Why Do Unsuccessful Companies Survive? US Airlines, Aircraft Leasing and GE, 2000–2008

Business History Review, Forthcoming

52 Pages Posted: 23 Nov 2021 Last revised: 24 Nov 2021

See all articles by Gishan Dissanaike

Gishan Dissanaike

University of Cambridge - Judge Business School

Ranadeva Jayasekera

Trinity Business School; Judge Business School; Cambridge

Geoff Meeks

University of Cambridge - Judge Business School

Date Written: November 18, 2021

Abstract

Warren Buffett famously commented that the US airline industry had made zero profit in its first nine decades. Subsequently, between the millennium and the Great Financial Crisis the airlines in total lost almost $60bn. Yet no major airline was liquidated or taken over in those nine years. Financial support was repeatedly provided by GE, the conglomerate supplier of leasing finance, engines and servicing. The paper offers a historical perspective on the factors behind this relationship between GE and airlines. It outlines the benefits or costs to GE, airline shareholders, and passengers; the relevance of the model for other industries; and implications for different notions of efficiency.

Keywords: Airlines; leasing; bankruptcy; liquidation; reorganization; General Electric

JEL Classification: N2, N72, K2, K10, G00, G14, G33, D43, D61

Suggested Citation

Dissanaike, Gishan and Jayasekera, Ranadeva and Meeks, Geoff, Why Do Unsuccessful Companies Survive? US Airlines, Aircraft Leasing and GE, 2000–2008 (November 18, 2021). Business History Review, Forthcoming , Available at SSRN: https://ssrn.com/abstract=3966361

Gishan Dissanaike

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+441 223 339626 (Phone)
+441 223 339701 (Fax)

Ranadeva Jayasekera (Contact Author)

Trinity Business School ( email )

Aras an Phiarsaigh
College Green
Dublin, Leinster D2
Ireland

Judge Business School; Cambridge ( email )

Trumpington St.
Cambridge, CB21AG
United Kingdom

Geoff Meeks

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 (0) 1223 764226 (Phone)
+44 (0) 1223 339701 (Fax)

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