FacebookTwitterGoogle+RedditEmail

Even in Bankruptcy, Airlines Cash In

by CARL FINAMORE

Only a few years ago there were six major US airlines. All of them went bankrupt and all of them received financial relief off the backs of employees amounting to billions of dollars.

As it turns out, the funds generated in bankruptcy courts resulted in a buying spree and an accrual of additional assets. Since 2008, for example, there have been three mega-mergers so that, now, there are only three major US airlines, four, if you include low-cost carrier Southwest Airlines.

Several significant mergers were actually consummated while still in bankruptcy such as between Delta and Northwest, so, there is certainly nothing new when another bankrupt airline, American Airlines, announced in February its plans to merge with US Airways.

The $11 billion deal would create the world’s largest airline. Again, nothing new, as American pays for its expansion with more employee concessions – wages have already been cut and pensions are now frozen.

The April 18, 2013 Wall Street Journal website states the obvious: American “is proving that bankruptcy really did help to drive down the costs.”

Nothing new, true enough, but, nonetheless remarkable – how US bankruptcy courts allow businesses to expand and profit while employee wages and benefits are cut. American estimates that $1 billion in savings will result from this most recent merger and airline workers have a pretty good idea where most of these savings will come.

Meanwhile, the majors continue to fly higher than ever, awash in profits.

Poor United, it was by far the least profitable major US airline in 2012. Its profit of $589 million compares favorably to Southwest Airlines’ $421 million profit but pales to “bankrupt” Delta Air Lines net profit of $1.6 billion.

Expect more of the same as fewer airlines means less competition and fewer aircraft flying the same routes. Notwithstanding luxurious new seats and services catering to high-ticket business passengers, most travelers can expect more crowded aircraft and fewer direct flights.

What about fares? Most analysts expect these also to increase as a result of fewer airlines. In fact, it already has been happening for some time. While airlines do try to keep a lid on listed “fares” where there is competition, all of them have added the increasingly annoying array of costly “fees,” expected to bring in a staggering $36 billion to US carriers in 2013.

All this means that owning an airline will continue to be a lot better experience than flying in one and certainly a heck of a lot better than working for one.

This article will appear in the Summer issue of TradeWinds, the award-winning newsletter of Air Transport Employees Local Lodge 1781, IAMAW, AFL-CIO. The union is based at San Francisco International Airport and mails TradeWinds to the union’s 10,000 active and retired members.

Carl Finamore retired as president in 2008. He can be reached at local1781@yahoo.com

Carl Finamore is Machinist Lodge 1781 delegate, San Francisco Labor Council, AFL-CIO. He can be reached at local1781@yahoo.com

More articles by:

CounterPunch Magazine

minimag-edit

Weekend Edition
August 26, 2016
Friday - Sunday
Louisa Willcox
The Unbearable Killing of Yellowstone’s Grizzlies: 2015 Shatters Records for Bear Deaths
Paul Buhle
In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment
Rob Urie
Crisis and Opportunity
Charles Pierson
Wedding Crashers Who Kill
Richard Moser
What is the Inside/Outside Strategy?
Dirk Bezemer – Michael Hudson
Finance is Not the Economy
Jeffrey St. Clair
Roaming Charges: Bernie’s Used Cars
Margaret Kimberley
Hillary and Colin: the War Criminal Charade
Patrick Cockburn
Turkey’s Foray into Syria: a Gamble in a Very Dangerous Game
Ishmael Reed
Birther Tries to Flim Flam Blacks  
Brian Terrell
What Makes a Hate Group?
Andrew Levine
How Donald Trump Can Still be a Hero: Force the Guardians of the Duopoly to Open Up the Debates
Howard Lisnoff
Trouble in Political Paradise
Terry Tempest Williams
Will Our National Parks Survive the Next 100 Years?
Ben Debney
The Swimsuit that Overthrew the State
Ashley Smith
Anti-imperialism and the Syrian Revolution
Andrew Stewart
Did Gore Throw the 2000 Election?
Vincent Navarro
Is the Nation State and Its Welfare State Dead? a Critique of Varoufakis
John Wight
Syria’s Kurds and the Wages of Treachery
Lawrence Davidson
The New Anti-Semitism: the Case of Joy Karega
Mateo Pimentel
The Affordable Care Act: A Litmus Test for American Capitalism?
Roger Annis
In Northern Syria, Turkey Opens New Front in its War Against the Kurds
David Swanson
ABC Shifts Blame from US Wars to Doctors Without Borders
Norman Pollack
American Exceptionalism: A Pernicious Doctrine
Ralph Nader
Readers Think, Thinkers Read
Julia Morris
The Mythologies of the Nauruan Refugee Nation
George Wuerthner
Caving to Ranchers: the Misguided Decision to Kill the Profanity Wolf Pack
Ann Garrison
Unworthy Victims: Houthis and Hutus
Julian Vigo
Britain’s Slavery Legacy
John Stanton
Brzezinski Vision for a Power Sharing World Stymied by Ignorant Americans Leaders, Citizens
Philip Doe
Colorado: 300 Days of Sunshine Annually, Yet There’s No Sunny Side of the Street
Joseph White
Homage to EP Thompson
Dan Bacher
The Big Corporate Money Behind Jerry Brown
Kollibri terre Sonnenblume
DNC Playing Dirty Tricks on WikiLeaks
Ron Jacobs
Education for Liberation
Jim Smith
Socialism Revived: In Spite of Bernie, Donald and Hillary
David Macaray
Organized Labor’s Inferiority Complex
David Cortright
Alternatives to Military Intervention in Syria
Binoy Kampmark
The Terrors of Free Speech: Australia’s Racial Discrimination Act
Cesar Chelala
Guantánamo’s Quagmire
Nyla Ali Khan
Hoping Against Hope in Kashmir
William Hughes
From Sam Spade to the Red Scare: Dashiell Hammett’s War Against Rightwing Creeps
Raouf Halaby
Dear Barack Obama, Please Keep it at 3 for 3
Charles R. Larson
Review: Paulina Chiziane’s “The First Wife: a Tale of Polygamy”
David Yearsley
The Widow Bach: Anna Magdalena Rediscovered
FacebookTwitterGoogle+RedditEmail