All of the airlines serving the US can not survive.
Even with full planes, no airline has the pricing power to charge fares that
make them consistently profitable.
Will airline mergers & failures help or hurt the
customer? What role should government play in approving or
disapproving mergers?
As long as there is a demand for a product, someone
will attempt to fill it if they believe that it can be done profitably.
If airlines merge or fail and flights are reduced and fares raised, someone
will view the market as an opportunity. One of the great attributes of
the American economy is the ease of opening or expanding a business.
Aircraft leasing companies would rather get some money for their planes
rather than park them in the desert. The backlog of aircraft orders at
Boeing and Airbus is larger than ever. I guess I'm a Darwinist but
airlines are no different than any other business, they should be allowed to
fail. If there is a market, it will be addressed.
When government tries to "level the playing field,"
the situation usually gets worse. Your and my tax dollars are spent
subsidizing air and rail travel to many smaller cities. Who made a law
guaranteeing low fare travel to a certain city with subsidies from your
taxes? Your tax dollars now guarantee the pensions of many of the
employees of airlines that went through Chapter 11. Is this fair to
the airlines that have been profitable, paid their taxes and employees and
their pension obligations? It's unfortunate but management and labor
freely entered agreements. No one held a gun to anyone's head.
I live in the Detroit area. My father told me
that in the early 1900's there were hundreds of automobile manufacturers.
Now there are only a few. That's the nature of business, it's not
pretty but we live better as a result. In 1905, the companies that
made buggies didn't go to Washington asking for a bailout when Henry Ford
started to build automobiles. They adapted or perished and we (the
customers) are better off as a result. If Washington had decided to
subsidize buggy manufacturers, we would have a well developed buggy industry
today that was paid for with your taxes. Is that what you want?
