User 272317

Airlines: Bail or Let Them Fail?

I'd have to agree, mostly, with the first 2 comments. Yet foreign carriers find themselves in much the same pickle -- even without the fierce domestic competition that you see in the US. First and foremost this is a recession driven problem, and like all large companies airlines are not very nimble. And even the newest carriers, without legacy costs (airline employees stick around forever, same as auto and steel before them) are finding it hard to come by a profit when everyone shops online to save a nickel. but you can't blame the consumer -- these carriers all have roughly the same safety record and all have passed FAA inspections. Its grim and something has to give. The current model is unsustainable, even with oil at 40$ a barrel. Mergers seem to be the only way to bring some rationality (ironically: less competion, higher fares) Yet, at present most dont deliver the efficiencies they promise. In fact, what you get at mergers like Delta and USair is more like twice the management and half the workers. Not a winning formula -- mainly because the executives in charge of bringing about such mergers are more concerned with the bonuses they recieve in the process than the actual results (sound familiar?).