71–76 of 76 posts
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Chapter 11 bankruptcy as well as all modern corporate law has its roots in the tycoons of the late 19th century. They lobbied and wrote it which is why it's corrupt.
U.S. bankruptcy law is a foundational social technology that enables the marvelous world around you to exist.
Can you please expand? This is an expansive claim.
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> was surprising. Goes against the idea that deregulation allows companies to squeeze consumers and earn excess profits. That's because this assertion is economically illiterate. Deregulation can lead to increased profits where otherwise companies have monopoly power. But often, the regulation was there in the first place to ensure that companies had sufficient profit to invest in expensive infrastructure. ( E.g. rai…
That also didn't work well. The US is notoriously very poor in railroads.
I mean, they are still regulated, and they still have to go through regulators to abandon a line (IIUC), but it's much faster than it was.
Earlier quoted context omitted.
U.S. bankruptcy law is a foundational social technology that enables the marvelous world around you to exist.
> U.S. bankruptcy law is a foundational social technology that enables the marvelous world around you to exist. Can you please expand? This is an expansive claim.
More broadly, our modern world exists because of large scale organizations, the ability for strangers to transact, and efficient markets for allocating credit and capital. Bankruptcy law is a pillar that makes that possible. It enables lenders to extend credit knowing that, if the debtor can’t repay, there will be an orderly process for getting some of the money back. That backstop in turn lowers the barriers to transaction.
Contrast this with what happens in a country without modern bankruptcy law. Businesses in those countries still need to borrow money. But what happens when a debtor can’t pay? Individual creditors have an incentive to harass the debtor and be the first ones to recover their share. Debtors have incentives to pay back certain creditors before others. Creditors might seek to liquidate an otherwise viable business just to get paid. All that means that lending and borrowing is risky. So when people do it, they go through established trust networks, such as families, clans, etc. This dampens business formation and entrepreneurship.
Simply because flying passengers is a losing business. The ones that make money operate as financial services from selling points to their partners via their frequent flyer programs.
But _why_ is it a losing business? The article also mentions frequent flier programs.
rising cost bases in legacy fleet costs, engineering costs. a lot of airlines fail near their capital renewal programs as fleet age > 25yrs
pure domestic competition beomes a race to the bottom between full service and low cost carriers removing any premium
It might not be that significant of a cost all things considered, but I have always felt the peculiar existence of "professionally happy" cabin crew, in-flight meals, screens and other pointless "comforts" glaringly unnecessary in what's generally meant to be just 2-3 hours of sitting on an average for the passengers. You could just operate a plane like a dumb bus and save up on a lot of costs and turn it into compet…
Budget airlines have tried all of these things. Planes doing short haul routes often don't have comforts like screens, let alone meal service. It turns out that in-flight entertainment helps minimize unruly passengers, and flight attendants are there for safety, not just to serve passengers. Same for legroom requirements (egress).
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A race to the bottom on pilot pay won't help anything. Well it may lead to less qualified pilots. You can ask Boeing how well screwing over labor has worked for them if you like. All US airlines have the same labor costs for pilots and it isn't their highest cost anyway. That would be fuel. If you want to divvy up costs that way: Boeing is probably the biggest problem. Both them and Airbus eat up all possible excess…
How exactly does Boeing drive up the cost? The cost of the aircraft is less than 20% of the lifetime cost of operating an airliner and a lot of the maintenance cost is not related to the cost of parts from Boeing, since most parts that get replaced on an aircraft are not made by Boeing and airlines do not go through Boeing to buy them.
FWIW I'm not interested in flying commercial with non-union pilots so that airlines can become cheap labor body shops.
I'm also not interested in saving money by having Boeing outsource to kick as many people out of their machinist union as they can (and screw those people out of retirement and healthcare benefits).
I got my pilot certificate last year (zero plans to go ATP/commercial). Its a lot of work. Then you've got years of getting paid pennies to earn your 1500 hour ATP. Then you've got more years of taking the crap routes and not making super dollars. Much like a doctor its after you've put in 10-15 years that it starts really paying off.
The union also protects pilots from blame culture and trying to game metrics. If it isn't based on seniority then what metrics do you use? And do you want pilots to start making flying decisions based on on-time percentage instead of safety?
If your business needs to screw over labor to survive you don't have a worthwhile business.