Emirates to take over Etihad
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Emirates to take over Etihad
Partnership for Open and Fair Skies
Become informed. The evidence speaks for itself.
Become informed. The evidence speaks for itself.
It's silly to equate Chapter 11 bankruptcy protection with direct government subsidies. Chapter 11 is a legal, time-buying alternative dependent on plans approved by the Courts that allow a company to restructure itself and debt in an effort to pay their creditors what's owed rather than everyone fighting over the small crumbs left from an outright Chapter 7 liquidation. It's also not in any way, shape, or form "convenient" for any party.
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Search wikipedia, it is axiomatic that the US carriers possess scale and scope beyond most other competitors. By revenue, passengers carried and a few other metrics, US carriers dominate the top 10.
As one of the early 'adopters' of a US style "free trade-Open skies" arrangement The Netherlands experienced first hand the impact when capacity and constraint is removed and a dominant "trading partner" swamps a route.
It is argued that the experience of "US style Free Trade" slowed the deregulation process in Europe
Ironically whether a government owns and supports(as alleged) a national carrier or a government negotiates asymmetric trading relationships the outcome is similar for the airline with bigger scale.
Chapter 11 has been a regular labour unit cost reduction strategy for US carriers for decades. It could be argued that this remedy is government subsidy.
Monopoly is only a bad thing when you don't own one.
Yes!
Search wikipedia, it is axiomatic that the US carriers possess scale and scope beyond most other competitors. By revenue, passengers carried and a few other metrics, US carriers dominate the top 10.
As one of the early 'adopters' of a US style "free trade-Open skies" arrangement The Netherlands experienced first hand the impact when capacity and constraint is removed and a dominant "trading partner" swamps a route.
It is argued that the experience of "US style Free Trade" slowed the deregulation process in Europe
Ironically whether a government owns and supports(as alleged) a national carrier or a government negotiates asymmetric trading relationships the outcome is similar for the airline with bigger scale.
Chapter 11 has been a regular labour unit cost reduction strategy for US carriers for decades. It could be argued that this remedy is government subsidy.
Monopoly is only a bad thing when you don't own one.
Search wikipedia, it is axiomatic that the US carriers possess scale and scope beyond most other competitors. By revenue, passengers carried and a few other metrics, US carriers dominate the top 10.
As one of the early 'adopters' of a US style "free trade-Open skies" arrangement The Netherlands experienced first hand the impact when capacity and constraint is removed and a dominant "trading partner" swamps a route.
It is argued that the experience of "US style Free Trade" slowed the deregulation process in Europe
Ironically whether a government owns and supports(as alleged) a national carrier or a government negotiates asymmetric trading relationships the outcome is similar for the airline with bigger scale.
Chapter 11 has been a regular labour unit cost reduction strategy for US carriers for decades. It could be argued that this remedy is government subsidy.
Monopoly is only a bad thing when you don't own one.
Perhaps one could argue that Chapter 11 is a "government subsidy", but since it doesn't involve taking sums of money from the government, they'd be wrong. It's purpose is for the Company to pay it's debts through continued operation, not the taxpayer. All Chapter 11 does is give business a temporary chance to stop the bleeding, bind the wound, and remain alive to try and dig itself out of a hole pay debts by holding the creditors at bay for a period of time as long as there's a legitimate plan. It doesn't in any way guarantee success, and Chapter 7 liquidation is still a risk. Anyone thinking otherwise need only take a look at the list of U.S. airlines that don't exist anymore.
Last edited by PukinDog; 22nd Sep 2018 at 04:35.
Chapter 11 is a legal instrument which is ratified in the courts so it is not incorrect to characterise it as a government-sponsored subsidy.
It may not involve taking sums of the money from the government but it allows a company to write off/not meet its financial obligations using a government ratified procedure.
So essentially US the government is using its position to bring financial aid/relief to companies as it sees fit.
It may not involve taking sums of the money from the government but it allows a company to write off/not meet its financial obligations using a government ratified procedure.
So essentially US the government is using its position to bring financial aid/relief to companies as it sees fit.
If the U.S. nationalized it's air carrier ops, did away with all domestic competition, and operated a truly government-subsidized, national airline at home and abroad like the ME3 etc pumping money into it at will, the world would know it and even in hard times, there would be no hard times. They could operate at a loss forever to undercut the world competition.
If Chapter 11 is "essentially" government direct financial support, then why have so many that filed Chapter 11 gone on to Chapter 7 and liquidated? Did someone in the government forget to turn on what some have argued is "essentially" a money faucet that day?
Last edited by PukinDog; 22nd Sep 2018 at 07:32.
Now you're starting to really stretch reality - the US government can't afford to provide healthcare to its own citizens, let alone fund an airline to move them around the place. So yes, there would certainly be hard times.
Additionally, the ME3 don't use tax payers money to fund the airlines because there is so little tax paid by the citizens (a mere 5% VAT in the UAE and no income tax etc.). Myriad other social and human rights issues aside, there is no robbing of the poor to pay for the tax cuts of the rich in the Middle East.
I don't have a dog in this fight but it pisses me off when Americans whinge about this issue when the real fact is simply that the US carriers offer a comparatively crap product so go running to their politicians when they're the ones getting a towelling from the competition.
The same thing happened when Airbus won the tankering contracting from the USAF - Boeing went crying to Washington and basically used extortion tactics to have the contract referred again so they could win it. No doubt after some entirely above board and legitimate lobbying.
So don't defend the US carriers from some holier than thou position because the situation in US politics and industry stinks to high heaven and complaints like this against foreign competition are simply hypocritical.
Additionally, the ME3 don't use tax payers money to fund the airlines because there is so little tax paid by the citizens (a mere 5% VAT in the UAE and no income tax etc.). Myriad other social and human rights issues aside, there is no robbing of the poor to pay for the tax cuts of the rich in the Middle East.
I don't have a dog in this fight but it pisses me off when Americans whinge about this issue when the real fact is simply that the US carriers offer a comparatively crap product so go running to their politicians when they're the ones getting a towelling from the competition.
The same thing happened when Airbus won the tankering contracting from the USAF - Boeing went crying to Washington and basically used extortion tactics to have the contract referred again so they could win it. No doubt after some entirely above board and legitimate lobbying.
So don't defend the US carriers from some holier than thou position because the situation in US politics and industry stinks to high heaven and complaints like this against foreign competition are simply hypocritical.
However, if as you assert Chapter 11 is a "subsidy" merely because it's a legal mechanism linked to a government-run court system, then isn't the illegality of Unions and right to strike to negotiate for higher worker salaries and benefits a "government subsidy" the ME3 enjoy?
There's some real stink for you and the ME3 all operate under that condition; No Unions. No collective bargaining. No striking or though will go to jail. No Rights. The power to dictate salary and conditions, no negotiating necessary, ever. Most who go on about the "crap" American product and the "superior" ME one always do so while consciously avoiding talking about the crap salaries and working conditions and no Rights of those providing it while ignoring that almost every aspect of US airlines are unionized and working under negotiated contracts.
I spent over a decade living and working in the ME myself and have loads colleagues working at ME as well as US airlines, and any comparison as far as being a worker bee employee is concerned there's no comparison. Just like Dubai loves to advertize and present it's shiny modern bizarrechitecture to the world but hide the deaths and conditions of those who build it, the shiny wide-body aircraft hide the lack of modern work rules and conditions. The idea that any of the ME3 are "modern" entities of the business world just because they have shiny aircraft is a joke. They might fool some people, they may have fooled you, they certainly fool themselves, but they operate in the corporate Dark Ages.
Having spent over a decade in the Kingdom alone plus too much time in the UAE, I have to laugh at your statement "There's no robbing of the poor to pay for the tax cuts for the rich in the Middle East". The truly poor of the region, the expat Bangladeshis, Pakistanis, Indians, Malaysians, Egyptians, etc etc etc doing the actual work in the UAE and the Kingdom, Kuwait, Bahrain...are robbed every day of the little money they make by the incestuous, power family-held phone companies, housing groups, utility companies, and so on where there is no competition, there's only another well-placed relative's turn at squeezing them out of every Riyal or Dirham possible before it can be sent home. They're also robbed of their lives with no recourse for abuse, lured there by false promises.
How anyone from a worker-respecting, modern society where their rights are recognized and protected can sing the praises of companies literally and figuratively built on the backs of those who have virtually none is beyond me, but I guess that's what spending millions on Public Relations, glossy magazine ads, scenes in Hollywood movies, and sponsoring soccer teams gets you.
Another Btw...the bottom 45% of income earners in the U.S. don't pay any Federal income tax. Quite obviously, you didn't know that so if you want to talk about the government "robbing" a certain level of earners to pay for things please learn the facts instead of false rhetoric that seems handy to make an inaccurate, even ridiculous comparison with as you did.
Last edited by PukinDog; 22nd Sep 2018 at 16:51.
Moderator
This thread is not being closed due to it's reference to Etihad, rather a thread titled "Chapter 11 and other irrelevant matters" does not belong in the Dunnunda forum. 
