Originally Posted by
Visconti
By the way, had DL achieved their position purely by virtue of innovation and creating a product so superior and cheaper to drive out their peers would be one thing, but it appears to me, at least in this industry, you just buy out & absorb the competition. Enough of this taking out competition, just compete vigorously.
The problem is how to approach bankruptcies, from two perspectives:
-On the one had, there's "this airline is in bankruptcy
again and clearly can't compete as-is" (TWA). Call this the "collapse" problem.
-On the other hand, there's "airlines which have gone through bankruptcy get to rejigger their union contracts, pension rules, etc., so those that go through them get an advantage over everyone else". This was sort-of the problem in the early 2000s - I seem to recall that "everyone else has gone through bankruptcy" basically forced at least one bankruptcy (but I don't recall who it was) since that was the only way to get on an equal footing in terms of contracts.
In the former case, I think examining the viability of the airline under various conditions (e.g. discharging all debts and allowing a rework of major existing contracts) might be worthwhile. If a carrier over X size is truly doomed, then so be it, but if it's not then avoiding a merger (especially with a major carrier) should probably be prioritized.
And in any event, some sort of "conservation of size" restrictions on "large" carriers (say, more than 10% of US domestic market share) during mergers might be worth looking at.