Favor Continued Support of Industry Overcapacity
The Official Committee of Unsecured Creditors of UAL and
United Airlines delivered the following letter to the White House
and Congressional Leadership, urging swift government action on
airline industry relief legislation.
Need for Urgent Government Assistance for the Airline
Industry
The
Official Committee of Unsecured Creditors of UAL Corporation and
United Airlines (formed by the United States Trustee arm of the
U.S. Department of Justice) represents the interests of unsecured
creditors of United in its ongoing bankruptcy case. Tens of
thousands of corporations, small businesses, employees, local
governments, airport authorities, and individual families in every
state are among the unsecured creditor class represented by the
Committee.
On behalf of these businesses and individuals, the Committee
urges immediate and meaningful United States government action to
bolster our domestic air transportation system, and in particular
to preserve the viability and ongoing operations of United
Airlines. The Committee is working closely with United to assist it
in emerging from bankruptcy as a competitive carrier with a robust
business plan. The precious time needed to work through the many
business issues facing United and the industry can only be afforded
if the non-market, adverse effects on United of the Iraq war are
immediately blunted.
National policymakers and legislators must vocally join the
creditor constituency in recognizing the devastating rippling
effect that any dramatic decrease in United's operations would
impose on vital portions of our nation's economy well beyond the
U.S. aviation industry, both domestically and in the global
marketplace.
As Congress and the Administration consider the
nature and extent of new steps to ameliorate forces buffeting
United and other carriers, it is critical to give voice to the tens
of thousands of industries, companies, communities, and families
whose operations and livelihood are inextricably woven with the
fate of United and similarly situated network carriers.
United plays a significant role in our national economy and
communities. Failure to offer immediate war-related relief to
United and this industry as it restructures for a new era of global
competition will jeopardize the future of commercial air travel. In
the pending FY 2003 Supplemental Appropriations bill or in any
stand-alone legislative measures that may emerge in the coming
days, the Committee strongly requests adoption of relief provisions
that provide immediate enhanced liquidity and financial support for
United and the industry.
Sincerely, THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF UAL
CORPORATION AND UNITED AIRLINES
[Note:
an economist would say that, while there is no doubt that the
short-term fallout among those affected will be devastating, the
assessment of the risk of UAL's collapse was grossly underestimated
by those who chose to invest in it, as stockholders,
employees, or suppliers. Regardless the short-term effects, the
taxpayers' and consumers' interests are best-served by allowing the
marketplace to perform as it must, rather than artificially
propping up failing businesses. As we have pointed out in the past,
by not allowing businesses [e.g., US Airways, United,
Hawaiian] to fail, the government is causing other
businesses [e.g., American, others] to fail. "Every action has an
equal and opposite reaction." --Sir Isaac Newton]