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German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

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Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#171
post #141

Earlier quoted context omitted.

Perhaps because the claim "The way EU works is by letting monopolies in a few west European countries expand their market to east" is clearly ludicrous as a summary of how the EU works? I mean, the EU - ignoring the name changes over the years - had existed for over 30 years before the fall of the Iron curtain and nearly 50 years before admitting new members from the the East. The idea that the whole thing was set-up…

If it didn't work this way, protectionism wouldn't exist. There are various economics models which show Germany has benefited the most from creation of EU Sure countries in middle of Europe and east are improving their baseline but it's nothing compared to what Germany has achieved. Germany is effectively china of EU. It's funny to see the same people who oppose China's currency manipulation are in favour of EU I sug…

The link is a rambling mess. What exact are we supposed to learn from it?

Germany was against monetary union in Europe, they saw it as giving away their ability to be fiscally conservative. This is of course what happened with the ECB finally printing their way out of the Euro debt crisis.

The fact that Germany retained their manufacturing capacity and still takes pride in it is the reason they are an export economy. The economics of the Euro are just working for them rather than against them.

Other countries threw away their manufacturing capacity for a service sector, most notably Britain which centralised their economy in London.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#172
post #90

Earlier quoted context omitted.

Are you kidding. We citizen will earn money by that. Germany will borrow 10 billion with negative interest and invest in a solid company at a low point. Now you can argue, that the flight sector will never recover, which I agree too, but that will not change anything. Lufthansa is a very solid airline. There will be hundreds of small airlines leaving the market with the Lufthansa to pick the market shares up.

I'm not sure whether you are serious. But if you are: There are not many people who agree on your opinion, otherwise the share price would be way higher.

Airlines have a very low profit margin business. They earn very less for the amount of money they invest in the product. Therefore, capitalists are not very interested in the dividend. It is also a high risk business as the market is very volatile (see current crisis) and have a high merger/fail rate.

Lufthansa is one of the top carriers in the world with a solid infrastructure and network. The eliminated many competitors by just letting them starve themselves in low prices while Lufthansa never compete. I personally do not doubt their value. But the overall market is not an investment friendly one.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#173
post #90

Earlier quoted context omitted.

Are you kidding. We citizen will earn money by that. Germany will borrow 10 billion with negative interest and invest in a solid company at a low point. Now you can argue, that the flight sector will never recover, which I agree too, but that will not change anything. Lufthansa is a very solid airline. There will be hundreds of small airlines leaving the market with the Lufthansa to pick the market shares up.

And increasing the ticket prices Germans pay with their own money through the continuation of their government-sponsored monopoly.

Well.. Lufthansa does not have a monopoly in Germany. We have solid railway infrastructure within Germany, other Airlines servicing us in all directions. Lufthansa will have to offer competitive prices.

However, yes, flying will become more pricy. Around the world. We will see lower passenger numbers for many many years, mid-term many have to financially recover, long term environmental and viral concerns will be a permanent affect on tourism. Increased digitalization will reduce business travel. And all of that while the costs of the airlines increases due to stable fix costs and increased security/hygiene/... regulations.

So yes, flying will become more expensive. But not due to government sponsorship and monopolies (for LH in Germany).

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#174
post #107
post #59

Earlier quoted context omitted.

Never mind that several smaller airlines of national importance went bankrupt in recent years because of EU regulation against state aid. Now that the big ones need it, the regulation is out the window.

Or it's because of special circumstances and we can stop pretending it's not.

Sure, nobody pretends it is not a special situation. It is still deeply unfair that when you need a bailout I don't allow it, when I need it, it is a special situation so it is OK.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#175
post #173

Earlier quoted context omitted.

And increasing the ticket prices Germans pay with their own money through the continuation of their government-sponsored monopoly.

Well.. Lufthansa does not have a monopoly in Germany. We have solid railway infrastructure within Germany, other Airlines servicing us in all directions. Lufthansa will have to offer competitive prices. However, yes, flying will become more pricy. Around the world. We will see lower passenger numbers for many many years, mid-term many have to financially recover, long term environmental and viral concerns will be a p…

You're right about the railways and other European railways. But DB is constantly late. A friend of mine has a BahnCard 100 but gave up on the train and now flies-- Dusseldorf to Berlin has taken him up to 9 hours in the past with delays.

And most economists would agree LH definitely has a monopoly on the German market, especially for international travel: https://www.neweurope.eu/article/lufthansa-reaps-home-market...

It also gets special tax treatment from the government versus Easyjet and Ryanair: https://pointmetotheplane.boardingarea.com/germanys-climate-...

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#176

Earlier quoted context omitted.

She who pays the piper calls the tune

That “she” is very forced.

Not at all, “she” is Angela Merkel. EU policy on anything, no matter what was previously written down, is whatever she wants it to be because Germany pays all the EU’s bills.

I see at least 4 people didn’t get it either, Americans are so insular.

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#177

Earlier quoted context omitted.

That “she” is very forced.

Not at all, “she” is Angela Merkel. EU policy on anything, no matter what was previously written down, is whatever she wants it to be because Germany pays all the EU’s bills. I see at least 4 people didn’t get it either, Americans are so insular.

I'm not American, it's just a common expression that starts with "he", not "she".

I guess I should've paid more attention to the context...

Re: German government to bail Lufthansa out of bankruptcy with nearly $10B state aid

#178
post #169

Earlier quoted context omitted.

Not long, when a massive airline recently went bankrupt and you can purchase their assets at fire sale prices and hire their now-jobless employees.

If you purchase their assets and hire their jobless employees wouldn’t you still have the same inefficient airline?

Presumable you could choose different routes and a different organizational structure
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