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So, Let 200 Airports Go Bust

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Much of the modern media is simply special interest group pleading dressed up as a “report”. It used to be that someone serious talked to a serious reporter and that’s how their “concerns” entered the public conversation. That moved on to it being PR that worked. Now it’s a “report”. You know, we’ve done science, real science with numbers and all so give us everyone elses’ money.

As with this:

Nearly 200 airports across the UK and Europe are at risk of going bust within months due to the dramatic collapse in air travel caused by the coronavirus pandemic, the European airports trade body warned on Tuesday.

Airports Council International Europe (ACI Europe), which represents airport operators, said it estimated that 193 out of Europe’s 740 commercial airports face “insolvency in the coming months if passenger traffic does not start to recover by the year-end”.

The trade body said the at-risk airports employed 277,000 people and generated collective annual revenues of €12.4bn (£11.2bn).

Olivier Jankovec, the director general of ACI Europe, said the figures “paint a dramatically bleak picture” for the future of the aviation industry, which has already suffered tens of thousands of job losses.

Well, OK, so agreed there’s a real problem here. What should we do about it?

Let ’em all go bust.

Because this is what capitalism means. You sink your money into something that doesn’t work? So, tough, bye bye money. That’s the flip side of getting it right where you end up with hot and cold running Ferraris. It also doesn’t matter why you got it right. Consumer tastes change, the Martians invade, wok’d bat becomes too popular, whatever, whether it’s good fortune or good planning that’s just the way the system works. You get to keep the excess of money at the end or lose the deficit.

So, many billions have been spent on the expansion of regional airports. Seemed like a good bet at the time but something’s changed. Tant pis, bye bye money.

However, do note what most hen miss. We don’t lose 200 airports by doing this. It’s not true that if the company goes bust then grass springs up immediately between the concrete. The capitalists who own the current legal envelope lost their money. And if we still want those regional airports then they will still exist and someone will come along and buy them up.

And, of course, if we don’t still want them then we don’t want to preserve them either, do we?

Let ’em go bust, that’s the mantra.

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4 COMMENTS

  1. I have a grandson who is sixteen. I also have an old car, which the grandson has expressed an interest in. I don’t need the car at all now and it costs me a few bob to keep it on the road. I should sell it and put the bucks in the bank. Then when the grandson turns eighteen I will take approximately double that amount of bucks out of the bank to buy a car in similar condition.

    An esteemed commenter on things economic, Tim Worstall, once said that there is a difference between a stock and a flow. We are told that an airport is going bankrupt for flow reasons. This does not mean that in a year or two, that airport will not be needed. In fact, our experience is that to build a new airport from first signature to first flight takes about a decade, owing to all the legal hurdles. It is worth hanging onto that stock as an investment. Unless we have good reason to believe that air travel is permanently out of fashion, which does seem to be a startling reversal of trends.

  2. The problem with a lot of these airports is that they only exist because of support and often direct or indirect subsidy from local councils / regional governments and were marginal (at best) before COVID-19. So it’s not “shareholders” that are going bust so much as those local councils / regional governments having to pay the bill for white elephants and boondoggles.

    Far better that they go bust and their local politico’s face the music, then these brownfield sites can be recycled into something that actually has value like housing, mixed use light commercial / industrial or whatever.

    The saga over Blackpool Airport for example is a case in point. When I last used it in 2014 it was running a couple of scheduled flights a week to regional destinations and that was about it. Literally a waste of space.

    • It should be easy to differentiate between the congenitally lame ducks and the ducks that, once high-flying and agile, are temporarily grounded.

  3. I used to argue that Sheffield’s airport is the one just south of Wythenshawe. So investment should be in things like fast processing at Sheffield Railway Station and the trains going directly to the airport railhead with swift links to the departure area.

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expunct

in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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