Neoclassical bizarreness!!!

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

David Shemano

It seems to me that the airlines were a coddled oligopoly for 50 years and
the unions (and shareholders) were able to share in the benefits of the
oligopoly at the expense of the flying public.  Deregulation changed all of
that and, like the Hebrews who had to wander in the desert for 40 years to
work off the slave mentality, it is taking a generation for management and
the unions to adjust.

^^^
CB: On this analogy, the airline management and unions were like slaves to
whom in the past before deregulation ?

 If they were an oligopoly , weren't they more like masters than slaves ?
So, they had to work off the master mentality and think more like slaves ,
maybe ?

Slaves to whom ? Wallstreet , so to speak. J.P. Morgan and Associates.

^^^^^


I do agree with Robert Crandall that the ability of carriers to operate in
chapter 11 does have a prejudical effect on the other carriers.  I am not
sure of the solution to that problem.  There are specific provisions in the
Bankruptcy Code that give aircraft lessors and secured lenders special
rights -- they can take back their aircraft unless the airline cures any
defaults and agrees to perform all obligations within 60 days after the
bankruptcy is filed.  However, like the old joke that if you owe the bank $5
million you are in trouble, but if you owe the bank $500 million the bank is
in trouble, lessors and lenders are reluctant to take back their equipment
and would rather work out a deal.

^^^^^^
CB: Do you know where I can get in trouble with a $5 million loan ?