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> The only thing missing is ownership that answers to the people — not to shareholders. Noble, but this will fail. Why would anyone do this? No incentive. The

> The only thing missing is ownership that answers to the people — not to shareholders. Noble, but this will fail. Why would anyone do this? No incentive. These sorts of initiatives forget the toil of actually operating a business. You might as well get more pledges given that you'd have more control and the same profit share. It will regress to the same as the status quo.

corvad 6mo ago
I'm not sure that's even noble as by buying you would be a shareholder...
- UqWBcuFx6NV4r 6mo ago
  Yes. Reminds me of the “anarchists” that don’t realise that they just want to recreate the government but with their people in charge.
  - mjevans 6mo ago
    Some of them want to create a monarchy with them in charge... Remember to be on the lookout for that trend too.
- danaw 6mo ago
  co-op: one member, one vote. members elect leadership with standard term limits. emphasis on services, price and patron returns. dividend according to use not capital investment. members have direct engagement in financials. public companies: votes scale with shares. large institutional investors and other large share holders have most say in leadership. emphasis on "shareholder value" (eg extractive value). dividends according to shares. shareholders have only limited visibility into finances. they're very different, concluding otherwise is misguided
morkalork 6mo ago
Co-ops don't exist at all, right?
- amazingamazing 6mo ago
  I dont know of any with such high capex
- doubled112 6mo ago
  I wouldn't say they are common. MEC was the only co-op I have ever been part of. I'm pretty sure they stopped being a co-op and sold it to private equity.
  - throw0101c 6mo ago
    For the Americans in the audience: MEC ~ Canadian REI. See perhaps: https://en.wikipedia.org/wiki/Consumers%27_co-operative https://en.wikipedia.org/wiki/Consumers%27_co-operative
  - bombcar 6mo ago
    Vanguard is "kind of" like a co-op, in that it is owned by its mutual funds which are owned by its customers. Fidelity is still better in some metrics, however.
- tunapizza 6mo ago
  Few people know this, but Desjardins, a Canadian financial service cooperative, is hugely popular in the province of Quebec (and also Ontario), and has close to CAD $400 billions in total assets.
  - morkalork 6mo ago
    The largest exporter of pork and poultry from Canada ($9B in revenue!) is also a 100 year old co-op from Quebec.
- tonyarkles 6mo ago
  This is a really interesting thing, both from an ownership structure perspective and from a "there is nuance in the details" perspective. I did a bit of a deep dive into this a few years ago when there was a local refinery strike. The refinery is a co-op and is also part of a larger co-op system. I'll lay out the specifics here from what I learned. I'm not convinced either way, yet, that it could work for an airline. So here's the ownership structure: - Co-op Refinery Complex (CRC) - produces fuel - Federated Co-operatives (FCL) - owns the refinery, also owns food and agriculture distribution warehouses, negotiates bulk pricing - 200-ish independent regional Co-ops jointly own FCL The CRC is highly profitable. FCL is profitable. The independent regional co-ops are not, on their own, all individually profitable. Some of these exist in small rural centres, some of them exist in larger cities. The urban ones are generally profitable, the smaller ones not so much. The rural ones, though, are largely the lifebloods of their communities; it's not unusual for the Co-op Grocery Store and Co-op Gas Station to be the only sources of food and fuel for miles and miles. While these do sometimes run at a loss, they make up for it with their annual Patronage cheques from FCL: when the CRC makes a profit and when FCL makes a profit (from the CRC and from their distribution network), those profits get returned back to the member co-ops on a pro rata basis: buy more from FCL, get more at the end of the year. At the far tail end, each of these independent co-ops is a member-owned co-op. At the end of the year I end up getting a patronage cheque based on how much fuel, food, and building supplies I bought that year. It's not large, but getting a $100 cheque in the mail is always nice :). In this situation, though, it all works because the not-so-profitable pieces own both their upstream wholesalers and a crazy-profitable refinery. (The refinery sells to other customers outside of FCL as well). One of the other critical pieces that the strike/lockout/overall "labour dispute" really made clear to everyone: the independent Co-ops, FCL, and the upstream CRC are all member-owned co-ops, not worker-owned co-ops. --- So let's look at how an airline co-op might be structured. The first parallel that I could see would be flipping the regional airline model on its head; currently the big players like Delta and United run a bunch of their smaller routes through regionals (SkyWest, Republic, etc). If a bunch of them got together, they could in theory jointly one one of the majors. The wrinkle there, as others have pointed out, the majors aren't profitable as airlines, but rather through their credit cards and loyalty programs. Alternative, then? Do a bunch of regionals get together and buy a bank? Let the bank be profitable, let the major airline handle traffic between the regional hubs? I know quite a bit less about worker-owned co-ops, but generally speaking aviation is incredibly capital intensive. Starting a worker-owned co-op airline is probably not possible. A single, say, 737 Max 8 costs $121M. That capital's gotta come from somewhere.
paulddraper 6mo ago
“The only thing missing is ownership that answers to the people — not to shareholders.” Like, all people in the world? Customers? Employees? What does this mean? EDIT: It’s shareholders, but each person has one vote regardless of share count.
- nerdsniper 6mo ago
  IMHO this should have been written “to the customers and employees”. To me, those are the people who compose a business enterprise.
  - JumpCrisscross 6mo ago
    I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops.
    - throw0101c 6mo ago
      > I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops. Focusing strictly on shareholders (value) has been en vogue since the 1970s: * https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine Before that the general thinking was along the lines of: * https://en.wikipedia.org/wiki/Stakeholder_theory https://en.wikipedia.org/wiki/Stakeholder_theory Somehow companies managed to survive and grow before the 1970s.
      - JumpCrisscross 6mo ago
        > Focusing strictly on shareholders (value) has been en vogue since the 1970s It's been in vogue, in circles, since the 17th century. We're not talking about for-profit structures here.
        throw0101c 6mo ago
        One needs to ask which "shareholder" are we talking about? The pension fund that wants steady cash flow for decades? The retirement-saver, who wants to grow a big bucket for retirement? The already-retired, who wants less growth and more wealth preservation? The hedge fund who wants a couple of quarters good numbers to raise their take of the 2-and-20? The options or day trader? "Investor heterogeneity" is a thing. There is no Platonic "shareholder" with one set of needs.
nerdsniper 6mo ago
I pledged $1,000. I have been daydreaming about a customer-owned airline for years now, just about every time I walk through an airport. This might not have much chance of succeeding in its purchase of Spirit’s assets, but I’d love to watch things unfold if it did. > These sorts of initiatives forget the toil of actually operating a business. For most businesses the size of Spirit Airlines, the owners typically do not operate the business. They pay people to do that. I don’t operate REI, even though I’m one of its many owners.
- iknowstuff 6mo ago
  aren't there plenty of state owned airlines? https://en.wikipedia.org/wiki/List_of_government-owned_airlines https://en.wikipedia.org/wiki/List_of_government-owned_airli...
  - nerdsniper 6mo ago
    Not in the USA. Also, the state’s interests often aren’t super well-aligned with the customers’ interests. Too many conflicts of interest for my taste.
    - mylifeandtimes 6mo ago
      Evidence? Isn't the state the expression of the people's will? That's the theory of democracy, isn't it? Also, any evidence or reason to believe that an extraction-based capitalist model is more aligned with customer interests (where the customer is the thing value is extracted from, and where corporate leadership salaries are directly tied to how much they can grift from the customers) than a government where the incentive is to get the maximum number of happy fliers to vote for you?
      - MrBuddyCasino 6mo ago
        > Isn't the state the expression of the people's will? Just recently HN discussed the „ban anonymity on the internet“ initiatives of various governments and who was behind it because nobody wants that. Certainly not the citizens.
empath75 6mo ago
I'm disappointed at how gullible people are about this. Spirit as an asset is worth less than $0. Buying it would be a commitment to set money on fire for a decade.

corvad 6mo ago

I'm not sure that's even noble as by buying you would be a shareholder...

UqWBcuFx6NV4r 6mo ago
Yes. Reminds me of the “anarchists” that don’t realise that they just want to recreate the government but with their people in charge.
- mjevans 6mo ago
  Some of them want to create a monarchy with them in charge... Remember to be on the lookout for that trend too.
danaw 6mo ago
co-op: one member, one vote. members elect leadership with standard term limits. emphasis on services, price and patron returns. dividend according to use not capital investment. members have direct engagement in financials. public companies: votes scale with shares. large institutional investors and other large share holders have most say in leadership. emphasis on "shareholder value" (eg extractive value). dividends according to shares. shareholders have only limited visibility into finances. they're very different, concluding otherwise is misguided

morkalork 6mo ago

Co-ops don't exist at all, right?

amazingamazing 6mo ago
I dont know of any with such high capex
doubled112 6mo ago
I wouldn't say they are common. MEC was the only co-op I have ever been part of. I'm pretty sure they stopped being a co-op and sold it to private equity.
- throw0101c 6mo ago
  For the Americans in the audience: MEC ~ Canadian REI. See perhaps: https://en.wikipedia.org/wiki/Consumers%27_co-operative https://en.wikipedia.org/wiki/Consumers%27_co-operative
- bombcar 6mo ago
  Vanguard is "kind of" like a co-op, in that it is owned by its mutual funds which are owned by its customers. Fidelity is still better in some metrics, however.
tunapizza 6mo ago
Few people know this, but Desjardins, a Canadian financial service cooperative, is hugely popular in the province of Quebec (and also Ontario), and has close to CAD $400 billions in total assets.
- morkalork 6mo ago
  The largest exporter of pork and poultry from Canada ($9B in revenue!) is also a 100 year old co-op from Quebec.
tonyarkles 6mo ago
This is a really interesting thing, both from an ownership structure perspective and from a "there is nuance in the details" perspective. I did a bit of a deep dive into this a few years ago when there was a local refinery strike. The refinery is a co-op and is also part of a larger co-op system. I'll lay out the specifics here from what I learned. I'm not convinced either way, yet, that it could work for an airline. So here's the ownership structure: - Co-op Refinery Complex (CRC) - produces fuel - Federated Co-operatives (FCL) - owns the refinery, also owns food and agriculture distribution warehouses, negotiates bulk pricing - 200-ish independent regional Co-ops jointly own FCL The CRC is highly profitable. FCL is profitable. The independent regional co-ops are not, on their own, all individually profitable. Some of these exist in small rural centres, some of them exist in larger cities. The urban ones are generally profitable, the smaller ones not so much. The rural ones, though, are largely the lifebloods of their communities; it's not unusual for the Co-op Grocery Store and Co-op Gas Station to be the only sources of food and fuel for miles and miles. While these do sometimes run at a loss, they make up for it with their annual Patronage cheques from FCL: when the CRC makes a profit and when FCL makes a profit (from the CRC and from their distribution network), those profits get returned back to the member co-ops on a pro rata basis: buy more from FCL, get more at the end of the year. At the far tail end, each of these independent co-ops is a member-owned co-op. At the end of the year I end up getting a patronage cheque based on how much fuel, food, and building supplies I bought that year. It's not large, but getting a $100 cheque in the mail is always nice :). In this situation, though, it all works because the not-so-profitable pieces own both their upstream wholesalers and a crazy-profitable refinery. (The refinery sells to other customers outside of FCL as well). One of the other critical pieces that the strike/lockout/overall "labour dispute" really made clear to everyone: the independent Co-ops, FCL, and the upstream CRC are all member-owned co-ops, not worker-owned co-ops. --- So let's look at how an airline co-op might be structured. The first parallel that I could see would be flipping the regional airline model on its head; currently the big players like Delta and United run a bunch of their smaller routes through regionals (SkyWest, Republic, etc). If a bunch of them got together, they could in theory jointly one one of the majors. The wrinkle there, as others have pointed out, the majors aren't profitable as airlines, but rather through their credit cards and loyalty programs. Alternative, then? Do a bunch of regionals get together and buy a bank? Let the bank be profitable, let the major airline handle traffic between the regional hubs? I know quite a bit less about worker-owned co-ops, but generally speaking aviation is incredibly capital intensive. Starting a worker-owned co-op airline is probably not possible. A single, say, 737 Max 8 costs $121M. That capital's gotta come from somewhere.

paulddraper 6mo ago

“The only thing missing is ownership that answers to the people — not to shareholders.” Like, all people in the world? Customers? Employees? What does this mean? EDIT: It’s shareholders, but each person has one vote regardless of share count.

nerdsniper 6mo ago
IMHO this should have been written “to the customers and employees”. To me, those are the people who compose a business enterprise.
- JumpCrisscross 6mo ago
  I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops.
  - throw0101c 6mo ago
    > I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops. Focusing strictly on shareholders (value) has been en vogue since the 1970s: * https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine Before that the general thinking was along the lines of: * https://en.wikipedia.org/wiki/Stakeholder_theory https://en.wikipedia.org/wiki/Stakeholder_theory Somehow companies managed to survive and grow before the 1970s.
    - JumpCrisscross 6mo ago
      > Focusing strictly on shareholders (value) has been en vogue since the 1970s It's been in vogue, in circles, since the 17th century. We're not talking about for-profit structures here.
      - throw0101c 6mo ago
        One needs to ask which "shareholder" are we talking about? The pension fund that wants steady cash flow for decades? The retirement-saver, who wants to grow a big bucket for retirement? The already-retired, who wants less growth and more wealth preservation? The hedge fund who wants a couple of quarters good numbers to raise their take of the 2-and-20? The options or day trader? "Investor heterogeneity" is a thing. There is no Platonic "shareholder" with one set of needs.

nerdsniper 6mo ago

I pledged $1,000. I have been daydreaming about a customer-owned airline for years now, just about every time I walk through an airport. This might not have much chance of succeeding in its purchase of Spirit’s assets, but I’d love to watch things unfold if it did. > These sorts of initiatives forget the toil of actually operating a business. For most businesses the size of Spirit Airlines, the owners typically do not operate the business. They pay people to do that. I don’t operate REI, even though I’m one of its many owners.

iknowstuff 6mo ago
aren't there plenty of state owned airlines? https://en.wikipedia.org/wiki/List_of_government-owned_airlines https://en.wikipedia.org/wiki/List_of_government-owned_airli...
- nerdsniper 6mo ago
  Not in the USA. Also, the state’s interests often aren’t super well-aligned with the customers’ interests. Too many conflicts of interest for my taste.
  - mylifeandtimes 6mo ago
    Evidence? Isn't the state the expression of the people's will? That's the theory of democracy, isn't it? Also, any evidence or reason to believe that an extraction-based capitalist model is more aligned with customer interests (where the customer is the thing value is extracted from, and where corporate leadership salaries are directly tied to how much they can grift from the customers) than a government where the incentive is to get the maximum number of happy fliers to vote for you?
    - MrBuddyCasino 6mo ago
      > Isn't the state the expression of the people's will? Just recently HN discussed the „ban anonymity on the internet“ initiatives of various governments and who was behind it because nobody wants that. Certainly not the citizens.

empath75 6mo ago

I'm disappointed at how gullible people are about this. Spirit as an asset is worth less than $0. Buying it would be a commitment to set money on fire for a decade.