Air Obama

July 8, 2009 at 4:42 pm Leave a comment

From WSJ

Yet the Obama Justice Department has come out of the blocks trying to scuttle a promising experiment to stabilize the chronically unprofitable U.S. airline sector. The new administration seemingly won’t let companies fail, and won’t let them succeed either.
The airline industry’s self-help solution has been an evolving trio of international alliances, partly blessed with “antitrust immunity” by the U.S. Department of Transportation. One, the Star Alliance led by United and Lufthansa, is currently poaching Continental from a rival alliance, SkyTeam. DOT was set to approve their application last week when Justice belatedly intervened with a 58-page complaint about why the pact should be restructured.
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To anyone drilled in the antitrust mindset, Justice’s argument won’t seem outlandish. It frets about reduced competition on this or that international route, and sees little chance of competitive entry by new carriers despite fat profits that presumably would be on offer. It argues, in a fashion typical of antitrust these days, that nonstop flights are a market unto themselves, so connecting flights on the same routes don’t count.
But the real fulcrum is Justice’s insistence, or plea, that DOT should set a high bar for antitrust immunity, because antitrust enforcement has been such a gosh-darn boon to consumers”

Great, does the next thing we need is a government-owned airlines. There are a lot of services that the government performs more effectively than the private sector including healthcare insurance.

However, it is my opinion that the government needs to stay out of the airline industry. We already two airlines that a publically owned airline would never match the efficency which is Jetblue and Southwest.

In my opinion, the government needs to stay out of the airline industry


Entry filed under: aviation, economy. Tags: , , .

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