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5 Reasons Why Airlines Will Never Be Profitable  
User currently offlineJetlanta From United States of America, joined Jul 2001, 3262 posts, RR: 35
Posted (4 years 9 months 21 hours ago) and read 19597 times:

Another very provocative post on swelblog.com:

http://www.swelblog.com/articles/mon...y-will-nev.html?SSScrollPosition=0

He talked with ex-AC CEO Monte Brewer who shared his thoughts on why the airline business will never make any real money. Here is a snippet:

Quote:

1. It’s A Capacity Lead Business Model (Causes Constant Overcapacity)

Since deregulation the airline product has been commoditized. In the commodity framework, the only way the industry, or an airline, can grow revenue is to grow capacity. Then, the Computer Reservations Systems and the Global Distribution Systems institutionalized the notion that in order for an airline to grow revenue, it needed to offer more and more capacity even before demand warranted.

The addition of capacity led to low and lower operating costs. On the margin, revenue exceeded cost. Uneconomic capacity was being deployed each and every day. Ultimately an industry too big to be sustainable was created.

The GDS’s were a major contributor to the commoditization of the airline product. Based on this fact, airlines that distribute directly to the consumer have the best likelihood of differentiating, and more importantly, not commoditizing, their product. This fact contributes to the notion that certain airlines can do well while the industry suffers.

2. Airplanes Don’t Go Away (They Just Become More Efficient)

A bad airline industry assumption is consolidation of the industry, whether through a merger or carrier liquidation, leads to industry capacity reduction. The airline industry time and again has demonstrated that once a carrier’s capacity is pushed to the edge, that carrier’s capacity (efficient and inefficient) does not go away.

With the working premise that the only way to grow revenue is to grow capacity, then new aircraft need to ordered. The problem is aircraft do not go away, and: aircraft do not make their way from an inefficient operator to a more efficient operator; aircraft CAN fly forever; even when an airline tries to retire aircraft, they come back like a bad spaghetti sauce (remember ValuJet using Delta’s DC-9s to compete directly with them in Atlanta); and, when carriers grow they realize great efficiencies.

An example of those efficiencies is a 3 percent growth in capacity results in only a 1 percent increase in the cost per available seat mile. However, this works in reverse when carriers pull capacity down as the cost savings


3. Labor Leverage (Political Organizations Cannot Manage Commercial Reality)

Labor organizations are not structured to manage the responsibility they possess. In Brewer’s view labor has tremendous leverage over the industry. However, they are highly simple political organizations and, as such, only have a short-term view. For the politicians, the short-term view is to remain in their elected position. To overcome this flaw, labor organizations need to completely overhaul their governance structure.

Like the ordering of airplanes, management historically reaches agreements with labor at the very end or the peak of economic up cycles and then faces the prospect of paying the bill during subsequent downturns. Given the high fixed costs of the industry, airlines can rarely afford a strike or intermittent work stoppages. During negotiations, both the airline and labor pretend management is in control. According to Brewer, the working assumption is management will not allow labor to take too much, but in reality, labor can take all it wants - - then both live with the outcome. Brewer believes, when costs like labor, fuel, maintenance, airport fees are factored in on a daily basis, the typical airline has 10 - 20 profitable days a year.


4. Input Costs are Too Volatile (Revenue Cycle and Cost Cycle Out of Sync)

Even in the best of years, the airline industry is a low margin business where it is not uncommon for any number of input costs to increase at least 20 percent. A low margin business with volatile input costs is a toxic mix. A good example occurred in 2008 when the price of oil increased from $80 per barrel to $147. As is typical in the airline business, tickets are often purchased months in advance. During the first half of 2008, it was not uncommon for passengers to be flying in June on a ticket purchased when oil was $50 per barrel cheaper.

Is the relationship of volatile costs relative to revenue impossible to manage? No, but it would require companies to maintain outsized cash balances. Cash balances that look good to labor during contract negotiations and to financial raiders seeking to buy a company to harvest that cash.

5. Nobody Really Wants It to Be Fixed

Brewer makes a powerful case that things are fine the way they are… and, for the most part, the airline industry value chain, consumers and the government know it.

When it comes to low fares, the consumer can shop the internet and find some market on sale. They may even find the price of a ticket today equal to, or less, in nominal dollars than a fare charged two decades ago. When adjusted for inflation, it is hard to find any consumer item that is a better bargain than air travel.

Taxes and fees are nearly $60 - or 20 percent - of the price of a ticket today. This compares to $22, or 7 percent, in 1972. The government is getting a bigger share of a shrinking pie.

Perhaps, most compelling is the industry's value chain like airline catering, aircraft lessors, ground handling, manufacturers, airports, distribution systems, fueling; travel agents, maintenance repair organizations and freight operations. Each of these industry sectors in the airline industry value chain earn a higher return on invested capital than the airline companies that keep them in business.

Read the whole thing. This type of discussion is so important for this industry. We too often get caught up looking inward that we don't see the big picture.

[Edited 2009-11-26 16:44:08 by srbmod]

69 replies: All unread, showing first 25:
 
User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 1, posted (4 years 9 months 20 hours ago) and read 19352 times:

What - no mention of passengers being too cheap to pay what airlines need to make money? Who'd have thought?

User currently offlineKappel From Suriname, joined Jul 2005, 3533 posts, RR: 17
Reply 2, posted (4 years 9 months 20 hours ago) and read 19323 times:

I assume this only applies to North America? Because up to this year, many airlines in Europe and Asia were very profitable, with profits of the big airlines up to USD 1 bln. SQ will report it's first loss in it's existence this year. After the recession, these airlines will become profitable again. Not to mention airlines like FR, U2, etc.


L1011,733,734,73G,738,743,744,752,763,772,77W,DC855,DC863,DC930,DC950,MD11,MD88,306,319,320,321,343,346,ARJ85,CR7,E195
User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4499 posts, RR: 33
Reply 3, posted (4 years 9 months 19 hours ago) and read 19260 times:

Just a few observations:

1) "Overcapacity" is a constant meme on Airliners.net. I'm not buying. Investors support the capacity the airlines have, employ people to operate it, and consumers buy it. Too much capacity? Then let investors stop supporting it, which they don't. BTW, the in case Brewer missed it, US legacy carriers (I don't know about AC) have been parking planes left and right the past year, and LCC's aren't expanding. Fares are much higher on most of the routes I've been flying this year, which is probably related.
2) Brewer's ValuJet example is about 15 years out of date. In the US and Canada, most low-fare carriers operate a/c bought new--WS, WN, FL, B6, and F9 all buy their a/c new. But when retired legacy-carrier a/c "go from a less efficient to a more efficient" carrier, as he puts it, that's competition, and it's a good thing and good economics. Sorry he doesn't like it.
3) Brewer is correct about this one. Yes, the market rationalization of the industry has reduced regulation-protected high compensation, and opened unions to the kind of economic realities most of us face. No one denies that that kind of structural change is difficult. But unions still have huge power over the structure of the industry, a major role in shaping the kind and amount of capacity airlines have--and markets get.
4) Yes, input costs are volatile. As long as we're dependent upon fossil fuels, that's probably going to be the way it is. And yes, the structure of the industry prevents airlines from building up large cash reserves. That's life.
5) Yes, nobody seems to want the "problem" of airlines not constantly making high profit margins to be fixed. Talk to the investors. However, it might be good to start getting on governments about high taxes on civil aviation.

Most of the material posted seems to me more or less the whining of a legacy-carrier CEO who wishes there was a world without LCC's, only business fliers took to the air, and a legacy-dominated industry made consistent high profits. He's free to hold these views and dream over coffee on his front porch.

BTW, happy US Thanksgiving to all.

Jim

[Edited 2009-11-26 09:34:13]


Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5403 posts, RR: 7
Reply 4, posted (4 years 9 months 19 hours ago) and read 19255 times:

Pretty much the same arguments were made to justify federal regulation of agriculture.

We know where that led. You can argue whether it was for good or bad; but notice that there are now more Department of Argiculture employees than there are farmers.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineAl2637 From Ireland, joined Oct 2006, 407 posts, RR: 3
Reply 5, posted (4 years 9 months 19 hours ago) and read 19170 times:



Quoting Khobar (Reply 2):
What - no mention of passengers being too cheap to pay what airlines need to make money? Who'd have thought?

Passengers pay the fare that is offered. Airlines offer low fares to fill empty seats, i.e. there is too much capacity. The only way to increase fares is to reduce capacity, but the industry doesn't do that very well. (and all it entails.. layoffs, mothballing aircraft etc etc)

If you're offering $25 dollar fares to get bums on seats, you can't blame passengers for purchasing them!


User currently offlineReadytotaxi From United Kingdom, joined Dec 2006, 3222 posts, RR: 2
Reply 6, posted (4 years 9 months 19 hours ago) and read 19119 times:

Now if we can just control the weather and the price of fuel, we are on a winner!  stirthepot 


you don't get a second chance to make a first impression!
User currently offlineMariner From New Zealand, joined Nov 2001, 25086 posts, RR: 85
Reply 7, posted (4 years 9 months 19 hours ago) and read 19000 times:
Support Airliners.net - become a First Class Member!



Quoting Jetlanta (Thread starter):
Another very provocative post on swelblog.com:

Jetlanta, I just want to say thanks for introducing me to Swelblog a few months ago.

I think he is one of the smartest minds writing about airlines that I know.  Smile

cheers

mariner



aeternum nauta
User currently offlineSsublyme From United States of America, joined Dec 2008, 516 posts, RR: 0
Reply 8, posted (4 years 9 months 19 hours ago) and read 18965 times:



Quoting Khobar (Reply 2):
What - no mention of passengers being too cheap to pay what airlines need to make money? Who'd have thought?

In any profit driven endevour, you create value and charge for it, if the consumer doesn't feel the value created is worth the asking price, it has nothing to do with being cheap. A business class ticket might be worth $2500 to me, but be too much for someone else. The seller can't agree to a price then complain about selling at a loss because I'm too cheap to pay an amount that ensures they make a profit. If consumers were expected to always pay an amount that ensures profit, there would never be a bankrupt company.


User currently offlineFlybyguy From United States of America, joined Jun 2004, 1801 posts, RR: 1
Reply 9, posted (4 years 9 months 18 hours ago) and read 18878 times:

Reason #7 - Heavy regulation of the industry as a whole.

I think in order to bring down prices and costs the FAA is going to have to loosen restrictions on maintenance, training, oversight, route authorities and corporate ownership. Airlines have small operating margins because the fixed costs of running an airline is so high. To get to a situation where airlines can charge Greyhound fares profitably, we are going to have to compromise on what is an acceptable level of safety for the industry. Millions drive automobiles that would probably be deemed unsafe if inspected to airline standards worn brakes, faulty fuel systems, leaky radiators etc. About 5 million auto accidents of varying severeity occur annually in the U.S. out of which about 50,000 deaths occur. This IMHO is widely accepted as an appropriate risk for fatality. Playing devils advocate here, why isn't a proportional number of deaths acceptable for airline travel? In a bad year in the US we would see maybe 500 deaths attributed to airline accidents... why is it not an acceptable risk to have 5,000?

I guess my argument is that aviation is the only mode of transportation that undergoes an unprecedented level of scrutiny and oversight. While auto, bus, rail and maritime transportation experience far less. What's good enough for the goose is good for the gander.



"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
User currently offlineGDB From United Kingdom, joined May 2001, 13186 posts, RR: 77
Reply 10, posted (4 years 9 months 17 hours ago) and read 18548 times:

I have heard that if you take every airline service ever, from the first (subsidized) mail flight, hops from London to Paris, imperial routes, the growth of air routes in the US, then everywhere else, right through to the present day, the industry as a whole has lost twice as much money than it has ever made.

User currently offlineEugdog From United Kingdom, joined Apr 2001, 518 posts, RR: 0
Reply 11, posted (4 years 9 months 16 hours ago) and read 17978 times:

I think the union leverage is the single most important factor. Airlines and unions were made for each other. You have a product which cannot be stored, requires huge capital input, highly skilled labour and is largely a fixed cost operation. So if unions go on strike revenue is lost forever, the costs remains (because it is fixed cost). Because of the need for highly skilled labour you cannot replace the strikers. A strike is much more devastating to a airline then any other business because of this.

A manufacturing industry can still earn revenue by selling its unsold stock. It can also hire replacement workers. Only small airlines can make profit because they can find replacement labour more easily so unions have less leverage!!

I do not begrudge unions acting this way. I would do the same. GREED is a universal human instinct which we ALL have. But they must adapt to a changing economic environment or legacy airlines will go the way of the railways!


User currently offlineSlinky09 From United Kingdom, joined Jun 2009, 827 posts, RR: 0
Reply 12, posted (4 years 9 months 16 hours ago) and read 17575 times:

What's the biggest problem with the airline industry? Outside of few countries, it's not a real market where companies are able to build their businesses freely and independently. The whole industry is beholden to Governments, rights, laws, particualrly in the US, supposedly the most free market country in the world. Consequently, you get powerful labour unions, restrictive practices on freedom of trade (who can fly where), controls on ownership (only a majority from one country), restrictions on investment, self-interested practices and then an industry that is fixated on capacity over market pricing.

No wonder it's a mess and not one I would want to enter as a businessman ... but then again, new ones that do enter face attempted murder by incumbants.

What airlines need is complete independence from the law as it affects their ability to trade freely and how they are invested in and how they invest.


User currently offlinePink77W From United States of America, joined Aug 2009, 179 posts, RR: 0
Reply 13, posted (4 years 9 months 16 hours ago) and read 17474 times:

I think WN has the answer, just fly the dam plane, no need to impress with an A380 or what have u. i try to fly a different airline every time i fly, i almost alway end up on WN cause they just get me there, no hassles no problem

User currently offlineYycramprat From Canada, joined Apr 2007, 36 posts, RR: 0
Reply 14, posted (4 years 9 months 15 hours ago) and read 17172 times:

WOW!!!

All this from a man who took millions and millions from AC to line his own pocket (and that of many of his friends), then told the employees that they had to take more and more cuts every year without making management take any cuts. How about his 'Golden Parachute'for the 5 years of service with AC. Do you think he deserved to be credited with a full 25 years of service so he could pull a full pensions, as well as his severance package.


User currently offlineFlyboy2001 From Canada, joined May 2005, 186 posts, RR: 0
Reply 15, posted (4 years 9 months 15 hours ago) and read 17110 times:



Quoting Flybyguy (Reply 10):
What's good enough for the goose is good for the gander.

You're joking, right? You didn't actually post what you posted in seriousness, did you?



And you... Revolution, or just resistance?
User currently offlineDocLightning From United States of America, joined Nov 2005, 19516 posts, RR: 58
Reply 16, posted (4 years 9 months 15 hours ago) and read 16864 times:

Nobody has ever been able to give me a satisfactory answer:

If airlines keep losing money and are, on average, never profitable, then where do they get the cash to continue operations?


User currently offlineCrosswinds21 From Netherlands, joined Jun 2009, 698 posts, RR: 0
Reply 17, posted (4 years 9 months 14 hours ago) and read 16627 times:



Quoting DocLightning (Reply 17):
Nobody has ever been able to give me a satisfactory answer:

If airlines keep losing money and are, on average, never profitable, then where do they get the cash to continue operations?

This is a very good question. My opinion has always been that if the airline industry is, on average, highly unprofitable, then eventually, (just like any other industry) the worse airlines will go out of business and only the few better airlines will remain. It's a matter of simple economics - or at least it should be. Contrary to the above, it always seems that when an airline is in trouble, it's always able to raise new capital and somehow find investors to pump in additional cash. Moreover, there are constantly new airlines that are popping up which are somehow finding investors (think Skybus) despite the fact that everyone knows that the chances of success in the long term are small. Most of these airlines fail. It would seem that after all that's happened over the years since deregulation, that by now, the likes of US and UA should be gone by now but yet they somehow keep finding additional sources of cash to remain in operation despite heavy continuous losses. So, again, yes, this is a very good question.


User currently offlineMariner From New Zealand, joined Nov 2001, 25086 posts, RR: 85
Reply 18, posted (4 years 9 months 14 hours ago) and read 16525 times:
Support Airliners.net - become a First Class Member!



Quoting DocLightning (Reply 17):
If airlines keep losing money and are, on average, never profitable, then where do they get the cash to continue operations?

Debt and debt refinancing. See Doug Parker's comments the other day:

http://finance.yahoo.com/news/US-Air...y-of-apf-1674582304.html?x=0&.v=17

"Parker ... said the company was fortunate to have partners willing to help, but "we cannot continue to lose money indefinitely and fund our losses through financing and partner support."

The airline may lose money, but the interest on the debt still gets paid. It's a goose consistently laying golden eggs for the credit market.

mariner



aeternum nauta
User currently offlineViscount724 From Switzerland, joined Oct 2006, 25125 posts, RR: 22
Reply 19, posted (4 years 9 months 14 hours ago) and read 16444 times:



Quoting DocLightning (Reply 17):
If airlines keep losing money and are, on average, never profitable, then where do they get the cash to continue operations?

One reason is that depreciation is a very large but non-cash expense. It's an expense and thus reduces reported profits (or results in a bigger loss) but it doesn't affect cash flow.


User currently offlineXdlx From United States of America, joined Aug 2008, 636 posts, RR: 1
Reply 20, posted (4 years 9 months 14 hours ago) and read 16275 times:



Quoting Viscount724 (Reply 20):

Can anyone then explain why Allegiant makes money? Buys used airframes CASH,
and does not subsribe to GDS or flies where it can lose money?

I think small airlines make money... Big airlines do not.... DL made money in the
first 50-60 years it existed and after that ..... well it got big and it has a hard time making
money!


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4499 posts, RR: 33
Reply 21, posted (4 years 9 months 10 hours ago) and read 15714 times:

BTW, it's not clear to me what's "provocative" about what Brewer says. It's fairly typical legacy-carrier reasoning. Any real competition, by LCC's and their different business model, is bad for the industry because they make it difficult for us legacies to simply charge high fares and make easy money. Boeing and Airbus should just make enough aircraft for the legacies, and then legacy carriers should be allowed to dictate that every aircraft they retire either go to FedEx or be turned into pop cans. Dream on, Montie.

Free markets are tough that way--they demand that companies work hard for, and earn, their customers' money, and give them value instead of just raking people. Which is why we can reasonably expect a legacy CEO to pine for a situation like the pre-1978 USA, and wish for a comfy legacy oligopoly.

Jim



Need a new airline paint scheme? Better call Saul! (Bass that is)
User currently offlineRafaelyyz From , joined Dec 1969, posts, RR:
Reply 22, posted (4 years 9 months 10 hours ago) and read 15555 times:



Quoting DocLightning (Reply 17):
If airlines keep losing money and are, on average, never profitable, then where do they get the cash to continue operations?

No one ever said that markets were rational (actually they did, but they've since recanted). Some investors believe airlines are not a profitable business, others disagree. C'est la vie.


User currently offlinePPVRA From Brazil, joined Nov 2004, 8957 posts, RR: 40
Reply 23, posted (4 years 9 months 10 hours ago) and read 15538 times:



Quoting Xdlx (Reply 21):
Can anyone then explain why Allegiant makes money? Buys used airframes CASH,

Depreciation expense is not an extra expense, it's just the acquisition cost being recognized over time, rather than all at once. Doesn't matter how you pay for your airplanes, you'll have some kind of depreciation expense.



"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offline787KQ From United States of America, joined Mar 2006, 549 posts, RR: 0
Reply 24, posted (4 years 9 months 10 hours ago) and read 15345 times:



Quoting Eugdog (Reply 12):
I think the union leverage is the single most important factor. Airlines and unions were made for each other. You have a product which cannot be stored, requires huge capital input, highly skilled labour and is largely a fixed cost operation. So if unions go on strike revenue is lost forever, the costs remains (because it is fixed cost). Because of the need for highly skilled labour you cannot replace the strikers. A strike is much more devastating to a airline then any other business because of this.

By no means are the thoughts new and, in this case, not expressed as true scholarly articles, which cite the above most; A highly leveraged industry, which, as a result of the structure, companies give into the "unreasonable" demands of labor beause the alternative is to lose millions and millions of dollars. Go into bankrkuptcy, make no money for owners, repeat. The sillines of the seniority system also does not help. Until this can be fixed, the cycle will repeat.


25 XT6Wagon : Overcapacity does exist. Less so now, but a few years ago there was a huge number of extra seats. Part of the issue you fail to see is that Airlines
26 JHCRJ700 : Very interesting article. I could be wrong but I think that the airline industry in the US will reach a point where the only solution is government ow
27 DCA-ROCguy : How do you propose that airlines stretch and shrink planes to meet demand? Real world a plane parked for a day costs almost as much as one that flys.
28 Cubsrule : I think you have, without stating it, hit on a problem. It's hard to measure excess capacity or excess demand in the present. I think most would agre
29 Skydrol : And don't forget the immense cost burdens relating to security technology, training and equipment the airlines have to deal with which are non-existe
30 CXH : Several posters had good replies. Here's my take: investors, small and large, have a strange attraction to airlines and industries they think they kn
31 DocLightning : So, basically fake money? That shouldn't be sustainable for more than a few years. In fact, it's precisely why the markets collapsed last year. I'd b
32 Flybyguy : You're darn right I meant every word. I think if we want cheap tickets and a profitable airline industry the traveling public is going to have to mak
33 FlyPNS1 : Doesn't the fact that LCC's are cutting capacity (even the holy grail WN is down 9% in ASM) support the notion that maybe we do have overcapacity. I
34 DCA-ROCguy : Barring fuel... it could be possible to profitably travel cross country for the price of a long distance commuter rail ticket! Lower operating costs m
35 RussianJet : Ryanair makes decent money.
36 Babybus : The trouble with aviation is that all their costs are gigantic; fuel, ground handling, uniforms, pilot salaries, stationery, commissions etc, not to m
37 Cubsrule : Fares do, though it's still a hard thing for a couple of reasons: 1) Cutting capacity (to increase yields) frequently, though not always, drives up u
38 Tharanga : Look around - there are capacity cuts everywhere. What does that tell you? It's not just a meme; it's basic economics of supply and demand. Let me pr
39 RussianJet : Tertiary airports? Have a proper look at the route network. Plenty of 'primary' airports in there these days. Please let's not carry on propogating t
40 Tharanga : Speaking for myself and not cubsrule: Ryanair (and once upon a time, Southwest) make profits, but not everybody can use their respective models (FR a
41 DocLightning : Because it's the only mode of transportation that involves traveling at a significant portion of the speed of sound at an altitude where human surviv
42 Mariner : Ultimately - yes. As Mr. Parker said. The credit market gives some airlines enormous latitude, because he returns are so good. The money people who f
43 FrmrCAPCADET : I am not sure that the old adage may not apply: "You can tell the men from the boys by the Price of the toys." It had always struck me that the old Bo
44 Kappel : Don't forget SQ, they will have their first year with a loss in their existence. This thread is very US centric. The big EU and Asian airlines made b
45 FlyMIA : Here are my five reasons: Oil,Oil,Oil,Oil,Oil. For the next 100 years at least I do not see an altervative for airplane fuel. Cars and trains, buses e
46 Tharanga : That's just part of the game. It should still be possible to make a profit with oil at $80 (and some airlines do); it just makes the overcapacity iss
47 Viscount724 : Right, which is exactly why dozens of airlines no longer exist after they finally ran out of real cash to pay their bills and disappeared. For exampl
48 Lightsaber : When an industry blames their customers, something is very wrong. There will be LCC's pursuing the value customer who can do it at a profit. Like it
49 Planemaker : In 30-40 years crude oil will not be the main transport fuel for ground transportation. In 30-40 years crude prices will come down for a variety of r
50 GothamSpotter : I don't think the industry wants investors to realize they're gambling on smoke and mirrors.
51 Mariner : It isn't a secret. Anyone who can read a balance sheet knows what is going on. mariner
52 Kappel : I don't know what the definition of an emerging market is in the book you quoted, but it seems to me that Singapore has been an established market fo
53 DocLightning : Which is why all these airlines are doing biofuel trials and finding that...surprise, surprise... it packs more punch per pound than Jet A?
54 Mariner : Sure, it will. The problem is that there is not a single concerned constituency that wants 'the end' to happen - except in extremis, as with Pan Am o
55 Post contains links Jambrain : I would suggest one reason Airlines make a paper loss is to avoid paying tax Then firstly why did low oil price not lead to bumper profits in other p
56 Trucker : I don't think unions have huge power over anything anymore. And this is from a former union steward(along time ago). Check out the thread about Sully
57 Bmacleod : I beg to differ, New fuel technologies can be developed to offset rising crude. Union demands may last but at some point they will eventually give up.
58 Planemaker : Especially now that we have globalization and foreigners own assets in large industries like power, autos, etc, etc, yet Virgin America is having suc
59 DCA-ROCguy : I don't think unions have huge power over anything anymore. And this is from a former union steward(along time ago). Check out the thread about Sully.
60 Pyrex : Bill is a great guy, really knows his stuff and is not afraid to be controversial (with frequent attacks by airline workers wishing leaving comments
61 Trucker : Sorry....gotta disagree. Well, maybe not totally powerless but damn near. AA and US pilots would love to fly those E190s and CR7s but AA and US won't
62 Planemaker : Well scope certainly has had an affect on fleet make-ups... too many 50-seaters than the airlines would like. AA would rather fly more CRJ700s than t
63 WorldTraveler : All of the talk about US vs foreign airlines belies the fact that airline competition is more intense in the US than any other country in the world -
64 Trucker : I want to be carefull here because although I know union issues pretty good from my time as a union steward, I'm sure you and nearly everyone else on
65 DCA-ROCguy : AA and US pilots would love to fly those E190s and CR7s but AA and US won't give them the money they want to fly them. They tell the union, "either yo
66 Planemaker : There is no way that AA would bust scope. It would be a disaster as the pilots would indeed walk off the job. FYI, AA scope limited AE to only 25 CRJ
67 Mrocktor : As it happens, you are much, much, much, much more likely to die run over by a car or bus or train than having an airliner fall on your head. It is n
68 Trucker : OK, since you're both saying the pilots would strike I'm convinced. They would! No sir! The work is being contracted out. The scope clause creates cer
69 Cubsrule : US mainline flew the 190s.
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