U.S. Nationalized Airlines, Could this happen?

In the midst of a world wide pandemic, and with this tragic event taking place the economies of many countries are struggling to stay afloat. Of all the industries impacted, the airlines may be hit the hardest.
image https://www.bizjournals.com/chicago/news/2019/03/13/american-airlines-pilots-say-boeing-max-8-is-safe.amp.html

Just as in 2008/9 when the world governments bailed out the banks, and as a result, took stock in these companies, it seems they are looking or have done the same with the airlines. Alitalia airlines is now nationalized once again in Italy, Lufthansa is on the verge of becoming nationalized as Germany looks to keep them in the air. Australia and a few other countries are also looking to keep their air travel open post pandemic. So what are the odds that the U.S. does the same?

Fresh off the heals of delta saying they are 7000 plus pilots over staffed, the 737 Max incidents, American, United, Southwest, Etc., how long can they hold on? Would the government really let them go under? I don’t believe so. They will most likely, and already have, offered them bailout money with strings attached. Such stipulations as not laying employees off and keeping certain routes open among other things. In a way this is a form of nationalization. The major airlines are to big to fail, but also a necessary infrastructure in the country. If one or two go under, typically this would be good for the rest of the industry, as the better run companies will survive. But this could be bad for the consumer, as less options equal higher prices. For such an essential sector to the economy, the government could not let this happen. Congress has already approved money for the airlines and industry, and they want to approve more. But there is a catch, they are asking for more control and oversight for each company that accepts the money, one of the reasons Boeing did not accept. So at what point do airlines start accepting more and conceding more control to the government?

Could this be a good thing? My personal opinion is no. Historically government run or owned businesses and infrastructure is a disaster of itself. They will become bloated, lazy, and incompetent. Not to mention it will drive other airlines in to the ground as well. It is a slippery slope that we don’t want to start down. Just look at Amtrak as one example of how profits never returned after the government started propping them up. The same could happen to airlines. There profits will never return to what they were if government steps in.

Some articles on this subject

https://www.forbes.com/sites/jamesasquith/2020/04/01/could-airlines-be-nationalised-as-italy-takes-full-ownership-of-alitalia-will-more-airlines-follow/amp/

https://english.kyodonews.net/news/2020/05/09ea511d52d7-urgent-thai-govt-oks-restructuring-thai-airways-through-bankruptcy-court.html

https://slate.com/technology/2020/05/airlines-flying-after-coronavirus.amp

I welcome the discussion and insight on this possibility and the future of the industry!

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I have a few rebuttals to this. First, you mentioned bloated, lazy and incompetent. That’s a culture problem in the USA, not a union or private company issue. This stems from lax rules, procedures and follow through with getting rid of dead weight employees. I’m a firm believer in getting rid of people that can’t pull their weight and underperform. When I was a construction foreman in the union, I used to send people home all of the time and it got me in trouble. I didn’t care though, my name and my company’s reputation was on the line, don’t like go work for someone else.

Second, government bail outs can be successful. The big 3 (Chevy, Chrysler, Ford) we’re bailed out some years ago with some stipulations. All of them are still manufacturing vehicles and have improved the quality of products they sell. They are far from perfect but the government assistance helped out in a big way and I’m thankful for that.

Last, many industries including air travel will be severely impacted by this for many years to come. Nothing will be the same after this pandemic. We’ll have to evolve, tweak and maneuver our ways to stay innovative and profitable. I truly believe that the ramifications of COVID-19 will have an everlasting impact on everyone and everything. Hopefully, we can work together and all do our part which includes taking care of one another.

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I agree with everything you said. I think you misunderstood when I said bloated and lazy, it was not pointed at any union or private company. I was saying that “government“ (yes in the USA) is a very lazy and bloated bureaucracy, I should know, I work for them. Lol. You are right, it is a problem we have and needs to be resolved.

Bailouts are necessary and do help, but didn’t some of the automakers end up going out of business anyways? I do think the that federal money would be great for airlines, but let them do with it what they NEED to do, and not what the government wants them to do.

What is our part to do? Was this in regards to bailing the airlines out? Or just COVID and taking care of others.

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Our part would be supporting both small and large business, maintaining safe distancing and practicing better personal hygiene altogether.

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