MY ANSWERS IN CAPS
--------------------------------------------------------------------------------
I admit that I didn't know CDA in the good old days. But at 7000 employees at peak, it had to have always been a government employment scheme. Probably less than 500 of them were actually needed to run the airline. I'M JUST GIVING YOU A FACT. WHAT THEY WERE FOR IS YOUR OPINION. 500 IS DEFINITELY NOT ENOUGH. LOOK AT ANY EMPLOYEES DIVIDED BY FLIGHTS CALCULATION AND DOMINICANA AT ITS PEAK IS WELL IN LINE. REMEMBER THAT THE PILOTS AND CREW FLEW 12 TIMES A MONTH ONLY AND IN NEW YORK ALONE DURING THE PEAK THEY HAD 460 EMPLOYEES.
With a few exceptions (Southwest, indeed), airlines have been an irrational business (SO IN A FREE MARKET, WHY ARE THEY AROUND? WHAT DO YOU WANT TO TAKE TO GO TO NY NEXT, A BOAT?--OTHER EXCEPTIONALLY PROFITABLE AIRLINES HAS BEEN MIDWEST, SOUTH AFRICAN AIRWAYS, AIR EUROPE, AIR BERLIN, ICELANDAIR, AGAIN, TACA, LAN, TAM, THE NEW AVIANCA, COPA--ALL ARE PRIVATE AND HAVE BEEN PRIVATE FOR OVER 10 YEARS). And that goes for the USA too. Government loans only helped (but didn't save) two airlines in the US after 9-11 - UA (DOING INCREDIBLY WELL NOW) and US (DOING WELL AFTER MERGER WITH AWA). What saved those airlines, and others, were liberal US bankruptcy laws (WHICH CHANGED IN SEPT of 2005) that allowed debts to be wiped out (NO, DELTA STILL HAS 60% OF THE DEBT IT HAD, UA KEPT OVER 70%, and NW KEPT 75%) over and over while Boeing, Airbus, GE Capital, etc., provided more and more fresh financing to ensure their own equipment sales (IS THAT IRRATIONAL? I WOULDN'T CALL THEM "BAD" COMPANIES, SO THEY HAVE TO HAVE A REASON).
Europe and Latin America tend to protect and subsidize their airlines (GIVE ME A CASE IN THE PAST 10 YEARS, SERIOUSLY). The US just wipes out its airlines debts (WRONG--READ THE FILINGS AT SEC.GOV) from time to time.
BOTTOM LINE, THE US DOES NOT HELP OUT ITS AIRLINES. IT DID IN 2002 AND 2003 FOR LOSSES DIRECTLY RELATING TO SEPTEMBER 11 AND ITS FALLOUT (Air Transportation Stabilization Board ) AND YES IT WAS A LOT OF MONEY US$15BN WHICH TRIMMED LOSSES DOWN FROM US$54 TO US$39BN DURING THE 2001-2005 PERIOD. HOWEVER THERE WERE STILL LOSSES AND WHAT YOU IMPLY IS THAT THE US GOVERNMENT IN SOMEWAY "SAVED THE WORLD." IT DIDN'T--IT'S NOT IT'S BUSINESS TO DO SO, HENCE WHY I VEHEMENTLY TELL YOU, THE US GOVERNMENT AND MOST INDUSTRIALIZED NATIONS DO NOT BAILOUT AIRLINES. THEY DO STABILIZE AN ESSENTIAL INDUSTRY--AGAIN WHY ARE YOU ANTAGONIZING AIRLINES--HOW DO YOU EXPECT TO LEAVE YOUR ISLAND, OR WHEREVER YOU LIVE, NEXT? BY DONKEY? SO IT IS UNDERSTANDABLE THAT THEY HELP THEM OUT IN TIMES OF CRISES (IE 9.11) BECAUSE AIRLINES ARE QUASI-PUBLIC GOODS.
GOING BACK TO DOMINICANA, THE POINT OF THIS THREAD, OFCOURSE IT RECEIVED MONEY FROM THE GOVERNMENT, AND FRANKLY, IT WAS FULLY BAILED OUT MORE THAN ONCE. IT PROBABLY WOULD NOT HAVE SURVIVED 51 YEARS HAD IT NOT BEEN BAILED OUT BY BALAGUER A GAZILLION TIMES. HOWEVER--AND A BIG HOWEVER--MY MAIN POINT IS THAT WHAT LED TO ITS LOSSES WAS POOR MANAGEMENT AND ABUSE BY THE SAME GOVERNMENT THAT HELPED HER. AS A STANDALONE BUSINESS DOMINICANA WOULD HAVE DONE WELL, QUITE WELL, IN FACT. LIKE WITH ALL AIRLINES, IT WOULD HAVE HAD ITS PEAKS AND TROUGHS GIVEN THE CYCLICAL NATURE OF THE BUSINESS, HOWEVER AIRLINES DO SURVIVE THEM--AGAIN--YOU STILL FLY THEM AND WILL PROBABLY FLY THEM ALWAYS AND TRUST ME NO SELF-RESPECTING 1ST WORLD GOVERNMENT WILL OUTRIGHT SAVE AN AIRLINE. AS WITH ANY INDUSTRY, IT WILL HELP STABILIZE IT AND THIS, MY FRIENDS, IS FINE.
BUT AGAIN, GO TO THE FILINGS OF MIDWEST, AIR BERLIN, LAN, TAM, COPA, AMERICAN (I'M MAKING IT EASY SO YOU CAN CHECK 10 YEARS OF HISTORICAL FILINGS) SO YOU CAN SEE HOW DESPITE LOSSES SOME YEARS AND PROFITS THE NEXT, AIRLINES ARE GOOD GOING CONCERNS. I ALSO RECOMMEND READING: AIRLINE MONITOR FOR OCTOBER 2007 AS WELL AS ANY SH&E REPORT ON AIRLINES WHICH WILL ABOUND ON WHAT I'M TALKING ABOUT.
--------------------------------------------------------------------------------
I admit that I didn't know CDA in the good old days. But at 7000 employees at peak, it had to have always been a government employment scheme. Probably less than 500 of them were actually needed to run the airline. I'M JUST GIVING YOU A FACT. WHAT THEY WERE FOR IS YOUR OPINION. 500 IS DEFINITELY NOT ENOUGH. LOOK AT ANY EMPLOYEES DIVIDED BY FLIGHTS CALCULATION AND DOMINICANA AT ITS PEAK IS WELL IN LINE. REMEMBER THAT THE PILOTS AND CREW FLEW 12 TIMES A MONTH ONLY AND IN NEW YORK ALONE DURING THE PEAK THEY HAD 460 EMPLOYEES.
With a few exceptions (Southwest, indeed), airlines have been an irrational business (SO IN A FREE MARKET, WHY ARE THEY AROUND? WHAT DO YOU WANT TO TAKE TO GO TO NY NEXT, A BOAT?--OTHER EXCEPTIONALLY PROFITABLE AIRLINES HAS BEEN MIDWEST, SOUTH AFRICAN AIRWAYS, AIR EUROPE, AIR BERLIN, ICELANDAIR, AGAIN, TACA, LAN, TAM, THE NEW AVIANCA, COPA--ALL ARE PRIVATE AND HAVE BEEN PRIVATE FOR OVER 10 YEARS). And that goes for the USA too. Government loans only helped (but didn't save) two airlines in the US after 9-11 - UA (DOING INCREDIBLY WELL NOW) and US (DOING WELL AFTER MERGER WITH AWA). What saved those airlines, and others, were liberal US bankruptcy laws (WHICH CHANGED IN SEPT of 2005) that allowed debts to be wiped out (NO, DELTA STILL HAS 60% OF THE DEBT IT HAD, UA KEPT OVER 70%, and NW KEPT 75%) over and over while Boeing, Airbus, GE Capital, etc., provided more and more fresh financing to ensure their own equipment sales (IS THAT IRRATIONAL? I WOULDN'T CALL THEM "BAD" COMPANIES, SO THEY HAVE TO HAVE A REASON).
Europe and Latin America tend to protect and subsidize their airlines (GIVE ME A CASE IN THE PAST 10 YEARS, SERIOUSLY). The US just wipes out its airlines debts (WRONG--READ THE FILINGS AT SEC.GOV) from time to time.
BOTTOM LINE, THE US DOES NOT HELP OUT ITS AIRLINES. IT DID IN 2002 AND 2003 FOR LOSSES DIRECTLY RELATING TO SEPTEMBER 11 AND ITS FALLOUT (Air Transportation Stabilization Board ) AND YES IT WAS A LOT OF MONEY US$15BN WHICH TRIMMED LOSSES DOWN FROM US$54 TO US$39BN DURING THE 2001-2005 PERIOD. HOWEVER THERE WERE STILL LOSSES AND WHAT YOU IMPLY IS THAT THE US GOVERNMENT IN SOMEWAY "SAVED THE WORLD." IT DIDN'T--IT'S NOT IT'S BUSINESS TO DO SO, HENCE WHY I VEHEMENTLY TELL YOU, THE US GOVERNMENT AND MOST INDUSTRIALIZED NATIONS DO NOT BAILOUT AIRLINES. THEY DO STABILIZE AN ESSENTIAL INDUSTRY--AGAIN WHY ARE YOU ANTAGONIZING AIRLINES--HOW DO YOU EXPECT TO LEAVE YOUR ISLAND, OR WHEREVER YOU LIVE, NEXT? BY DONKEY? SO IT IS UNDERSTANDABLE THAT THEY HELP THEM OUT IN TIMES OF CRISES (IE 9.11) BECAUSE AIRLINES ARE QUASI-PUBLIC GOODS.
GOING BACK TO DOMINICANA, THE POINT OF THIS THREAD, OFCOURSE IT RECEIVED MONEY FROM THE GOVERNMENT, AND FRANKLY, IT WAS FULLY BAILED OUT MORE THAN ONCE. IT PROBABLY WOULD NOT HAVE SURVIVED 51 YEARS HAD IT NOT BEEN BAILED OUT BY BALAGUER A GAZILLION TIMES. HOWEVER--AND A BIG HOWEVER--MY MAIN POINT IS THAT WHAT LED TO ITS LOSSES WAS POOR MANAGEMENT AND ABUSE BY THE SAME GOVERNMENT THAT HELPED HER. AS A STANDALONE BUSINESS DOMINICANA WOULD HAVE DONE WELL, QUITE WELL, IN FACT. LIKE WITH ALL AIRLINES, IT WOULD HAVE HAD ITS PEAKS AND TROUGHS GIVEN THE CYCLICAL NATURE OF THE BUSINESS, HOWEVER AIRLINES DO SURVIVE THEM--AGAIN--YOU STILL FLY THEM AND WILL PROBABLY FLY THEM ALWAYS AND TRUST ME NO SELF-RESPECTING 1ST WORLD GOVERNMENT WILL OUTRIGHT SAVE AN AIRLINE. AS WITH ANY INDUSTRY, IT WILL HELP STABILIZE IT AND THIS, MY FRIENDS, IS FINE.
BUT AGAIN, GO TO THE FILINGS OF MIDWEST, AIR BERLIN, LAN, TAM, COPA, AMERICAN (I'M MAKING IT EASY SO YOU CAN CHECK 10 YEARS OF HISTORICAL FILINGS) SO YOU CAN SEE HOW DESPITE LOSSES SOME YEARS AND PROFITS THE NEXT, AIRLINES ARE GOOD GOING CONCERNS. I ALSO RECOMMEND READING: AIRLINE MONITOR FOR OCTOBER 2007 AS WELL AS ANY SH&E REPORT ON AIRLINES WHICH WILL ABOUND ON WHAT I'M TALKING ABOUT.
