The Vulgarian In Chief

[Ukridge]

Anyone who has at times dealt with politicians can readily recognize both their strengths and their inherant weakness'. Some are reflective and comport themselves well in enquery and foresight. Some are shallow and do not even posses the requisite skill to either cover up their shortcomings or to manage them so as not to cause further difficulty.
This leads to the question of what the chief vulgarian Sir Richard is planning on doing in the westward expanse and what benefit civic planners tend to gain from his proposed foray? Specifically, what benefit will the consumer gain from another entrant into a market that seems to habitually price its product significantly below production cost?
I am starting to see a dismal pattern here. Drive out the higher cost operators, replace them with those that can provide a less expensive product and still fashion a profit until an oligopoly results, upon which the oligopolists (in this industry it seems anyway) in turn fall to the wayside from another entrant that has government backing with landing allocations. Where does it stop and end?
My remarks about the politicians are made in that I will be interested to see just how much your fine taxpayers will subsidize good Dick's efforts with a "new startup" as it is so labeled. Perhaps he will not gain any assistance from said authorities and I am wrong in my expectation. Perhaps however, he will. The question then becomes how much does a governement really spend to ensure low public air transportation rates? Where is the balance point and if allocations do indeed in a manner control who has access and therefore profit, why is it called a free aviation market?
As always, perplexed.

 

[Flying Titan]

Excellent observations regarding the current cycle in the industry and what's likely to happen to some of the new darlings over the next decade or two. Relative to subsidies for new start-up carriers, there's not really much out there to be had. Many state and local governments are willing to toss some tax breaks and perhaps some job training money their way if the new carrier will hub there or have significant offices there, but there's not much beyond that. Typically, some airports will offer limited marketing assistance or breaks on landing fees and rent for new service, but that tends to run for a finite time period - say six months or a year.

All in all, it helps somewhat, but this money doesn't come close to justifying a start-up and won't determine whether the operation will ultimately be profitable or fail.

 

[kiowa]

the "gov" of california offered mr. branson $28 million of california tax payer dollars to start up a low budget carrier in san francisco. it was not offered to any other carrier or individual and was offered right after arnold got elected. quite pathetic that the taxpayers were not outraged by this waste of their money. i doubt that money will be offered to one of the US low budget carriers to come to heathrow to compete with BA.