The subsidy debate is heating up in the blogosphere. TheCrankyFlier discussed it early in this week, and now we have Lucky and Gary Leff dueling it out.

Lucky, who's apparently been briefed about the USA airlines' report, adds lots of color to the dispute: showing how the President of Emirates Airlines holds just about every other aviation leadership post in the country (much easier to move the money around this way). But then Lucky drops an extraordinary bombshell: he says the gov't simply picked up Emirates recent $4 BILLION fuel hedge loss. If that's not a subsidy, I don't know what is.

http://onemileatatime.boardingarea.c...tem-heres-why/

And this, of course, is the fundamental difference between what's going on with the Middle East airlines and what has previously occurred in the int'l aviation industry. Before, every country, to some extent, extended favors or subsidies to their own airlines. But these were marginal benefits: they kept badly run airlines (Alitalia, anyone?) in the air. But they didn't pour billions of dollars into an effort at world domination, such that tiny countries can order half the widebody planes built in the world. This is crazy stuff. And I suspect the current fight is the beginning of the end of this nuttiness.