Piedmont Publius is, perhaps, as confused as we are at the rationale behind central planners like Henry Isaacson o’er there in the Triad. Here’s Isaacson – quoted by the PP – opining about the market dynamics:
I want people in the Triad to understand that Allegiant is an altogether different airline than Skybus,” Isaacson said. “They’ve been around for awhile; they’ve been making money; they’re established. I think the only reason they were leaving us is that Skybus was sort of permeating the low-fare territory. They don’t compete at the point of origin with another low-fare carrier.”
Is this 20/20 hindsight or something Isaacson could have sussed beforehand? Seriously, a company that hasn’t been around for awhile, isn’t making money and isn’t established in an industry plagued by multiple factors like unstable inputs (jet fuel)… Why are these bureaucrats throwing our cash at such poor investments? This attempt to pick winners and losers is just wacky. Isaacson, et al, couldn’t possibly have had the prescience to predict what Allegiant called the "destablizing" factor of Skybus — never mind that these subsidies contributed to the destabilization. Nor does 20/20 hindsight help matters once everything goes haywire.
Excuse me, Mr. Isaacson, I think I’d like to invest my own resources. I’m pretty sure Vanguard or I could do a heckuva lot better than you.
-Max Borders
Max, Max, Max. You are so wrong. The most dynamic economic engine an area can have is direct air service to popular destinations. Just look at Charlotte and the explosive growth it started to enjoy when it became a hub city for a major air carrier. Yes, you could likely do better with Vanguard on an individual basis, but then you only have to worry about yourself and not an entire community. Mr. Isaacson is a visionary!
Glad you think so Flysalot! I’ll be happy for you to give your resources over to such “visionaries.” But please, leave me and my wallet alone.
Correlation does not prove causality.
Did Charlotte start growing merely because of the US Air hub?
Did the US Air hub come to Charlotte because it was a growing area?
Or did some other set of events and circumstances cause both the economic growth and cause US Air to decide that Charlotte was the place they wanted to be?
Prove which hypothesis is correct, and make sure to show your work.
It is certain that frequent, inexpensive airline service is a big plus in a business deciding to move to an area. But there is nothing that I see that makes this statement a plausible argument that taxpayers ought to bear the burden of paying for this. If something makes economic sense, it will occur without incentives.
And if a deal does NOT make economic sense, then the good times will roll only as long as there is a subsidy. And maybe not even THAT long.
Raleigh seems to be doing OK after losing both Midway and American hubs.
We can all see the explosive economic growth and prosperity occurring in Detroit thanks to the Northwest hub!
Chris, I am just glad that Southwest flies out of RDU!
I fly them a lot more than I ever flew American. But then, I am a cheapskate.