Political views aside, does this not sound like reregulation of the industry to anyone else? It also says that the unions are in favor of this? Is this a true statement?
MetjetCEO From United States, joined Jun 2007, 124 posts, RR: 0 Reply 2, posted (1 month 1 day 8 hours ago) and read 4876 times:
If reregulation is used to generate funds for special projects (GPS Control systems, etc.) I assure you the benefits will not be going to the Unions. In fact, you could argue that regulation will eliminate the flexibility needed by companies and severly hamper the work environment as yet another layer of management is placed in between the employees and the airline managers.
MetjetCEO From United States, joined Jun 2007, 124 posts, RR: 0 Reply 3, posted (1 month 1 day 8 hours ago) and read 4861 times:
The other thing to remember that deregulation brought about the great companies that are benefiting travel today, and though some great players are gone due to deregulation the industry is much healthier than it was in the past. If the airlines cant survive in a competitive environment...they should not be in operation to begin with.
I would gladly take my chep fare on a self sufficient airline than pay 3-5x as much because a company cant manage their finances and traffic flows.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 4, posted (1 month 1 day 7 hours ago) and read 4762 times:
Quoting MetjetCEO (Reply 3): the industry is much healthier than it was in the past.
By what measure?
Quoting MetjetCEO (Reply 2): If reregulation is used to generate funds for special projects (GPS Control systems, etc.) I assure you the benefits will not be going to the Unions.
No - unions, I assume, hope that that is a first step toward some sort of fare regulation, which would benefit them.
Flighty From United States, joined Apr 2007, 4586 posts, RR: 2 Reply 5, posted (1 month 1 day 7 hours ago) and read 4744 times:
Just imagine if the Detroit auto industry hadn't taken ANY government bailout money, but still restructured and produced more goods than ever.
That's what the airline industry has achieved. The airline industry is a big success for America. Near zero bailouts. Bankruptcies occurred but guess what, the industry is doing its job safely and in the genuine capitalist environment. Businesses do fail, and it's not a government problem when they do. It is a private problem.
This means nobody was taxed to fund the airlines. It means services are everywhere the consumer wants them. To reregulate would be crazy. If anything, the airline industry suggests that bailouts are totally unnecessary (in my view, the banking / TARP was protecting bad businesses in the name of "stabilization" in the form of giant tax pools flowing to certain people.
Airlines showed that capitalism's backside (bankruptcy) can work in an orderly way and keep people employed, keep an industry working. They even tolerated the financial crisis more or less intact!
DocLightning From United States, joined Nov 2005, 7500 posts, RR: 50 Reply 6, posted (1 month 1 day 7 hours ago) and read 4725 times:
Quoting MetjetCEO (Reply 3):
I would gladly take my chep fare on a self sufficient airline than pay 3-5x as much because a company cant manage their finances and traffic flows.
I keep hearing about the massively increased fares that regulation would cause.
Now, does anyone know how average fares have changed since regulation? Not the absolutely cheapest, rock-bottom, six-months-in-advance-on-alternate-Tuesdays-when-the-moon-is-in-the-house-of-Aires fares, but average fares.
N911YX From United States, joined Mar 2006, 117 posts, RR: 0 Reply 7, posted (1 month 1 day 4 hours ago) and read 4639 times:
Quoting Ikramerica (Reply 7): Now, does anyone know how average fares have changed since regulation?
Anecdotally. My Dad flew from SFO-PIT on TWA in 1971 with a 2 day advance purchase and paid $586 r/t. Adjusted for inflation that's a small fortune.
In 1980, post deregulation, I flew SFO-MCI-JLN two-day advance notice with a return reroute JLN-SGF-FYV-FSM-DFW-SFO and paid no more than the original $500 r/t ticket. Again, in 1980 dollars that was quite a small fortune.
I can still fly MCI-SFO-MCI regularly for less than $229 with a week's notice.
I don't see re-regulation coming back without further diminishing business travel. The Feds will demand carriers reduce "deep vein thrombosis" by forcing them to widen seating and pitch length. Fewer seats - fares go up. Meals for all - fares go up, Fares go up - pax counts go down.
Tdscanuck From Canada, joined Jan 2006, 5768 posts, RR: 56 Reply 8, posted (1 month 1 day 4 hours ago) and read 4620 times:
Quoting MetjetCEO (Thread starter):
Political views aside, does this not sound like reregulation of the industry to anyone else?
It does not sound like reregulation to me. The airline industry is already heavily regulated, it sounds like they want to tweak the existing regulations. "Reregulation" in the sense of going to the pre-1970's business model seems incredibly unlikely.
Quoting Cubsrule (Reply 4):
Quoting MetjetCEO (Reply 3):
the industry is much healthier than it was in the past.
By what measure?
Safety, cost, number of destinations served, flight frequency, accessibility...
Quoting DocLightning (Reply 6): Now, does anyone know how average fares have changed since regulation? Not the absolutely cheapest, rock-bottom, six-months-in-advance-on-alternate-Tuesdays-when-the-moon-is-in-the-house-of-Aires fares, but average fares.
I believe the average has stayed rather constant in numeric dollars. That means, when you account for inflation, it's been getting steadily cheaper.
Kellmark From United States, joined Dec 2000, 569 posts, RR: 8 Reply 10, posted (1 month 1 day 2 hours ago) and read 4528 times:
This whole thing will be about saving union jobs. Just like the auto industry.
The "popular" way to guarantee jobs has been to "bailout" the large legacy companies (carriers). But the government could still limit competition and have nearly the same effect.
They could limit new entrant carriers, or create a "floor" fare which no one can go below. Or even limit certain routes.
The problem with all of this is that if you abandon the free market, it creates a larger problem than you had before. Note the Auto industry and what a disaster that is. GM will always need more and more taxpayer money. They have never met any of their targets.
Even better, just look at Amtrak. Billions of dollars a year for a failed enterprise, which subsidizes a few at the expense of the many.
To save a union job, all of us will pay a very high price. Higher fares, fewer choices. And higher taxes for the rest of us. Once you intervene in the market, logic is removed and politics replace it.
Companies would no longer seek to make profits by being productive, efficient, and effective. They would become pure lobbyists in Washington, just like the auto companies, banks and apparently soon, health care companies. Its a disaster in the making, just like the rest of the government intervention.
The airlines are in big trouble because demand is way down, especially business travel. Because the economy is in the tank. And this will continue as the Obama administration continues its statist high spending high tax policies, No business is going to invest in the future or hire anyone back in this terrible environment. But this administration's response to every problem that it creates is simply more state intervention. It is a deepening spiral. But the airlines would recover, along with the rest of the economy, if the government drastically cut spending and slashed taxes. Business would respond and the economy would recover. But that is not the Obama ideology. They are doing exactly the opposite, with the health care trillion dollar boondoggle and cap and trade which will double energy costs and the union card check, which seeks to unionize nearly every business in the country, all of which will hurt business, create more unemployment and raise taxes.
It is interesting that the airlines/unions are going to the same people that have caused the problem to get help. But if the government intervenes in the airlines,like they have in other industries, it is going to cost the rest of us big time.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 12, posted (1 month 1 day ago) and read 4412 times:
Quoting Cubsrule (Reply 1): Why wouldn't they be? Deregulation has resulted in a massive wealth transfer from labor and investors to passengers.
It wasn't full deregulation... and that has caused the problem. There are simply too many airlines, and legislators make it extremely difficult to merge airlines.
Tdscanuck From Canada, joined Jan 2006, 5768 posts, RR: 56 Reply 13, posted (1 month 23 hours ago) and read 4354 times:
Quoting Jetfuel (Reply 10): A system where airlines are again forced to compete on service to customers - YES
They do that now. Customers have *very* clearly demonstrated exactly how much they value service by the airlines.
Quoting Cubsrule (Reply 12):
Quoting Tdscanuck (Reply 9):
Safety, cost, number of destinations served, flight frequency, accessibility...
And which of those tells us anything about financial health?
None...but financial health of an *industry* is meaningless. You've got some carriers that are fine and some that are financial disasters. The problem isn't the marketplace...that's worked just fine to delivery exactly what it's supposed to. The problem is that we don't let the companies die off who *can't* deliver a healthy service and be financially at the same time.
John From United States, joined Sep 1999, 1303 posts, RR: 8 Reply 14, posted (1 month 15 hours ago) and read 4263 times:
If the "average" consumer truly values full service amenities, then they should be willing to pay for it. In today's environment, all the customer cares about is cheapest fare, period. What kind of service do you expect on a $69.00 fare? Safe, convenient and reliable transportation. That's all anyone should expect. Nothing more, nothing less.
Brilondon From Canada, joined Aug 2005, 1515 posts, RR: 0 Reply 15, posted (1 month 14 hours ago) and read 4235 times:
Quoting MetjetCEO (Reply 3): I would gladly take my chep fare on a self sufficient airline than pay 3-5x as much because a company cant manage their finances and traffic flows.
Unfortunately people still expect the same service levels for the lower fares but of course that is not the way it works. Deregulation has led to choice in the market place that is good. The choices though are still controlled by Government by airlines having to apply for routes and in Canada the Government still controls a fair bit of the industry by not allowing foreign airlines to compete domestically with in Canada there by giving only two choices within Canada. This is bad. No choice, high fares.
Having low expectations means you won't be disapointed.
Kalvado From United States, joined Feb 2006, 205 posts, RR: 0 Reply 17, posted (1 month 14 hours ago) and read 4208 times:
Quoting Tdscanuck (Reply 14):
They do that now. Customers have *very* clearly demonstrated exactly how much they value service by the airlines.
Services may be different. on-board amenities are an easy way of selling "service", but what about real ones? Improve travel, not travel experience.
Just for example, service may mean different priorities for different flights in / out of busy hub.
Some, like Mir, would like 30-minutes intervals on a route, with flights running 2 hours late. some may settle with 3 flights a day, with flights having guaranteed slots for harsh weather conditions. Mix those, and see if pax would choose congestion or price. It's not overpriced sandwiches, it's something real.
I don't think anyone tried that, since current airport regulations make it impossible. But we're talking about changing rules, so why not?
2175301 From United States, joined May 2007, 636 posts, RR: 0 Reply 18, posted (1 month 13 hours ago) and read 4165 times:
I would not support a return to the old regulated airlines of the 70's and 80's.
The biggest change needed to ensure profitable companies in the US is a change to the bankruptcy laws to limit the number of companies that can do a Chapter 11 reorganization. If about 1/2 of the companies that enter Chapter 11 were forced to shut down and liquidate (Chapter 7) then the entire industry (and many industries) would in fact be in better shape. It would eliminate the worst decision makers and the most uneconomical airlines. It would sharpen investors and lenders focus to avoid risk in saturated markets. It would force a company in trouble to take actions a lot earlier than currently.
The second change needed is a change in the tax laws that focus the Board of Directors and Investors on 2-3 year profitability instead of "this quarter's performance"
As far as the airlines: I would support regulations that would ensure you had a well rested crew and allowance for naps during cruise.
PanAm788 From United States, joined Sep 2008, 125 posts, RR: 0 Reply 20, posted (1 month 11 hours ago) and read 3966 times:
I guess I'd say that I'm for either one government funded flag carrier (like LH, EK, etc) or a completely deregulated market. Since America is a bit too large of a market for one international flag carrier, I support a free market system. IMO, a government reregulation would cause a lot of problems.
1. What about carriers that get the majority of their money because of their low fares (SW)?
2. The amount of money needed to please the current private investors would be mind blowing.
3. I think overall, service would go way down on domestic flights, though perhaps not international ones because domestic carriers would have little or no competition on domestic routes.
I think the idea that the glory days of TWA and PanAm would return with regulation is just pure optimism.
I would disagree. DL, in becoming a "World Airline" is much more likely to try to offer a product more like EK's and SQ's without raising fares. If DL and NW didn't merge, DL and NW would attract basically only Americans who flew on them for convenience (low fares, frequent flier programs, etc). Now they wan to keep that level of convenience as well as making themselves attractive to the world.
Manfredj From United States, joined Mar 2007, 865 posts, RR: 0 Reply 21, posted (1 month 11 hours ago) and read 3922 times:
Quoting MetjetCEO (Thread starter): Political views aside, does this not sound like reregulation of the industry to anyone else? It also says that the unions are in favor of this? Is this a true statement?
It's VERY hard to take politics out of the equation here. This could spell disaster for the industry. (and no it's not in bad shape already) The government will use any excuse it can to gain more control of this industry siting "greenhouse gas emissions" or a revamp of the ATC system in order regulate the industry.
We're talking about a government who took over Amtrak, which hasn't made a sustainable profit since....imagine what they would do the airline industry. The post office, DMV's and basically anything else the govenment touches is riddled with too much regulation, unions and politics which hurt our industry.
Leave the airline industry alone. That means you need to take a truly capitalist approach and stop bailing out the weak airlines. Let them go and this will enable the stronger ones to grow and make a profit.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 22, posted (1 month 10 hours ago) and read 3680 times:
Quoting PanAm788 (Reply 21): I would disagree. DL, in becoming a "World Airline" is much more likely to try to offer a product more like EK's and SQ's without raising fares. If DL and NW didn't merge, DL and NW would attract basically only Americans who flew on them for convenience (low fares, frequent flier programs, etc). Now they wan to keep that level of convenience as well as making themselves attractive to the world.
It's great for the airline that merge. The issue is that it isn't good for the industry.
Quoting Manfredj (Reply 22): We're talking about a government who took over Amtrak, which hasn't made a sustainable profit since....imagine what they would do the airline industry.
To be fair, the government took over passenger rail because it wasn't making money.
PanAm788 From United States, joined Sep 2008, 125 posts, RR: 0 Reply 23, posted (1 month 9 hours ago) and read 3585 times:
Quoting Cubsrule (Reply 23): It's great for the airline that merge. The issue is that it isn't good for the industry.
Well since they want to increase their service and keep their low prices and convenience, assume they succeed to some level, and other airlines have to follow to stay competitive, and sooner or later, all airlines have increased service, low prices and good convenience
Sure the competition is upset that they need to spend money in order to remain profitable, but in the end, the best will win, and the customer will be happiest. How is that bad for the industry?
Just because there's a goalie doesn't mean you can't score.
N1120A From United States, joined exactly 6 years ago today! , 23653 posts, RR: 89 Reply 24, posted (1 month 9 hours ago) and read 3568 times:
Quoting Flighty (Reply 5): The airline industry is a big success for America. Near zero bailouts.
Um, do you remember the post-9/11 bailouts?
Quoting Jetfuel (Reply 10):
A system where airlines are again forced to compete on service to customers
The airlines do compete on service. The problem is, customers are too often unwilling to vote with their wallets and either 1) not fly or 2) not look past the basic cost of the ticket to all the ancillary costs (this is even worse in Europe).
Quoting Planemaker (Reply 13): There are simply too many airlines, and legislators make it extremely difficult to merge airlines.
1) The anti-trust laws exist for a reason. To protect capitalism and market efficiencies.
2) Who says there are too many airlines? These airlines can make money if they want, they just steadfastly refuse to shape their product based on actually successful models and try to nickel and dime their way to profitability instead.
Quoting PanAm788 (Reply 21): I would disagree. DL, in becoming a "World Airline" is much more likely to try to offer a product more like EK's and SQ's without raising fares.
Not really. US airlines are different than their foreign competitors. Most of their business comes from the massive domestic market, which then also drives their international traffic.
Quoting Cubsrule (Reply 23):
To be fair, the government took over passenger rail because it wasn't making money.
Not to mention the fact that the freight railroads set up Amtrak to fail and have been nothing but an impediment to its progress. Personally, I think all rails should be either federalized or taken over by the states, in the way highways are.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 25, posted (1 month 8 hours ago) and read 3480 times:
To reduce congestion, privatize and fully deregulate (you can keep safety regulations) major congestion centers: all NYC area airports, Chicago airports, and Los Angeles airports (even general aviation airports). This will have a major impact on the industry and congestion.
Short of that, fixing how airlines are charged for using airports should help a little bit. I don't know how all airports charge airlines, but a flat, fixed fees for all types of aircraft would be better than what we have now. This also means phasing out passenger facility fees.
I don't understand the safety argument from the article. Airline travel has never been safer.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 26, posted (1 month 8 hours ago) and read 3645 times:
Quoting Cubsrule (Reply 23): Quoting Manfredj (Reply 22):
We're talking about a government who took over Amtrak, which hasn't made a sustainable profit since....imagine what they would do the airline industry.
To be fair, the government took over passenger rail because it wasn't making money.
The interstate system gave rise to the car dependency culture and urban sprawl, which drove the pax rail companies out of business.
[Edited 2009-11-14 12:57:34]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
N1120A From United States, joined exactly 6 years ago today! , 23653 posts, RR: 89 Reply 27, posted (1 month 8 hours ago) and read 3608 times:
Quoting PPVRA (Reply 26): To reduce congestion, privatize and fully deregulate (you can keep safety regulations) major congestion centers: all NYC area airports, Chicago airports, and Los Angeles airports (even general aviation airports). This will have a major impact on the industry and congestion.
I completely disagree. Ports, including airports, are inherently governmental. Even the staunchest libertarians I know agree on this point. BAA's running of London airports is reflective of just how bad private airport "ownership" is.
Quoting PPVRA (Reply 27): The interstate system gave rise to the car dependency culture and urban sprawl, which drove the pax rail companies out of business.
Not to mention the massive under-investment in the rail infrastructure, despite its obvious efficiency advantages and historic links to government intervention anyway.
Quoting PPVRA (Reply 26): This also means phasing out passenger facility fees.
PFCs are passed on directly to the consumer, so I don't see why the airlines would care.
Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
Manfredj From United States, joined Mar 2007, 865 posts, RR: 0 Reply 28, posted (1 month 8 hours ago) and read 3593 times:
Quoting Cubsrule (Reply 23): To be fair, the government took over passenger rail because it wasn't making money.
Yes but, arguably...consititutionaly, our government is not in business to take over companies that aren't making money, let alone whole industries.
Capitalism is set up to Naturally drive up or down demand, let companies who aren't competitive fail and the strong ones survive. When you "bail out" companies it upsets the idea of free markets and impedes on the natural order of survival.
Our "beloved" Southwest Airlines would not exist if the government ran things. It was a perfect example of customer demand for a cheap airline with quality product. Someone listened and a great airline was born. It's free of the rules and general wasted money that's reminiscent of government ran entities.
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 29, posted (1 month 8 hours ago) and read 3516 times:
Quoting N1120A (Reply 28): I completely disagree. Ports, including airports, are inherently governmental. Even the staunchest libertarians I know agree on this point. BAA's running of London airports is reflective of just how bad private airport "ownership" is.
I don't see why. I know of companies that avoid the port of Houston and prefer to use a nearby one that is privately owned because it is less delay prone.
BAA has their hands tied behind their backs by economic regulations. They can do much better if they were allowed to try to maximize profits from their airport operations rather than be forced to make up revenue with useless shopping stands.
Quoting N1120A (Reply 28):
Not to mention the massive under-investment in the rail infrastructure, despite its obvious efficiency advantages and historic links to government intervention anyway.
The under investment was due to government regulations. You almost lost your freight rail industry too, but they were more resilient than pax rail and lasted until Carter largely deregulated rail and airlines. Today they are very healthy companies.
Quoting N1120A (Reply 28): PFCs are passed on directly to the consumer, so I don't see why the airlines would care.
All fees airports charged would be replaced with a flat landing fee, so some complaining from the airlines would definitely happen. Aside from simplifying, a higher landing fee (since it's combining all fees into one) gives airlines an incentive to reduce scheduling abuses by making it more expensive.
[Edited 2009-11-14 13:25:40]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 30, posted (1 month 8 hours ago) and read 3506 times:
Quoting Manfredj (Reply 29): Yes but, arguably...consititutionaly, our government is not in business to take over companies that aren't making money, let alone whole industries.
But the government created the problem by building interstate highways - so wouldn't leaving the railroads alone have unfairly favored the stakeholders in road transportation?
Quoting PanAm788 (Reply 24): Sure the competition is upset that they need to spend money in order to remain profitable, but in the end, the best will win, and the customer will be happiest.
Right - the best win until there's only one airline left, and then that airline can charge monopoly rents. Is that a good result?
BMI727 From United States, joined Feb 2009, 3379 posts, RR: 1 Reply 31, posted (1 month 8 hours ago) and read 3480 times:
Quoting Cubsrule (Reply 31): Right - the best win until there's only one airline left, and then that airline can charge monopoly rents. Is that a good result?
But that won't be the case. Someone will see that and start a new airline. But don't get me wrong, both anti-trust laws and economic Darwinism are very good things. Problems occur when failing businesses are propped up.
Why do Aerospace Engineering students have to turn things in on time?
Safety, cost, number of destinations served, flight frequency, accessibility...
I believe more destinations were served in the 70s and early 80s. And there were more flights and choices for small and medium cities, and their fares were lower. Ergo, accessibility was greater. As they say, it was a different time.
Quoting Kellmark (Reply 10): Even better, just look at Amtrak. Billions of dollars a year for a failed enterprise, which subsidizes a few at the expense of the many.
Railroads create and pay for their own infrastructure. Amtrak is part of that. If airlines had to provide their own airports (one each per airline, if you use the analogy of single tracks for single railroads), air traffic control, navigation...
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 33, posted (1 month 1 hour ago) and read 3326 times:
Quoting Cubsrule (Reply 19): Actually, the mainstream view among economists seems to be that mergers have hurt the industry.
There are not even 5 economists that would say that mergers have hurt the industry. Forget about mainstream!
Quoting N1120A (Reply 24): 1) The anti-trust laws exist for a reason. To protect capitalism and market efficiencies.
Sorry, but it is politicians protecting their own district's employment that use laws to stop mergers until an airline is in Chap 11 or heading towards liquidation.
Quoting N1120A (Reply 24): 2) Who says there are too many airlines? These airlines can make money if they want, they just steadfastly refuse to shape their product based on actually successful models and try to nickel and dime their way to profitability instead.
IATA for starters. What magic wand do you know of that will make airlines profitable... "if they want." And just how exactly have "they just steadfastly refused to shape their product?" What "models" are you talking about??
Quoting Rampart (Reply 32): I believe more destinations were served in the 70s and early 80s. And there were more flights and choices for small and medium cities, and their fares were lower. Ergo, accessibility was greater. As they say, it was a different time.
We have never had the number of cities served, nor the low prices in the '70 and early '80s as we have had during the past few years. You just have to look at the TRB site to see this.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 34, posted (1 month 1 hour ago) and read 3320 times:
Quoting Planemaker (Reply 33): There are not even 5 economists that would say that mergers have hurt the industry. Forget about mainstream!
Alfred Kahn - the architect of deregulation - has said it. I'll see if I can link you to something more concrete, but he has a decent general discussion of it here.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 35, posted (1 month 1 hour ago) and read 3305 times:
Quoting Cubsrule (Reply 34): Alfred Kahn - the architect of deregulation - has said it.
Sorry but the article does not support your assertion.
This is what he said...
The recent wave of mergers and airline failures has made the industry more concentrated at the national level than it was before deregulation. The trend continues or threatens to do so, with the failure of Eastern Airlines, Midway, and Pan American, and the bankruptcy of carriers such as Continental, America West, and TWA. Most hubs will support only a single airline, and the superior efficiency of hubbing tends to insulate an airline from direct competition on short trips originating or terminating at its hub. All of this means that pricing may well become less competitive in the future.
The emphasis is mine since it highlights just how out of date the article is! It is at least 15 years old and LCCs, apart from Southwest, didn't even start to take off until after 2002. As you must surely know, LCC's now effectively control pricing on their routes. And you just have to look at LCC market share and see how majors have responded to see that he did not anticipate the rise of LCCs.
But thank you for the link,. It made interesting historical reading.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 36, posted (1 month 1 hour ago) and read 3294 times:
Quoting Planemaker (Reply 35): The emphasis is mine since it highlights just how out of date the article is!
I believe it's from the mid-90s. He has repeated the assertion more recently; as I said, if I can find something both more concrete and more recent, I'll post it. To the best of my knowledge, the following paragraph still reflects his view:
Quote: Second, the government could actively attempt to make markets more competitive by assuming responsibilities that it has neglected. It could vigorously enforce the antitrust laws. It could also remove barriers to competition by expanding airport capacity enough to allow new competitors to operate on routes, by dissolving preferential arrangements between hub-dominating carriers and their hub airports, and above all, by allowing foreign airlines to compete for domestic traffic, either directly or by investing in American carriers.
That is still "ancient" history as not only did LCCs not exist but neither did the "swarm" of RJs (now over 2000)... arguably the two things that changed domestic air travel the most in the past 10 years!
Quoting Cubsrule (Reply 36): To the best of my knowledge, the following paragraph still reflects his view:
But you don't seem to realize that the quote you gave isn't true... the LCCs have made the markets more competitive. How many threads have there been about the need to raise the fare levels!!!! As highlighted, the article is very out of date.
Rampart From United States, joined Aug 2005, 1698 posts, RR: 11 Reply 38, posted (1 month ago) and read 3234 times:
Quoting Planemaker (Reply 33): We have never had the number of cities served, nor the low prices in the '70 and early '80s as we have had during the past few years. You just have to look at the TRB site to see this.
I don't think this is true regarding the cities served. I posed the question in a thread last Spring Most Commercial Airports: What Era? (by Rampart May 14 2009 in Civil Aviation)
I believe the consensus was that the 1970s had the greatest number of cities served, though some had the opinion that it was the 1950s when local service airlines were starting and the major airlines still had minor stops on their milk runs. There haven't been enough Myrtle Beaches, Sanfords, and Bransons to balance out the losses from the 70s (or 50s). Business in the 50s was very different from present, but the 70s, particularly de-regulated late 70s, is not that much different. Air fares from something typical, like DEN-ORD or LGA-TPA, any bigger city pair, do probably have lower air fares than then. But, compare airfares between eras on something like PUB-ORD, which used to have mainline nonstops other than Denver, and more competition with 2-4 airlines, but now barely has EAS service to DEN on one airline. Despite subsidies, EAS service is often outrageously priced. And all those cities that have no service at all, that's an infinite fare comparison ratio. Add taxi fare!
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 39, posted (4 weeks 1 day 11 hours 49 minutes ago) and read 3104 times:
Quoting Planemaker (Reply 37): But you don't seem to realize that the quote you gave isn't true...
What part of it is untrue? The aviation industry still largely escapes competition law scrutiny, many airports are still at or near capacity, and there is still minimal foreign investment in U.S. airlines (US, B6, and VX are the only carriers with any foreign investment, I believe).
Quoting Planemaker (Reply 37): the LCCs have made the markets more competitive.
More competitive, sure. But do we have healthy competition today?
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 40, posted (4 weeks 1 day 7 hours 52 minutes ago) and read 3033 times:
Quoting Rampart (Reply 38): I don't think this is true regarding the cities served. I posed the question in a thread last Spring
Somewhere there is a listing of the number of cities served which I can't locate right now. However, you just have to look at the travel numbers (or airline route maps from the different decades) to see that more cities are served.
BTW, the BTS website shows that domestic pax emplanements for 1977 were 240,326 - for 1987 were 447,307 and for 2007 were 768,849. So in 30 years there was a 220% increase in the number of pax carried.
Quoting Rampart (Reply 38): Air fares from something typical, like DEN-ORD or LGA-TPA, any bigger city pair, do probably have lower air fares than then. But, compare airfares between eras on something like PUB-ORD, which used to have mainline nonstops other than Denver, and more competition with 2-4 airlines, but now barely has EAS service to DEN on one airline.
Again, from the BTS website, it shows that ave fare (inflation adjusted) for the top 85 markets increased almost 45% from 1995 to 2009. That PUB doesn't have the service it use to have is simply because it is not profitable.
That the markets are not competitive... any more competitive and they would perpetually be bleeding red ink.
Quoting Cubsrule (Reply 39): More competitive, sure. But do we have healthy competition today?
Yes, we have healthy competition in that air fares are lower today than 10, 20 and 30 years ago. No, we don't have healthy competition in that there are too many air carriers and they are thus "unhealthy".
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 44, posted (4 weeks 1 day 7 hours 8 minutes ago) and read 2984 times:
Quoting Cubsrule (Reply 43): All consolidation isn't created equal. That's why Kahn et al argue for more vigorous enforcement of the antitrust laws.
Obviously regulators should never allow mergers among the top two carriers but, having said that, mergers that were unthinkable only 10 years ago have now happened. BTW, consolidation is not just mergers... but mergers are the most political palatable option since maintaining jobs in their district is what counts most to most politicians.
Flighty From United States, joined Apr 2007, 4586 posts, RR: 2 Reply 45, posted (4 weeks 1 day 6 hours 48 minutes ago) and read 2961 times:
I still say the airline industry is a big success. We should be glad today that we have about 300 cities served today, in the worlds largest airline system. It is very safe and flexible. It is exactly what the consumer wants. This is something the government could never create. We can thank deregulation for millions of families being together on holidays, memorable vacations, and efficient business travel leading to new economic growth. In a regulated environment these victories would be sacrificed so that a particular interest group can live better. This would be a very destructive bargain. It was a brilliant stroke of luck that reason prevailed 30 years ago.
DAL1044 From United States, joined Jan 2006, 58 posts, RR: 0 Reply 46, posted (4 weeks 1 day 6 hours 35 minutes ago) and read 2939 times:
If and when the US Government steps back in to regulate Airlines I will never fly again. Speaking from experience I've seen government regulation destroy other types of businesses. Its not do to any one administration. Its due to any form of government here applying undo pressure to (as one Senator told me once) fix things. All of the airlines here in the US have a equal right to make themselves profitable. There are and have always been laws in force to make certain that no one carrier has a advantage. Short of sometimes cheating lawmakers this has always been the way its been.
Tdscanuck From Canada, joined Jan 2006, 5768 posts, RR: 56 Reply 47, posted (4 weeks 1 day 6 hours 28 minutes ago) and read 2918 times:
Quoting Cubsrule (Reply 39): The aviation industry still largely escapes competition law scrutiny
They're under huge scrutiny...they can't even change frequent flier system alliances without begging with the government.
Quoting Cubsrule (Reply 39): But do we have healthy competition today?
Yes. Enourmous competition...the reason it's so hard to be profitable as an airline is that the competition is so fierce. The competition is so fierce because the government keeps propping up failed carriers. If the bankrupt ones were allowed to actually fold, the system would stabliize much more quickly.
Lightsaber From United States, joined Jan 2005, 5236 posts, RR: 86 Reply 48, posted (4 weeks 1 day 6 hours 21 minutes ago) and read 2913 times:
Quoting Flighty (Reply 5): Just imagine if the Detroit auto industry hadn't taken ANY government bailout money, but still restructured and produced more goods than ever.
Once upon a time the US had the most competitive auto industry in the world. Besides the big three, there was Packard (and its divisions) as well as a few other custom makes (Anyone remember Stutz?)
Once the auto industry consolodated to the big three... the competition slowly decreased. They stopped producing the best cars in the world and now we have a case were the imports, who did compete in the hyper-competitive markets started to produce superiour vehicles and 'stole' away customers.
The same could be said about airlines in the US. The LCC's have the better product for domestic travel right now. Do we put up barriers and make it so that our Legacy airlines are like AI, constantly 3 years away from being competitive?
Quoting Cubsrule (Reply 1): Deregulation has resulted in a massive wealth transfer from labor and investors to passengers.
Like the ability for someone like me to fly more often?
If regulation resulted in a HUGE airport expansion program, pulling domestic airports back up to at least "category C," I'd be more in favor of that.
But how does going back to regulation help the working class? Besides a tiny number of airline employees, it would just lock quite a few people out of flying. Ok, so LAX-LAS becomes empty. People would either drive or... not go.
Quoting Cubsrule (Reply 41): But the industry is perpetually bleeding red ink. That's the problem.
The industry is also no longer an emerging industry. It is an estabilished industry that earns lower profits.
Quoting Planemaker (Reply 42): Precisely because there is too much competition.
I've read JP Morgan's definition of ruinious competition. What is yours?
How will new entrants be allowed? (I do not want a market that becomes stale.) How will the better run airlines be allowed to expand?
Will regulation return 'service with a smile?'
I know the current status of the industry isn't healthy, but returning to regulation won't make UA suddenly competitive with QF, etc.
The long term growth of the industry is outside the United States. I'd like to see some of our airlines competitive enough to compete in long haul. Letting airlines fail is the way to go.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 49, posted (4 weeks 1 day 6 hours 17 minutes ago) and read 2903 times:
Quoting Flighty (Reply 45): I still say the airline industry is a big success.
It isn't simply because it has not paid a return on invested capital.
Quoting DAL1044 (Reply 46): If and when the US Government steps back in to regulate Airlines I will never fly again.
It already regulates airlines in so many ways. Furthermore, look at how CO (among others) is using "rules" to try to shut down Virgin America. Other than pure politics, there is no reason not to increase the amount of foreign investment in airlines. It is rather silly.
PanAm788 From United States, joined Sep 2008, 125 posts, RR: 0 Reply 51, posted (4 weeks 1 day 5 hours 7 minutes ago) and read 2820 times:
Quoting N1120A (Reply 24): Not really. US airlines are different than their foreign competitors. Most of their business comes from the massive domestic market, which then also drives their international traffic.
Well sure, but DL is becoming so big that it will have to try to take EK & co. on if it wants to get international markets, but it also has to keep the cheap, domestic traveler happy. I'm just saying that mergers are good for the industry, especially in the US.
Quoting Cubsrule (Reply 30): Right - the best win until there's only one airline left, and then that airline can charge monopoly rents. Is that a good result?
It's not going to turn into a monopoly. The government would never allow it, and even in a purely anarchic system, a monopoly most likely wouldn't occur.
Quoting Tdscanuck (Reply 47): Yes. Enourmous competition...the reason it's so hard to be profitable as an airline is that the competition is so fierce. The competition is so fierce because the government keeps propping up failed carriers. If the bankrupt ones were allowed to actually fold, the system would stabliize much more quickly.
Exactly. The solution is less government not more.
However, I think there is a fine line here. I support the Auto industry bailouts because we only have three companies and if any of them failed, there would be disastrous economic outcomes, but I wouldn't support a bailout for an airline, because we have so many of them. If we had only three airlines, I think a bailout would be appropriate.
Just because there's a goalie doesn't mean you can't score.
DAL1044 From United States, joined Jan 2006, 58 posts, RR: 0 Reply 52, posted (4 weeks 1 day 2 hours 59 minutes ago) and read 2771 times:
Quoting PanAm788 (Reply 51): Exactly. The solution is less government not more
I couldn't agree more. Goverment intervention causes more problems not less. Carriers that have failed such as TWA, Eastern, Braniff just to name a few are no longer around because of mismanagement. Shareholders have the right to remove those in charge if needed. There are to many in upper staff that worry much more about lining their pockets then taking care of business. We probably have more members here that could do a much better job of running a airline on the brink of shutting down. Of course we have some that are worse too. It boils down to this. If the Airline isn't supporting its employees and customers then its due to fail. SW keeps its customers happy by cheap fairs and doesn't avertise thrills it can't show. I don't know how many have noticed but lately here in the states. At least here in Texas Japan Airlines has been advertising quite alot lately. I'd fly with them at the first chance. Keep your employees happy and more importantly your customers. I've spent over 20 years in Business management and I've seen what works and what doesn't.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 53, posted (4 weeks 1 day 2 hours 38 minutes ago) and read 2755 times:
Quoting Lightsaber (Reply 48): It is an estabilished industry that earns lower profits.
...or no profits, in some cases. When was the last time UA or US turned a profit?
Quoting Lightsaber (Reply 48): Like the ability for someone like me to fly more often?
Yes, precisely. The lower prices have largely come at the expense of labor.
Quoting Planemaker (Reply 44): Obviously regulators should never allow mergers among the top two carriers but, having said that, mergers that were unthinkable only 10 years ago have now happened
You argue that competition law enforcement has changed in the past 10 years (I disagree BTW, but let's take your assertion as true). Is that change a good thing?
Quoting PanAm788 (Reply 51): The government would never allow it, and even in a purely anarchic system, a monopoly most likely wouldn't occur.
...but it's not a purely anarchic system and never will be. The government will always have some role. The question is what the proper role is.
Flighty From United States, joined Apr 2007, 4586 posts, RR: 2 Reply 54, posted (4 weeks 1 day 2 hours 7 minutes ago) and read 2725 times:
Quoting DAL1044 (Reply 52): SW keeps its customers happy by cheap fairs and doesn't avertise thrills it can't show.
Very right. 100% agree with your read on that.
Quoting Cubsrule (Reply 53):
...or no profits, in some cases. When was the last time UA or US turned a profit?
Probably 2006... not very often, that is for sure. Airlines may not make a lot of money (that's for their shareholders and bankers to think about). But they do provide society with reliable safe services. That is all regular people need to worry about... IMO. They may be losing money, but it's their own private problem. It can be handled privately. Obama does not need to worry about it.
Flighty From United States, joined Apr 2007, 4586 posts, RR: 2 Reply 57, posted (4 weeks 1 day 1 hour 14 minutes ago) and read 2678 times:
Quoting Cubsrule (Reply 55): What if investors wise up and quit giving them money? You seem to feel that airlines are a public good...
It has happened before. It's never created a real public problem. The airlines do a very nice thing for the public, and I don't see it ending anytime soon. People flock like moths to go be pilots and F/As, and Boeing is happy to sell jets to the next gullible investor. It never has stopped and I doubt it ever will. Why mess with a good thing..
Rampart From United States, joined Aug 2005, 1698 posts, RR: 11 Reply 59, posted (4 weeks 23 hours 15 minutes ago) and read 2606 times:
Quoting Planemaker (Reply 40): Again, from the BTS website, it shows that ave fare (inflation adjusted) for the top 85 markets increased almost 45% from 1995 to 2009. That PUB doesn't have the service it use to have is simply because it is not profitable.
Did you mean decrease by 45%, corrected for inflation? If it actually did increase 45% in that 14 year period, as the industry has consolidated, that is a big worry for customers while airline profitability hasn't amounted to +45%, also a problem. Still, my concern is for the not-85 top markets. It's the remaining 300 that haven't necessarily seen fare parity or decreases.
Quoting Planemaker (Reply 40): BTW, the BTS website shows that domestic pax emplanements for 1977 were 240,326 - for 1987 were 447,307 and for 2007 were 768,849. So in 30 years there was a 220% increase in the number of pax carried.
That's true. You also stated that there are more airports served now. I think it's more people concentrated into fewer airports.
I think ultimately, deregulation has benefited large airlines, but not truly stimulated competition as was hoped. A flury of new airlines quickly dwindled as existing large airlines swallowed each other and their smaller competitors. Instead, now, it's more difficult to enter the industry, and more difficult to survive because the megacarriers have the ability to squash competition. The same has happened in utilities, telecommunication, and railroads.
AirNz From United Kingdom (Northern Ireland), joined Feb 2005, 3135 posts, RR: 14 Reply 60, posted (4 weeks 19 hours 33 minutes ago) and read 2554 times:
Quoting Tdscanuck (Reply 47): The competition is so fierce because the government keeps propping up failed carriers
Not exactly....the competition is so fierce because the carriers are only concerned with chasing 'market share' even if the route is loss making, instead of concerning themselves with profitability using their individual strengths. However, are you proposing a different set of bankruptcy laws between airlines and other industries? In this respect I don't thinks it's government at all, but the mentality of the US psyche itself (the term 'merger' is a good example of that)
Quoting PanAm788 (Reply 51): Well sure, but DL is becoming so big that it will have to try to take EK & co. on if it wants to get international markets,
Sorry, but I don't really see your point there, and especially taking into consideration that you were completely incorrect in your earlier assertion that LH and EK were government funded. Irrespective of size, I'm afraid DL has really a very long way to go if planning on taking on the likes of EK in the international arena.
Quoting Rampart (Reply 59): and more difficult to survive because the megacarriers have the ability to squash competition
Yes, and caused entirely by government who are freely allowing such.
UALWN From Spain, joined Jun 2009, 305 posts, RR: 0 Reply 61, posted (4 weeks 17 hours 50 minutes ago) and read 2519 times:
Quoting Flighty (Reply 5): Just imagine if the Detroit auto industry hadn't taken ANY government bailout money, but still restructured and produced more goods than ever.
That's what the airline industry has achieved.
Uh? The USA airline industry got LOTS of government bailout money (or whatever you want to call it) post 9/11.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 62, posted (4 weeks 15 hours 15 minutes ago) and read 2464 times:
Quoting UALWN (Reply 61):
Uh? The USA airline industry got LOTS of government bailout money (or whatever you want to call it) post 9/11.
It ended up being a lot smaller than advertised. US, F9 and HP took government aid. As did ATA and Aloha. UA asked for it, but was rejected. The loan guarantees actually given were a small fraction of what was authorized by Congress.
This discussion is largely based on general ideology, as opposed to specific proposals.
At heart, I think the financial woes of the industry are directly related to overcapacity and lack of consolidation - as others above have noted. The airlines and their investors just refuse to give up; for some strange reason they enjoy continuously losing their money.
One wonders if the investors are like anutters at heart - so emotional about the industry and their airline that they're willing to lose money propping it up.
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 63, posted (4 weeks 14 hours 55 minutes ago) and read 2449 times:
Quoting Rampart (Reply 59):
That's true. You also stated that there are more airports served now. I think it's more people concentrated into fewer airports.
I think ultimately, deregulation has benefited large airlines, but not truly stimulated competition as was hoped. A flury of new airlines quickly dwindled as existing large airlines swallowed each other and their smaller competitors. Instead, now, it's more difficult to enter the industry, and more difficult to survive because the megacarriers have the ability to squash competition. The same has happened in utilities, telecommunication, and railroads.
Utilities are some of the most highly regulated industries in the world. So is telecom. With this in mind, you could say regulation leads to bigger and bigger companies. Makes sense, since regulation makes running a business more costly and difficult, something bigger companies are better able to manage because they have greater resources.
As far as airlines, if you want to look into mega-carriers you need to also look at mega-airports. I'd look into massive airport building by certain cities around the country as an incentive to grow the local airline (and thus have one big voter block aside from increasing the tax base and prestige of that city) as one of the central reasons for the mess we have today.
You also need to look at how cars developed over time. It's easier to drive further distances today than back in the 1970s. Governments also make that easier by not charging you tolls along the route. If people had to pay tolls between Birmingham and Atlanta, maybe they'd be flying out of BHM rather than driving to ATL to catch a Delta flight.
(and never-mind the benefits politically-connected businesses, usually the bigger ones, get today anyways. Often at the expense of small businesses who then have to indirectly subsidize their politically-connected competition through taxes)
[Edited 2009-11-16 06:57:54]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 64, posted (4 weeks 13 hours 25 minutes ago) and read 2380 times:
Quoting PPVRA (Reply 63): With this in mind, you could say regulation leads to bigger and bigger companies. Makes sense, since regulation makes running a business more costly and difficult, something bigger companies are better able to manage because they have greater resources.
You have the cart before the horse there. Most utilities are (and, historically, all were) natural monopolies even without the cost of compliance with regulation.
Some sort of government intervention (either regulation or vigorous enforcement of the antitrust laws) makes sense with natural monopolies, and given the predictability available with regulation, regulation is probably preferable to vigorous enforcement of the law.
The next obvious question is whether airlines share this cost structure, and that's a question that has attracted a fair amount of debate and disagreement in academia.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 65, posted (4 weeks 12 hours 33 minutes ago) and read 2317 times:
Quoting PPVRA (Reply 25): To reduce congestion, privatize and fully deregulate (you can keep safety regulations) major congestion centers: all NYC area airports, Chicago airports, and Los Angeles airports (even general aviation airports). This will have a major impact on the industry and congestion.
Privatization will do nothing of the sort. Capacity expansion will.
Quoting PPVRA (Reply 25): Short of that, fixing how airlines are charged for using airports should help a little bit. I don't know how all airports charge airlines, but a flat, fixed fees for all types of aircraft would be better than what we have now. This also means phasing out passenger facility fees.
There's nothing wrong with the way airports chareg fees. As each year passes, airlines pay less and less for use of an airport. Fixed fee's will do nothing.
Quoting PPVRA (Reply 29): I don't see why. I know of companies that avoid the port of Houston and prefer to use a nearby one that is privately owned because it is less delay prone.
They go to the privately owned one because its has less demand and is therefore less delay prone and as a result has lower costs. If the other facility were govenrment owned and operated it would have the same impact. Ownership of the facility is irrelivant.
Quoting PPVRA (Reply 29): Aside from simplifying, a higher landing fee (since it's combining all fees into one) gives airlines an incentive to reduce scheduling abuses by making it more expensive.
Congestion pricing does nothing to releive congestion, the reason being is that the number of airports that are impacted are too few. The airlines, being private companies, pass the cost to the consumer or even worse distrubute the cost across the billions of available seat miles per year forcing everyone to subsidize the handful of operations at the congested airports.
The government needs to do three things here:
1. Pay for and complete the NextGen (I mean LastGen) transition.
2. Make it easier to expand and/or build new airports.
3. Designate all military airfields in large to medium sized cities as future sites for commerical airports and protect them from encroachment.
AirNz From United Kingdom (Northern Ireland), joined Feb 2005, 3135 posts, RR: 14 Reply 66, posted (4 weeks 11 hours 28 minutes ago) and read 2264 times:
Quoting John (Reply 14): If the "average" consumer truly values full service amenities, then they should be willing to pay for it. In today's environment, all the customer cares about is cheapest fare, period. What kind of service do you expect on a $69.00 fare? Safe, convenient and reliable transportation. That's all anyone should expect. Nothing more, nothing less.
I certainly have to disagree with your gross, and very inaccurate, generalisation. "Full service amenities" are there for anyone willing to pay for a First Class ticket, so where do you see an issue with that? For the vast majority of travellers, airlines are quite correctly nothing more than a mode of transportation.......they have always been such no matter what 'gloss' some may try to put on it. Such days of air travel are long gone and to attempt to perpurtrate it is a nonsense.
Of course what customers care about is the lowest fare.....why wouldn't they, and about 99% of those who tell you it doesn't are being blatantly untruthful? Do you buy something in a shop down the road just for the sake of it, when you know you can get it for half the price in another shop?? Of course not, so why should buying an airline ticket to somewhere be portrayed as being any different? Those who use the cheaper fares very rarely complain....they want to get from A to B safely, and they know that's what they'll get. It's what they expect as you point out. On the contrary, however, it seems to be most of the whinging and complaining comes from those who try to look down on anyone who isn't cadging someone else to pay their 'business' fare for them!
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 67, posted (4 weeks 11 hours 16 minutes ago) and read 2251 times:
Quoting AirNz (Reply 67): Do you buy something in a shop down the road just for the sake of it, when you know you can get it for half the price in another shop??
If it's the same product, sure. But if it's not the same product, the question gets harder. Certainly, everyone doesn't drive a Kia; people drive more expensive cars because there is some value in it. Most airlines (domestically) give you the choice between a Kia and a BMW. There's a whole lot of space in between.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 68, posted (4 weeks 10 hours 23 minutes ago) and read 2229 times:
Quoting Cubsrule (Reply 67): Most airlines (domestically) give you the choice between a Kia and a BMW. There's a whole lot of space in between.
I agree that there is a big gap, although on short-haul in the US, the premium cabins aren't all that premium.
But if there were some way to profitably fill that gap, I'd think somebody would be doing it. So far, we have various premium economies, extra-legroom seats, and a couple bells and whistles at VX or B6. If there is money to be made going in this direction, somebody will follow the trail and do it.
AM744 From Mexico, joined Jun 2001, 1267 posts, RR: 0 Reply 70, posted (4 weeks 9 hours 51 minutes ago) and read 2206 times:
Quoting Planemaker (Reply 42): Precisely because there is too much competition. Hence, industry consoliation is what is required.
It's nearly impossible to profit from a high risk, high tech, highly regulated (regarding safety and operational standards) industry. Airlines are rarely profitable, consolidated or not (Air Canada/Canadian comes to mind). This has been the case since ever and will continue to be.
Quoting Planemaker (Reply 49): It isn't simply because it has not paid a return on invested capital.
And I think it never will. I'd love to hear from a professional broker or an investor what is the motivation behind investing in an airline.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 71, posted (4 weeks 9 hours ago) and read 2167 times:
Quoting AM744 (Reply 70): It's nearly impossible to profit from a high risk, high tech, highly regulated (regarding safety and operational standards) industry. Airlines are rarely profitable, consolidated or not (Air Canada/Canadian comes to mind). This has been the case since ever and will continue to be.
I don't see why that should be true. Plenty of profit in pharmaceuticals, which is probably higher in each of those things. The idea that there is too much capacity and too many carriers is not disproven by the failure of one single merger someplace to create a profitable airline.
Quoting AM744 (Reply 70): I'd love to hear from a professional broker or an investor what is the motivation behind investing in an airline.
BMI727 From United States, joined Feb 2009, 3379 posts, RR: 1 Reply 72, posted (4 weeks 8 hours 55 minutes ago) and read 2156 times:
Quoting AM744 (Reply 70): And I think it never will. I'd love to hear from a professional broker or an investor what is the motivation behind investing in an airline.
Really I think that there aren't many good reasons other than love of the game so to speak. Bob Crandall for one knows the score, as does Richard Branson.
Why do Aerospace Engineering students have to turn things in on time?
DocLightning From United States, joined Nov 2005, 7500 posts, RR: 50 Reply 73, posted (4 weeks 8 hours 36 minutes ago) and read 2120 times:
Quoting DAL1044 (Reply 52): SW keeps its customers happy by cheap fairs and doesn't avertise thrills it can't show.
WN does a lot more than that. WN also keeps its customers happy by keeping its employees happy. This means that a trip on WN gives me an experience with a (by and large) devoted, pleasant, enthusiastic group of employees who treat me like a valued customer. WN also keeps customers happy by running a good, honest business and training their people that you help the company by helping your customers, rather than trying to weasel them out of, say, compensation to which they are entitled.
That is something that you can't buy with all the money in the world.
As for regulation, there is one thing that does need to be regulated: slots. It's not communism to have a system to ensure that airlines do not schedule more flights than airports can handle. The biggest complaint that passengers have about air travel isn't the lack of meals or the baggage fees, but DELAYS.
In the prisoner's dilemma of airlines, they could all reduce delays if they reduced frequency and switched to larger aircraft, but the airline to do that runs at a disadvantage to the others.
There are as many as 50 separate aircraft flying non-stop between NYC(JFK/EWR) and SFO every day. The majority of these aircraft are no larger than a 757. Regulation needs to check THAT kind of thing because it congests the whole system and increases delays.
During the three years I lived in NYC, I had one and only one on-time domestic flight out of a NYC airport...and that was the day I moved away.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 74, posted (4 weeks 8 hours 1 minute ago) and read 2082 times:
Quoting Rampart (Reply 59): Did you mean decrease by 45%, corrected for inflation?
My mistake. Yes, I should have put decrease!
Quoting Rampart (Reply 59): That's true. You also stated that there are more airports served now. I think it's more people concentrated into fewer airports.
There are more airports served... I just wish I could remember the link with the data. Obviously there is going to be greater pax growth at larger airports for the simple reason that fares will be lower than at outlaying airports and people will drive to the closest larger airport to avail themselves of the lower fares and more frequent schedules.
Quoting Rampart (Reply 59): I think ultimately, deregulation has benefited large airlines, but not truly stimulated competition as was hoped.
You just have to look at Southwest, JetBlue and AirTran... without de-reg they wouldn't have changed the face of the industry.
Quoting AirNz (Reply 60): Not exactly....the competition is so fierce because the carriers are only concerned with chasing 'market share' even if the route is loss making, instead of concerning themselves with profitability using their individual strengths.
There is no such thing as "individual" strengths in any meaningful way... airline seats are a commodity pure and simple. Lowest fare almost always wins.
Quoting Tharanga (Reply 62): At heart, I think the financial woes of the industry are directly related to overcapacity and lack of consolidation - as others above have noted. The airlines and their investors just refuse to give up; for some strange reason they enjoy continuously losing their money.
Yup... even Warren Buffet finally gave up (though he ended up making money on the debt structure side... not the airline operational side!)
Quoting Tharanga (Reply 62): One wonders if the investors are like anutters at heart - so emotional about the industry and their airline that they're willing to lose money propping it up.
Good one!
Quoting PPVRA (Reply 63): As far as airlines, if you want to look into mega-carriers you need to also look at mega-airports. I'd look into massive airport building by certain cities around the country as an incentive to grow the local airline (and thus have one big voter block aside from increasing the tax base and prestige of that city) as one of the central reasons for the mess we have today.
That is true to a certain degree. The other is that there is simply not enough concrete at airports for the number of flights. It seems that the majority of people miss this point entirely!
Quoting MSNDC9 (Reply 65): 1. Pay for and complete the NextGen (I mean LastGen) transition.
2. Make it easier to expand and/or build new airports.
3. Designate all military airfields in large to medium sized cities as future sites for commerical airports and protect them from encroachment.
1. Great help - but not enough.
2. It would be nice but.... impossible. It takes over 10 years to get a single runway built.
3. Wouldn't work.
Quoting Cubsrule (Reply 67): f it's the same product, sure. But if it's not the same product, the question gets harder. Certainly, everyone doesn't drive a Kia; people drive more expensive cars because there is some value in it. Most airlines (domestically) give you the choice between a Kia and a BMW. There's a whole lot of space in between.
Sorry, but all airline seats are almost all identical.... not nearly so a Kia and BMW. Try another analogy because this one certainly does not work.
Quoting DocLightning (Reply 73): There are as many as 50 separate aircraft flying non-stop between NYC(JFK/EWR) and SFO every day. The majority of these aircraft are no larger than a 757. Regulation needs to check THAT kind of thing because it congests the whole system and increases delays.
Yup... the vast majority!! As you say, it is in each airline's financial self interest to use as many slots as they can. Other than really high landing fees, I don't see how regulation can change that effectively. Though, if there were fewer carriers than you wouldn't have so many different carriers all trying to serve the same city-pairs with RJs multiple times a day!!
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 75, posted (4 weeks 7 hours 52 minutes ago) and read 2071 times:
Quoting Planemaker (Reply 74): Sorry, but all airline seats are almost all identical.... not nearly so a Kia and BMW.
UA international F versus UA Y?
Quoting Planemaker (Reply 74): Though, if there were fewer carriers than you wouldn't have so many different carriers all trying to serve the same city-pairs with RJs multiple times a day!!
How many city pairs have three or more carriers flying RJs?
Rampart From United States, joined Aug 2005, 1698 posts, RR: 11 Reply 76, posted (4 weeks 6 hours 44 minutes ago) and read 2016 times:
Quoting Planemaker (Reply 74): There are more airports served... I just wish I could remember the link with the data.
When you do think of it, please post it, or send me an IM. I am curious, it would answer the question I posed a few months ago. I counted 380 +/- "primary airports" (DOT definition) at present. There were scads of non-primary airports served in the 70s and 80s, not amountintg to much traffic, but certainly covering a large geography.
Quoting Planemaker (Reply 74): You just have to look at Southwest, JetBlue and AirTran... without de-reg they wouldn't have changed the face of the industry.
Absolutely. They survived, some of the very few. I'd list HP among those as they successfully (?!) combined with US, who also benefited. You also think of the ones that tried to expand, some were successful, and were still absorbed. Air California. Reno Air. Midway. (it just occurred to me that all 3 of those were eaten by AA!)l; ATA, Morris (both absorbed by WN). Vanguard. And then the regionals that got big enough to be serious and were taken: Frontier, Ozark, Piedmont, Republic (Hughes/NC/Southern). Lots of airline carnage out there, much of it from predatory competition.
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 77, posted (4 weeks 6 hours 26 minutes ago) and read 2002 times:
Quoting Cubsrule (Reply 64): You have the cart before the horse there. Most utilities are (and, historically, all were) natural monopolies even without the cost of compliance with regulation.
Can you give me examples?
Quoting Cubsrule (Reply 64): Some sort of government intervention (either regulation or vigorous enforcement of the antitrust laws) makes sense with natural monopolies, and given the predictability available with regulation, regulation is probably preferable to vigorous enforcement of the law.
I'm not so sure, I've seen some pretty horrendous results of poor regulations. To the point I might prefer to live under a monopoly. Might cost a bit more, but maximizing profits even under a monopoly does not mean extravagant price increases.
Quoting MSNDC9 (Reply 65): Privatization will do nothing of the sort. Capacity expansion will.
Because it worked so well for interstates Or the mega, congested airports we already have today. Simply adding more capacity has failed every time, everywhere. It is at best a temporary solution.
Quoting MSNDC9 (Reply 65):
There's nothing wrong with the way airports chareg fees. As each year passes, airlines pay less and less for use of an airport. Fixed fee's will do nothing.
And they abuse it more and more. Everything is wrong.
Quoting MSNDC9 (Reply 65): They go to the privately owned one because its has less demand and is therefore less delay prone and as a result has lower costs. If the other facility were govenrment owned and operated it would have the same impact. Ownership of the facility is irrelivant.
Governments don't maximize productivity because they want to run everything on a non-profit or subsidized basis. They do not charge anything for what it is worth. They run these infrastructures to maximize political benefits, not to get the most out of the facility.
Lethargic government agencies aren't exactly unheard of either.
Quoting MSNDC9 (Reply 65): Congestion pricing does nothing to releive congestion, the reason being is that the number of airports that are impacted are too few. The airlines, being private companies, pass the cost to the consumer or even worse distrubute the cost across the billions of available seat miles per year forcing everyone to subsidize the handful of operations at the congested airports.
You need to study more about congestion pricing. The airlines don't have to pass costs to consumers at all. If you double landing fees today, and double the average aircraft size, your monetary net effect is zero to the customer. They might lose half of the 100 ATL-NYC flights a day, but I can live with 50.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Commavia From United States, joined Apr 2005, 6803 posts, RR: 59 Reply 78, posted (4 weeks 6 hours 22 minutes ago) and read 1992 times:
It's very simple.
If we as a country want to go back to an era in which air travel is more expensive and unaffordable for a not-unsubstantial segment of the U.S. population, than re-regulation is the way to go.
If we want to maintain a responsive and competitive market in which fares are low but the industry is less stable, then re-regulation is not the way to go.
This thinly veiled and comically transparent example of the Secretary of Transportation doing the bidding of airline unions is fairly pathetic. If more "stability," and thus higher fares, is the way that we as a country want to go, then fine, but doing it for the sole purpose of making airline unions' business better is about the last reason to do it.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 79, posted (4 weeks 6 hours 10 minutes ago) and read 1987 times:
Quoting PPVRA (Reply 77): You need to study more about congestion pricing. The airlines don't have to pass costs to consumers at all. If you double landing fees today, and double the average aircraft size, your monetary net effect is zero to the customer. They might lose half of the 100 ATL-NYC flights a day, but I can live with 50.
Totally untrue. Congestion pricing at 5 or 6 of some 300 airports with commerical air service will not make a dent in relieving congestion - don't buy the massively ignorant academic hype. Airlines don't budget operating costs on a micro scale which is what would be required to make congestion pricing work. The airlines don't care. You could charge 5 times the amount and they wouldn't care.
Quoting PPVRA (Reply 77): And they abuse it more and more. Everything is wrong.
There is nothing wrong with the airport pricing model.
Quoting PPVRA (Reply 77): Or the mega, congested airports we already have today. Simply adding more capacity has failed every time, everywhere. It is at best a temporary solution.
Adding capacity to about 4 more US airports that aren't expanding today solves the capacity problem. Quit exaggerating. The problem is wasted gas flying antiquated air routes.
Quoting PPVRA (Reply 77): Because it worked so well for interstates
The interstates have a cash flow problem because they began to divert fuel tax revenue in the 1980's to "other things". Almost 50% of the revenue pays for pet projects instead of roads. Not so with Aviation which is off budget.
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 80, posted (4 weeks 5 hours 43 minutes ago) and read 1966 times:
Quoting MSNDC9 (Reply 79): Totally untrue. Congestion pricing at 5 or 6 of some 300 airports with commerical air service will not make a dent in relieving congestion - don't buy the massively ignorant academic hype. Airlines don't budget operating costs on a micro scale which is what would be required to make congestion pricing work. The airlines don't care. You could charge 5 times the amount and they wouldn't care.
I doubt it wouldn't work, given that a huge chunk of the delays start out at these few airports. However, preferably, all airports would be privatized. With that I agree.
Quoting MSNDC9 (Reply 79): There is nothing wrong with the airport pricing model.
There are price caps on them. Prices are supposed to fluctuate with supply and demand. By default they are wrong, whether in model and/or in amount.
Quoting MSNDC9 (Reply 79):
Adding capacity to about 4 more US airports that aren't expanding today solves the capacity problem. Quit exaggerating. The problem is wasted gas flying antiquated air routes.
Technology can help but it won't solve the inadequate supply/demand imbalance for very long, unless it's some kind of technology that eliminates our problem of resource scarcity, which I don't see happening.
Quoting MSNDC9 (Reply 79):
The interstates have a cash flow problem because they began to divert fuel tax revenue in the 1980's to "other things". Almost 50% of the revenue pays for pet projects instead of roads. Not so with Aviation which is off budget.
So if we did have the cash, what would Atlanta look like? 32 lane wide freeways? An I-286 and I-287, each with 16 lanes each way? That's a Wal Mart parking lot, not a city. It's insane and preposterous. And it would all be clogged up again in a few years.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Lightsaber From United States, joined Jan 2005, 5236 posts, RR: 86 Reply 81, posted (4 weeks 5 hours 32 minutes ago) and read 1957 times:
Quoting Planemaker (Reply 74): You just have to look at Southwest, JetBlue and AirTran... without de-reg they wouldn't have changed the face of the industry.
Exactly. And the first two are often the ones I choose to fly.
If we as a country want to go back to an era in which air travel is more expensive and unaffordable for a not-unsubstantial segment of the U.S. population, than re-regulation is the way to go.
If we want to maintain a responsive and competitive market in which fares are low but the industry is less stable, then re-regulation is not the way to go.
100% agree. I would add that regulation would also make the US airlines bloated and lazy. Exactly how would they compete any better internationally then?
Quoting PPVRA (Reply 80): So if we did have the cash, what would Atlanta look like? 32 lane wide freeways? An I-286 and I-287, each with 16 lanes each way? That's a Wal Mart parking lot, not a city. It's insane and preposterous. And it would all be clogged up again in a few years.
Bad urban planning is not an excuse for diverting the funds. US cities need their transportation expanded. "You grow or you rot" is an expression very applicable to cities. Stopping planning for growth is a bad excuse. I see engineering solutions to the supply/demand imbalance you site.
I've read Mathusian arguments from papers over the last 200 years. Most have me snark. Thankfully, humans have this way of adapting and inventing solutions that were not seen before. We have insufficient iron to have the society we have by 1800 standards... so we invented better concrete work. We have insufficient oil by today's standards to bring the world up to Western standards of living. Ok, there are a hundred ways to expand without regulating and saying "we cannot go any further."
Cities should be held reponsible for providing adequate airport infrastructure. The fact that so many US airports are tough to get to via the ground transportation should be corrected.
Quoting MSNDC9 (Reply 79): Adding capacity to about 4 more US airports that aren't expanding today solves the capacity problem. Quit exaggerating.
The sad lack of US airport expansion... well, speaks for itself. Some cities are expanding. Funny how they are the ones that seem to attract new jobs. Most of the congested airports can be expanded (LHR, ATL, ORD, LAX, SFO, etc.) A few cannot be expanded. Have them fly larger planes to DEN. Or do not expand and have the cities wonder why high paying jobs leave.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 82, posted (4 weeks 5 hours 30 minutes ago) and read 1953 times:
Quoting PPVRA (Reply 80): There are price caps on them. Prices are supposed to fluctuate with supply and demand. By default they are wrong, whether in model and/or in amount.
There are no such caps. Airports charge what it costs to own and operate and fund facilities. The most prevalent models actually do fluctuate with supply and demand in the form of catchup payments or chargebacks.
Quoting PPVRA (Reply 80): Technology can help but it won't solve the inadequate supply/demand imbalance for very long, unless it's some kind of technology that eliminates our problem of resource scarcity, which I don't see happening.
Again, your exaggerating the problem.
Quoting PPVRA (Reply 80): So if we did have the cash, what would Atlanta look like? 32 lane wide freeways? An I-286 and I-287, each with 16 lanes each way? That's a Wal Mart parking lot, not a city. It's insane and preposterous. And it would all be clogged up again in a few years.
All regions have an equilibrium point with their roadways. This can be observed in every major city. Where I grew up we had a freeway that was a parking lot. Its never been expanded because it can't be expanded. Today it's never congested because of new routes that get you to the same places. That caused a capacity shift. The key isn't always more lanes on the same route, often its new highways or bypass roads which are based on the pattern of traffic.
As for airports, if you can't expand, then the solution is a mandatory minimum seat count per departure of about 70 seats with increases until congestion is releived. This way no on is precluded from operating, they just need a certain aircraft size to operate. Then again, the government probably won't allow this so its moot, but its a much better mechanism for congested airports than slots or pricing mechanisms which clearly don't work (Peak pricing was tried at Boston by the way - it was an abject failure - slots aren't much better).
If we as a country want to go back to an era in which air travel is more expensive and unaffordable for a not-unsubstantial segment of the U.S. population, than re-regulation is the way to go.
It's not so simple. Regulation isn't always bad. Regulation is why air travel is so safe, for one thing.
There are ways to do regulations to improve efficiency and reduce costs.
I didn't say that all regulation was always bad. But, regulation does always increase cost over the long-run, in the macro sense.
I'm not saying whether or not re-regulation of the domestic U.S. airline industry is a good thing or a bad thing. I certainly do have an opinion, but that is not what I was expressing.
As I said, the choice is simple: if we, as a country, are willing to accept less competition, higher fares, and less air travel, than re-regulation will result in all three - guaranteed. I cannot understand how anyone could possibly suggest that re-regulation of the U.S. airline industry could ever conceivably lead to anything other than the above.
Quoting DocLightning (Reply 83): There are ways to do regulations to improve efficiency and reduce costs.
Your faith in the government is far greater than mine. I have precisely 0 faith in the government to ever be able to "improve efficiency" and/or "reduce costs" in anything - let alone the airline industry - especially with "regulation."
From energy to healthcare to small business incorporation, along with about a million other things, the federal government's record is one of consistent increases in cost, not efficiency.
Is what I am proposing. If it sounds expensive to you, then people are going to find ways around it. That system above is going to drive demand for capital to be invested in bus lines, subway lines, and God only knows what kind of new technologies out there.
Quoting MSNDC9 (Reply 82):
There are no such caps. Airports charge what it costs to own and operate and fund facilities.
That is a cap. It's a cap set at break-even. Set a cap at break even for farmers and we'll all starve.
Quoting MSNDC9 (Reply 82):
All regions have an equilibrium point with their roadways. This can be observed in every major city. Where I grew up we had a freeway that was a parking lot. Its never been expanded because it can't be expanded. Today it's never congested because of new routes that get you to the same places. That caused a capacity shift. The key isn't always more lanes on the same route, often its new highways or bypass roads which are based on the pattern of traffic.
That's what the purpose of I-285 was. Now it's congested. I'm sure it helped for a while, but eventually it filled up again.
Put tolls on them and people will move closer to work (aside from eliminating urban verticalization regulations, but that's for another thread). This is the sane solution.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Telecommunications is the classic one. Electric is close if you have a utility that transmits only, as is natural gas. Water and sewer are similarly close.
Quoting Commavia (Reply 84): As I said, the choice is simple: if we, as a country, are willing to accept less competition, higher fares, and less air travel, than re-regulation will result in all three - guaranteed.
You have to define "re-regulation," don't you? The government could step in ways that do not lead to less competition. A price ceiling on tickets, for instance, might increase competition and might also lower fares.
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 87, posted (4 weeks 4 hours 43 minutes ago) and read 1905 times:
Quoting Cubsrule (Reply 86):
Telecommunications is the classic one. Electric is close if you have a utility that transmits only, as is natural gas. Water and sewer are similarly close.
Both Telecomms and Electricity were around for very short amounts of time between those technologies first appearing and then being regulated. And if you look at electricity, if it wasn't for 100 years of subsidies for those who live far off in the country side, we would already have had 100 years of R&D going into solving that problem. Be it wind turbines or solar panels or something else, there would be no need to subsidize those technologies today. And if something actually great came out of it, electric utilities could have been history by now.
But it's not as exciting to talk about what could have been. It's pure speculation too, anyways.
ps: gas isn't piped in Brazil, it's sold by barrels. As for sewer systems, I can think of ways around it (think of how apartment complexes handle trash disposal. no I don't mean you're going to haul a bag full of crap to a dumpster, you can easily pipe it there and have a third party collect it).
Quoting Cubsrule (Reply 86): A price ceiling on tickets, for instance, might increase competition and might also lower fares.
They lead to shortages. And they won't lead to better wages for workers, more like layoffs.
[Edited 2009-11-16 17:02:25]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Commavia From United States, joined Apr 2005, 6803 posts, RR: 59 Reply 88, posted (4 weeks 4 hours 40 minutes ago) and read 1893 times:
Quoting Cubsrule (Reply 86): A price ceiling on tickets, for instance, might increase competition and might also lower fares.
It would do precisely the opposite.
This is Economics 101: putting a price ceiling on tickets would artificially constrain the fare that airlines could charge in order to make a profit, and thus force airlines out of the market. That, in the long-run, would reduce competition and consumer choice.
The federal government tried that whole "price ceiling" thing with oil back in the 1970s. Remember how well that worked out?
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 89, posted (4 weeks 4 hours 39 minutes ago) and read 1899 times:
Quoting PPVRA (Reply 87): They lead to shortages. And they won't lead to better wages for workers, more like layoffs.
I'm not arguing that it's a good idea - just throwing out an example of regulation that might not have anticompetitive effects.
Quoting PPVRA (Reply 87): Both Telecomms and Electricity were around for very short amounts of time between those technologies first appearing and then being regulated.
...but that doesn't affect their status as natural monopolies. If anything, regulation makes them less like natural monopolies, as, at least in the States, there is a definite variable cost to complying with regulation.
Huh? Now you bring up the same airline. That has absolutely no relation to your Kia/BMW analogy.
Quoting Cubsrule (Reply 75): How many city pairs have three or more carriers flying RJs?
The cities that have the congestion problems, like BOS-NYC. Do you even realize how many RJs are in the US?
Quoting Rampart (Reply 76): Absolutely. They survived, some of the very few. I'd list HP among those as they successfully (?!) combined with US, who also benefited.
Yes, only a few survived... and yet they changed domestic air travel.
Quoting MSNDC9 (Reply 79): There is nothing wrong with the airport pricing model.
There is, otherwise we wouldn't see so many RJs at congested airports.
Quoting MSNDC9 (Reply 79): Adding capacity to about 4 more US airports that aren't expanding today solves the capacity problem.
No it wouldn't... Herb Keller wrote an editorial about 10 years ago in AW&ST that they needed 50 miles of concrete at airports to solve the congestion problem (back then!)
Quoting MSNDC9 (Reply 82): Again, your exaggerating the problem.
No he's not. There is indeed a "resource" scarcity in aviation that is not going to be solved with the status quo pace of advancement.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 91, posted (4 weeks 4 hours 28 minutes ago) and read 1884 times:
Quoting Planemaker (Reply 90): The cities that have the congestion problems, like BOS-NYC.
Yes - it's not a widespread problem. Outside of BOS-NYC-WAS, I can't think of a single city pair that is overrun by multiple carriers' RJs.
Quoting Planemaker (Reply 90): Huh? Now you bring up the same airline. That has absolutely no relation to your Kia/BMW analogy.
You said that all airline seats are more or less the same. You and I both know that's not true. Compare AA Y to UA international F if you like.
Quoting Commavia (Reply 88): The federal government tried that whole "price ceiling" thing with oil back in the 1970s. Remember how well that worked out?
It's not analogous. Airlines price discriminate. That's what might permit increased competition with a price ceiling.
Commavia From United States, joined Apr 2005, 6803 posts, RR: 59 Reply 92, posted (4 weeks 4 hours 1 minute ago) and read 1862 times:
Quoting Cubsrule (Reply 91): It's not analogous. Airlines price discriminate. That's what might permit increased competition with a price ceiling.
Price discrimination has nothing to do with it. If you artificially prevent airlines from pricing their product at a profit, what - exactly - do you expect those airlines to do in response?
Will they:
a) Add more loss-making capacity that they will be unable to profitably price
b) Remove capacity from the market
Since last I checked, the laws of economics do still apply here on Earth, I'm going with option (b). And since option (b) will lead to less capacity rather than more, I fail to see how that will in any way lead to "increased competition." It will simply lead to the all-out extinction of America's legacy network carriers.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 93, posted (4 weeks 3 hours 57 minutes ago) and read 1854 times:
Quoting Commavia (Reply 92): If you artificially prevent airlines from pricing their product at a profit, what - exactly - do you expect those airlines to do in response?
If you prevent them from pricing at a profit, they will cut capacity. It is not at all clear, however, that that will happen if you cap profit margin (say at fifty or sixty percent) or limit the amount of price discrimination (e.g. Y ticket cannot be more than five times the price of cheapest coach ticket).
Lightsaber From United States, joined Jan 2005, 5236 posts, RR: 86 Reply 94, posted (4 weeks 3 hours 53 minutes ago) and read 1843 times:
I'm not into price ceilings or floors. Why shouldn't an airline be allowed to sell seats below cost if that is the only revenue they will receive? A flight is a perishable product, its either sold or the airline losses money on the empty seat. Why not lose less?
Now the off topic discussion:
Quoting PPVRA (Reply 85): That system above is going to drive demand for capital to be invested in bus lines, subway lines, and God only knows what kind of new technologies out there.
Your link is for a local freeway toll lanes. I do not mind some toll lanes, as long as it is for new growth. But there is plenty of room for other growth. I object to a tax people agreed to being diverted away from the agreed upon purpose though. Most US cities would have plenty of funds for roads if the road tax was spent properly.
So this might surprise you, I'm all for a 50 cent per gallon tax to fund mass transit! But only if that mass transit is interconnected creating the 'network effect' and having major destinations included. For example, why doesn't LAX have rail by now?!?
But this is like airport fees. I am strongly against them being spent on anything non-airport related. Oh, it could be a new feeder freeway or rail line to the airport, but that is as far as I'm willing to stretch.
But this is like airport fees. I am strongly against them being spent on anything non-airport related. Oh, it could be a new feeder freeway or rail line to the airport, but that is as far as I'm willing to stretch.
Here's why I disagree: if every industry was like that, there would be no venture capital. We'd recycle funds back into the same things, and there would be no or little capital for new industries. Creativity would suffer from lack of financing. Imagine if all the billions of dollars of profits from the oil industry were tied up in the oil industry. We could use more oil, but we don't need them going crazy with drilling either.
I don't have a problem with distributing money out from one industry, and actually think it's quite a good thing. Leave what makes sense to leave, use the rest elsewhere where it makes more sense. This is the role of dividends--most are not spent in luxury items, but rather are re-invested in many other places.
The problem you are hinting at is a government one, where politicians lose focus on running these things to other more politically expedient endevours. In markets, such assets come at great expense to you and are used to generate income, neither of which is true of government. You simply don't lose focus off of it, as you have a lot running on their productive and efficient use. And if you do lose focus, someone else will take it away from you. Creating these single-use government money accounts that are "untouchable" (though we know the reality) is just another (failed) way to try to avoid the nature of the beast, which is its tendency to lead to underfunding and decay.
[Edited 2009-11-16 18:17:30]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
Commavia From United States, joined Apr 2005, 6803 posts, RR: 59 Reply 96, posted (4 weeks 3 hours 23 minutes ago) and read 1820 times:
Quoting Cubsrule (Reply 93): It is not at all clear, however, that that will happen if you cap profit margin (say at fifty or sixty percent)
But what if one airline can afford to maximize that "acceptable" profit in a given market and yet another airline in that same market could charge a fare that would yield 0 profit and yet still not be competitive with the first, lower-cost, airline?
Quoting Cubsrule (Reply 93): or limit the amount of price discrimination (e.g. Y ticket cannot be more than five times the price of cheapest coach ticket).
But what if price discrimination above what some government bureaucrat deems "acceptable" is critical for certain airlines to make a profit in certain markets?
In both of these hypothetical cases, I'm not quite sure why you seem to think a government bureaucrat would be better at making pricing decisions for the airline industry than the airlines themselves. Has the government had massive success in manipulating prices in a competitive market before, and I missed it?
PanAm788 From United States, joined Sep 2008, 125 posts, RR: 0 Reply 97, posted (4 weeks 3 hours 14 minutes ago) and read 1814 times:
Quoting AirNz (Reply 60): Sorry, but I don't really see your point there, and especially taking into consideration that you were completely incorrect in your earlier assertion that LH and EK were government funded. Irrespective of size, I'm afraid DL has really a very long way to go if planning on taking on the likes of EK in the international arena
DL is now flying scheduled flights all over the world to huge business destinations. For example, I'm pretty casual American fliers aren't flocking to Lagos, instead, DL is beginning to cater to business destinations such as Lagos, and in order to do that, its going to need to increase its service if it's going to win these customers over. It's still a long ways off, but DL is trying to at least get closer to EK type service. They also fly to Australia with their new 77L whose product rivals Qantas'.
My overall point is that airlines can and do improve and adapt to any form of competition without the government's involvement.
LH was government owned until 1997 according to LTU932 and EK is owned by the Emirates Group which is 100% owned by the Government of Dubai, it's not state funded, but I'm sure they played a major role in investment, and would bail it out if it was in financial trouble. Sorry for the mistakes but I'm not 100% off.
Quoting Cubsrule (Reply 53): The question is what the proper role is
I personally favor an oversight role, where the government insures some sort of free market system exists and makes sure companies follow regulations, etc.
Just because there's a goalie doesn't mean you can't score.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 98, posted (4 weeks 3 hours 3 minutes ago) and read 1794 times:
Quoting Commavia (Reply 96): In both of these hypothetical cases, I'm not quite sure why you seem to think a government bureaucrat would be better at making pricing decisions for the airline industry than the airlines themselves.
I'm not arguing that any of these is a good idea - I'm just imagining regulatory schemes that might increase competition and/or reduce prices.
It's not true that regulation has to decrease competition and increase prices. Certainly, there is vigorous competition in the pharmaceutical industry, for instance, and it is quite heavily-regulated.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 99, posted (4 weeks 2 hours 35 minutes ago) and read 1769 times:
Quoting Cubsrule (Reply 91): Yes - it's not a widespread problem. Outside of BOS-NYC-WAS, I can't think of a single city pair that is overrun by multiple carriers' RJs.
Every major airport is "overrun" by RJs (certainly in terms of domestic flights). Airport data from Innovata shows that RJs account for the top or second spot in terms of aircraft movement at most major airports... and that includes all movement - doemstic and international. Just for example here is ORD's top 10 aircraft movement list...
Quoting Cubsrule (Reply 91): You said that all airline seats are more or less the same. You and I both know that's not true. Compare AA Y to UA international F if you like.
I do not know where you are going with this, comparing now AA Y to UA F, nor what is your point since you originally said...
"Most airlines (domestically) give you the choice between a Kia and a BMW. There's a whole lot of space in between."
You know, judging from most of the replies on here, I don't think many people on this thread have actually read the article. FYI, almost half of it deals with NextGen ATC.... and the key points is who should to pay for the airlines' equipment upgrade.... the tax payers or airline pax. Most of what is being discussed on here isn't even remotely referenced.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 100, posted (4 weeks 2 hours 21 minutes ago) and read 1761 times:
Quoting Planemaker (Reply 99): I do not know where you are going with this, comparing now AA Y to UA F, nor what is your point since you originally said...
Airlines, by and large, only bifurcate the service. That was my original point. You rejected the analogy for reasons I don't really understand, but it works across airlines as well as within airlines.
Kia=Y
BMW=F (or international J)
There's no other choice on most U.S. carriers.
Quoting Planemaker (Reply 99): Every major airport is "overrun" by RJs (certainly in terms of domestic flights).
I haven't argued otherwise. I don't think it's true, however, that there are a large number of ROUTES that are overrun by RJs where mainline might be appropriate.
You referred to "so many different carriers all trying to serve the same city-pairs with RJs multiple times a day!!"
Commavia From United States, joined Apr 2005, 6803 posts, RR: 59 Reply 101, posted (4 weeks 2 hours 21 minutes ago) and read 1760 times:
Quoting Cubsrule (Reply 98): It's not true that regulation has to decrease competition and increase prices.
Yes it is.
Quoting Cubsrule (Reply 98): Certainly, there is vigorous competition in the pharmaceutical industry, for instance, and it is quite heavily-regulated.
Huh?
Pharmaceuticals in the United States would cost literally tens of billions less - at least - each year to the collective American public if not for the massive amount of regulation and bureaucracy attached to getting a new drug through the FDA approval process. I'm not saying that is necessarily a bad thing, but it is nonetheless reality. And as for competition, the entire bedrock foundation of the U.S. pharmaceutical industry is based on patents which expressly prohibit competition in a given market space for a set period of time.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 102, posted (4 weeks 2 hours 15 minutes ago) and read 1750 times:
Quoting Commavia (Reply 101): And as for competition, the entire bedrock foundation of the U.S. pharmaceutical industry is based on patents which expressly prohibit competition in a given market space for a set period of time.
So there is no competition between, for instance, Lipitor and Vytorin?
Flighty From United States, joined Apr 2007, 4586 posts, RR: 2 Reply 103, posted (4 weeks 2 hours 11 minutes ago) and read 1743 times:
Quoting Cubsrule (Reply 102): So there is no competition between, for instance, Lipitor and Vytorin?
That's not a very good example because nobody pays the list prices for drugs anyway. So no, it's not really a market. To the extent that the drug market exists in the USA, it is woefully broken and is not indicative of consumer choice. Nor is it necessarily the outcome of legitimate science.
The airline industry has plenty of competition though. Even an elevated airfare market can be crashed by a newcomer. How many firms can manufacture Lipitor? Only one, because they control our government and rob our people. The way airlines work is so much better.
Planemaker From Tuvalu, joined Aug 2003, 3825 posts, RR: 22 Reply 104, posted (4 weeks 53 minutes ago) and read 1724 times:
Quoting Cubsrule (Reply 100): Airlines, by and large, only bifurcate the service. That was my original point. You rejected the analogy for reasons I don't really understand, but it works across airlines as well as within airlines.
Kia=Y
BMW=F (or international J)
There's no other choice on most U.S. carriers.
Everyone knows that the majors offer Y and F domestically... so what is the point. And the difference between Y and F isn't like the difference between a Kia and a BMW!!!
Quoting Cubsrule (Reply 100): I haven't argued otherwise. I don't think it's true, however, that there are a large number of ROUTES that are overrun by RJs where mainline might be appropriate.
You are correct that there are not a LARGE number of routes in terms of the nation as a whole... but at congested airports there are many routes, such as NYC-PHL, where RJs and TPs operate exclusively or predominate and where larger equipment could be used if there were not almost hourly flights.
A related point is the use of RJs traffic connecting city pairs through different airline hubs. And one can see this in the plethora of connecting options that one has.
Quoting Rampart (Reply 76): When you do think of it, please post it, or send me an IM. I am curious, it would answer the question I posed a few months ago. I counted 380 +/- "primary airports" (DOT definition) at present. There were scads of non-primary airports served in the 70s and 80s, not amountintg to much traffic, but certainly covering a large geography.
I have not found the detailed listing yet but from the RAA web site...
"At last count, regional airlines served more than 650 airports in the United States, nearly 70% of which rely on these airlines to provide their only means of scheduled air transportation. As such, regional carriers provide a critical and unparalleled economic development tool for hundreds of local communities across the country; literally from Presque Isle (Maine) to Anacortes (Washington)."
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 105, posted (3 weeks 6 days 16 hours 2 minutes ago) and read 1651 times:
Quoting Planemaker (Reply 104): Everyone knows that the majors offer Y and F domestically... so what is the point. And the difference between Y and F isn't like the difference between a Kia and a BMW!!!
I understood the point in the very beginning; it's pretty simple. There is bare-bones, a la carte Y, and then F. Somebody else was complaining, saying that he was willing to pay more for better service than Y, but not the huge jump in price required to reach F. He was wanting a Toyota, and is willing to pay for it, but does not find it offered by anybody. A true premium economy.
On the face of it, it might seem odd that nobody offers this. But that's probably just because it isn't profitable to do so; so all we get in-between is premium economy (such as it is), paying for extra legroom, and whatever is offered by VX and B6.
I still think the whole discussion is ill-grounded in reality. Precisely what regulation are we talking about? I can't even tell.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 106, posted (3 weeks 6 days 13 hours 19 minutes ago) and read 1614 times:
Quoting Flighty (Reply 103): That's not a very good example because nobody pays the list prices for drugs anyway.
So it's like airfare, then?
The idea that patents mean that there can be no competition in an industry is ludicrous. If it were true, there would be no competition in any high-tech industry. Heck, even airlines use patented technology. Does that make air travel uncompetitive.
Quoting Flighty (Reply 103): To the extent that the drug market exists in the USA, it is woefully broken and is not indicative of consumer choice.
What, then, explains all of the advertising that we see? There is a market in spite of the regulation. The fact that you don't like its results doesn't mean it doesn't exist.
And would the elimination of direct to consumer advertising - an example of increased regulation to be sure - increase competition?
Quoting Planemaker (Reply 104): but at congested airports there are many routes, such as NYC-PHL, where RJs and TPs operate exclusively or predominate and where larger equipment could be used if there were not almost hourly flights.
Here, we agree.
Quoting Planemaker (Reply 104): And the difference between Y and F isn't like the difference between a Kia and a BMW!!!
Internationally it is - and even if it isn't (if it's more like a Kia and a Buick), you still have non-binary preferences mapped onto binary products.
Quoting Commavia (Reply 101): Quoting Cubsrule (Reply 98):
It's not true that regulation has to decrease competition and increase prices.
Yes it is.
How would a regulation requiring 24 hours of pilot rest after commuting but before beginning work reduce competition in the domestic market?
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 107, posted (3 weeks 6 days 13 hours 4 minutes ago) and read 1603 times:
Quoting Planemaker (Reply 99): Every major airport is "overrun" by RJs (certainly in terms of domestic flights). Airport data from Innovata shows that RJs account for the top or second spot in terms of aircraft movement at most major airports... and that includes all movement - doemstic and international. Just for example here is ORD's top 10 aircraft movement list...
Actually, a smaller mix index increases the operational throughput capability of an airport. You start swaping out the RJs for larger aircraft your mix index increases and the operational throughput decreases.
But you knew that right?
Quoting Planemaker (Reply 90): No it wouldn't... Herb Keller wrote an editorial about 10 years ago in AW&ST that they needed 50 miles of concrete at airports to solve the congestion problem (back then!)
LOL... Herb must have had a bit too much to drink that day.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 109, posted (3 weeks 6 days 12 hours 55 minutes ago) and read 1583 times:
Quoting Cubsrule (Reply 106):
How would a regulation requiring 24 hours of pilot rest after commuting but before beginning work reduce competition in the domestic market?
It could slightly increase labor costs (you might need more pilots), and thus you could say it'd be an incremental increase in the barriers to entry - it'd be slightly harder to start up a new airline. Not saying it would make any real difference, but abstract questions can get abstract answers.
The topic of commuting is a bit of a hornet's nest, and I'm not sure there's an easy way to address any problem it brings, if it's even a problem at all.
But at least we're moving towards discussing actual regulations. The things actually listed in the OP link were how to pay for nextGen ATC, maintenance standards, and required qualifications for regional carrier pilots. The union guy also wanted to make it harder for new airlines to start, on the basis of how they weaken existing carriers before they finally are driven out; that seems like an awful anti-competition idea to me.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 110, posted (3 weeks 6 days 12 hours 52 minutes ago) and read 1580 times:
Quoting Cubsrule (Reply 108): But if you swap 30 CRJs for 10 320s, the throughput decrease isn't enough to cancel out that effect.
But you can't operate those A320's economically so your point is moot.
There's nearly 22% fewer scheduled operations today then there were in 2000 so lets not get too excited there buddy. GA is also in the toilet.
The problem is with the yields and the FAA's inept handling of navigation system improvement.
There was congestion before the RJ and when the smaller variants are gone in 5 years there will still be congestion. Its the nature of the beast. Its the way the major carriers control the market by keeping out new entrants and in most cases LCCs. It is what it is.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 111, posted (3 weeks 6 days 12 hours 51 minutes ago) and read 1576 times:
Quoting Tharanga (Reply 109): It could slightly increase labor costs (you might need more pilots), and thus you could say it'd be an incremental increase in the barriers to entry
I think that's right (and you are absolutely correct that abstract questions deserve abstract answers). But I have a hard time foreseeing any real effect on competition from regulations like that, and I'd lump m/x standards and pilot qualifications in there too.
What they all do is tell carriers that it isn't OK to compete in certain areas, mostly safety-related or arguably safety-related. They do not, however, prohibit vigorous competition in other areas, like fares or service. I would argue that the permitted areas of competition are where we see the most vigorous competition today.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 112, posted (3 weeks 6 days 12 hours 48 minutes ago) and read 1568 times:
Quoting Cubsrule (Reply 108):
But if you swap 30 CRJs for 10 320s, the throughput decrease isn't enough to cancel out that effect.
As you've noted, no airline is going to reduce frequency on its own. It's a sort of tragedy of the commons, and slots alone didn't fix it. Slots for peak congestion hours need to be made more precious. But those who do well with the slots status quo will want to keep it.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 113, posted (3 weeks 6 days 12 hours 44 minutes ago) and read 1566 times:
Quoting Tharanga (Reply 112): As you've noted, no airline is going to reduce frequency on its own. It's a sort of tragedy of the commons, and slots alone didn't fix it.
Quoting Tharanga (Reply 112): But those who do well with the slots status quo will want to keep it.
That's actually the one piece of the puzzle I'm not sure about. AA had a recent, well-publicized desire to retire some of its LGA slots - had that been permitted, it would have been a step toward reduced congestion.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 114, posted (3 weeks 6 days 12 hours 44 minutes ago) and read 1565 times:
Quoting Tharanga (Reply 112): As you've noted, no airline is going to reduce frequency on its own. It's a sort of tragedy of the commons, and slots alone didn't fix it. Slots for peak congestion hours need to be made more precious. But those who do well with the slots status quo will want to keep it.
Its called a free market, and as I've pointed out, placing a premium on slots in a small handful of markets does little to deter a carrier that calculates its operating costs on a macro scale. They simply redistribute those costs across the entire system so the guy in Nashville ends up subsidizing the cost of peak hour flying out of La Guardia.
Quoting Cubsrule (Reply 113): AA had a recent, well-publicized desire to retire some of its LGA slots - had that been permitted, it would have been a step toward reduced congestion.
Someone else would have moved to occupy the void by picking up those slots.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 115, posted (3 weeks 6 days 12 hours 41 minutes ago) and read 1556 times:
Quoting Cubsrule (Reply 111): What they all do is tell carriers that it isn't OK to compete in certain areas, mostly safety-related or arguably safety-related. They do not, however, prohibit vigorous competition in other areas, like fares or service. I would argue that the permitted areas of competition are where we see the most vigorous competition today.
A good summary. Nobody is allowed to skimp on safety, and some minimum level of service (some compensation for involuntary bumping, stuff like that). After that, compete on whatever basis you want.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 117, posted (3 weeks 6 days 12 hours 29 minutes ago) and read 1536 times:
Quoting Cubsrule (Reply 113): That's actually the one piece of the puzzle I'm not sure about. AA had a recent, well-publicized desire to retire some of its LGA slots - had that been permitted, it would have been a step toward reduced congestion.
I'm with you. If the slot could be simply retired into non-existence, then AA would have let it. But if it would have been picked up by a competitor, then AA would rather keep using it. Sort of a pickle.
Saying that means little. In any market, if a resource is underpriced or unpriced, it will be overused. Runway and airspace capacity are perfect examples of such resources. Auctioning of slots is a way to address it.
Quoting MSNDC9 (Reply 114): placing a premium on slots in a small handful of markets does little to deter a carrier that calculates its operating costs on a macro scale. They simply redistribute those costs across the entire system so the guy in Nashville ends up subsidizing the cost of peak hour flying out of La Guardia.
The problem is solved (I think) if the slots are specific to a time frame, and the number of slots available in that time frame is equal to the capacity of the airport and ATC. If the number of slots for 7 am to 9 am is capped at X, then you won't have more than X flights in that time period, regardless of how airlines spread their costs around.
Of course, there would be much resistance to such a system.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 118, posted (3 weeks 6 days 11 hours 52 minutes ago) and read 1511 times:
Quoting Tharanga (Reply 117): The problem is solved (I think) if the slots are specific to a time frame, and the number of slots available in that time frame is equal to the capacity of the airport and ATC.
That creates even less of an impact because they would only apply to the peak hour, typically 2-4 hours a day. This is how slots are handled today anyway. La Guardia uses the VFR rate, DCA uses the IFR rate.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 119, posted (3 weeks 6 days 11 hours 30 minutes ago) and read 1492 times:
Quoting MSNDC9 (Reply 118): That creates even less of an impact because they would only apply to the peak hour, typically 2-4 hours a day.
How could that possibly be true? If the number of slots available is low enough, you get the exact impact you are looking for. You can't say slots don't work, just because some airport has too many slots available. The rational thing is to reduce the number of slots, but then the airlines scream bloody murder. (for whatever it's worth, you'd also have slots at off-hours; they'd just cost less because they'd be less demanded.)
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 121, posted (3 weeks 6 days 11 hours 11 minutes ago) and read 1467 times:
Quoting Cubsrule (Reply 120): ...and LGA is chronically congested and DCA is not. Coincidence?
No coincidence at all, but they aren't going to change the model for LGA so the answer isn't with the slots or remove gates from service so they can't schedule a flight because they don't have a place to put a plane. Removing the Marine Terminal ought to do it, good luck though.
AirNz From United Kingdom (Northern Ireland), joined Feb 2005, 3135 posts, RR: 14 Reply 122, posted (3 weeks 6 days 11 hours 8 minutes ago) and read 1461 times:
Quoting MSNDC9 (Reply 110): But you can't operate those A320's economically so your point is moot.
UALWN From Spain, joined Jun 2009, 305 posts, RR: 0 Reply 126, posted (3 weeks 6 days 10 hours 49 minutes ago) and read 1441 times:
Quoting MSNDC9 (Reply 123): If you think you can operate an A320 to a small market in lieu of an RJ, then go for it. You'll be done in about a week.
What was being discussed is replacing, say, six RJs in a single route (yes, there are many routes with several RJ trips per day) with two 320s. That would work.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 127, posted (3 weeks 6 days 10 hours 45 minutes ago) and read 1431 times:
Quoting UALWN (Reply 126): What was being discussed is replacing, say, six RJs in a single route (yes, there are many routes with several RJ trips per day) with two 320s. That would work.
No, its not whats being discussed. The discussion is the extensive use of RJ's in the market causing congestion - which is a bunch of bull by the way. The reason those RJs are operating is because the markets they serve are too small for an A320. Thus, the argument that you can somehow shift capacity by way of an aircraft swap is moot and would therefore not work.
DocLightning From United States, joined Nov 2005, 7500 posts, RR: 50 Reply 129, posted (3 weeks 6 days 10 hours 34 minutes ago) and read 1422 times:
Quoting MSNDC9 (Reply 127): The reason those RJs are operating is because the markets they serve are too small for an A320.
Is that why UA has used CRJ's on IAD-JFK? By golly, you're right! The DC-NYC route is *way* too small for an A320!
The reason the RJ's are operating is because: 1) they are cheaper to operate because the crew gets paid nothing 2) they can offer 60 flights a day and keep their high-yield business passengers happy.
Yes, it's totally appropriate to use an RJ on SFO-SBA, but it is *not* appropriate to use an RJ on SFO-LAX. Oh, and I am not aware of any aircraft larger than a 757 operating that route, which is always congested and delay-prone.
Now, admittedly, the stage length on JFK-IAD is so short that trying to use an aircraft the size of a 744D is a bit impractical because boarding/disembarkation would take almost as long as the flight.
There are several ways to solve this. You could use slot restrictions, minimum aircraft sizes with liberalized code-share rules, etc. But something has to be done about the many routes in the U.S. that have way too much frequency for their capacity. It's not only bad for congestion, but it's also bad for the environment and it's bad for the airlines because they have to pay more crew to fly the same flight.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 130, posted (3 weeks 6 days 10 hours 31 minutes ago) and read 1414 times:
Quoting MSNDC9 (Reply 125):
Because no one is going to change the slot formula.
Until they do.
So you admit changing the slot formula would work; you're simply saying the Port Authority or whoever wouldn't be able to force the change through, over the complaints of the airlines.
UALWN From Spain, joined Jun 2009, 305 posts, RR: 0 Reply 131, posted (3 weeks 6 days 10 hours 28 minutes ago) and read 1410 times:
Quoting MSNDC9 (Reply 127): No, its not whats being discussed.
Yes, it is. Please, read again posts 74,75,77,90,91,99, etc. Nobody is complaining about a lonely RJ flight a day between, say, ORD and EAU, which couldn't be replaced by a 320 flight, but about multiple RJ flights a day between, say, PHL and BOS, which could be replaced by a couple of 320s. I'm making up the examples, but I trust the idea is clear.
Quoting DocLightning (Reply 129): Yes, it's totally appropriate to use an RJ on SFO-SBA, but it is *not* appropriate to use an RJ on SFO-LAX.
Ha, I was writing the same thing, then stopped as I'd figured somebody else would beat me to it.
I think the task should be to map out LGA's capacity, and see how many of the RJs are on 2x daily service to some small town, and how many of them are part of a higher frequency route to a larger market.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 134, posted (3 weeks 6 days 10 hours 20 minutes ago) and read 1382 times:
Quoting DocLightning (Reply 129): Yes, it's totally appropriate to use an RJ on SFO-SBA, but it is *not* appropriate to use an RJ on SFO-LAX.
Says you. If it was not appropriate, then they wouldn't use it would they?
Quoting Cubsrule (Reply 128): CLE-LGA is too small for a 320?
RDU-LGA is too small for a 320?
In most cases, yes.
Quoting UALWN (Reply 131): Nobody is complaining about a lonely RJ flight a day between, say, ORD and EAU, which couldn't be replaced by a 320 flight, but about multiple RJ flights a day between, say, PHL and BOS, which could be replaced by a couple of 320s. I'm making up the examples, but I trust the idea is clear.
Don't you think that if the demand were there this would be the case? Or do you profess to know something the airlines don't? They all must be stupid and you must be some sort of genius. They should hire you right away!
Aviation is massively, heavily, suffocatingly regulated at every level imaginable.
* Aircraft design is massively regulated. Both design standards and the means to attain them are determined by the government, not by the industry. A gross estimate is that aircraft could be 50% cheaper sans the costs of compliance and the chains on innovation that regulation represents.
* Aircraft operation is massively regulated. When, how, where aircraft can be maintained is determined by the government. Who can do what on an aircraft is determined by the government.
* Airport construction and operation is hugely, massively, regulated. Most airports are outright owned by government. Building a private airport of commercial scale is, essentially, impossible - due to virtually limitless regulations on business, land use, environmental and others. Even nominally private airports are bound by rules dictating how their business is run.
* Air traffic control is massively regulated. In most countries outright owned and in many operated by the government. Why do we continue to fly in corridors in the age of GPS and TCAS? Because government has NO incentive to go through the trouble of adopting 20 year old technology. Maybe when it is 50 years old. We'll see.
Aviation is NOT a capitalist environment. It is nowhere even close to a capitalist market. It is a sham, a con game, where governments set up an impossible business environment and fools lose money. And brilliant, dedicated, driven people keep the whole thing going in the face of contradictory, ineffective, sometimes orwellian regulations.
Quoting N1120A (Reply 27): Ports, including airports, are inherently governmental. Even the staunchest libertarians I know agree on this point.
If that is true, you don't know any libertarians.
Quoting Cubsrule (Reply 64): You have the cart before the horse there. Most utilities are (and, historically, all were) natural monopolies even without the cost of compliance with regulation.
No. Every utility was born in a free market and taken over by government "for the greater good". They have been screwing it up ever since.
Quoting DocLightning (Reply 83): Regulation is why air travel is so safe, for one thing.
I'm sure the professionals all over the industry are aglow with your trust in their integrity. I mean, if it were not for "the man" in Washington we'd all be cutting corners to save a buck.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 136, posted (3 weeks 6 days 10 hours 10 minutes ago) and read 1380 times:
Quoting Mrocktor (Reply 135): * Airport construction and operation is hugely, massively, regulated. Most airports are outright owned by government. Building a private airport of commercial scale is, essentially, impossible - due to virtually limitless regulations on business, land use, environmental and others. Even nominally private airports are bound by rules dictating how their business is run.
Some people are unable to come to terms with this issue. Even those airports out there that are under private operation still have a government board to report to. Everyone of them is still subject to the same laws and use restrictions simply because no private firm could afford to construct a major airport in the US without government funding of some sort which ties their hands. If there was money to be made in this, then private companies would have started building and operating airports left and right decades ago.
Quoting Cubsrule (Reply 128): ...and no one is going to knock down the MAT. What is your point?
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 137, posted (3 weeks 6 days 10 hours 9 minutes ago) and read 1375 times:
Quoting Mrocktor (Reply 135): Every utility was born in a free market and taken over by government "for the greater good".
...which has not a thing to do with whether or not they are natural monopolies.
Natural monopolies are defined by their cost structure, not the way they are regulated. In the U.S., as I've said, government regulation actually makes utilities' cost structures LESS like natural monopolies, not more.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 139, posted (3 weeks 6 days 10 hours ago) and read 1364 times:
Quoting MSNDC9 (Reply 134): Says you. If it was not appropriate, then they wouldn't use it would they?
Quoting MSNDC9 (Reply 134): Don't you think that if the demand were there this would be the case? Or do you profess to know something the airlines don't? They all must be stupid and you must be some sort of genius. They should hire you right away!
You've forgotten the whole point of the discussion.
Yes, airlines find it more profitable to use high frequencies of smaller planes on some routes. The pax like the schedule flexibility; the airlines like the lower costs of the regionals.
If that's all there was to the picture, yes, it would be appropriate. But we're coming back to the problem of limited resources - airport and airspace. If the number of available slots were lower, such that it actually reflected airfield capacity, would the airlines still find this the best way to operate? Maybe they would, and they'd just drop service to EAU altogether; I don't know. But limiting the slot availability changes the calculation.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 140, posted (3 weeks 6 days 9 hours 59 minutes ago) and read 1365 times:
Quoting MSNDC9 (Reply 138): Depends upon how many ways to get there exist in alternative to the non-stop.
In May, 2009 (most recently-available data), AA carried 512 PDEW (and offered about 630 daily seats) on NYC-RDU. How, exactly, is that too small for mainline?
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 141, posted (3 weeks 6 days 9 hours 48 minutes ago) and read 1350 times:
Quoting Cubsrule (Reply 140): In May, 2009 (most recently-available data), AA carried 512 PDEW (and offered about 630 daily seats) on NYC-RDU. How, exactly, is that too small for mainline?
You're over simplifying the issue. When is a plane too small, when is it too big? How much flexibility does the market demand in terms of frequency? When does the market need a flight? When doesn't it?
Clearly you'd like re-regulation. Because the only way you'll get what you want is to re-regulate where the type, size and frequency of operations can be dictated.
Quoting Tharanga (Reply 139): If that's all there was to the picture, yes, it would be appropriate. But we're coming back to the problem of limited resources - airport and airspace. If the number of available slots were lower, such that it actually reflected airfield capacity, would the airlines still find this the best way to operate? Maybe they would, and they'd just drop service to EAU altogether; I don't know. But limiting the slot availability changes the calculation.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 142, posted (3 weeks 6 days 9 hours 47 minutes ago) and read 1356 times:
Quoting MSNDC9 (Reply 141): Clearly you'd like re-regulation.
No, I want BETTER regulation. All three of the New York airports are regulated and will be for the foreseeable future (the same is true for the industry writ large). Complete deregulation is not an option, so the question is what the best sort of regulation is.
At the core of deregulation is the right of a carrier to schedule. You want to strip away the right of a carrier to schedule. You take that away and everything else goes right down the tube with it. You also ignore the reasons why slots are permitted in certain markets, but here is a good read for you to gain a better understanding of why they are even permitted in the first place. It has to do with proprietary powers not being a violation of preemption:
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 146, posted (3 weeks 6 days 9 hours 11 minutes ago) and read 1323 times:
Quoting MSNDC9 (Reply 145): At the core of deregulation is the right of a carrier to schedule. You want to strip away the right of a carrier to schedule.
Quoting MSNDC9 (Reply 141):
Clearly you'd like re-regulation. Because the only way you'll get what you want is to re-regulate where the type, size and frequency of operations can be dictated.
Not in the least. Far from it.
Quoting MSNDC9 (Reply 145): At the core of deregulation is the right of a carrier to schedule.
The carrier can schedule whatever it pleases. So long as it does not exceed the capacity of the airport. That is the whole point.
If the capacity of LGA is 60 movements per hour, and the airlines are limited to that, then I don't care if the carriers use all of those 60 spots using Beech 1900s bringing people to and from BOS and DCA. Though I bet they won't.
The number of slots should actually reflect the capacity of the airport. What the airlines think is the most efficient way of using those slots is totally up to them. All we're doing is suggesting one way they might deal with the slot reduction; they can do whatever they want.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 148, posted (3 weeks 6 days 6 hours 34 minutes ago) and read 1252 times:
Quoting Tharanga (Reply 146): The number of slots should actually reflect the capacity of the airport. What the airlines think is the most efficient way of using those slots is totally up to them. All we're doing is suggesting one way they might deal with the slot reduction; they can do whatever they want.
Here's a sensible scheme for dealing with LGA:
Set the number of slots at the IFR arrival rate
Permit incumbent carriers to retire slots at will, tweaking times if necessary
If this does not sufficiently reduce the number of slots, give 80 percent of slots to incumbents in the proportion in which they previously held slots
Auction the remaining slots, giving preference to new entrants and those carriers with fewer than 30 (for instance) daily operations.
Mrocktor From Brazil, joined Jan 2005, 1420 posts, RR: 45 Reply 149, posted (3 weeks 5 days 18 hours 29 minutes ago) and read 1184 times:
Quoting Cubsrule (Reply 137): Natural monopolies are defined by their cost structure
There may be certain services where under certain conditions, during a certain period of time, a monopoly is the most economically efficient entity. This means that everyone would be better off if that industry in those particular conditions were a monopoly. If you want to call that "natural monopoly" be my guest.
Such conditions are transient. Saying "X industry is a natural monopoly" is idiotic (and im not calling you an idiot - im calling the economists who created this theory idiots), because no industry operates in static conditions, no industry is uniform in all locations and (most importantly) no industry, even an established monopoly, is immune from direct and indirect competition in a free market.
To use just one example: electricity. Power transmission is supposedly a "natural monopoly". That is bovine excrement. Where you can route one cable or wire, you can route two of them. Now there certainly are costs to duplicating or multiplicating the power grid - but that is the point: if the market can sustain it, it will happen.
Or, it WOULD happen if the market were not hampered by hundreds of thousands of pages of regulation.
NorCal From United States, joined Mar 2005, 1634 posts, RR: 3 Reply 150, posted (3 weeks 5 days 14 hours 34 minutes ago) and read 1140 times:
Quoting Mrocktor (Reply 135): * Aircraft design is massively regulated. Both design standards and the means to attain them are determined by the government, not by the industry. A gross estimate is that aircraft could be 50% cheaper sans the costs of compliance and the chains on innovation that regulation represents.
How do you think Aviation maintains such a good safety record? The second you remove government regulations on the design of regulation we'll have much higher accident rate when OEMs start cutting corners. The bean counters will do their cost/benefit analysis and will determine that it is easier to pay out settlements to the families of victims then make it right the first time.
I doubt Boeing would have spent the time and money to redesign the 787 wing if they weren't forced to do it by regulations.
Quoting Mrocktor (Reply 135): * Aircraft operation is massively regulated. When, how, where aircraft can be maintained is determined by the government. Who can do what on an aircraft is determined by the government.
That's a bad thing? I like the safety record as it is right now and I don't want to see bean counters cut corners on safety to save a buck. I don't want some 10 year old child in Mexico getting paid $1 a day to maintain the aircraft I fly, that is what will happen if you remove all government regulation.
Quoting Mrocktor (Reply 135): * Airport construction and operation is hugely, massively, regulated. Most airports are outright owned by government. Building a private airport of commercial scale is, essentially, impossible - due to virtually limitless regulations on business, land use, environmental and others. Even nominally private airports are bound by rules dictating how their business is run.
I'd agree with most of this but a lot of those regulations are important. Regulations like runway spacing, runway strength, obstacle clearance requirements, etc. We have a system of protections in place that govern airport construction and while there are some flaws I think it better to fix those flaws then throw it all out. Again I don't want bean counters building airports because they will take short cuts.
Quoting Mrocktor (Reply 135): * Air traffic control is massively regulated. In most countries outright owned and in many operated by the government. Why do we continue to fly in corridors in the age of GPS and TCAS? Because government has NO incentive to go through the trouble of adopting 20 year old technology. Maybe when it is 50 years old. We'll see.
Privatization of ATC would be a good thing, it's worked in Canada. I still think there should be government oversight on how the system is maintained and implemented.
"Rapid decompression leads to involuntary exiting of the Aircraft"
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 151, posted (3 weeks 5 days 13 hours 3 minutes ago) and read 1124 times:
Quoting UALWN (Reply 147): Probably they are not all stupid.
Which begs the question... What does that make your view on this matter? I'd say DOA.
Quoting UALWN (Reply 147): Thank you, but so far I kind of like my career as a particle physicist.
Then you should stick to your day job.
Quoting Tharanga (Reply 146): The carrier can schedule whatever it pleases. So long as it does not exceed the capacity of the airport. That is the whole point.
That would require re-regulation. BTW. Not one airport in the US is "over-scheduled". Thats a myth. The problem is system delays which lead to gate non-availability and airfield mobility issues. Thats not an airport problem, thats an ATC problem.
Quoting Cubsrule (Reply 148): Permit incumbent carriers to retire slots at will, tweaking times if necessary
This precludes new entrants and is therefore discriminatory. If a slot is surrendered, then it should be made available to new entrants who can't access the market today.
Quoting Cubsrule (Reply 140): In May, 2009 (most recently-available data), AA carried 512 PDEW (and offered about 630 daily seats) on NYC-RDU. How, exactly, is that too small for mainline?
Sounds like their schedule is balanced just about right with an 81% load factor.
Mrocktor From Brazil, joined Jan 2005, 1420 posts, RR: 45 Reply 152, posted (3 weeks 5 days 12 hours 51 minutes ago) and read 1109 times:
Quoting NorCal (Reply 150): The bean counters will do their cost/benefit analysis and will determine that it is easier to pay out settlements to the families of victims then make it right the first time.
What this means (if it were true, which it may or may not be) is that as a whole society is not willing to pay the price of the current safety standards. Or, in other words, people would like to fly more (i.e. cheaper) with a little less safety. This makes absolute sense - since aviation is orders of magnitude safer than any other form of long range transportation.
What we have is the government imposing a standard of safety that actual people wouldn't pay for - if they had the choice. Making it about the "evil bean counters" is just stale ideology. If a company determines it can (or must) "cut corners" and stay viable in the long term - that means that those corners should be cut.
Quoting NorCal (Reply 150): I'd agree with most of this but a lot of those regulations are important. Regulations like runway spacing, runway strength, obstacle clearance requirements, etc.
You are under the misguided impression that a government bureaucrat 1. is more knowledgeable and 2. cares more (or at all) about the actual effectiveness and efficiency of airports than the guys who actually make a living of that business.
Wearing a federal badge does not make people smarter and it actually REMOVES the incentive to improve and innovate.
Regulation does not make anyone safer in the long run. Take the FDA. Yes, maybe hundreds of thousands of people were spared ill side effects by the extensive and strangling drug validation process. But it is certain that millions of people do not have access to potentially life saving drugs that 1. did not pass the risk averse FDA's muster or 2. were deemed too costly to attempt to develop and validate in the first place.
Likewise, perhaps today there would be an entirely different panorama of air travel today if the industry were free to act. We will never know.
AM744 From Mexico, joined Jun 2001, 1267 posts, RR: 0 Reply 153, posted (3 weeks 5 days 12 hours 36 minutes ago) and read 1092 times:
Quoting Cubsrule (Reply 86): A price ceiling on tickets, for instance, might increase competition and might also lower fares.
Wouldn't a price floor be better? You can't sell below cost and flood the market with artificially cheap tickets to drive out competition. Weren't there anti dumping regulations in international commerce?
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 154, posted (3 weeks 5 days 12 hours 35 minutes ago) and read 1093 times:
Quoting Mrocktor (Reply 149): Where you can route one cable or wire, you can route two of them. Now there certainly are costs to duplicating or multiplicating the power grid - but that is the point: if the market can sustain it, it will happen.
Yes - the extremely low marginal cost it what makes the thing a natural monopoly. Those low costs exist because the grid is already in place. Industries with really high fixed costs and low or zero marginal costs are natural monopolies, and unless there is innovation (which we haven't yet seen in electric transmission), they stay that way.
They are if technology changes. If technology stays the same, the cost structure really can't change much.
Quoting MSNDC9 (Reply 151): Sounds like their schedule is balanced just about right with an 81% load factor.
...which says nothing about the size of the aircraft they use. 4 S80s is about the same number of seats.
Quoting MSNDC9 (Reply 151): This precludes new entrants and is therefore discriminatory. If a slot is surrendered, then it should be made available to new entrants who can't access the market today.
How would you suggest equitably getting LGA to the correct number of slots?
Quoting MSNDC9 (Reply 151): That would require re-regulation.
What is your definition of "regulation?" Apparently, nothing we have today fits your definition.
To understand it, I suggest you read the files I posted in reply 145.
Quoting Cubsrule (Reply 154): How would you suggest equitably getting LGA to the correct number of slots?
The airport isn't scheduled to the IFR rate today. Nothing needs to be done with the slots. What needs a fix is the ATC enroute system that is so unpredictable that airlines pad their flights by 30-45 minutes.
Maybe your particle physics friend can provide a solution.
...which isn't the one used in this thread (note the article in the original post - much of what is suggested there has nothing to do with the preemption statute you linked and, FWIW, the preemption statute is irrelevant here). Sorry for the confusion.
Quoting MSNDC9 (Reply 155): The airport isn't scheduled to the IFR rate today.
What is the IFR rate, what is the VFR rate, and to what is it scheduled?
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 157, posted (3 weeks 5 days 12 hours 12 minutes ago) and read 1048 times:
Quoting Cubsrule (Reply 156): Maybe - but how do we know that. You are arguing by assertion?
Well, if it was seats they'd have four MD-80's a day wouldn't they?
Quoting Cubsrule (Reply 156): ...which isn't the one used in this thread (note the article in the original post - much of what is suggested there has nothing to do with the preemption statute you linked and, FWIW, the preemption statute is irrelevant here). Sorry for the confusion.
Its completely relevant. You're suggesting the exclusion of a class. A perimeter rule does not exclude a class, a slot allocation or pricing scheme does which is why the slots are covered under federal statute vs. being permitted under a multi-airport proprietorship.
Quoting Cubsrule (Reply 156): What is the IFR rate, what is the VFR rate, and to what is it scheduled?
IFR = 74, VFR = 85.
Peak Hour Scheduled = 73 followed by an hour with 60 flights allowing catch up.
The problem is enroute delays which pushes the operations beyond the scheduled level in the peak hour. The existing ATC system is a heaping pile of government crap.
Khobar From United States, joined Mar 2006, 2368 posts, RR: 3 Reply 158, posted (3 weeks 5 days 12 hours 7 minutes ago) and read 1040 times:
Quoting Planemaker (Reply 12): It wasn't full deregulation... and that has caused the problem. There are simply too many airlines, and legislators make it extremely difficult to merge airlines.
Before you know it we'll be left with PC Air and Apple, with PC flying 90% of the routes.
Quoting Tdscanuck (Reply 13): They do that now. Customers have *very* clearly demonstrated exactly how much they value service by the airlines.
Indeed, fewer and fewer passengers (-6.7% over last year) are flying even as airlines try to entice them with even lower fares, and even fewer passengers are expected in the future. Time to cut service some more and roll out a few new charges. Oh wait, that's what they've done to spur demand. LOL.
A 40" Voire LCD goes for about $500. A Vizio for about $700. Why do so many people fork out $1000-$2000 for Sony? That's what the airline industry needs to ask.
The airline industry is not unique. They need to get their heads out of their commissioned studies and do some honest research. There's an obvious reason why people pay so much more for Sony (or other brand name) - they perceive it to be of better quality and, well, usually it is.
New entrants - anyone who wants a slot but can't get one. Incumbents are heavily protected.
Quoting Cubsrule (Reply 159): No - they are using RDU at least partially as a place to park slots.
If they were, the loads would be aroudn 65%.
Quoting Cubsrule (Reply 159): If there are 85 slots/hour, why can't WN get the slots it wants?
Because they are apparently limiting them to the IFR rate for now even though the allocation and gate build out is tied to the VFR rate. Ask someone who works at PANYNJ.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 161, posted (3 weeks 5 days 11 hours 49 minutes ago) and read 1014 times:
Quoting MSNDC9 (Reply 160): If they were, the loads would be aroudn 65%.
No. Let's say the market demands 600 seats and at least four frequencies.
They could do 4 S80s or 12 ER4s. Both would serve the market equally well, but the latter occupies twelve slots.
If the market demands six frequencies, 4 S80s would not be a good choice.
Quoting MSNDC9 (Reply 160): Incumbents are heavily protected.
Short of reauctioning all slots (which wouldn't be very efficient), there is no way not to protect incumbents to some extent.
Quoting MSNDC9 (Reply 160): Because they are apparently limiting them to the IFR rate for now even though the allocation and gate build out is tied to the VFR rate.
How many slots are there? This should not be a hard question.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 162, posted (3 weeks 5 days 11 hours 46 minutes ago) and read 1014 times:
Quoting Cubsrule (Reply 161): They could do 4 S80s or 12 ER4s. Both would serve the market equally well, but the latter occupies twelve slots.
Well, they aren't, so that must mean something.
Quoting Cubsrule (Reply 161): Short of reauctioning all slots (which wouldn't be very efficient), there is no way not to protect incumbents to some extent.
Then I guess your stuck aren't you?
Quoting Cubsrule (Reply 161): How many slots are there? This should not be a hard question.
I just answered it. Try reading:
Quoting MSNDC9 (Reply 160): Because they are apparently limiting them to the IFR rate for now even though the allocation and gate build out is tied to the VFR rate. Ask someone who works at PANYNJ.
LTBEWR From United States, joined Jan 2004, 9391 posts, RR: 7 Reply 166, posted (3 weeks 5 days 11 hours 2 minutes ago) and read 962 times:
This is a dilemma. None of us want regulations that would make flying more expensive for anyone, yet we want rules that would increase costs. There is going to have be some compromise by all parties to keep our airlines flying. There is also the issue of much higher fuel prices in the future that will significantly affect demand.
At the least, many want regulations to be considered in several areas:
- cap or ban certain fees or included them in the advertises fares
- caps or limits on rebooking and refund fees
- include all taxes, government and airport imposed fees in base fares
- assure a minimum standards of seat pitch, time one can be trapped in a/c wihh an on the ground delay, access to free or low priced beverages and snacks in flight.
- minimum standards of service with humans if have a problem
- better slot management at key airports
- Allow airlines limited anti-trust immunity to work out scheduling among them to limit reduntant flights, everyone trying for the same limited peak time slots, some fares, etc.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 167, posted (3 weeks 5 days 10 hours 47 minutes ago) and read 946 times:
Quoting MSNDC9 (Reply 162):
Then I guess your stuck aren't you?
Not stuck at all. A total re-auction of all slots would be the most logical way to go about it. First, compensate all the existing carriers at the market value of their slots, then start over with a new reduced set of slots. The incumbent carriers will scream about it, so likely nothing will actually get done. Sure, it'd be challenged in court. But on this board, we can identify it as the most logical thing to do, at the moment.
Quoting MSNDC9 (Reply 157): The problem is enroute delays which pushes the operations beyond the scheduled level in the peak hour. The existing ATC system is a heaping pile of government crap.
For the purpose of the discussion, this doesn't matter. Whether it is the gates, runways, airspace, the ATC - whoever or whatever it is that is overwhelmed, something is overwhelmed. Whatever the root cause of the problem, the number of slots exceeds the capacity of the system.
You can grumble about ATC all you want, but it's not going to improve in the near future. So you have to deal with it. If, after nextgen is up and working (if it ever happens), and ATC is better, then you can increase the slots again. But until that time, the number of slots needs to be realistic.
oh, and while we're on it, the airlines and airline pax can do their share by helping pay for nextgen, too. the highest benefit goes to them; they should help pay.
Why don't you quit hiding the ball and just post the number?
Quoting Tharanga (Reply 167): First, compensate all the existing carriers at the market value of their slots, then start over with a new reduced set of slots.
The only problem with this is that it's hard to know the market price beforehand, but maybe they could hold the auction and give incumbents some sort of credit (equal to, say, the average sale price times the number of slots held) after.
Tharanga From United States, joined Apr 2009, 591 posts, RR: 1 Reply 169, posted (3 weeks 5 days 9 hours 43 minutes ago) and read 907 times:
Quoting Cubsrule (Reply 168): The only problem with this is that it's hard to know the market price beforehand, but maybe they could hold the auction and give incumbents some sort of credit (equal to, say, the average sale price times the number of slots held) after.
I've thought about this, and I agree it's hard to know. The last big bit of market pricing data involved a slot swap, between LGA and DCA, so that hardly helps.
The recursive method of giving the incumbents some money after the fact will lead to a very unnatural auction. It would affect the auction itself. Consider the extreme scenario: say Delta owned all the current slots. Delta would just outbid everybody else, no matter what, and bid a trillion dollars per slot. It doesn't matter to Delta, as it would just get the trillion dollars right back again, as compensation for the old slot it had before.
So that doesn't quite work.
I'll concede it would be legally messy, however you did it, unless the airlines willingly sold the old slots back - which they won't.
Cubsrule From United States, joined May 2004, 13791 posts, RR: 14 Reply 170, posted (3 weeks 5 days 9 hours 40 minutes ago) and read 906 times:
Quoting Tharanga (Reply 169): The recursive method of giving the incumbents some money after the fact will lead to a very unnatural auction. It would affect the auction itself.
It would - but I wonder whether it's the least bad solution. I don't know. Your guess is as good as mine.
MSNDC9 From United States, joined Jul 2009, 413 posts, RR: 0 Reply 171, posted (3 weeks 5 days 8 hours 32 minutes ago) and read 878 times:
Quoting Cubsrule (Reply 168): Why don't you quit hiding the ball and just post the number?
75 plus government mandated exemptions for small and medium markets. The whole world knows that, so I'm not sure what your point is. You're like a broken record. Ultimately how its managed rests with PANYNJ which is why I said ask them how they are handling it.
Quoting Tharanga (Reply 167): Not stuck at all. A total re-auction of all slots would be the most logical way to go about it.
Yeah, you are stuck because you're not going to see a re-auction.
Quoting Tharanga (Reply 167): oh, and while we're on it, the airlines and airline pax can do their share by helping pay for nextgen, too. the highest benefit goes to them; they should help pay.
They already have paid. The FAA has squandered billions ($40 Billion roughly) on something promised initially in the mid 1990's and now have nothing to show for it. There is no "NextGen" per se.
Quoting Tharanga (Reply 167): But on this board, we can identify it as the most logical thing to do, at the moment.
I'm afraid in the real world, what's put up on this board amounts to squat when it comes to this issue.
JRDC930 From United States, joined Jan 2007, 957 posts, RR: 0 Reply 174, posted (3 weeks 5 days 5 hours 22 minutes ago) and read 795 times:
First off, i personally am strongly pro-labor, and pro-reregulation. I think air travel should be seen as a public good, and that for the US to function properly as a nation everyone needs to have acess to affordable air travel. to this end i think government re-regulation is the best way to achieve this goal. Leaving the airlines to regulate themselves was a disaster. When ever you let private insustry regulate itself, it screws over the employees and the consumer, the only people who benefit are greedy capitalists.
Reregulation is the only solution that will not result in aviation becoming a wealthy person only form of travel. I have spent 2 semesters studying the effects of deregulation in my school, and two of my aviation management texts were written with a clear position that deregulation was bad for all involved. Government intervention is the only way to ensure the consumer and the employee are protected from corrupt profit driven CEO's. IMO. Personally i think airlines should be nationalized, but that wont happen. Overwhelming evidence shows that deregularion has harmed consumers, employees, and even the airlines themselves. (ill post some evidence when i can refer to my management texts). The industry's solution? Consolidation---this is code for private monopoly, which can only hurt the consumer and the employee. Id much rather see strong government economic regulation, that consolidation that leaves consumers at the whims of the greed of airline stockholders.
My
U.S. Legacy carriers,STILL leaders in lowering industry standards...
NorCal From United States, joined Mar 2005, 1634 posts, RR: 3 Reply 175, posted (3 weeks 5 days 5 hours 22 minutes ago) and read 796 times:
Quoting Mrocktor (Reply 152): Making it about the "evil bean counters" is just stale ideology. If a company determines it can (or must) "cut corners" and stay viable in the long term - that means that those corners should be cut.
So as long as the dollars keep rolling in to hell with safety? They teach ethics in business school for a reason so that businessmen and women don't lose sight of morals just to make a quick $.
Quoting Mrocktor (Reply 152): You are under the misguided impression that a government bureaucrat 1. is more knowledgeable and 2. cares more (or at all) about the actual effectiveness and efficiency of airports than the guys who actually make a living of that business.
With out government regulations what is to stop someone from building a gigantic skyscraper in the approach path of a runway that shuts down your wonderful private airport? Government regulators don't just make up the rules themselves they consult with the private industry and use years of experience and studies to formulate how airports should be run.
What's to keep one private company from deciding an ILS should be 3 degrees vs. another deciding on 7 or 8 degrees? What's to keep one from choosing blue lights for taxiway edge lights vs. another choosing red lights? Standardization is what makes aviation work safely so why should we change that? It isn't perfect but we do need regulations to keep things standard and up to the safety level we enjoy.
"Rapid decompression leads to involuntary exiting of the Aircraft"
BMI727 From United States, joined Feb 2009, 3379 posts, RR: 1 Reply 176, posted (3 weeks 5 days 5 hours 14 minutes ago) and read 800 times:
Quoting JRDC930 (Reply 174): Reregulation is the only solution that will not result in aviation becoming a wealthy person only form of travel.
Then why have we seen a proliferation of low cost carriers in places that deregulate the airlines? The fact of the matter is that if ever a monopoly occurs in the airline industry, someone comes along and starts up a competitor. Often the competitor does quite well. Sometimes, however, the market becomes saturated resulting in one player going out of business.
[Edited 2009-11-18 16:28:15]
Why do Aerospace Engineering students have to turn things in on time?
JRDC930 From United States, joined Jan 2007, 957 posts, RR: 0 Reply 177, posted (3 weeks 5 days 5 hours 6 minutes ago) and read 792 times:
Quoting BMI727 (Reply 176): The fact of the matter is that if ever a monopoly occurs in the airline industry, someone comes along and starts up a competitor
WRONG! Monopolies allow the company to squash any incoming competitor, why do you think so many start ups fail? SW and B6 are rare exceptions. Monopoly or Duopoly gives you the power to eliminate competition before it begins, thats basic economics. Add to that the already high cost of entrace, and high barriers to entry, and you'll have an environment with few if any competitors. Consolidation is the same as monopoly, and whats worse its not a government monopoly either. A legal government runned or regulated monopoly, has the interests of the consumer and the employee at hand, and is answwerable to its constituents (the people). Consolidation gives private management too much power, all in the name of profits for the few.
U.S. Legacy carriers,STILL leaders in lowering industry standards...
I don't see how you get the 75 number out of there; that's why I was confused. I see 62 commercial slots per hour plus 6 "other" plus exempt operations per the small/non-hub statute plus the fourteen daily Canadian slots which don't count per Part 93 Subpart K.
Quoting JRDC930 (Reply 177): Monopolies allow the company to squash any incoming competitor,
But many of them don't get squashed. Some get squashed, some screw up on their own, but some do it right and succeed.
Quoting JRDC930 (Reply 177): Add to that the already high cost of entrace, and high barriers to entry, and you'll have an environment with few if any competitors
...but there are always more startups despite this.
Why do Aerospace Engineering students have to turn things in on time?
AirNz From United Kingdom (Northern Ireland), joined Feb 2005, 3135 posts, RR: 14 Reply 180, posted (3 weeks 5 days 4 hours 2 minutes ago) and read 764 times:
Quoting JRDC930 (Reply 174): Reregulation is the only solution that will not result in aviation becoming a wealthy person only form of travel.
Absolute cobblers! If that's what you've allegedly learnt in two semesters at college could you then explain to me the concept and success of LCC's?
Quoting JRDC930 (Reply 174): I think air travel should be seen as a public good, and that for the US to function properly as a nation everyone needs to have acess to affordable air travel.
Hmmm! air travel is currently more affordable than at any time in history, so thus how are you then explaining that? Out of curiosity, with the propensity of modern communications why does the US need 'affordable' air travel "to function properly as a nation"? Before modern air travel it seems it functioned quite well.
Quoting MSNDC9 (Reply 171): I'm afraid in the real world, what's put up on this board amounts to squat when it comes to this issue.
And I'm equally afraid that is merely your own opinion......nothing more. Seems like only your opinion is valid while you tell everyone else they're wrong. Neither debates, nor a.net, work that way I'm afraid.
JRDC930 From United States, joined Jan 2007, 957 posts, RR: 0 Reply 181, posted (3 weeks 5 days 3 hours 20 minutes ago) and read 747 times:
Quoting BMI727 (Reply 179): but there will always be exceptions
Do you want to rely on those"exceptions" to provide you with the only competition?? I dont.
Quoting BMI727 (Reply 179): But many of them don't get squashed
In the US can you give me example other than WN, B6, Airtran and Frontier??? SkyBus...Failed, and there have been a whole host of other startups fail since deregulation, much more than have succeded.
Quoting BMI727 (Reply 179): but there are always more startups despite this.
For how long? You think people will risk surefire failure against an industry with one or two competitors...? I doubt it.
Quoting AirNz (Reply 180): could you then explain to me the concept and success of LCC's?
By providing low cost service with often times better inflight service and frequencies than the so called full-service carriers. People dont expect anything from an LCC when they get small things like free bags, and friendly FA's compared to other airlines that market themselves as full-service and charge more, your going to get more customers. The LCCs succeded because the Legacy carriersjacked up prices, and cut ammenities. the LCCs cut prices, and cut amenities.
Quoting AirNz (Reply 180): Hmmm! air travel is currently more affordable than at any time in history
Debatable. When i get off of work ill cite specific sections of my text that will refute that claim. Also employees have lost most of the benefits they had under regulation, due to corporate greed. THAT is undeniable
U.S. Legacy carriers,STILL leaders in lowering industry standards...
PPVRA From Brazil, joined Nov 2004, 6121 posts, RR: 48 Reply 182, posted (3 weeks 5 days 3 hours 1 minute ago) and read 730 times:
There is absolutely nothing positive that will come out of regulation. The only "good" regulation is the one that is based on supply and demand, which is determined by market players. Government-run airports and air traffic management are Public Failures, because of the Tragedy of the Commons. This has affected the airline industry, which uses this infrastructure, very negatively. Further deregulation, particularly of airports following their privatization, is the only thing that will solve this problem in a way that benefits society as a whole.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
JRDC930 From United States, joined Jan 2007, 957 posts, RR: 0 Reply 183, posted (3 weeks 5 days 1 hour 58 minutes ago) and read 710 times:
Quoting PPVRA (Reply 182): The only "good" regulation is the one that is based on supply and demand, which is determined by market players.
Neo-classical economics, has been proven to be a failure. Look at where it lead the US...straight into a recession. Keynesian economics is a more realistic model that rational leaders such as Obama should follow. This system requires strong gov
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Or the mega, congested airports we already have today. Simply adding more capacity has failed every time, everywhere. It is at best a temporary solution.
Have them fly larger planes to DEN. 
Or do not expand and have the cities wonder why high paying jobs leave. 