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Old May 1, 04, 5:54 pm
FlyerTalk Evangelist
Join Date: Jan 2000
Posts: 14,195
Hey Nicky, you got some kind of anti-US complex?? I really don't see what the US or its carriers have to do with this subject, especially as its you who brought it up. As you have it should be noted that between 1992 and 1997 AF received more in DIRECT subsidies from the French government than the ENTIRE US airline industry has received since 9/11 (Where one can consider that all of AF's losses were due to bureaucracy and idiocy while one can argue that a huge chunk of the US losses, at least initially were due to terrorist action and the total shut down of the US air transport system).

BTW, you are right, there is no Chapter 11 in Europe, especially with government carriers, generally when they are absolutely insolvent many governments find ingenious direct and even non-direct ways of dumpingtaxpayer dollars into their airlines, Until the mid 90's this was actually allowed and when it was no longer allowed by the EU, the more "honest" of them (such as AF in this case) were allowed to make a last time injection of funds into their airlines, often taking into account how much they projected that the airlines would need for the next decade. Since that time even this provision has been violated by many including Sabena (in its old form and its new form is just another way of doing it by allowing the old airline to die, and start up a new one), Olympic, Aer Lingus, TAP, Iberia (An ingenious one, whereby the government basically discharged IB from all of its debts from its very bad idea of taking over airlines such as Aerolineas Argentinas, Viasa and Dominicana among other handouts), Alitalia and even Lufthansa (who since their last handout have been pretty good about it).

As far as your open skies/cabotage rights rant goes, it is nonsensical. The Eu has only recently tried to make a community wide air past with the US. Why would the US let KLM let's say fly anywhere they want in the US? What would a US airline get, rights between Amsterdam and Rotterdam? In the case of BA, what would they get LHR-EDI rights? this is silly. As far as wonership provisions are concerned, while the ceilings are different (24.9 vs. 49.9 re: voting shares) what is the difference really as neither allows for operational control of an airline n the other "block" anyway. Besides, this is 2004, not 1995 (The last time I can recall this being an issue regarding KL and NW), besides Richard Branson perhaps wanting a bigger direct stake in the airline he is supposed to be starting in the States, no one is looking for operational control of another airline on the other side of the pond.

As for control of Domestic operations, you must not have flown much in France of from France over the last twenty years, otherwise you would know exactly what I was talking about. AF was "encouraged" to create Grup Air Franc and basically soak up Air Inter and others, monoplizing the industry (interestingly enough getting other indirect subsidies in the process), other smaller more private airlines were sidelined, etc.

If KLM were handed the equivalent today of US $8 billion, they would not be in the situation that they found themselves last year. Then again no one has ever dumped that equivalent of money into an airline other than the French government.
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