This is a topic that could easier be a multi-week research
paper with all the intricacy’s that are involved. I must have read “is it fair” about three
dozen times in regards to the accusation that Emirates, Etihad, and Qatar being
“propped up” by their respective government.
Is it fair that General motors were bailed out? AIG? The big banks?
Those “Green Energy” companies? I think the major difference in opinion starts
with a lack of understanding of governments.
Most, ok some, have a fairly good idea how our government works, and
that we the people pay taxes to the government pot for our elected officials
(and their lobbyists) to do what they see fit, good or bad, with our hard
earned dollars. Is it a good idea for
our government to continue running the United States Postal Office since losing
$46 Billion dollars since 2007, close to $5 Billion a year? No.
That I think is the drastic difference when opposition says
that the 3 major gulf airlines don’t need to worry about a bottom line, and can
sustain constant losses. (onemileatatime, 2015)
They relate what the US government has done for BIG U.S. companies,
bailed them out, propped them up, regardless if they more poor business
decisions. The Gulf States are different
in this regard; from my experience they don’t fund a losing horse. The leaders in the U.A.E. have taken
proactive steps for years to develop their respective Emirates to use natural
resource money that they have currently, develop a robust infrastructure to
develop economic growth and future revenue as the oil reserves (at least in the
Dubai Emirate) are expected to run dry within the next 20 years or so. Also different that the Royal families do
have great personal wealth, are generally appointed high governmental/military
positions, and do venture into large business opportunities locally and
abroad. CEO of American Airlines Doug
Parker views this a conflict of interest. (onemileatatime, 2015) So where I was
going with this was that Dubai (Emirates) and Abu Dhabi (Etihad) may very well
have funded their initial start up, and capital for ridiculous growth, but both
airlines are now showing profits, and self reliant.
US carriers have no place to complain either. In 2003, Congress passed a $2.9 billion
dollar financial-aid package for the carriers. (travel weekly, 2004) It is said
that the airlines have received around $8 billion dollars from the Federal
Government since 9/11. US Airlines have also used the federal government CH. 11
bankruptcy laws to shed unwanted debt and benefits, and received funds thanks
to another bill passed in Congress, the “Airline Bail out Act”. (US Airlines
backdoor bailout, 2011) Here’s a chart from a research document I
found online, of “just” the cash grants to airlines.
This document titled “short changed” (Briones and Meyer,
2008) has all the information you’d want to know about loans, grants, tax
exemptions, bailouts, etc., regarding the Airlines and our Federal Government.
The Export Import bank of the United States, essentially
finances and insures foreign purchases of U.S. goods, of customers who are
unable or unwilling to take the credit risk (Exim, 2015) and it does not
complete with private sectors. In regards
to Boeing, in 2007 and 2008, 65% of the Export-Import bank guarantees went to companies
purchasing Boeings. 2012, that number increased to staggering 85%. No wonder they’ve been fighting to keep the
EXIM Bank alive…
Again, HERE is that article, on all the money the airlines receive (from us tax payers). They should probably stop crying about fairness, and take a few lessons from the Gulf Carriers instead.
Reference:
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