airbusdriver

Fixing the Airlines: Reconfigure or Reregulate

Spinning off the international aircraft and routes of Delta and Northwest into a separate airline just wouldn't work. International only airlines just don't work - they need the domestic network to feed them. Take for example Pan Am which lacked a domestic structure and died a slow death. NWA merged with Republic for this same reason. In addition, the labor issues that arise from such a deal are worse than a full scale merger. Who who go with the part of the airline that is spun off and who will stay to be hired at the bottom of someone else's list. The sell off of Pan Am's pacific routes to United is an example of the difficulties that arise in this regard. You're right about the use of bankruptcy as a business tool by management in the industry. There used to be a stigma associated with filing but not so anymore. The fact that the recent round of bankruptcies has produced larger than otherwise pay days for emt's at the airlines just made the decisions even easier.

Delta/Northwest: Evaluating Company Performance in a Dysfunctional Industry

I think the root of the problems surrounding airlines is that the Government cannot decide if the industry is an infrastructure or if its a free-market business system. The business communities of many cities depend on regular, reliable air service. When hub status is threatened or the local hometown airline faces possible liquidation watch the politicians come out of the woodwork to protect "their" airline (as if it were a government entity) Of course politician want their constituencies to have cheap airfares so they offer bribes in the form of tax incentives, etc to discount carriers to keep fares (and airline profits) low. In addition, its hard to think of an industry that is so dependent on the Federal Government for its infrastructure. Airports and air traffic controllers are all employees of the government and not controlled by the industry that depends on them. We all want cheap fares, hourly flights to our destination, and onboard meals (not to mention a level of safety unequalled in any other form of transportation)- we just dont want to pay for it. So what is our air transportation system - infrastructure or a free market system?