Thursday, August 20, 2009

A Thought

A while back, Canada had 3 major airlines. Air Canada, CP Air, and Wardair.

Air Canada was government owned, CP Air (formerly Canadian Pacific, later Canadian Airlines) was your everyday publicly owned company with stocks and such, as was Wardair.

Wardair had fantastic service, great meals, and was the smallest of the three. They were eventually bought by CP Air (leading to the change to Canadian Airlines). There were two big players in the market.

Canadian had struggled throughout their existence, like most airlines do. Air Canada, being owned by the government, was "debt-free", and the bigger dog.

Then the government decided to sell Air Canada off. It became a public corporation just like Canadian. Then the usual airline downswings happened, and competition between two large airlines in a country with fairly low population density was looking unfeasible. They merged, with Air Canada taking over Canadian by government decree. Why? Because Air Canada was the one in the better position. To speak to Air Canada employees, it was because they were the better company and that their competition was never good at running a business. Woe be they who reminded them that they were born, raised, and matured as a wholly-owned government agency. So when they finally became public, they were debt-free. It had nothing to do with running a business and everything to do with taxpayers footing the bill for decades.

Soon enough, they went bankrupt too, then again, then almost again a few weeks ago before refinancing like mad.

The point? That government corporations have built-in safety net with the taxpayers. The reason private companies can effectively compete with them is because they are so INefficient that if it wasn't for this net, they'd be dead.

I can't imagine a parallel that could be drawn in the US right now...


KenP said...

Shame on you. Don't you know we have disadvantaged folks that need care. Don't you realize illness can kill you?
The government is now stepping in to provide health and welfare reforms so that all these hideous occurrences will be a thing if the past. The safety net will lead us to a new and better world.

And, if you don't understand the current situation, I refer you back to Lyndon Johnson's Great Society program of the 70's that address and solved all those same issues as a benign government should.

P.S. I see they started picking up Welfare Queens again. So, thing are getting better for many.

Astin said...

Who said anything about illness? I was talking about... the post office.

Mike said...

Actually, CP Air did not buy Wardair and Wardair was far from Canada's 3rd biggest airline. They did have great steaks though.

Pacific Western Airlines was Canada's 3rd biggest airline at the time which bought Canadian Pacific Airlines and the two merged into Canadian which then bought Wardair in 1989.