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United’s Government Funded Low Fare Airline

The New York Times looks at how smaller airlines are rightfully up in arms at the prospect of United Airlines receiving a $1.6 billion loan guarantee from the federal government. Yes, you read that correctly. $1.6 billion in loan guarantees. I shall now include a hypothetical Q&A session that may answer some of your questions.

Q: Wait, didn’t United just launch TED, it’s low fare carrier?
A: Yes they did.

Q: And they want $1.6 billion in loans from the government at the same time?
A: Yes they do.

Q: Wouldn’t it seem like they’re taking government money to subsidize low fares?
A: It certainly seems that way.

Q: But how do low fare carriers like JetBlue and Spirit offer low fares without government help?
A: They run a normal business like most such organizations in countries that are not Burma. Or the former Soviet Union.

Q: Hold on, there, buckeroo. I think I get it….Where does the government get money to offer such loans?
A: From taxpayers, silly.

Q: So what you, Mr. Answer Man, are saying is that I, the American taxpayer, am helping to subsidize United’s low fares from Denver to Phoenix that United hopes will ultimately driver Frontier out of business in which case United will raise all their fares again?
A: It certainly seems that way, doesn’t it.

Q: What I can I do about this travesty?
A: Write to your congressperson and tell them you’d prefer that they not subsidize United’s low fare airline.

The end.

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