Conventional wisdom in St. Louis is that American Airlines must be saved to save the hub status in St. Louis. Regular readers know that I think this is incredibly stupid and anti-consumer, but more importantly, efforts to keep inefficient airlines alive hurt consumers by keeping inefficent business models alive. Fortunately, Daniel Gross at Slate agrees.
But maybe they shouldn’t. What if we’re in the midst of a several-years-long era of lower demand, transparent pricing, and rising competition from upstarts free of expensive contracts and airplane leases? These airlines might emerge from bankruptcy with lower debt loads and better union contracts and find they still can’t compete. They might be setting the stage for a round-trip journey to Chapter 11?call it Chapter 22. Perhaps instead of trying to save all our airlines we should let some of them die off.
Amen.