No, chapter 11 "bankrupty protection" could not technically be considered a "subsidy" like gauranteed low interest loans or disbursement of government funds. It is no big shock that certain parties might broaden the definition of the word a bit if it tends to support their argument. Perhaps it would be more accurate to say that chapter 11 staus may provide certain competitive advantages to participants by helping them lower their cost structure. This may be done by re-structuring their debt in a way that is advantagious to the company.
Trouble is, the creditors and employees may be forced by court decree to accept less than contracted for or wait longer to be paid what was agreed to. Tremendous leverage for the company because of the bargaining position it puts them in. Just as an example, the United bankruptcy court ruling that allowed them to dump their pension fund obligations means that other companies who choose to meet their obligations may be at a competitive disadvantage because of higher costs. So the court has by their action endorsed an ethical standard for business practices that
cannot escape the notice of that company's competitors. How must they react to a playing field that is no longer level? If BA must compete against companies who enjoy this kind of "help", What will they have to do to lower their costs and remain competitive?
So while Ch 11 is not a subsidy per se, it has a similar effect upon the competitive environment in that some players are given an advantage by the government while others (the ones who pay their bills) are not. On the other hand, protectionism takes many forms. It might be argued that BA enjoy the benefit of that now and hope that a little rhetoric might help maintain status quo a while longer. I do not have enough information yet to say with any certainty which forms of protection are more destructive. As ever, I suppose that one's opinion will be based upon how it affects oneself. I, for one, am sorry to see the goal of airline industry reduced to the lowest (cost) common denominator. But the people have spoken and I hope they appreciate the results.
Best regards,
Westhawk