Are the airlines Obama's next target?

Holman Jenkins writing in The Wall Street Journal asks, "Does Obama Want to Own The Airlines?"

Only luck and falling oil prices saved Washington from having to face mass bankruptcy of the airline industry last year. Now the specter is rising again. Fuel prices are up. Traffic continues to plummet amid a global recession. United Airlines last week mortgaged its spare-parts inventory to raise cash at a usurious 17% interest rate.

Yet the Obama Justice Department has come out of the blocks trying to scuttle a promising experiment to stabilize the chronically unprofitable U.S. airline sector. The new administration seemingly won't let companies fail, and won't let them succeed either.

The airline industry's self-help solution has been an evolving trio of international alliances, partly blessed with "antitrust immunity" by the U.S. Department of Transportation. One, the Star Alliance led by United and Lufthansa, is currently poaching Continental from a rival alliance, SkyTeam. DOT was set to approve their application last week when Justice belatedly intervened with a 58-page complaint about why the pact should be restructured.

To anyone drilled in the antitrust mindset, Justice's argument won't seem outlandish. It frets about reduced competition on this or that international route, and sees little chance of competitive entry by new carriers despite fat profits that presumably would be on offer. It argues, in a fashion typical of antitrust these days, that nonstop flights are a market unto themselves, so connecting flights on the same routes don't count.

"Won't let companies fail, and won't let them succeed either" sounds an awful lot like the administration is hell bent on taking over another industry.

It's already a pain in the butt to fly. Can you imagine what it would be like if the government owned the airlines? Tofu snacks, propaganda movies, stewardesses who look like Nurse Ratched from "Cuckoo's Nest," and planes dropping out of the sky with disturbing regularity.

Welcome to Obama Skies.
Holman Jenkins writing in The Wall Street Journal asks, "Does Obama Want to Own The Airlines?"

Only luck and falling oil prices saved Washington from having to face mass bankruptcy of the airline industry last year. Now the specter is rising again. Fuel prices are up. Traffic continues to plummet amid a global recession. United Airlines last week mortgaged its spare-parts inventory to raise cash at a usurious 17% interest rate.

Yet the Obama Justice Department has come out of the blocks trying to scuttle a promising experiment to stabilize the chronically unprofitable U.S. airline sector. The new administration seemingly won't let companies fail, and won't let them succeed either.

The airline industry's self-help solution has been an evolving trio of international alliances, partly blessed with "antitrust immunity" by the U.S. Department of Transportation. One, the Star Alliance led by United and Lufthansa, is currently poaching Continental from a rival alliance, SkyTeam. DOT was set to approve their application last week when Justice belatedly intervened with a 58-page complaint about why the pact should be restructured.

To anyone drilled in the antitrust mindset, Justice's argument won't seem outlandish. It frets about reduced competition on this or that international route, and sees little chance of competitive entry by new carriers despite fat profits that presumably would be on offer. It argues, in a fashion typical of antitrust these days, that nonstop flights are a market unto themselves, so connecting flights on the same routes don't count.

"Won't let companies fail, and won't let them succeed either" sounds an awful lot like the administration is hell bent on taking over another industry.

It's already a pain in the butt to fly. Can you imagine what it would be like if the government owned the airlines? Tofu snacks, propaganda movies, stewardesses who look like Nurse Ratched from "Cuckoo's Nest," and planes dropping out of the sky with disturbing regularity.

Welcome to Obama Skies.