>First, someone will have to start from scratch.

Only if the existing infrastructure completely disappears which is an unlikely situation.

>In the mean time we will have to endure a length of time where there will not be enough flights to meet demand for cargo and mail. Costs of goods in stores etc. will rise.

This is what will drive the recovery of the industry.

>Second whoever takes over will have to increase prices to make them run more efficiently than they do now.

Actually increased efficiency COULD result in lower prices. In any event increased efficiciency does not necessarily require higher prices.

Assuming that in fact we end up with higher prices the question that still needs to be addressed is whether the higher prices paid for air transit exceed the proposed government subsidies (keeping in mind that prices may rise even with the subsidies).

>Costs of goods in stores etc. will rise.

Do you think that paying these subsidies will not effect the rest of the economy? -- Where is this money coming from?

>What will we do when there are a choice of only 3 airlines in this entire country.

If the market demands more airlines they will develop.