More airline special pleading

This resolution from the International Air Transport Association (IATA) calls for yet more government help for the airline industry. The IATA represents some 230 airlines, including Air New Zealand, comprising 94% of scheduled international air traffic. It is asking for lower taxes, more cross-border merger flexibility, lower wages and lower fuel costs. But such a call must be rebuffed, it makes no economic sense to give taxpayer funded handouts or special concessions to airlines. As the Economic Logician puts it over at the Economic Logic blog,

Airlines have at numerous times received substantial help from governments. Some can be justified, like when the US government curtailed air traffic after 9/11. But the fact that this industry has overcapacity and cannot sell tickets to cover its own costs calls for a market correction (bankruptcies, reducing capacity) not governement intervention. This industry is already subsidized (explicitely: security agencies, tax breaks; and implicitely: gas priced lower than what externatilities would call for), it should not ask for more.

The Logician goes on to ask,

Is it of national interest to have this much capacity in the air? No. Is it of national interest to have some airlines? Possibly, but this does not mean the whole industry should be bailed out.

Times may be tough in the airline industry but that the nature of business, at times things get tough. But its the airlines job to deal with this, not the governments.