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Air traffic up, forecast dim–Europe owning US carriers?

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Japan and other countries own a substantial portion of the United States national debt, according to my financial advisor. A little scary to think what might happen if they all decided to call it in at the same time.

And other financial guys are saying air traffic is going up (faster, in fact, than capacity), but as indvidual fares continue to drop and interest and taxes don’t, the airlines are headed for serious red ink in a couple of years. Now comes the European Union insisting they should be allowed to fully own some of the U.S. air carriers that are looking for investments.

I’m a great believer that the leveling effects of globalization are all-told a good thing. But I can just imagine how hard it might be for a CEO and board of directors to give up control of their company to a foreign investor–unless of course the financial rewards were so sweet the pain would fade quickly.

Would we passengers experience a change in customer service–good or bad? What about prices? Who knows, but I think that executives in more and more countries are beginning to think more alike than not. Maybe it just won’t matter after all.

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  • alienboy

    I hope this is written as a genuine enquiry. It could come across as presumptious, ignorant, xenophobic or really really stupid…

  • Tristan

    Capitalistic societies operate under the premise that competition is the correcting and all-important feature in the marketplace; “survival of the fittest”: the strong will prevail and the weak vanish.

    According to this theory—the market will not “support” the “bad” businesses and they will fail, leaving the better run stronger businesses to survive.

    All I know is that my father was a pilot in the Air Force for 30 years and would never get on a commercial plane; his reason being that their maintenance was almost non-existent because of the dollar/cost “factor”: do as little as needed that costs money…..

    The Air Force planes, on the other hand, were maintained almost “perfectly”–especially the jets my father flew for the VIP wing out of Andrews AFB which flew the President and all the big politicians, etc. THOSE planes were kept pristine and no expense was spared in their constant maintenance.

    Just make sure you know where the parachute is if you DO fly on a commercial plane.

  • http://www.biomednews.org Barbara Payne

    It is written as a genuine inquiry, alienboy. But thank you for pointing out how it could be taken–my apologies if it was taken so by anyone. The article I referred to mentioned the fact that US law currently allows investors from other countries to own up to 25% of an airline. The US government offered the European Union the right to own up to 49 or 50%. The Union’s representative refused, and said they wanted to be able to own 100%. My experience with Europe is that customer service is often better than in equivalent businesses in the US (though not always to Americans in some countries).

    And Tristan’s point about well-run is very true. The only way to survive in business today if you’re not well-run is to lie about your numbers til you get caught.

    As for maintenance, I know that air travel in general is now the safest of any mode of transportation…but maybe I’ll still find out where the parachutes are.

  • alienboy

    Thasnks for the clarification there, Barbara. I don’t think ownership will make a whole lot of difference, the market dynamic is still king