Moderators: richierich, ua900, PanAm_DC10, hOMSaR
alexrg wrote:I've seen several articles published over the last couple of days on some airline industry blogs regarding how it is hypocritical for the US airline industry to be for EAS subsidies but against subsidized Gulf carriers. Two examples:
http://liveandletsfly.boardingarea.com/ ... subsidies/
http://onemileatatime.boardingarea.com/ ... -argument/
I would disagree with the opinion that since EAS and the Gulf carriers both involve subsidies of some kind means it's wrong to be for one and against the other. EAS is intended to provide areas without air service to areas without it, while it can be argued that subsidies given to Gulf carriers by their respective governments are intended to give them an advantage over their competitors (say what you want about this argument). The reality is that these subsidies are very different from one another and it doesn't make sense to argue that being for one and against the other is somehow hypocritical or only being for something when it benefits you.
What do you think? Is it wrong to be for some subsidies but against others, or is it wrong to consider the two subsidies similar and thereby argue that it's hypocritical to be for EAS but be against government subsidies to Gulf carriers?
enilria wrote:Not only is EAS the same thing, what's worse are airport revenue bonds. The USA carriers complain all the infrastructure of the ME3 is subsidized by the government. Airport Revenue Bonds in the USA are tax free (huge subsidy) and are backed up government credit because the USA is one of the few remaining large countries with government owned airports. The combination of both massively subsidizes the interest rate. They are routinely used not only for terminals, but other capital items used exclusively by a single airlines. Buildings such as airlines headquarters, airline offices, maintenance bases, hangars, etc are all financed with these subsidized bonds in the USA to the tune of probably $70-100 billion. 3 less points on the interest rate is a $3 billion annual subsidy.
Varsity1 wrote:Didn't realize EAS was detrimentally dumping capacity on international routes.
eye roll
Aesma wrote:Basically the US government/citizens consider it's good policy to spend money to support EAS communities.
Meanwhile the UAE governments consider it's good policy to spend money to support airlines which bring millions of people to their countries.
c933103 wrote:Come to think of it, yes some governments might have spent money in subsidizing their carrier and make them able to provide lower fare than others so as to attract visitors to visit or transit in their country, but it is what the government attempts to do in order to better their position. Thus, it also serve the purpose of better connect their place to the world.
I think it should be looked at in this way: if government of certain nation believes that having a carrier with extensive network will benefit their local economy and livinghood, even if the airline itself is making some losses from it, there are still every reason for the government to support the airline as long as the boost it provide to the airline is larger than that. I think if you treat the entire country as a corporation, it is somewhat similar to that in some larger corporation, the growth and survival of weaker department are supported by stronger department for the betterment of the entire corporation's benefit.
32andBelow wrote:c933103 wrote:Come to think of it, yes some governments might have spent money in subsidizing their carrier and make them able to provide lower fare than others so as to attract visitors to visit or transit in their country, but it is what the government attempts to do in order to better their position. Thus, it also serve the purpose of better connect their place to the world.
I think it should be looked at in this way: if government of certain nation believes that having a carrier with extensive network will benefit their local economy and livinghood, even if the airline itself is making some losses from it, there are still every reason for the government to support the airline as long as the boost it provide to the airline is larger than that. I think if you treat the entire country as a corporation, it is somewhat similar to that in some larger corporation, the growth and survival of weaker department are supported by stronger department for the betterment of the entire corporation's benefit.
I agree with this. I don't think anyone in their right minds would want to travel to Dubai without very low fares.
Varsity1 wrote:Didn't realize EAS was detrimentally dumping capacity on international routes.
eye roll
BoeingGuy wrote:Yes, they do. The airlines are not politicians with deep beliefs, they are companies looking out for their bottom line. They will be for what is good for them and against what is not.Varsity1 wrote:Didn't realize EAS was detrimentally dumping capacity on international routes.
eye roll
You either didn't read, or didn't understand the OP's point. It's clear to me.
He's noting that the US3 may support subsidies for EAS when it benefits them to do so; yet protest subsidies for Gulf carriers because its'not in the US3's best interesting. In other words, I think he's asking if we feel this is a double standard. US3 carriers support subsidies when it's in their own best interest, but protest them when it's not.
BoeingGuy wrote:He's noting that the US3 may support subsidies for EAS when it benefits them to do so; yet protest subsidies for Gulf carriers because its'not in the US3's best interesting. In other words, I think he's asking if we feel this is a double standard. US3 carriers support subsidies when it's in their own best interest, but protest them when it's not.