196 times:

If that happens I bet complaints will be filed by the EU to the WTO within 2 hours of that happening.

Pass the popcorn please.



A310/A319/20/21/A332/3/A343/6/A388/B732/5/7/8/B742/S/4/B752/B763/B772/3/W/E145/J41/MD11/83/90
User currently offlineFXramper From United States of America, joined Dec 2005, 7191 posts, RR: 86
Reply 4, posted (6 years 2 weeks 2 days 23 hours ago) and read 6168 times:
Support Airliners.net - become a First Class Member!

Hooray Amtrak!  airplane 

Quoting Seatback (Thread starter):
Is there any chance that the government will loan airlines cash to get through, like they did after 9/11?

No.


User currently offlineTN757Flyer From , joined Dec 1969, posts, RR:
Reply 5, posted (6 years 2 weeks 2 days 23 hours ago) and read 6161 times:

It looks like the government may be in the faced with bailing out Freddie Mac and Fannie Mae. That's going to a very costly chunk of change. To bail out the airlines is going to add to a deficit many taxpayers are already up in arms over. The post 9/11 bailouts in essence just postponed the inevitable for a number of airlines, and I'm not sure this time would be any different. Certainly, there's no easy solution to this one unless someone can figure out how to get oil prices back down, and we know the likelihood of that happening in the near future.

User currently offlineSawb1980 From United States of America, joined Jul 2008, 25 posts, RR: 0
Reply 6, posted (6 years 2 weeks 2 days 23 hours ago) and read 6118 times:



Quoting FXramper (Reply 4):
Hooray Amtrak!

I hate to say this, but if it did not take so long for the train to get places, I am sure more people would be riding it. I take a commuter train everyday and it is a nice way to travel, but it takes an hour to move about 40 miles. If it was possible to speed that up, I think the airlines would be hurting worse then they already are, especially in the intrastate market of some states (such as California).


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2241 posts, RR: 9
Reply 7, posted (6 years 2 weeks 2 days 23 hours ago) and read 6084 times:



Quoting LAXintl (Reply 2):
At the end of the day, let the markets right themselves. If this means a couple spectacular shutdowns so be it. At the end, the strong

Natural progression. Best solution in the long run, and inevitable regardless of bailouts.

Quoting Cloudyapple (Reply 3):
If that happens I bet complaints will be filed by the EU to the WTO within 2 hours of that happenin

And rightfully so!

Quoting TN757Flyer (Reply 5):
The post 9/11 bailouts in essence just postponed the inevitable for a number of airlines,

I don't think that has escaped attention. I believe the likely survivors would protest vigeroulsy any meddling by the government.



I don't understand everything I don't know about this.
User currently offlineBoston92 From United States of America, joined Aug 2006, 3390 posts, RR: 7
Reply 8, posted (6 years 2 weeks 2 days 23 hours ago) and read 6070 times:



Quoting Sawb1980 (Reply 6):
especially in the intrastate market of some states (such as California).

http://www.cahighspeedrail.ca.gov/



"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
User currently offline474218 From United States of America, joined Oct 2005, 6340 posts, RR: 9
Reply 9, posted (6 years 2 weeks 2 days 22 hours ago) and read 6037 times:



Quoting Seatback (Thread starter):
Is there any chance that the government will loan airlines cash to get through, like they did after 9/11? What would be the pros and cons?

The United States government does not loan any private company money. What the government does is back or guarantee the loans. The loans come from private banks.


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2241 posts, RR: 9
Reply 10, posted (6 years 2 weeks 2 days 22 hours ago) and read 5984 times:



Quoting 474218 (Reply 9):
The United States government does not loan any private company money. What the government does is back or guarantee the loans. The loans come from private banks.

I hope they don't do that either! It will just prolong the agony for everyone, including those who will lose jobs and need to move forward.



I don't understand everything I don't know about this.
User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5008 posts, RR: 21
Reply 11, posted (6 years 2 weeks 2 days 21 hours ago) and read 5908 times:

Not a bailout, and not by the feds. State and local governments can and have given tax breaks, incentives, fee waivers etc...to large airline employers in various locations in the past. But no state, or combination of states have the financial means, nor likely the legal means to "bailout" a major US carrier.


Next Up: STL-LGA-RIC-ATL-STL
User currently onlineCubsrule From United States of America, joined May 2004, 22726 posts, RR: 20
Reply 12, posted (6 years 2 weeks 2 days 21 hours ago) and read 5887 times:



Quoting Spacecadet (Reply 1):
Pros and cons? There are no pros that I can see.

You say there are no pros because you assume that the situation is temporary. Why do you assume that? There seems to be a fair amount of disagreement about the trajectory of oil prices.

Quoting Spacecadet (Reply 1):
This is not a temporary situation they're in with these oil prices, which is the only situation in which a bailout ever makes sense.

If it is temporary, there's a straightforward theoretical argument for a bailout: if the transaction costs of other carriers picking up the pieces post-liquidation are higher than the amount spent on the bailout, society comes out ahead with a bailout.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineRevelation From United States of America, joined Feb 2005, 12340 posts, RR: 25
Reply 13, posted (6 years 2 weeks 2 days 21 hours ago) and read 5852 times:



Quoting Cloudyapple (Reply 3):
If that happens I bet complaints will be filed by the EU to the WTO within 2 hours of that happening.

Pass the popcorn please.

I am definitely not in favor of a bailout, but I can't imagine the WTO would get around to dealing with such a thing for quite a while - how long have they been sitting on the Airbus/Boeing dispute?



Inspiration, move me brightly!
User currently offlineSawb1980 From United States of America, joined Jul 2008, 25 posts, RR: 0
Reply 14, posted (6 years 2 weeks 2 days 20 hours ago) and read 5814 times:



Quoting Boston92 (Reply 8):
http://www.cahighspeedrail.ca.gov/

This is a nice concept! This will change the habits of the frequent traveler especially since it seems to hit a lot of the big cities. Be interesting to see if/when it goes through.


User currently offlineBoston92 From United States of America, joined Aug 2006, 3390 posts, RR: 7
Reply 15, posted (6 years 2 weeks 2 days 20 hours ago) and read 5799 times:



Quoting Sawb1980 (Reply 14):
This is a nice concept! This will change the habits of the frequent traveler especially since it seems to hit a lot of the big cities. Be interesting to see if/when it goes through.

Its going to be on the NOV ballot. If approved, bids and construction may begin as early as 2010.



"Why does a slight tax increase cost you $200 and a substantial tax cut save you 30 cents?"
User currently offlineAdam T. From United States of America, joined Jun 2000, 957 posts, RR: 6
Reply 16, posted (6 years 2 weeks 2 days 20 hours ago) and read 5758 times:



Quoting Sawb1980 (Reply 14):

Quoting Boston92 (Reply 8):
http://www.cahighspeedrail.ca.gov/

This is a nice concept! This will change the habits of the frequent traveler especially since it seems to hit a lot of the big cities. Be interesting to see if/when it goes through.

Actually several areas of the USA are looking into it including off the top of my head a southeast corridor (VA, NC, SC, and GA), the state of Florida, the state of TX, and the midwestern states.


User currently offlineLAXintl From United States of America, joined May 2000, 24857 posts, RR: 46
Reply 17, posted (6 years 2 weeks 2 days 20 hours ago) and read 5749 times:



Quoting Boston92 (Reply 15):
Its going to be on the NOV ballot. If approved, bids and construction may begin as early as 2010.

And hopefully it loses!

The biggest financial boondoggle the state has ever seen, that will drain tax payer money for decades to come with just about zero chance of turning a profit. (unlike what they like to say on their website).



From the desert to the sea, to all of Southern California
User currently offlineCadet57 From United States of America, joined Jul 2005, 9085 posts, RR: 31
Reply 18, posted (6 years 2 weeks 2 days 19 hours ago) and read 5743 times:



Quoting Cloudyapple (Reply 3):
that happens I bet complaints will be filed by the EU to the WTO within 2 hours of that happening.

Why would the european union care?

Quoting FXramper (Reply 4):
Hooray Amtrak!

Indeed. Fares are up this summer, and well into October. And the trains are packed! Which is both a good thing, and bad for me when I want to get the heck away for a day lol.

Quoting Sawb1980 (Reply 6):

The problem isnt amtrak per se,but its the fact that they dont own many onf the tracks they run on outside of the Northeast. The corridor is rather efficient for the amount of trains on it, not just amtrak. For instance, I did Springfield,Ma-Washington DC in about 7 hours. Not really a bad ride, better then going by car and cheaper then flying. Two people 250.00 total. Lowest airfare to BWI/IAD/DCA was 189pp. For me, traveling anywhere in the Northeast I look at amtrak first then the airlines.



Doors open, right hand side, next stop is Springfield.
User currently offlineAA7295 From Australia, joined Aug 2007, 620 posts, RR: 0
Reply 19, posted (6 years 2 weeks 2 days 19 hours ago) and read 5658 times:



Quoting Revelation (Reply 13):
I am definitely not in favor of a bailout, but I can't imagine the WTO would get around to dealing with such a thing for quite a while - how long have they been sitting on the Airbus/Boeing dispute?



Quoting Cadet57 (Reply 18):
Why would the european union care?

Exactly, it is not an EU matter. It will not affect the competitiveness of EU carriers, nor affect Airbus, so the EU would have zero stance.


User currently offlineTUNisia From United States of America, joined Aug 2004, 1844 posts, RR: 5
Reply 20, posted (6 years 2 weeks 2 days 18 hours ago) and read 5574 times:



Quoting Seatback (Thread starter):
Is there any chance that the government will loan airlines cash to get through, like they did after 9/11? What would be the pros and cons?

Will they print more money? How long before a dollar is worth less than the paper it's printed on?



Someday the sun will shine down on me in some faraway place - Mahalia Jackson
User currently offlineNYC777 From United States of America, joined Jun 2004, 5732 posts, RR: 48
Reply 21, posted (6 years 2 weeks 2 days 17 hours ago) and read 5551 times:

Well look the Fed and the Trasury are bailing out Fannie Mae and Freddie Mac. the housing market in the US is going to take precedence over the US Airline industry.


That which does not kill me makes me stronger.
User currently onlineCubsrule From United States of America, joined May 2004, 22726 posts, RR: 20
Reply 22, posted (6 years 2 weeks 2 days 17 hours ago) and read 5542 times:



Quoting NYC777 (Reply 21):
Well look the Fed and the Trasury are bailing out Fannie Mae and Freddie Mac.

They've done no such thing.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineAirbazar From United States of America, joined Sep 2003, 8212 posts, RR: 10
Reply 23, posted (6 years 2 weeks 2 days 17 hours ago) and read 5542 times:



Quoting Boston92 (Reply 8):
http://www.cahighspeedrail.ca.gov/

Great idea however, there's no way in hell San Fran to LA will cost only $55.
Just as a comparison, Boston to NYC is around $100 today and it's subsidized.


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 24, posted (6 years 2 weeks 2 days 17 hours ago) and read 5500 times:



Quoting FXramper (Reply 4):
Hooray Amtrak!

does anyone in here know how much the govt gives amtrak every year?



bus driver.......move that bus:)
25 Planefxr : What bailout after 9/11 are you referring to? There were emergency loans made that had to be repaid. Very few airlines took advantage of that great ba
26 Aaron747 : The housing industry will take precedence above all others because it is already hopelessly capitalized by government subsidy and has been for a long
27 Lambert747 : The last thing that the government needs to do now is bailout airlines for not only their failed business plans, but inept management. This is someth
28 Commavia : Yeah, slight correction: the government didn't loan airlines money after the 9/11 attacks. What the federal government offered to do was to guarantee
29 Planefxr : I totally forgot about that. Thanks for the reminder, yeah that was quite some bailout wasn't it?
30 UAL747 : The airlines are going to have to raise prices..which may be unfortunate for some, but it seems like a necessity. Until advances are made on alternati
31 Planefxr : This is what I was refering to, trying to be everything to everybody has got to end. Have you ever thought about the relief on the ATC system if freq
32 Cubsrule : What airline tries to be everything to everybody?
33 Planefxr : I am speaking in the sense that there are to many frequencies to certain markets for the convenience of connections or passenger. If it warants it fi
34 Lambert747 : Continental Airlines (Mainline/CalLite) Delta Air Lines (Mainline/Delta Express/Song) United Airlines (Mainline/Shuttle by United/Ted) US Airways (Ma
35 Planefxr : Absolutely. The problem with only focusing on what actually makes money is that it changes so frequently. Some routes are seasonal, or trying to matc
36 TN757Flyer : The EU would care because any time there is a hint of state aid to a European company (a certain aircraft maker comes to mind) or the fact the EU is
37 Airbazar : Just about every legacy carrier. Besides the fact that it would most likely violate WTO rules, how is that that AA/UA/US/DL would not affect European
38 Post contains images Maddog888 : that's a nice "alternative reality" your living in. can I come and live there, cause in my world there is zero chance that the corporate suits would
39 Maddog888 : And this is why the world is in the mess it is in now. The perversion of capitalism by the immediate/very short term return effect. No long term proj
40 Planefxr : All I know is that the business model of the last 20 plus years is not working, and that is reality. So if mergers and high fuel prices can shake thi
41 XJETFlyer : Forget the politics. As a taxpayer, I do not want my tax dollars going to any private companies as a bailout. These companies have made their mistakes
42 Rampart : I see it in the supposed trend toward "consolidation", and therefore coverage and market share. DL+NW is the new megacarrier, and with the national c
43 Cubsrule : But they're still a lousy choice for SAN-SEA or PWM-DCA. I don't see it. CO does almost no non-hub flying. US does almost no non-hub flying that does
44 Planefxr : How many carriers do you think should fly these routes? And how many times a day should they fly them? I think your expectations are what I was refer
45 Lambert747 : It was not mentioned in my list.. So the answer is "No".. I fly it way to much to not agree with its purpose for every 1 paid full-fare Business Clas
46 Cubsrule : Not many. But if all legacies are trying to be all things to all people, as you posit, shouldn't all 6 legacies at least offer a decent connecting it
47 Planefxr : If you take what I posted quite literally, then yes. But you are missing the point I was trying to make, and that is airlines by utilizing so many RJ
48 Cubsrule : I'm still not sure I agree with you. I see DL (mainly in Boston and Florida) and AA (mainly on the east coast, though also in California) having done
49 Planefxr : As for DL you can add SLC and to a greater extent CVG. DL has probably added more RJ flying than any of the other legacy carriers.
50 Avek00 : I pray the US Government stays FAR away from any attempt to bailout the US airline industry. The market is SOOOOOOOOOO close to FINALLY sorting itself
51 Planefxr : I believe you are absolutely correct.
52 Cubsrule : I'm not sure replacing mainline flying with RJs is a problem per se. DL would have been in most of those markets with mainline even if they hadn't bo
53 JTR : The government's too busy with bailing out the banking system to worry about anything else.
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