The government bailout is keeping all the existing airlines flying when some should be allowed to expire.

I'm talking about Midway, and about America West, for instance. These weak players undercut fares, lose money, and keep the other surviving airlines from achieving some financial stability.

For instance, TWA ruined markets for the majors, flying full planes at deep losses, right up to the end. Now, HP is doing it.

I know the argument that the secondary airlines keep the majors from price gauging. Everyone who pays $1000 for a 350 mile round trip on a coach ticket feels burned, taken advantage of.

So I'm not saying you don't need competition to the "majors." Quite the opposite. You do need competition.

You need to let airlines quickly and easily enter the business, survive or die.

But, you need to let airlines come and go. No politics should mix here.

Strong competitors like Southwest, JetBlue or AirTran can get into a market, and make very high profits by undercutting the dominant player in that market (US in PIT, for instance, or DL in ATL, UA in IAD).

You have to let them succeed or fail on their own. Like fruitflies.

The bailout politicized the process of success or failure and we will all pay. I want to do business with financially healthy airlines, not losers. I want AA and UA and DL and NW and CO to become stronger, not to all be on the edge of bankruptcy.

By letting weak, near-bankrupt competitors fly, we are all jeopardizing the financial health of the entire airline industry.

I don't think you should knock TWA considering that most of their discount fares were simply matches of Southwest's fare sales. TWA and Southwest competed on many, many routes -- especially out of St. Louis.

Greg

I believe that Midway already folded and decided not to try to reorganize, so that's not an issue.

As far as competition goes, there are tremendous barriers to entry in the airline industry. This ain't a business where your everyday Joe can just show up and start an airline. Starting a new airline to create competition isn't like opening a new pet shop or gas station.

Now, personally, I think that this country would be well served by four, maybe five national airlines and several regional airlines.

But you need to keep in mind the huge barriers to entering the business before you go and say that if the feds don't help out, there will be more competition.

mdtony -

midway has gotten a $10 million dollar chunk of taxpayer money, and has decided to take another shot at it.

richard -

can i ask where you were in late september, when i was writing any congress member and saying the same things?

the bailout was a bad idea, pushed to the front of the media's attention by the layoffs and service cuts following 9/11. the airlines expected to use the shutdown as an excuse to get the american taxpayer to bail them out for years of reckless growth and poor business practices.

thankfully, that didn't work to the point that Gordon Bethune and others hoped for. i don't think a similar bailout would happen again, so maybe we learned an expensive lesson?

This would be moot, because the bailout is a done deal, but I am discussing this here because there will be lots more money doled out and it is in our interests on FlyerTalk to make sure that we get some strong airlines instead of a bunch of government supported weaklings.

Well, that should not happen. I would like to see whoever is in charge of these loan guarantees say, look, you couldn't make it before the attacks, so no, we are not going to bail you out.

i agree that they shouldn't have gotten the money either, especially since the rules had to be changed in order to give them the money.

the taxpayer bailout was designed to compensate the airlines for losses during the shutdown. midway announced that they were ceasing operations later in the day on 9/11. so technically midway lost no money during the federally mandated shutdown.

you don't think senator john edwards (D-NC), who is widely thought to be positioning himself for a run for the white house in 2004 had anything to do with a change in the rules do you? or his seat on the committee on commerce, science, and transportation?

it's just a thought, but you know that some kind of political pressure had to be brought on the senate leaders to make this happen...

[This message has been edited by duxfan (edited 12-06-2001).]

please excuse dupe post

[This message has been edited by duxfan (edited 12-06-2001).]

I'm sure he did. And I'm sure that the good ole senior Senator from North Carolina was right there with him making that case.

And when it's time for America Worst to fold, you can be sure that "free market" guys Kyl and McCain will be there too.

That's politics for you. The free market's and government should stay out of it...until some of your constituents will lose their jobs.