Delta Pilots End Era of Luxurious Pay

devil wrote:
mortgage companies), interest rates were surely much lower than market
value as a result. In my book it's tantamount to a subsidy. That never
got repaid.

And in the event they lose their shirt, it's the taxpayer that holds the
bag.

When you start a business, if your credit history isn't good enough, you get a
co-signer whose credit history gives the bank the necessary nudge to approve
the loan. The co signer doesn't dish out any money. Is this a subsidy ?

The subsidy occurs if the co-signer has to dish out money because you can't
fulfill your obligations. Until that happens, no subsidy has occured.

In the case of Chrysler, many governments pitched in BTW, not just the US
government. And it was good business savvy for each government since the
number of jobs involved and the resulting uninsurance payoffs should Chrysler
have defaulted would have been significant and would have trickeled down to
the rest of the economy.

Now, in the case of Airbus, unless we can see the specifics of the launch aid
it has received, we can only speculate. If they have a very flexible repayment
schjedule, what matters is whether interest is still accrued when they skip payments.

If the government does compensate the banks for interest accrued during
periods where Airbus need not repay the loan, then yes, it would be a subsidy.
But to the governments, considering he jobs created and ensuing economic
activity, those payments are probably good business.

"nobody" wrote in message
...

Now, in the case of Airbus, unless we can see the specifics of the launch
aid
it has received, we can only speculate. If they have a very flexible
repayment
schjedule, what matters is whether interest is still accrued when they
skip payments.

Is it true that, in some cases, the European governments have acted as
"investors"
in Airbus projects? Not a "loan", not a "subsidy". They hope to be paid
back when
the product sells.

This sounds like an interest-free loan to me, and it need never be paid back
if the product fails. Can't get much better government support than that.

"nobody" wrote in message
...

Now, in the case of Airbus, unless we can see the specifics of the launch
aid
it has received, we can only speculate. If they have a very flexible
repayment
schjedule, what matters is whether interest is still accrued when they
skip payments.

Is it true that, in some cases, the European governments have acted as
"investors"
in Airbus projects? Not a "loan", not a "subsidy". They hope to be paid
back when
the product sells.

This sounds like an interest-free loan to me, and it need never be paid back
if the product fails. Can't get much better government support than that.

John Mazor wrote:
There's also a bias against network carriers. If you're a low-cost carrier,
most of your service is point to point. Network carriers run a lot of
traffic through connecting flights at hubs, so some of the fees are applied
twice to the ticket price, once for each segment.

But the legacy carriers ended up charging less for flights going through hubs
and more for the privilege of flying direct. Artificial pricing that didn't
reflect reality. That is the big difference between legacy and low cost carriers.

And low cost carriers don't generally offer unsustainable rates. Their goals
are to be profitable, not to kill other carriers.

Legacy carriers had been conditioned to expects cycles of very profitable and
cycles of losses. So employees were also conditioned to ask for hefty raises
even during downturns because they knew the airline would recover and make
tons of profits for a few years.

What is happening now is that airlines and employees are finding out that they
aren't dealing with the normal cycle of ups and downs and that some serious
permanent changes are needed.

What is missing now is some real changes in legalcy airlines schedules/operations

On Sat, 13 Nov 2004 22:19:30 -0500, nobody wrote:

[ Snip ]

When you start a business, if your credit history isn't good enough, you get a
co-signer whose credit history gives the bank the necessary nudge to approve
the loan. The co signer doesn't dish out any money. Is this a subsidy ?

The subsidy occurs if the co-signer has to dish out money because you can't
fulfill your obligations. Until that happens, no subsidy has occured.

In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.

That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.

Malc.

On Sat, 13 Nov 2004 22:19:30 -0500, nobody wrote:

[ Snip ]

When you start a business, if your credit history isn't good enough, you get a
co-signer whose credit history gives the bank the necessary nudge to approve
the loan. The co signer doesn't dish out any money. Is this a subsidy ?

The subsidy occurs if the co-signer has to dish out money because you can't
fulfill your obligations. Until that happens, no subsidy has occured.

In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.

That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.

Malc.

Malcolm Weir wrote:
In this case, the government backing meant that the risk to the lender
was reduced (actually, eliminated), so the lender lends at (say) 6%
instead of 24%.

That's the subsidy: the difference in what they had to pay for the
money, versus what unbacked loan would have cost.

Semantics.

Is a subsidy some amount actually disbursed by a government (or a direct
revenu loss due to a tax breaks), or is it just the signature of a piece of
paper that gives a company a competitive edge ? Or both ?

If a government provides an environment that fosters creation and expansion of
enterprises, is that a subsidy or just a government doing a good job ?

If a governmnmet helps a corporation sign a better deal with the greedy banks
by assuming some of the risks, it is definitely "help". But is it a subsidy ?
No money gets exchanged.

If a government puts in a bankrupcy law that helps companies weather a bad
storm is that a subsidy ?

"nobody" wrote in message
...

What is missing now is some real changes in legalcy airlines
schedules/operations

They need to get to understand that flying today is no longer a luxury for
the few but a commodity for the many. This will dramatically change the
entire way the business is being run and the priorities set.


Nik

Nik wrote:
They need to get to understand that flying today is no longer a luxury for
the few but a commodity for the many. This will dramatically change the
entire way the business is being run and the priorities set.

Service levels are just a small portion of the total costs.

While AA was out calculating the pennies saved by not carrying a spare spoon
on its flights, it was staying blind to the mass inefficiencies of its
schedules which requires mucy larger fleet than necessary, more gates at hubs
and thus more ground staff etc etc etc.

In terms of "luxury", even intercity buses in australia show movies for free.
Heck, Jetblue shows TV on board its planes.

The $12 meal is nowhere near the reason legacy airlines wanted to charge $400
more for a flight compared to a low cost carrier. Just an easy excuse for
legacy carriers to blame it on the meal while not fixing the real causes of
its high cost structure.

Nik wrote:
They need to get to understand that flying today is no longer a luxury for
the few but a commodity for the many. This will dramatically change the
entire way the business is being run and the priorities set.

Service levels are just a small portion of the total costs.

While AA was out calculating the pennies saved by not carrying a spare spoon
on its flights, it was staying blind to the mass inefficiencies of its
schedules which requires mucy larger fleet than necessary, more gates at hubs
and thus more ground staff etc etc etc.

In terms of "luxury", even intercity buses in australia show movies for free.
Heck, Jetblue shows TV on board its planes.

The $12 meal is nowhere near the reason legacy airlines wanted to charge $400
more for a flight compared to a low cost carrier. Just an easy excuse for
legacy carriers to blame it on the meal while not fixing the real causes of
its high cost structure.