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Could US Carriers Merging Spawn A Need For VLA?  
User currently offlineJetjack74 From United States of America, joined Jul 2003, 7408 posts, RR: 50
Posted (7 years 8 months 3 weeks 4 days 7 hours ago) and read 3175 times:
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With all these possible mergers and fewer carriers in the US, could there be a renewed need for the 747/A380? With many routes being combined, the need for a 747 or an A380 could sprout by fewer carriers.


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11 replies: All unread, jump to last
 
User currently offlinePlanemaker From Tuvalu, joined Aug 2003, 6156 posts, RR: 35
Reply 1, posted (7 years 8 months 3 weeks 4 days 2 hours ago) and read 3096 times:

Eventually, absolutely but not just in the US.

The industry globally is still in the 70's from a business and regulatory environment. Eventually aviation will have to catch up with every other major industry and operate on a global playing field where international M&As are allowed. It makes absolutely no sense that there are more more airlines than car manufacturers, or computer manufacturers, etc, etc.



Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
User currently offlinePanAm747 From United States of America, joined Feb 2004, 4242 posts, RR: 8
Reply 2, posted (7 years 8 months 3 weeks 3 days 17 hours ago) and read 3024 times:

Only at slot-restricted airports.

The trend in the United States is to maximize the number of choices while restricting the number of available seats. Business travellers want choices - aka six RJ flights a day from ORD rather than just two mainline flights, for example - and keeping too many of those seats from being the "super-cheap" seats (more premium passenger fares = more money).

As an example, look at SAN. Critics of the way the airport is "run" contend that it is American Eagle and United Express clogging the runway with their puddle-jumper flights to LAX.

"If they'd just switch to larger jets, we wouldn't have such a crowded runway" the logic goes.

United tried mainline flights on "Shuttle By United". They bled red ink from day one.

United Express, however, offers smaller planes, fewer available seats per flight, but most importantly, can be up and down all day. This is the trend that business travellers (the real money makers for airlines) want - more frequencies and more choices.



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User currently offlineSJCRRPAX From , joined Dec 1969, posts, RR:
Reply 3, posted (7 years 8 months 3 weeks 3 days 14 hours ago) and read 2948 times:

Quoting Planemaker (Reply 1):
The industry globally is still in the 70's from a business and regulatory environment. Eventually aviation will have to catch up with every other major industry and operate on a global playing field where international M&As are allowed. It makes absolutely no sense that there are more more airlines than car manufacturers, or computer manufacturers, etc, etc.

There is a military aspect of airlines that you are over looking. Every major country will want to keep control over their civillian aircraft in case of national emergencies, so the international mergers will not occur to the point that you have only a few airlines. Another aspect that you are overlooking is a national pride, nothing shows off a national flag more than an airline, therefore I can never see countries giving up having an airline. For high labor countries like the US, can you imagine letting a Chinese airline paying employees $5/day shuttle pax's around? The reason there will always be a lot of airlines is because the cost of entry is relatively low and nothing stokes the ego like owning your own airline. Number of airlines will more likely equal number of Taxi-cab companies than number of auto manufactures.


User currently offlineBobnwa From United States of America, joined Dec 2000, 6465 posts, RR: 9
Reply 4, posted (7 years 8 months 3 weeks 3 days 14 hours ago) and read 2935 times:

Quoting SJCRRPAX (Reply 3):
There is a military aspect of airlines that you are over looking. Every major country will want to keep control over their civillian aircraft in case of national emergencies, so the international mergers will not occur to the point that you have only a few airlines

This is exactly what happened in the shipping industry. All the ships owned by Carnival, Princess, RCCL, Holland America, Costa, Cunard,Celebrity which are American owned companies, are registered in Foreign countries. The same with cargo ships. The U.S. shipping industry does not exist any more. There are a couple of NCL ships which are U.S. registration through a quirk in the law. It has been that way for many years.


User currently offlineNosedive From , joined Dec 1969, posts, RR:
Reply 5, posted (7 years 8 months 3 weeks 3 days 11 hours ago) and read 2854 times:

Quoting SJCRRPAX (Reply 3):
There is a military aspect of airlines that you are over looking. Every major country will want to keep control over their civillian aircraft in case of national emergencies, so the international mergers will not occur to the point that you have only a few airlines.

Fair point in theory, but the major airlift you're implying hasn't happened since the 2nd World War.

Quoting SJCRRPAX (Reply 3):
Another aspect that you are overlooking is a national pride, nothing shows off a national flag more than an airline, therefore I can never see countries giving up having an airline.

KLM? Swiss? Virgin being 49% owned by Singapore Air? Granted there is some major branding... but int'l M&As do happen! The freer the private sector is able to move across borders, the more it happens. Also, you act as if a good chunck of national airlines are owned by the state still....

Quoting Bobnwa (Reply 4):
This is exactly what happened in the shipping industry. All the ships owned by Carnival, Princess, RCCL, Holland America, Costa, Cunard,Celebrity which are American owned companies, are registered in Foreign countries.

I'm not following your logic here, or you're comparing apples and oranges. Many times foreign registration of ships can relieve many of your headaches, but there are a multitude of (labor) issues with foreign registration of aircraft, not to mention open skies problems. Also, can Americans crew a non US registered aircraft? Someone with more enlightenment please help me b/c I'm shooting from the hip here.


User currently offlineAirCop From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 8 months 3 weeks 3 days 10 hours ago) and read 2843 times:

Quoting Bobnwa (Reply 4):
All the ships owned by Carnival, Princess, RCCL, Holland America, Costa, Cunard,Celebrity which are American owned companies, are registered in Foreign countries.

FYI: Carnival owns Holland America, Cosa, Windstar etc. Ships are registered in non-US ports for various reasons, one major reason is labor laws. Same reason why US Airlines will hire non-americans for cabin crew staff, not only can they speak the language of the base country but they can be paid less.


User currently offlineSJCRRPAX From , joined Dec 1969, posts, RR:
Reply 7, posted (7 years 8 months 3 weeks 3 days 10 hours ago) and read 2806 times:

Quoting Nosedive (Reply 5):
Fair point in theory, but the major airlift you're implying hasn't happened since the 2nd World War.

We haven't used atomic weapons since WWII but we still got them. But, as far as I know 2003 was the last time the US called upon the civilan airlift capability. Also Gulf War I. The USA isn't the only country either that does this, China does it extensively and fairly sure on Russia, ... but I won't bother research further.

http://www.usatoday.com/travel/news/...3/2003-02-10-pentagon-airlines.htm

Quoting Nosedive (Reply 5):
KLM? Swiss? Virgin being 49% owned by Singapore Air? Granted there is some major branding... but int'l M&As do happen! The freer the private sector is able to move across borders, the more it happens. Also, you act as if a good chunck of national airlines are owned by the state still....



You can always find exceptions to the rule, but I wonder how the British would feel if Singapore Air with its close government ties took over BA in additon to Virgin, or how the French would like it if China Air took over Air France. I was in France once when a huge Indian company tried to take over their steel plant and the French didn't seem to happy about that.

[Edited 2006-12-14 00:55:38]

[Edited 2006-12-14 00:59:17]

User currently offlineGbfra From Germany, joined Sep 2006, 448 posts, RR: 0
Reply 8, posted (7 years 8 months 3 weeks 3 days 10 hours ago) and read 2773 times:

Quoting PanAm747 (Reply 2):
The trend in the United States is to maximize the number of choices while restricting the number of available seats. Business travellers want choices - aka six RJ flights a day from ORD rather than just two mainline flights, for example - and keeping too many of those seats from being the "super-cheap" seats (more premium passenger fares = more money).

You are certainely right that business travellers want choices - but airline companies have to make money!

I wonder if this business model based on high frequencies inside the US has served American legacy carriers well. If this was not the case they might have to reconsider it. Just a guess.



The fundamental things apply as time goes by
User currently offlineSJCRRPAX From , joined Dec 1969, posts, RR:
Reply 9, posted (7 years 8 months 3 weeks 3 days 9 hours ago) and read 2712 times:

Quoting Gbfra (Reply 8):
You are certainely right that business travellers want choices - but airline companies have to make money!

I wonder if this business model based on high frequencies inside the US has served American legacy carriers well. If this was not the case they might have to reconsider it. Just a guess.

I have seen this guess being made over and over on this forum, and typically by a European. To me it shows clearly why Airbus and Boeing have different views on air travel. I think part of it has to do with the great train system in Europe. Over the years we have watched, and Boeing has too, virtually every single domestic 747 flight be replaced by smaller aircraft, and yet this idea keeps popping up. Ok, here is the deal, lets say UA decides to launch domestic air travel on an A380 daily from SFO - JFK, departing at 10:00 AM. Do you know what will happen? Jet Blue, Southwest, USAIR, Virgin America etc, will Bracket that flight with about 10 flights going from (JFK-LGA-EWR-ISP-TEB-HPN) to (SFO-SJC-OAK-SMF) leaving every 1/2 hour to and from every possible combination of local airports. The A380 would end up running with about 1/3 full losing money all the way. Sure, you can go ahead and imagine all the airlines merging, but than maybe Bill Gates or someone will start GATES AIR, and than where are you? Maybe in Europe, you'll get your wish and have daily departures on the A380 from HAM to FRA, but I think Americans will have no part of that.


User currently offlineNosedive From , joined Dec 1969, posts, RR:
Reply 10, posted (7 years 8 months 3 weeks 3 days 9 hours ago) and read 2691 times:

Quoting SJCRRPAX (Reply 7):
You can always find exceptions to the rule, but I wonder how the British would feel if Singapore Air with its close government ties took over BA in additon to Virgin, or how the French would like it if China Air took over Air France.

Again, apples and oranges. If BA piped up over Singapore Air they would be hypocritical. The EU, through, the common market theory, allows for some nice ownership regulations. If you want to say exceptions to the rule, Europe is a huge one.... or maybe the rules are loosely defined. Hell, even Qantas has had a take-over bid, and even Ryanair is looking at AerLingus. The point is, the argument of losing a flag carrier may be a bit overblown, save for namesake alone, and I've addressed those points.

Quoting SJCRRPAX (Reply 7):
But, as far as I know 2003 was the last time the US called upon the civilan airlift capability. Also Gulf War I. The USA isn't the only country either that does this, China does it extensively and fairly sure on Russia, ... but I won't bother research further.

Fair points on the Gulf; being tired makes you forget things. But again, no disagreements with the theory at all, but your article states:

Quote:
Officials have the authority to call up 78 aircraft --- 47 passenger planes and 31 wide-body cargo planes. But for now, Air Force Gen. John W. Handy, commander of the U.S. Transportation Command, has enough cargo planes and is calling only the passenger aircraft, said command spokesman Navy Capt. Steve Honda.

So that's 47 (probably widebody) passenger planes...

Of which:

Quote:
They are American Airlines, American Trans Air, Continental Airlines, Delta Airlines, Hawaiian Airlines, North American Airlines, Northwest Airlines, Omni Air International, United Airlines, US Airways and World Airways.

Familiar planes in military transport.... that probably leaves us with 35 planes... Again, the theory of civil-military airlift is valid, but there should be plenty of American owned airlift to supply the military for some time to come. The rest ought to come from some nicely worded treaties and legislation...

How much does China lift? Do you know the regulations?

Nonetheless, it's apparent I don't have much knowledge about the military lift requirements for full deployment of US troops. If you know it, how much would it be in terms of planes required and frequency of aircraft use? If you don't have it, we'll be going around in circles, which I don't feel like doing.

Back on topic: Mergers and previous history did not lead to 2006 having 747s doing transcons, and I don't think future economics will either. You lose a lot of your nimbleness with too big a plane. Too many seats go unfilled, and you can't just reduce flying VLAs b/c anytime a plane is parked it's not adding revenue to an airline. Smaller LCCs and other mergers would eat you alive w/ a wrong sized aircraft.

Internationally, I don't see foreign ownership laws improving, unless there are major structural problems inside the entire airline industry, and I see the government bailing out every last airline instead of letting foreign ownership laws being relaxed. Think of the union backlash. Or maybe I've just been too far away from home for too long.

EDIT: spelling and a major typo

[Edited 2006-12-14 02:00:07]

User currently offlineBobnwa From United States of America, joined Dec 2000, 6465 posts, RR: 9
Reply 11, posted (7 years 8 months 3 weeks 2 days 19 hours ago) and read 2578 times:

Quoting AirCop (Reply 6):
FYI: Carnival owns Holland America, Cosa, Windstar etc. Ships are registered in non-US ports for various reasons, one major reason is labor laws. Same reason why US Airlines will hire non-americans for cabin crew staff, not only can they speak the language of the base country but they can be paid less.

Didn't I just say that? My point was they are not American ships and cannot be used at will by the US government if it became necessary. There is no great uproar over this.


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