Suggestions that the US government should take equity stakes in airlines as part of the aid package for the countries aviation sector is a “bad idea”, according to Richard Rahn, chairman of the Institute for Global Economic Growth.
Rahn’s statement came in an editorial for the Washington Post in which he characterised suggestions that the US government should take stakes in airlines to offset Coivd 19 losses as being a result of, “a fundamental misunderstanding of the proper roles of both government and business in a capitalist society.”
Rahn said that US airlines were in trouble through no fault of their own but instead as a function of government mandated shutdowns of economic activity and flight restrictions, “which has been a disaster for the airlines.”
Rahn said that airlines and other businesses should not be paying a disproportionate share of the cost because of what he said was the failure of government leaders.
Government insistence on equity ownership in the airlines, would mean that airlines are punished for a situation they did not cause and that even partial government ownership of companies would cause problems.
“There are many ways to offset the damage to the air carriers and to keep them viable. Government equity ownership in airlines is almost always a disaster. This proven bad idea ought not to be repeated,” said Rahn.
Related posts
AWAS raises finance in debt market and signs lease agreement with Norwegian
By
Dino D'Amore
30th September 2010