After running a series of stories about how UAL Corp., United Airlines’ parent company, has landed itself in the crapper, the Chicago Sun-Times editorial board comes to the solid conclusion that it needs to bailed out.
More specifically, United wants a $1.8 billion-dollar federally guaranteed loan. They’re in such bad shape that the only way they can convince any lender to give them money is to have the feds backing them up. Yep. Sounds like a hot investment. Of course, the Sun-Times editorial board argues that if United goes under, we’re all doomed. Gee, I guess people will just stop flying in and out of Chicago if United goes bankrupt.
Doesn’t the fact that United is being outdone by smarter, more effective competitors like Southwest and JetBlue mean anything? That perhaps United’s way of doing business just doesn’t cut it anymore? That perhaps we’d be better off having them disappear?
The most fallacious part of the argument is as follows:
The airline is a strategic asset to the nation. Having a solid U.S. air transportation system is important enough that the government has kept foreign carriers out of local service by law. What good will that be if we allow our local carriers to wither and die, victims, in part, of an unprecedented meltdown in their industry sparked by terrorism?
Good point; we should allow foreign competition. And, yes, Chicago may suffer a little if United goes under and more people connect through Denver or Atlanta, but the nation as a whole will not suffer one bit. But taxpayers will suffer if United defaults on its loan and the feds have to pick up the bill. The Sun-Times is being just as provincial as the steel-producing states’ newspapers which argued that upping steel tarriffs is good for the country.