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United and Bankruptcy, Yet Again

The New York Times offers a look at United’s attempted emergence from bankruptcy this fall. The carrier’s CEO says that they will exit Chapter 11 by the end of this year with or without the $1.6 billion government loan they’ve applied for.

I’ve mentioned it here before, but I’ll say it again: YOU are paying for this loan (assuming you pay taxes in the US). United will use this money to offer fare sales. Some of these fare sales, especially in Denver, will be targeted at driving Frontier out of business. Frontier has brought you, the Denver taxpayer, low fares after many, many years of very high fares brought to you by United. United is not doing you, the Denver taxpayer, a favor by introducing TED, their low fare carrier. They are trying to drive Frontier away. And the best part is that you, the Denver taxpayer, are paying for this.

I feel terribly for United’s tens of thousands of employees, but, unlike many African nations, our government should not be in the business of propping up unprofitable airlines.

Each time you see United lowering their fares on routes where they compete against Frontier, please keep in mind that when Frontier goes out of business, United’s low fares go away. And you, the Denver taxpayer, will have helped that to happen.

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