The dust hasn’t settled, and the greed-heads already have their hands out.
Here in Minnesota, some of the gas stations are running full page ads in the local papers apologizing for jumping the gun on US$6 per gallon gas prices.
According to most accounts, the U.S. airlines lost US$100 - US$275 million each day their planes were grounded. Now they want US$2.5 billion outright and another US$12.5 billion and loan guarantees. And they want it out of the US$40 billion emergency package Congress approved yesterday. And please, if it’s not too much, they’d also like to have their liability limited in relation to Tuesday’s tragedy. It’s all spelled out in this New York Times article.
Let’s get out a stubby pencil and do some back-of-the-envelope ciphering:
Figure four days grounded (Tue. - Fri.) at US$200 million total loss per day. That’s giving them the benefit of the doubt just for the sake of argument. That’s an US$800 million loss for the industry as a total for the period in question. So how does the figure jump drastically to US$15 billion?
Maybe this sheds some light: The Times quotes an aviation consultant as saying “this week’s events would trim the industry’s sales by US$15 billion over the next 12 months,” or 16% of last year’s total ticket sales. So the airline industry wants the taxpayers to ensure their profits at the same level as last year.
The kicker is this howler from Gordon M. Bethune, Continental Airlines CEO: “What I am seeing and what I don’t think our government is seeing is that the airlines are driving the economy.”
The trend since the 1980s has been drastic deregulation, consolidation, and privatization. In this time of crisis maybe instead of a bailout what’s best for the airline industry—and the populace—is reregulation of the industry.
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