AviationAddict From United States of America, joined Feb 2006, 566 posts, RR: 0 Posted (7 years 10 months 6 days 20 hours ago) and read 8721 times:
I can't help but wonder if the liquidation of a major USA carrier would actually help the market a little bit. My thinking is this: all these airlines that are operating under government protection are basically using all their earnings to pay off the legal bills and pay their employees, which means they really aren't making any profits. Therefore, the money that customers of airlines like NW and DL are spending on tickets really aren't helping to improve the condition of those carriers. However, if those passengers migrated over to companies like CO and WN then they'd actually be supporting a healthy market. I could be completely crazy and I have no economics background whatsoever, but I just think the marketplace is a little over saturated right now, especially with companies that barely have a pulse. But then again, I'd hate to see any airline go under, but maybe that's what it'll take for the market to rebound. The loss of smaller carriers like Independence certainly had an impact on the market in the short term, but in the end I don't think it will make a huge difference. What do you all think?
FLALEFTY From United States of America, joined Jan 2006, 395 posts, RR: 3 Reply 1, posted (7 years 10 months 6 days 20 hours ago) and read 8690 times:
In a word - "No!"
If DL were liquidated, for example, it would be a disaster for smaller cities in the South - Montgomery, Jackson, Augusta, Daytona Beach, Melbourne, etc.. These cities would lose mainline service, with scant hope that one of the surviving major airlines would be willing to offer replacement services.
Delta is the primary airline for business travellers in the South, so losing them would have a severe negative impact on economic development in the region.
Southwest, JetBlue and AirTran may temporarily get fatter with some additional "white shoes" business, but none of these airlines could successfully fill Delta's key role in the Southern economy.
DLPMMM From United States of America, joined Apr 2005, 3566 posts, RR: 10 Reply 2, posted (7 years 10 months 6 days 20 hours ago) and read 8653 times:
Quoting AviationAddict (Thread starter): can't help but wonder if the liquidation of a major USA carrier would actually help the market a little bit.
Absolutely! It is basic supply and demand. The supply of airline seats is far too high at this time, leading to unsustainably low prices for an inflated quantity of seats.
This is ECON 101, not rocket science.
FLALEFTY's response, while understandable (I do like DL, as you can see by my screen neme), is merely a knee jerk reaction that is very common.
With the abolition of any airline, the market would work quickly to redistribute the profitable routes among the living. Some unprofitable and marginal routes might disappear completely, but that's life. They can drive a couple of hours to a more major airport.
Lehpron From United States of America, joined Jul 2001, 7028 posts, RR: 22 Reply 3, posted (7 years 10 months 6 days 20 hours ago) and read 8633 times:
Note: Do not reply until you have read the whole thing, message changes twice.
I think yes, but put it this way:
While I agree with some of FLALEFTY's points, it is not like those people wll ever have a job again. What I think, and keep thinking, is that everyone should asymilate back into the airline market; those carriers' only problem is lack of sales, they are rolling in dough then go bankrupt.
They're not MC Hammer from the early 90's, he made 30 million one year and filled for bankrupcy the next, wow.
I think if the top execs were smart (as opposed to running away with millions not entirely like the Enron deal), they would formulate a plan to start from clean slate and use the resources available. That is, start a new airline annd use all of the previous employees, but with a change in contract (for the time being) and direction of interest. Something must be dramatically different to keep the same things from happening again.
These idea are not without their disadvantages. In order for these ideas to work, a bunch of someones must invest millions, possibly of they're own money, to make this work. I do not know how many current employees would invest so much ino their employer for the company's sake and their own. Most I run into seem quite selfish, based on that alone, perhaps none of this would work.
The meaning of life is curiosity; we were put on this planet to explore opportunities.
Bmacleod From Canada, joined Aug 2001, 2163 posts, RR: 0 Reply 4, posted (7 years 10 months 6 days 19 hours ago) and read 8610 times:
Quoting FLALEFTY (Reply 1): If DL were liquidated, for example, it would be a disaster for smaller cities in the South - Montgomery, Jackson, Augusta, Daytona Beach, Melbourne, etc.. These cities would lose mainline service, with scant hope that one of the surviving major airlines would be willing to offer replacement services.
DL may be the only option in the South, but if NWA were to shut down due to union woes (remember Eastern?) and it's starting to look more like it will happen, I can't see why UA, AA or CO wouldn't be able to handle the gaps at DTW, SEA, MSP.
The engine is the heart of an airplane, but the pilot is its soul.
Well express jet serves MGM, JAN, and DAB. I'm sure either they or Gulfstream would be more than willing to pick up Melbourne. As to all the other smaller markets in the south, I seriously doubt they'd go very long without anybody picking up service. One large carrier biting the dust is what most analysts have said needs to happen for years.
AviationAddict From United States of America, joined Feb 2006, 566 posts, RR: 0 Reply 7, posted (7 years 10 months 6 days 19 hours ago) and read 8582 times:
Would the loss of NW be enough to really shake-up the market though? Despite it's size it still seems to hold on to a sort of niche market. The loss of UA, AA, DL, CO or US would probably have a much greater long term effect. I don't really see any of those carriers going under anytime soon though; NW is probably the most likely candidate for closure. By the way, this is my first day as a FirstClassMember, so I'm sorry if I do something 'wrong' or say something that offends someone, I'm still learning!
Dreamflight767 From United States of America, joined Dec 2008, 75 posts, RR: 0 Reply 8, posted (7 years 10 months 6 days 19 hours ago) and read 8571 times:
I kinda asked this question on the NW pilot strike thread. There has been no response so I'm still wondering...
If NW goes on strike and does go into CH.7. What happens to all the small communities where NW, Pinnacle, and Mesaba are the ONLY airline service. Like here in Grand Forks, ND and several other ND cities/townships where NW is the sole airline link to the outside world. I have yet to hear of any other airline(s) putting these small towns on their "just in case" route map.
With that said, which ever airline does step up to replace NW should CH.7 occur...they will become an over night hero. Especially in MSP.
FLALEFTY From United States of America, joined Jan 2006, 395 posts, RR: 3 Reply 9, posted (7 years 10 months 6 days 19 hours ago) and read 8552 times:
Quoting DLPMMM (Reply 2): Absolutely! It is basic supply and demand. The supply of airline seats is far too high at this time, leading to unsustainably low prices for an inflated quantity of seats.
There is an old saying that the hole left in the water after pulling a finger out would be how much impact an individual person would have if leaving a big company. I think the loss of a major carrier would have a similar impact on the airline industry.
The supply of airline seats is far too high - on some routes: JFK-FLL, MCO-BOS, MIA-ORD, etc.. And that is the problem - all airlines, be they LCCs or legacies, want to fly the same high volume/low yield routes. Losing a major airline will not change this dramatically, especially with LCCs like AirTran and Spirit (for instance) in the process of adding capacity.
Even with the potential loss of Delta, I bet a passenger will still be able to fly to Boston from Orlando cheaper than flying to Miami.
9252fly From Canada, joined Sep 2005, 1367 posts, RR: 0 Reply 13, posted (7 years 10 months 6 days 19 hours ago) and read 8544 times:
It's my opinion that if a major airline were to go under,the vacuum would be filled in short order and you would be back to where you were. So having a major carrier go bankrupt is not the solution. What we are dealing with is rather complex. So long as any carrier see opportunities,it will continue to add capacity(Jetblue),it then becomes a question of whom to blame for the excess capacity in the market,Jetblue and Southwest for continually adding capacity,or the legacy carriers for not ceding market share to the low-cost carriers? If the legacy carriers can be profitable overall and not have their domestic operations cause an annual loss,then I think they should continue to maintain a domestic presence. The dilemma that most legacy carriers face is that without a domestic operation,they risk losing the connectivity to their international operations(domestic as well). It's a two-edged sword for the legacy carriers when faced with what domestic routes to cut.
Ckfred From United States of America, joined Apr 2001, 4906 posts, RR: 1 Reply 14, posted (7 years 10 months 6 days 19 hours ago) and read 8527 times:
If NW went under, you might see some of the surviving carriers set up focus-city operations at either DTW or MSP. Some of the cities in the upper Great Plains and Montana could get service to ORD (AA, Eagle, UA, or UA Express), SLC (DL or DL Connection), SEA (AS or Horizon), or DFW (AA or Eagle.)
But, any service added to these hubs would, in total, be less than service to MSP and DTW. DFW is a long flight from places like Grand Forks or Butte, MT. ORD is under operation caps set by the FAA, so increases would be somewhat limited.
Dreamflight767 From United States of America, joined Dec 2008, 75 posts, RR: 0 Reply 15, posted (7 years 10 months 6 days 19 hours ago) and read 8504 times:
Quoting FCYTravis (Reply 12): UA's SkyWest jets to DEN and ORD would be logical replacement service to the upper Midwest.
I thought so too but...
Alot of the airports here can't handle an RJ. NW used the Saabs on a lot of these routes, I don't believe Skywest has enough prop equipment to handle up here. The airports cannot afford to lengthen/upgrade the runways or the fire fighting equipment, ect.
Also, just not enough demand or paxs. to fill an RJ too and those who do fly, they want to go to and LOVE MSP not ORD or DEN that's all they know is MSP. The culture is kinda funny up here. They love love love NW as it has been their sole carrier for eternity. And many people here do business and have family in MSP. So this area is in big trouble.
AviationAddict From United States of America, joined Feb 2006, 566 posts, RR: 0 Reply 16, posted (7 years 10 months 6 days 19 hours ago) and read 8504 times:
Quoting 9252fly (Reply 13): If the legacy carriers can be profitable overall and not have their domestic operations cause an annual lose,then I think they should continue to maintain a domestic presence.
But the problem is that so many of the legacy carriers are not profitable, or if they are profitable they are making way less than the best LCCs. US and UA have filed for C11 so many times I think they probably have the bankruptcy court on speed dial. After a while the government, and all us taxpayers, are probably going to get tired of bailing out crappy companies that can't seem to get their acts together. Something has got to give eventually, and even if the liquidation of a major carrier doesn't "help" the industry, I really don't think it would hurt it any more, at least not in the long term. Sure the little markets would be in trouble at first, but eventually another carrier would certainly pick them up.
Isitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 25 Reply 17, posted (7 years 10 months 6 days 19 hours ago) and read 8472 times:
Hell yes. Planes are fully now. I ought to know, I am on them a couple of times a month..last week and again next week. If DL shut down, it would be an impact on a few burgs in the south, yeah but someone else would pick up the slack. Same with NW only in the midwest. Branson wants to start up and thats suicide. Just what we need....... another el cheapo to finish off markets already sick. If the carriers will raise price 9-11 per cent, and fuel dropped 40-60 cents a gallon, the carriers have a real shot at turning a dollar. Perhaps the sick balance sheet and dire futures on JetBlue is what the industry needs. Once the LCC raise fares the big guys will follow suit.
Its the SW and the JetBlues and the AirTrans saying no to increases over the past 18 month. Now the tide is turning because Blue is going red and there is one surefire way to fix that....and its not start another airline.
If two people agree on EVERYTHING, then one isn't necessary.
FLALEFTY From United States of America, joined Jan 2006, 395 posts, RR: 3 Reply 18, posted (7 years 10 months 6 days 19 hours ago) and read 8456 times:
Quoting AviationAddict (Reply 16): US and UA have filed for C11 so many times I think they probably have the bankruptcy court on speed dial.
I'm not implying that Delta's financial problems are not self-inflicted. When times were good (like in the Big '90's), Delta's management spent money like drunken sailors on leave. When times got bad (after 9/11), the managers woke up with a "hangover" consisting of uneconomically-sustainable labor agreements, a mish-mash of incompatible fleet types and a heavy debt incurred by foolishly purchasing two of their regional carriers (ASA and Comair).
And by the way, as much as it would hurt to lose them, I would never support using our tax dollars to bail Delta out.
Stitch From United States of America, joined Jul 2005, 28479 posts, RR: 84 Reply 19, posted (7 years 10 months 6 days 18 hours ago) and read 8448 times:
When it comes to supply and demand, remember that the majors have all reduced supply a great deal, but the LCCs came in and make it up. WN has expanded as the majors have retreated, because the majors can no longer use overwhelming capacity as a weapon to "flood out" the LCCs as they did in the 1990s. When both a major and WN operate a few flights a day, those passengers displaced by the major's reduction of capacity (and therefore faced with higher fares) are now migrating to the LCC.
Where the loss of a major will help is the supply of last-minute and flexible "extortion fares" in Economy and the First Class fares, which is where the majors really make their money. Remember the LCCs can (in theory) survive on a $299 one-way transcon fare, where the majors cannot. So if a major goes under, there will be less supply - but constant demand - for those $699/$999/$1999 fares, which means the remaining airlines will see improved revenue at the top end.
AviationAddict From United States of America, joined Feb 2006, 566 posts, RR: 0 Reply 20, posted (7 years 10 months 6 days 18 hours ago) and read 8424 times:
What's the real benefit of flying a legacy versus a LCC on a typical domestic route? The legacies have had cut back on so many of their frills which made them a "legacy" carrier in the first place that now they've basically turned into an overprice Greyhound bus that flies. I mean, I fly a lot between the Boston area and the DC area, which up until the recent introduction of B6 service between IAD-BOS, meant that tended to fly either WN or US because those two airlines offered the most flights. Yet, after a while I got smart and stopped flying US because I realized I was generally paying nearly twice as much for the same size seat, glass of water and bag of peanuts. So honestly, why continue to pump money into an overpriced, poorly managed company?
9252fly From Canada, joined Sep 2005, 1367 posts, RR: 0 Reply 23, posted (7 years 10 months 6 days 17 hours ago) and read 8331 times:
Quoting AviationAddict (Reply 20): The legacies have had cut back on so many of their frills which made them a "legacy" carrier in the first place that now they've basically turned into an overprice Greyhound bus that flies.
...and who's fault is that? Yes,it's you the consumer(Not you specifically Aviaiton Addict)! Stop whining about the legacy carriers turning into the Greyhound(Mass transit) of the skies(Domestic). I've never heard so much whining from people on this forum about how the legacies have cut back on this and that. Somehow it's okay to pay LCC fares,yet somehow think a legacy carrier still has enough margin in the fare to continue to offer the "frills". Please don't' give me that BS story that legacy carriers fares are all 10X the price of the LCC's. If the whiners on this site had their way we wouldn't have any legacy carriers,which by the way,make for great discussion on this site. Imagine having only Jetblue,Southwest,Frontier and Airtran as the only domestic airlines in the country,oh boy,that sure would make for fascinating comparisons! Topics on domestic travel would simply become boring and mindless.
AviationAddict From United States of America, joined Feb 2006, 566 posts, RR: 0 Reply 24, posted (7 years 10 months 6 days 16 hours ago) and read 8246 times:
Quoting 9252fly (Reply 23): If the whiners on this site had their way we wouldn't have any legacy carriers,which by the way,make for great discussion on this site. Imagine having only Jetblue,Southwest,Frontier and Airtran as the only domestic airlines in the country,oh boy,that sure would make for fascinating comparisons! Topics on domestic travel would simply become boring and mindless.
Well, sorry, I didn't realize the legacy airlines were still around to give you something to talk about. Honestly, the consumers surely have some role in the demise of these carriers, but I would argue that high gas prices, older and less fuel efficient fleets and some overall bad managment decesions are much more to blame. I still don't understand why you'd pay more money for the same flight; it's like people that go to gas station A when gas staion B right next door has the same fuel for $0.08 less. I still don't think I'd be inclined to fly a legacy even if it were able to offer all the extras is used to so long as carriers like WN, B6 and others undercut the fares. I don't fly so I can sit in a big cushy lounge chair, watch movies on my personal TV and eat ice cream, I fly for the thrill of it (but hey, I can get a lot of that stuff on the "boring" LCCs too at lower prices, so why not)? I don't think anyone was whining, I myself said I didn't want to see any airline go under if it was avoidable. And to be honest with you, I think the whole legacy vs. lcc argument will become irrelevant eventually anyways because somewhere down the road the thrill of cheap fares or ultraluxurious cabins will cancel eachother out and the industry will have to find something else to attract more customers.