State of the Airlines

Thursday, January 06, 2005

OPINION: Why are airlines allowed to linger in bankruptcy

Internal and external observers all hammer on the terrible state of US Airways and United which causes me to wonder why the bankruptcy courts are allowing them to wallow in the muck of an ugly Chapter 11. Why keep them around? My answer is timing, in this case factor in one election and one upcoming State of the Union address. The airline industry is poised to expel a large number of worker into the ranks of the unemployed. The Bush Administration did not want to talk about this during their campaign and they don't wanna talk about it in the State of the Union. So enter the bankruptcy courts to prop up the airlines for a while (yes, I am aware of the whole checks and balances thing...but do the math). Its basically privatized welfare and it allows a certain amount of controlled failure within the industry. I claim victory on this little conspiracy theory if United or US Airways liquidates within the first quarter of 2005 (its my blog, I make up the rules).