Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, July 18, 2005

Will the PEI Gubmnt Start Subsidizing Air Canada?

Air Canada is upset that the gubmnt of PEI has offered subsidies to WestJet and Northwest to provide service to Charlottetown from Trono and Detroit, respectively.
"Despite numerous discussions and meetings with PEI officials, including the Premier, over the past few months, we were unable to come to an agreement that would have levelled the playing field and enabled Air Canada to maintain its year-round service between Charlottetown and Toronto," Air Canada spokeswoman Laura Cooke said.
Now that the gubmnt of PEI has begun subsidizing WestJet and Northwest, Air Canada wants to belly up to trough, too. I don't much blame them, especially since the provincial gubmnt is subsidizing their direct and indirect competition. Too bad the gubmnt of PEI didn't use some basic economics before offering the subsidies.

The likely outcome is the after negotiations, PEI will also offer subsidies to Air Canada. It could, of course, withdraw the subsidies from WestJet and Northwest....

Wake me. I must be dreaming....
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