brilondon From Canada, joined Aug 2005, 3175 posts, RR: 1 Posted (10 months 2 weeks 1 day 13 hours ago) and read 15233 times:
Given the current talk about AA merging with (insert airline of the day here), I was wondering if the current and foreseeable future market is too small for the number of airlines all vying for passengers and what the right number of airlines would be if you could have the right number?
yegbey01 From United States of America, joined Nov 2003, 1679 posts, RR: 3 Reply 2, posted (10 months 2 weeks 1 day 12 hours ago) and read 15074 times:
Compare the US market with that of Europe...and you will get your answer.
LHCVG From United States of America, joined May 2009, 1368 posts, RR: 1 Reply 3, posted (10 months 2 weeks 1 day 12 hours ago) and read 15003 times:
Quoting DLPMMM (Reply 1): There are always too many competitors in the USA market, because there are some irrational investors who think that owning an airline is "cool"
Indeed! How does that old saw go, "the best way to become a millionaire in the airline business is to start out a billionaire"?
yegbey01 From United States of America, joined Nov 2003, 1679 posts, RR: 3 Reply 6, posted (10 months 2 weeks 1 day 12 hours ago) and read 14893 times:
Not really....There are no high speed trains in the US that compete with airlines on a large scale
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 7, posted (10 months 2 weeks 1 day 12 hours ago) and read 14897 times:
Quoting LHCVG (Reply 3): Indeed! How does that old saw go, "the best way to become a millionaire in the airline business is to start out a billionaire"?
Your very own Bob Crandall once said....
"A lot of people came into the airline business. Most of them promptly exited, minus their money"
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
MountainFlyer From United States of America, joined Jul 2005, 363 posts, RR: 0 Reply 8, posted (10 months 2 weeks 1 day 12 hours ago) and read 14871 times:
Quoting DLPMMM (Reply 1): There is room for 3 legacies, 3 large LCCs, a couple of specialized regionals like HA and AS, then some commuters.
So, are you saying basically what there is now (assuming US and AA merge)?
I don't know that you can put a number and say there should be XX number of airlines for XX size market. There are so many factors involved such as airline efficiencies and business models. If you would have asked the same question twenty years ago, who would have guessed that TW, NW, CO, HP and others would be gone now, and that we'd have B6, VX in the mix?
slider From United States of America, joined Feb 2004, 6518 posts, RR: 37 Reply 9, posted (10 months 2 weeks 1 day 12 hours ago) and read 14841 times:
I think the root question is specious. The issue isn't if there are too many or too few US carriers. The issue is whether they can all profitably and reasonably co-exist, no matter the number.
History hasn't really given us an answer to that one yet, but it would seem as if domestically, they've found religion in capacity restraint and pricing discipline (as well as cost discipline by and large).
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 10, posted (10 months 2 weeks 1 day 12 hours ago) and read 14806 times:
I think the issue in the USA is why consolidation is taking place, namely to reduce competition allowing increase yields and revenue, providing service to the customer is way down the list.
Since the market is open and the merged carriers have not been able to get laws passed to limit competition, a continuous cycle will exist. As the massive carriers make their money and do not provide service to a number of areas, business options are presented and savy and dumb investors will jump in to the market creating new airlines.
The savy ones will create airlines like NK, B6, AS etc. and eventually in the next cycle after their growth period will become candidates for mergers, the dumb ones will get crushed by the majors and their nefarious activities.
When customers around the country are complaining about monopoly service and high prices its hard to pick a number and say 3 legacies, 3 LCC's etc. My opinion is the USA from a pax perspective needs more commuter airlines who operate like WN or NK, no alliance, just charge pax for travel from A to B, in some cases combining all services into one creates more system problems than it solves, let pax find their own way to hubs, share the business versus trying to control everything from curb to curb.
Just a thought.
ItalianFlyer From United States of America, joined Nov 2007, 948 posts, RR: 2 Reply 11, posted (10 months 2 weeks 1 day 12 hours ago) and read 14798 times:
I love this kind of topic..because I am a contrarian to the B-school, hedge-fund driven mantra that consolidation will solve everything. The mathematic and statistical models say that consolidating the US marketplace into 2 or 3 network mega carriers with 1 or 2 LCCs will give the industry pricing traction to sustain profits and a return on capital. In a vaccuume I'm sure it does...but the airline industry is not the utility or railroad industries. The aforementioned are not subject to external shocks that impact airlines: geopolitics, plague/disease and economic flux in far away places.
When we put our national transportation system in a few baskets, we get into a 'too big to fail' scenario.....and that is counter intuitive to the free market mechanism. (see the financial industry in 2008 as exhibit A) Second, domestic capacity is already tight. If AA (or DL,US, UA) were to fail and close today, there is no way the surviving carriers could absorb the demand. Imagine face to face business meetings being put off because there are no seats available from SFO to ORD until next Thursday. Extrapolate that scenario a few thousand times and you are looking at serious national economic consequences.
Finally....global network carriers cannot be all things to all people. It has been done several times and failed (PS>UA>Ted, DL>DLExpress>Song,CO>COLite, everybody>regional partners). I personally think that there is no magic number, per se, that will lead to industry stability. I believe the key is capacity discipline, finding your market niche, sticking to it and serving it well.
Just my .2....Im sure some will tear it apart...just keep it respectful lol
SPREE34 From United States of America, joined Jun 2004, 2096 posts, RR: 10 Reply 12, posted (10 months 2 weeks 1 day 12 hours ago) and read 14767 times:
Not too many airlines. Too many seats being flown below cost.
I don't understand everything I don't know about this.
N202PA From United States of America, joined Jun 2000, 1549 posts, RR: 4 Reply 13, posted (10 months 2 weeks 1 day 12 hours ago) and read 14713 times:
IMO, there are way too FEW airlines. Not enough choice for consumers. Too much control of the industry locked up in the hands of a few companies. As a consumer, who are you going to threaten to take your business to when an airline screws you over if there's only 1 or 2 alternatives that treat you the same way? Our government has failed us in allowing these mergers to continue to occur and letting airlines become too big - all the while allowing the environment for competition to dry up.
It's not surprising, though - it's a reflection of what our government has allowed over the past 10 years with corporations in general. Our landscape is dominated by a few mega-players in most industries who have little incentive to serve the consumer well now that they've eaten up all the competition. While the corporations profit and the politicians get fat off corporate dollars, the American people are the only ones that lose out - in the airline industry or otherwise.
mogandoCI From , joined Dec 1969, posts, RR: Reply 14, posted (10 months 2 weeks 1 day 12 hours ago) and read 14702 times:
Quoting yegbey01 (Reply 2): Compare the US market with that of Europe...and you will get your answer.
IMO, the US could easily have more airlines.
Difference is that in Europe, all the large carriers are 100% fortress hubs. BA/IB vs. AF/KL vs. LH/LX don't overlap a single core hub. Intra-Euro fares are extreme - the Big 3 gouge you on the upfront fare, while Ryanair trap you on fees.
In the US, we have all airlines fighting to death over limited space. LAX has 3 airline hubs (UA, AA, WN), 1 focus city by DL, and another focus city/hub down the road at LGB. Chicagoland has 3 (if you exclude MKE). NYC has 4 airlines hubbing. Even freaking DEN has 3 airline hubs. The consumer wins, but all the airlines price war into Chapter 11.
LHCVG From United States of America, joined May 2009, 1368 posts, RR: 1 Reply 16, posted (10 months 2 weeks 1 day 12 hours ago) and read 14665 times:
Quoting mikey72 (Reply 7): Your very own Bob Crandall once said....
"A lot of people came into the airline business. Most of them promptly exited, minus their money"
I forgot about that one, but it is very true. It certainly corroborates the following too:
Quoting SPREE34 (Reply 12): Not too many airlines. Too many seats being flown below cost.
It's not as if the U.S. industry suffers a want of creative ideas and solutions, it's just that so many faily disastrously. It seems like every cute new idea ends up failing that basic test of somehow trying to rationalize (on the books) being able to fly too many seats below cost.
ItalianFlyer From United States of America, joined Nov 2007, 948 posts, RR: 2 Reply 17, posted (10 months 2 weeks 1 day 11 hours ago) and read 14600 times:
Europe also has an efficient and comprehensive rail system and a much smaller land mass with shorter distance between population and economic centers. Despite what the high speed rail fanboys say..connecting ATL to NYC/ DC or CHI to NY or DAL via rail will never happen. Rail makes sense in a handful of places in the US.
klwright69 From Saudi Arabia, joined Jan 2000, 1787 posts, RR: 3 Reply 18, posted (10 months 2 weeks 1 day 11 hours ago) and read 14600 times:
Quoting MountainFlyer (Reply 8): If you would have asked the same question twenty years ago, who would have guessed that TW, NW, CO, HP and others would be gone now,
Actually 20 years ago most of the above carriers were in big trouble: CO and TW were operating under bankruptcy protection, and maybe HP also. A consolidation of the industry was coming, and everybody knew it. In 1992, some of my friends at CO were predicting they were going to merge into NW, since NW had a stake in CO. PA and EA had recently vanished.
True, but since deregulation carriers have come and gone. No one ever predicted no new airlines would be created.
I vividly recall the industry 20 years ago. Then it was considered novel and strange to be an airline in bankruptcy, and the general thinking was no airlines every successfully survived a chapter 11 filing. Therefore I think the biggest surprise would have been that CO would still be around as an independent carrier for 20 more years.
It is hard to say the ideal number of airlines. Airlines that are loosing money hand over fist can hang on for a long time.
TecumsehSherman From , joined Dec 1969, posts, RR: Reply 19, posted (10 months 2 weeks 1 day 11 hours ago) and read 14493 times:
Quoting brilondon (Thread starter): Given the current talk about AA merging with (insert airline of the day here), I was wondering if the current and foreseeable future market is too small for the number of airlines all vying for passengers and what the right number of airlines would be if you could have the right number?
Depends how you look at it. It very well be there were too many Legacy carriers, which is why consolidation has been moving fast and furious for the past five years, with DL/NW, UA/CO and, AA and most likely US.
But there is obviously room for regional, mostly LCC carriers. Aircraft are going out very full this summer on everyone, so there certainly aren't too many seats to handle the demand.
And even as you have consolidation, there's no doubt that, in the future, you well see new start up carriers. Some may last a very short time, and some may make it. But in the U.S., I don't think there's too many carriers.
tdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 80 Reply 20, posted (10 months 2 weeks 1 day 11 hours ago) and read 14441 times:
Quoting ItalianFlyer (Reply 11): Second, domestic capacity is already tight. If AA (or DL,US, UA) were to fail and close today, there is no way the surviving carriers could absorb the demand. Imagine face to face business meetings being put off because there are no seats available from SFO to ORD until next Thursday.
But that's not what would happen.
If a major shut down today, the surviving carriers would immediately hike their prices up to restore supply/demand balance. You'd still be able to go SFO-ORD when you wanted to...it would just cost you more. As it should.
Aesma From France, joined Nov 2009, 4789 posts, RR: 9 Reply 21, posted (10 months 2 weeks 1 day 11 hours ago) and read 14356 times:
Quoting yegbey01 (Reply 6): Not really....There are no high speed trains in the US that compete with airlines on a large scale
They compete on some routes, complement each other on others. But I'd say the difference between the US and EU is that in EU you'll tend to use airlines available at the nearest hub of your country, not changing planes at a hub in another part of the EU, when in the US changing planes at a hub is very common. So, the US airlines compete on the same market whereas the EU airlines are more side by side.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
DocLightning From United States of America, joined Nov 2005, 16824 posts, RR: 57 Reply 23, posted (10 months 2 weeks 1 day 10 hours ago) and read 14054 times:
Quoting yegbey01 (Reply 2):
Compare the US market with that of Europe...and you will get your answer.
IMO, the US could easily have more airlines.
Yup. The issue isn't how many airlines, but how many ASM's and how many aircraft.
Quoting Aesma (Reply 21): They compete on some routes, complement each other on others.
The only US route system that has any "HSR" competition (and I use the term "HSR" very loosely) is the North-East Corridor. Boston-NYC-DC. Even then, the average line speed of Amtrak's Acela is only about 80MPH. The Acela takes 3.5 hours from Penn Station to Boston, while the normal train takes just under 4. Really, the only advantage to Acela over regular train is the nicer interior. That said, I always used the train on those routes even though door-to-door time was a bit longer than a flight because the overall experience was just so much less stressful.
Quoting Aesma (Reply 21): But I'd say the difference between the US and EU is that in EU you'll tend to use airlines available at the nearest hub of your country, not changing planes at a hub in another part of the EU, when in the US changing planes at a hub is very common.
To some degree, yes. But probably not as much as you think. Most major US cities have a hub. If you live near that hub, you will tend to use the hub airline(s) available there. Of course, there might not be a non-stop to where you are going (say you want to fly DTW-RNO), in which case you will choose any airline that can get you there in one stop. It is far less common for someone living in Detroit to insist on flying UA or AA and connecting through ORD.
The difference, I think, is with national identity. If you live in Grand Rapids, MI, and want to get to SFO, you won't necessarily fly DL through DTW. You could go US or AA through Chicago, or you could fly DL through MSP. If you live in Lyon, France and want to get to GLA (assume ML is off-season), you could choose AF, KL, BA, or LH among the majors. But most Frenchmen would probably choose AF. That said, on an individual level, and leaving FF programs aside, my guess is that a Frenchman is just as likely as an American to go with the cheapest and most convenient itinerary.
MountainFlyer From United States of America, joined Jul 2005, 363 posts, RR: 0 Reply 27, posted (10 months 2 weeks 1 day 8 hours ago) and read 14371 times:
Quoting planemaker (Reply 26):
With fewer airlines you have fewer aircraft carrying the same number of pax (+ growth) and that means larger aircraft.
That doesn't correlate. Fewer airlines does not necessarily = fewer aircraft.
Also, the number of passengers is not necessarily static, either. As airlines consolidate and create better a better pricing environment, fares will rise which will mean fewer passengers than there otherwise would be at a lower price level. That's the whole idea of consolidation is right-sizing the capacity to be able to price according to the cost.
Fewer RJ's will be as a result of fuel prices, not market consolidation.
planemaker From Tuvalu, joined Aug 2003, 5488 posts, RR: 34 Reply 29, posted (10 months 2 weeks 1 day 6 hours ago) and read 13737 times:
Quoting MountainFlyer (Reply 27): That doesn't correlate. Fewer airlines does not necessarily = fewer aircraft.
It does correlate... you just have to look at the upgauge trend across the board. Furthermore, if airlines merge they are obviously going to "merge" their flights.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
DeltaMD90 From United States of America, joined Apr 2008, 5309 posts, RR: 47 Reply 32, posted (10 months 2 weeks 1 day 5 hours ago) and read 13099 times:
I don't think there really are/were too many airlines... I think there was too much capacity. You can have the 3 mega carriers and 3 LCCs be healthy and profitable just like you could have had 5 or 6 legacies be profitable.
I think the biggest problem was propping up the dying airlines back in the early 2000s. There are too much capacity (not necessarily too many airlines) and if one legacy went under, maybe that would've reduced the capacity to a reasonable level. There were other problems, yes.
Saying that there are too many airlines or too few airlines ignores the realities of capacity. If you got all the current airlines profitable and split them all in half, I don't think there would be dramatic changes
jporterfi From United States of America, joined Feb 2012, 358 posts, RR: 0 Reply 33, posted (10 months 2 weeks 1 day 3 hours ago) and read 11726 times:
IMO, there will always be a market for different types of airlines in the U.S.: legacies, LCCs, and regionals. We already have consolidation among the legacies, and I don't see a need for consolidation among regionals or LCCs. I think the real problem is high ticket prices (especially in recent months), which result from high fuel prices and other expenses. If all the airlines in the U.S. can coexist, then let them coexist and let them fail and/or merge when necessary to keep the system healthy. One final note: if the Essential Air Service was downsized, I think that airlines would be better off, because even though the government is giving them money to operate those routes, they still are their least profitable routes, and often suffer from poor load factors. I think it's better to cut capacity on those routes and use the aircraft/capacity to supplement existing routes that have high load factors.
crj900lr From United States of America, joined Mar 2011, 197 posts, RR: 0 Reply 34, posted (10 months 2 weeks 1 day 3 hours ago) and read 11662 times:
Quoting planemaker (Reply 22): Fewer airlines will mean fewer delays... and fewer RJs.
Airlines need to get back to flying mainline aircraft on alot of these routes that the regionals are flying. If you are looking to eliminate airlines I would start with the regionals. Their product, for most of them, is well below that of a mainline carrier eventhough they carry the mainline name on their aircraft.
USPIT10L From United States of America, joined Mar 2006, 3266 posts, RR: 8 Reply 35, posted (10 months 2 weeks 1 day 2 hours ago) and read 11538 times:
Quoting klwright69 (Reply 18): In 1992, some of my friends at CO were predicting they were going to merge into NW, since NW had a stake in CO.
NWA did not buy the golden share in CO until 1998. In 1992, everybody was too worried about matching Crandall's Value Plan at AA to worry about consolidation. Everybody lost horrendous amounts of money in '92.
commavia From United States of America, joined Apr 2005, 10192 posts, RR: 62 Reply 36, posted (10 months 2 weeks 1 day 2 hours ago) and read 11111 times:
Quoting brilondon (Thread starter): I was wondering if the current and foreseeable future market is too small for the number of airlines all vying for passengers and what the right number of airlines would be if you could have the right number?
As others have said, I think the question really should be related to capacity in the aggregate, not necessarily airlines per se. And the answer depends largely on what the objective is - and, the truth is, in this country, even nearly 35 years after deregulation, we still do not have a single coherent national answer as to what we want from our airline industry. The capital markets - which airlines rely on to finance their operations as profit-seeking enterprises - want the airline industry to be profitable. Many politicians and public policy makers want lower fares that enable mass access. Those two goals inevitably come into conflict at some point.
But it all comes down to that question. If the ultimate goal is a stable, profitable industry that consistently earns its cost of capital and delivers value back to shareholders, than the answer is less capacity, less competition, (likely) fewer airlines, and higher fares. But if the ultimate goal is a highly competitive industry with low fares and more choices for consumers, than more capacity, more competition and (likely) more airlines are the answer.
Quoting ItalianFlyer (Reply 11): The mathematic and statistical models say that consolidating the US marketplace into 2 or 3 network mega carriers with 1 or 2 LCCs will give the industry pricing traction to sustain profits and a return on capital. In a vaccuume I'm sure it does...but the airline industry is not the utility or railroad industries. The aforementioned are not subject to external shocks that impact airlines: geopolitics, plague/disease and economic flux in far away places.
If anything, airlines' higher exposure to risk and volatility would only tend to further validate the need for consolidation so as to diversify their revenue streams and more broadly allocate risk. That is precisely what many other high-risk, volatile industries - oil, pharmaceuticals, etc. - do.
Quoting ItalianFlyer (Reply 11): When we put our national transportation system in a few baskets, we get into a 'too big to fail' scenario
That's highly debatable - but yes, it is true, unavoidable, and ultimately perfectly natural that in some industries you are going to end up with a few huge players that are going to generally dominate that market space. It happens in a myriad of industries besides just airlines - telecom, electronics, internet search, etc.
Quoting ItalianFlyer (Reply 11): ...and that is counter intuitive to the free market mechanism.
No it's not. "Too big to fail" is counter intuitive to the free market, but of course "too big to fail" is a political invention of bureaucrats and policy makers - not the market itself. Merely having an industry consolidate to a few large, oligopolistic competitors is not at all counter intuitive to the free market mechanism. Indeed - it is quite natural in many free markets, just like airlines, where capital requirements and fixed costs are so high and margins so relatively low.
The natural tendency of a free market is to allocate resources as efficiently as possible - and that is precisely what airlines have been trying to do, through consolidation, for years. The real action that has been "counter intuitive to the free market mechanism" was the government - for decades - arbitrarily and artificially stopping the airline industry from becoming more efficient through mergers.
Quoting DeltaMD90 (Reply 32): I think the biggest problem was propping up the dying airlines back in the early 2000s. There are too much capacity (not necessarily too many airlines) and if one legacy went under, maybe that would've reduced the capacity to a reasonable level.
Quoting crj900lr (Reply 34): Airlines need to get back to flying mainline aircraft on alot of these routes that the regionals are flying.
What airlines need to do is return value to shareholders - whatever that requires. Small jets are naturally going to go away in the next few years because of the rising costs of fuel and maintenance. But you're not going to simply see all that capacity replaced with mainline. Much of it will simply go away entirely, and many places that today rely solely on small jets for air service will simply see their air service disappear entirely or consolidate down to shorter list of carriers.
One of the key things that I think is often missed about the "rise of the RJ" in the last 20 years is that while it's true that much of that RJ capacity has replaced mainline flying at America's largest carriers, it's also true that realistically airlines were always going to have to cut capacity substantially in many current RJ markets anyway, because the truth is that there is so much more vibrant competition today than there ever was pre-deregulation, and thus it is just simply harder for any one airline to generate sufficient demand to fill larger jets in many markets.
Case in point: while AA may 35 years ago have been able to fill a DC10 from BUF to ORD, that would simply be impossible today because AA now faces direct competition from UA and WN in the BUF-CHI market, plus DL, US and B6 also heading west/south - there simply aren't enough people to go around anymore to fill up a plane that big for any one single airline.
Asiaflyer From Singapore, joined May 2007, 1019 posts, RR: 1 Reply 38, posted (10 months 2 weeks 1 day 1 hour ago) and read 10791 times:
Quoting DeltaMD90 (Reply 32): I think the biggest problem was propping up the dying airlines back in the early 2000s. There are too much capacity (not necessarily too many airlines) and if one legacy went under, maybe that would've reduced the capacity to a reasonable level.
Totally agree with that. Current legislation with Ch11 also keeps unprofitable airlines alive and prevents a fair competition.
Lufthansa From Christmas Island, joined May 1999, 3075 posts, RR: 10 Reply 39, posted (10 months 2 weeks 1 day 1 hour ago) and read 10741 times:
Quoting ItalianFlyer (Reply 11): If AA (or DL,US, UA) were to fail and close today, there is no way the surviving carriers could absorb the demand. Imagine face to face business meetings being put off because there are no seats available from SFO to ORD until next Thursday. Extrapolate that scenario a few thousand times and you are looking at serious national economic consequences.
This is the exact situation we faced when Ansett failed. It didn't last long. There were short term interruptions and a very massive expansion of QF and Virgin in a very short time. It created an ultimately healthier industry, and don't think that it gave them the excuse to jack up prices. Virgin has to watch it self carefully. It is now chasing the business market in a serious way, but if it hikes up fares too much the likes of jetstar and tiger will eat their market.
The problem is, in a true free market the US would have been left with just 2 or 3 big carriers years ago. They would have grown to dominate the market, and those who blew their capital would have been out of the business. Chap 11 allowed zombie carriers to stay in the market place in some form or another. This distorted the 'supply' side of the equation in supply and demand.
carpethead From Japan, joined Aug 2004, 2771 posts, RR: 4 Reply 40, posted (10 months 2 weeks 1 day ago) and read 10086 times:
Forget cheap fares or number of airlines, I just wish the days back when ORD-CLE/SFO/LAX was operated on DC10 or similar aircraft and ORD-ALB on 727 or 73S.
All those routes are now on narrowbodies and RJs respectively.
Maybe that's why I live in Japan, where everybody thinks an A320 or 737 is a small aircraft.
Lufthansa From Christmas Island, joined May 1999, 3075 posts, RR: 10 Reply 42, posted (10 months 2 weeks 23 hours ago) and read 9427 times:
Quoting mayor (Reply 41): Not on $80+ a barrel oil, you don't.
I beg to differ. I lighter weight widebody should give very good CASM on 4 or 5 hr routes. It's the competitive issue of frequency that is the problem. Taking an Hr to turn them around in between 4 or 5 hr flights won't really have much impact on total daily hrs in the air. It does however take too long for shorter routes.
boeingorbust From Canada, joined Oct 2011, 157 posts, RR: 0 Reply 43, posted (10 months 2 weeks 23 hours ago) and read 9388 times:
Quoting yegbey01 (Reply 2): Compare the US market with that of Europe...and you will get your answer.
IMO, the US could easily have more airlines.
Population is much larger in Europe and the demographics differ greatly also.
Quoting DocLightning (Reply 23):
Yup. The issue isn't how many airlines, but how many ASM's and how many aircraft.
I believe this to a point but airlines are a business and act like a lung. They expand and intake as much as they can and then hit bad times and file for chapter 11 and exhale, downsizing fleet and routes. Then they'll begin expanding again. No matter what it will keep the same trend. Look at recently, DL and AA. AC in Canada had the issue but they get the joy of government bailouts and due to pension and union issues, they have decent loads but continue to lose money and there are only 2 carriers in Canada.
I do think there are too many airlines in the States, and the current mergers are a good thing all around. It's good to see some are turning profits. Loads are still really decent in the states too but I guess higher priced fuel and other costs continue to drain profitability to what it would have been 10 years ago.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 44, posted (10 months 2 weeks 22 hours ago) and read 9242 times:
Quoting Lufthansa (Reply 42): I beg to differ. I lighter weight widebody should give very good CASM on 4 or 5 hr routes. It's the competitive issue of frequency that is the problem. Taking an Hr to turn them around in between 4 or 5 hr flights won't really have much impact on total daily hrs in the air. It does however take too long for shorter routes.
ORD-CLE and ORD-ALB are certainly not 4-5 hr trips (examples from reply #40).
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
AirlineCritic From Finland, joined Mar 2009, 612 posts, RR: 1 Reply 45, posted (10 months 2 weeks 22 hours ago) and read 9021 times:
Quoting slider (Reply 9): The issue isn't if there are too many or too few US carriers. The issue is whether they can all profitably and reasonably co-exist, no matter the number.
Quoting slider (Reply 9): History hasn't really given us an answer to that one yet
Hasn't it?
I would argue it has, very clearly.
How many legacies we have again that have not gone through a bankruptcy?
StarAC17 From Canada, joined Aug 2003, 3225 posts, RR: 9 Reply 46, posted (10 months 2 weeks 19 hours ago) and read 8104 times:
Quoting N202PA (Reply 13): Our government has failed us in allowing these mergers to continue to occur and letting airlines become too big - all the while allowing the environment for competition to dry up.
You make a very important point and this just doesn't apply to airlines. It is whether the end result of free market capitalism will create a more competitive industry that is good for the consumer but margins are low or does it create oligopolies that become too big to fail where the opposite is true. When you get the giants there is little chance of new competitors being able to make a dent to the market.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 47, posted (10 months 2 weeks 18 hours ago) and read 8081 times:
I don't why the U.S.A can't just have 'one' big international carrier like everyone else ?
What makes you lot so special ? (I mean that in a nice way I am just trying to get my point across)
If you must just divide it into divisions. i.e Pan Am East, Pan Am West (the name I plucked from the air)
I think you should stop worrying so much about the benefits of competition within the country because you face 'more' than enough to keep you honest from outside it !!!
As for short-haul/domestic well you have the LCC's to keep you honest.
Time to start 'bigging up' yankie doodles otherwise you aint gonna get nowhere.
[Edited 2012-07-13 02:29:57]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
carpethead From Japan, joined Aug 2004, 2771 posts, RR: 4 Reply 48, posted (10 months 2 weeks 18 hours ago) and read 8016 times:
Quoting mayor (Reply 41): Not on $80+ a barrel oil, you don't.
Agreed, a DC10 would certainly not be competitive regardless of price of oil, but what I meant was current-day A330, 767 or 777-size aircraft on these runs.
Obviously, Japan and the US market are totally different, but major markets here are served largely by widebody aircraft with load factor not much higher than 60%. In fact, ANA's average load factor on domestic flights is less than 60%.
With fewer airlines, perhaps there is a chance that larger capacity aircraft be available. With the upcoming retirement age of 50-seat RJs later this decade, airlines will certainly have to either cut frequency and/or upsize to 70-seat RJs or props.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 49, posted (10 months 2 weeks 18 hours ago) and read 7801 times:
Quoting mikey72 (Reply 47): I don't why the U.S.A can't just have 'one' big international carrier like everyone else ?
Simplistic answer, because all of us other lot who have such airlines were initially created by the government of the land, which meant that they made sure there was no competition and if there was, it was carefully crafted and allowed to exist in a niche capacity. Everything was done via political power to establish the single airline.
Yes a number of airlines the world over are now private, but they and their environment did not appear overnight, the legacy of government ownership remains.
Goldenshield From United States of America, joined Jan 2001, 5441 posts, RR: 12 Reply 50, posted (10 months 2 weeks 17 hours ago) and read 7460 times:
Quoting carpethead (Reply 48):
Agreed, a DC10 would certainly not be competitive regardless of price of oil, but what I meant was current-day A330, 767 or 777-size aircraft on these runs.
For the most part, the airlines that are hubbed at those cities ARE flying large widebodies on those runs. There's the occasional narrowbody at off-peak times, and to rotate the aircraft through the system. As for other airlines, well, they aren't dominant on those routes, and thus, there's not point on putting a widebody where they don't have much market power. Throwing in a bigger aircraft doesn't mean that the seats will be filled.
As for Japan, you know you've got population density problems when you've got hourly 747 runs on multiple airlines between cities that are 200 miles apart.
[Edited 2012-07-13 04:43:32]
Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 51, posted (10 months 2 weeks 16 hours ago) and read 7383 times:
Quoting par13del (Reply 49): Simplistic answer, because all of us other lot who have such airlines were initially created by the government of the land, which meant that they made sure there was no competition and if there was, it was carefully crafted and allowed to exist in a niche capacity. Everything was done via political power to establish the single airline.Yes a number of airlines the world over are now private, but they and their environment did not appear overnight, the legacy of government ownership remains.
That's not an answer though is it.
Not even a simplistic one. (in fact you are making it all way too complicated)
One does not make decisions about the future based upon what went on in the past.
Not when all around you is changing rapidly.
When all is said and done the needs of the customer will still be met only perhaps at less cost to the provider.
The disappearance of the CO and NW brand are evidence of that.
What happened there is the thin end of the wedge.
The American legacy airline industry will most certainly not be let down in terms of having fierce competition from both foreign long-haulers and its own LCC's domestically.
Of that we can be certain.
'That' will keep them honest regardless of whether you have 3 or 1.
Only with 1 you could probably operate much more efficiently.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
klwright69 From Saudi Arabia, joined Jan 2000, 1787 posts, RR: 3 Reply 52, posted (10 months 2 weeks 16 hours ago) and read 7047 times:
Quoting DeltaMD90 (Reply 32): I think the biggest problem was propping up the dying airlines back in the early 2000s. There are too much capacity (not necessarily too many airlines) and if one legacy went under, maybe that would've reduced the capacity to a reasonable level. There were other problems, yes.
It seems since deregulation, dying airlines have always been around.. In the late 80s and early 90's PA, TW, CO, and HP were dying. The situation you described has existed for a long time. F9 hangs on and on and on these days for example.
But I remember after just loosing EA and PA the widely held belief was that no airline successfully reorganizes under chapter 11. It was CO that broke the mold there.
Quoting USPIT10L (Reply 35): NWA did not buy the golden share in CO until 1998. In 1992, everybody was too worried about matching Crandall's Value Plan at AA to worry about consolidation. Everybody lost horrendous amounts of money in '92.
You are absolutely right. In the early 90's some of my CO friends were rumoring a NW takeover just because that was the daily rumor mill on that day I suppose.
And you are absolutely right about AA's moves back then.
There is no correct number of airlines, a few legacies, a few LCCs, and a few niche players. Not much more to really add.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 53, posted (10 months 2 weeks 16 hours ago) and read 6929 times:
Quoting mikey72 (Reply 51): That's not an answer though is it.
Yes it is, it explains why things are the way they are now.
Quoting mikey72 (Reply 51): Not even a simplistic one. (in fact you are making it all way too complicated)
One does not make decisions about the future based upon what went on in the past.
Correct, one stands on the results of the decisions made in the past while attempting to and making decisions for now and the future. The saying about those who do not study history does have some meaning.
Quoting mikey72 (Reply 51): The disappearance of the CO and NW brand are evidence of that.
Which means little since the majority of their a/c, employees and routes are still being flown under a new name, so in terms of service to customers, other than the name not much has changed as yet. When the new carrier attempts to downsize and increase fares you will see an increase in service offered by other competitors.
After all the US Chpt.11 process had been derided for not allowing carriers to die right? CO and NW only died as a brand.
Quoting mikey72 (Reply 51): The American legacy airline industry will most certainly not be let down in terms of having fierce competition from both foreign long-haulers and its own LCC's domestically.
Another little fact, the USA domestic market is so large that all legacies domestic operations dwarfs their international operations, certainely that is not the case for most international carriers flying into the USA.
Now in the same vein, the current "aviation country" that is known as the EU was envisioned from day one so the fact that it is as large as the USA makes the above comment meaningless, right?
poLOT From United States of America, joined Jul 2011, 1499 posts, RR: 0 Reply 54, posted (10 months 2 weeks 15 hours ago) and read 6912 times:
Quoting mikey72 (Reply 47): I don't why the U.S.A can't just have 'one' big international carrier like everyone else ?
Why don't the EU have 'one' big international carrier like everyone else?
The US is geography too large and spread out for one mega carrier to profitability handle all the traffic without another US competitor coming in and being profitable.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 55, posted (10 months 2 weeks 15 hours ago) and read 6872 times:
.
Quoting par13del (Reply 53): Now in the same vein, the current "aviation country" that is known as the EU was envisioned from day one so the fact that it is as large as the USA makes the above comment meaningless, right?
?
Different languages, different cultures, pride etc
Totally different scenario.
KLM is not called Air France and and Swiss is not called Lufthansa etc
What' is more people would REALLY care if they were.
In Europe there will always be obstacles.
Not so in the USA.
Quoting par13del (Reply 53): Another little fact, the USA domestic market is so large that all legacies domestic operations dwarfs their international operations, certainely that is not the case for most international carriers flying into the USA.
So what ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 56, posted (10 months 2 weeks 15 hours ago) and read 6825 times:
Quoting poLOT (Reply 54): The US is geography too large and spread out for one mega carrier to profitability handle all the traffic without another US competitor coming in and being profitable.
The political and legal environment at the state and federal level would not allow it, changes in constitutions would be required.
airbazar From United States of America, joined Sep 2003, 6879 posts, RR: 7 Reply 57, posted (10 months 2 weeks 15 hours ago) and read 6809 times:
Quoting yegbey01 (Reply 2): IMO, the US could easily have more airlines.
I agree, especially when you factor the distances and the lack of any reasonable public transportation between urban centers. IMO, the problem here in the US is that all airlines want to cater to every person and not just find their niche. In Europe for example you don't see the large "legacy" carriers with a giant domestic and intra-Europe networks and huge amount of frequencies within Europe like we see here. Here in the US you see the large lecay carriers flying into some pretty small cities. The LCC's also have their niche market and don't necessarily compete for the same customer as the legacy carriers. Here in the US all airlines, legacy and LCC's are chasing the same customer.
poLOT From United States of America, joined Jul 2011, 1499 posts, RR: 0 Reply 58, posted (10 months 2 weeks 15 hours ago) and read 6795 times:
Quoting mikey72 (Reply 55):
Different languages, different cultures, pride etc
Totally different scenario.
KLM is not called Air France and and Swiss is not called Lufthansa etc
What' is more people would REALLY care if they were.
In Europe there will always be obstacles.
Not so in the USA.
So it is okay for France and the UK, for example, to have two different large national airlines, despite the fact that together they are much smaller (in terms of size and population) than the US and LHR and CDG are only 200 miles apart because of language and culture reasons, but there should only be one intercontinental US airline (even if it can support multiple profitable carrriers)?
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 59, posted (10 months 2 weeks 15 hours ago) and read 6639 times:
Quoting poLOT (Reply 58): So it is okay for France and the UK, for example, to have two different large national airlines, despite the fact that together they are much smaller (in terms of size and population) than the US and LHR and CDG are only 200 miles apart because of language and culture reasons,
You left out the most important reason.
They are two different countries.
Quoting poLOT (Reply 58): , but there should only be one intercontinental US airline (even if it can support multiple profitable carrriers)?
The 'should' part is just my opinion the 'could' part is fact.
As for 'support'........both scenario's would 'support' the industry but one intercontinental carrier has the opportunity to do it to a financial advantage over several.
In the fleets of AA, UA, DL and US combined there are 180 (of what I consider to be) long-haul jets.
777's, 744's.
Not a huge amount for 'one' airline these days let alone 4.
The rest of the fleet is made up of small number A330's and a preposterous amount of 767's.
That should tell you something.
[Edited 2012-07-13 06:01:15]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
KDAYflyer From United States of America, joined Jun 2012, 155 posts, RR: 0 Reply 60, posted (10 months 2 weeks 15 hours ago) and read 6521 times:
I dont think it's too many airlines. I think it is too many seats and too much frequency thats killing the airlines that are still around.
If they pull these little RJ frequencies out of the system and go back to mainline flying, (fewer flights on bigger planes) they will return to profitibility. In this manner they would actually reduce the number of seats and get rid of the money-losing RJ operations.
IMO The problem with that is, that many Transatlantic routes would go away. If the mega airline had their main international hubs in JFK, MIA, LAX and SEA for example. Who would operate routes such as PHL-LHR, DFW-LHR, IAH-GIG, etc.? The airline can't have an international hub in each city because it would rather route traffic through its own hub. By having multiple carriers though, the hubs can compete and take traffic away from each other but to two completely different airlines.
In the fleets of AA, UA, DL and US combined there are 180 (of what I consider to be) long-haul jets.
777's, 744's.
Not a huge amount for 'one' airline these days let alone 4.
The rest of the fleet is made up of small number A330's and a preposterous amount of 767's.
I can understand not including the 767 as a "long haul jet" (though I beg to differ), but not including the A330 is preposterous. At a range of 7,250 nm, the A332 is only 475 nm short of the 772ER.
enilria From Canada, joined Feb 2008, 6135 posts, RR: 13 Reply 64, posted (10 months 2 weeks 14 hours ago) and read 6415 times:
Quoting brilondon (Thread starter): Given the current talk about AA merging with (insert airline of the day here), I was wondering if the current and foreseeable future market is too small for the number of airlines all vying for passengers and what the right number of airlines would be if you could have the right number?
I'd say it is definitely more than now. We do not any longer have a large LCC. You can say WN is an LCC, but with the defining characteristic being "low cost", WN is now paying the highest labor costs in the industry. B6 has lower labor costs, but it's overall costs are not that low. NK is tiny.
Quoting DLPMMM (Reply 1): There is room for 3 legacies, 3 large LCCs, a couple of specialized regionals like HA and AS, then some commuters.
There are always too many competitors in the USA market, because there are some irrational investors who think that owning an airline is "cool"
Then you'd think somebody would have bought F9 by now.
Quoting yegbey01 (Reply 2): Compare the US market with that of Europe...and you will get your answer.
IMO, the US could easily have more airlines.
Agreed. The EU is now far more fragmented than the USA. The largest U.S. carrier has 21% of domestic ASMs. In the EU it is 13%. The largest 4 in the USA have 70%. The largest 4 in Europe have only 32%!
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 65, posted (10 months 2 weeks 14 hours ago) and read 6392 times:
Quoting KGRB (Reply 62): I can understand not including the 767 as a "long haul jet" (though I beg to differ), but not including the A330 is preposterous. At a range of 7,250 nm, the A332 is only 475 nm short of the 772ER.
Well I guess so...we could include them in the 180 if you like...there aren't that many of them to make a difference.
Does the relatively small number of VLA's to A330's and 767's support my theory or disprove it ?
In other words are many of the 767 routes just duplicates on the four different carriers ?
Could there be less of them on larger aircraft ? Maybe not.
I only looked at JFK/LAX and for a start that's domestic and probably not the best example.
Anyone know ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 66, posted (10 months 2 weeks 14 hours ago) and read 6379 times:
Quoting mikey72 (Reply 55): Different languages, different cultures, pride etc
Ahh, so now that you have one explanation for your comment below we can move on
Quoting mikey72 (Reply 47): I don't why the U.S.A can't just have 'one' big international carrier like everyone else ?
What makes you lot so special ? (I mean that in a nice way I am just trying to get my point across)
Quoting mikey72 (Reply 55): KLM is not called Air France and and Swiss is not called Lufthansa etc
What' is more people would REALLY care if they were.
Well, maybe it has something to do with the fact that in aviation the EU is a country to allow these carriers to fly across borders but for most everything else the individual nations still exist, so.........
The USA is one country, individual states do have their own governments, rules and laws, but their federalization took place centuries ago versus the present EU integration underway in Europe, so the Americans are standing on a legacy built many moons ago.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 68, posted (10 months 2 weeks 14 hours ago) and read 6240 times:
Quoting commavia (Reply 36): we still do not have a single coherent national answer as to what we want from our airline industry.
We never will. There are many different interests in play and each will pull as much as they can in their direction. That is how it should be.
Quoting commavia (Reply 36): But it all comes down to that question. If the ultimate goal is a stable, profitable industry that consistently earns its cost of capital and delivers value back to shareholders, than the answer is less capacity, less competition, (likely) fewer airlines, and higher fares. But if the ultimate goal is a highly competitive industry with low fares and more choices for consumers, than more capacity, more competition and (likely) more airlines are the answer.
It is not one or the other. It is about finding a balance between all requirements.
Quoting commavia (Reply 36): The natural tendency of a free market is to allocate resources as efficiently as possible
If only that was true.The natural tendency is for investors to pull out until you have so dominating monopoly or oligopoly that no one is able to break it.
Quoting commavia (Reply 36): Much of it will simply go away entirely, and many places that today rely solely on small jets for air service will simply see their air service disappear entirely or consolidate down to shorter list of carriers.
The free market answer is that prices will go up until there is a balance between demand and profit.
Quoting StarAC17 (Reply 46): You make a very important point and this just doesn't apply to airlines. It is whether the end result of free market capitalism will create a more competitive industry that is good for the consumer but margins are low or does it create oligopolies that become too big to fail where the opposite is true. When you get the giants there is little chance of new competitors being able to make a dent to the market.
End result of free market is always a dominating monopoly or oligopoly reversing the actions leading up to them getting that position.
Quoting mikey72 (Reply 51): One does not make decisions about the future based upon what went on in the past.
That is how we make most decisions. Often it is called experience. Sometimes it is called statistics. Look at my tagline.
Don’t repeat earlier generations mistakes. Learn history for a better future.
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 69, posted (10 months 2 weeks 14 hours ago) and read 6151 times:
Trust a Canadian to start a topic about too many airlines.
The question itself is questionable. How does one define too many airlines? Shouldn't it be about capacity and not number of carriers? If there is oversupply, the market will correct it.
Frankly, more is better. Otherwise there will be 'too big to fail' issues as there are with AC in Canada. Even the government realizes that prolonged AC disruption can damage the economy. I don't think any country wants that.
In the current state, if one airline fails, others are somewhat flexible with their capacity (prices will go up regardless). That may be critical till the airlines acquire more capacity to fill the demand supply imbalance.
Spoken like a true Canadian. Things 'should' cost more. Why? Because that way many a Canadian can justify earning a salary higher than their output dictates. No wonder we re taking hits on our productivity from everyone and their uncles. I think the OECD was the latest to criticize poor productivity in Canada?
Prices 'should' be determined by demand and supply. In the economically advanced nations, the EU and US are closest to allowing this to happen. Canada is probably the farthest. One need only remember that on a per capita basis, Canadians fly half as much as Americans. Pretty impressive given that we re a larger more spread out country.
Personally, I think the US market has and will continue to address the issue of oversupply. Does the US have too many airlines? Pointless question. Is there a demand supply imbalance? More relevant, but one that will fix itself soon enough.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 70, posted (10 months 2 weeks 14 hours ago) and read 6148 times:
Quoting mikey72 (Reply 59): In the fleets of AA, UA, DL and US combined there are 180 (of what I consider to be) long-haul jets.
777's, 744's.
Not a huge amount for 'one' airline these days let alone 4.
The rest of the fleet is made up of small number A330's and a preposterous amount of 767's.
That should tell you something.
That most routes from within the USA can be flown with 767 size a/c, since they have multiple airports capable of international travel spread throughout the coutry. Compare the USA to the UK how many international capable airports exist per capita?
Simple again, if we look at a bicycle wheel, the USA is the outer rim and the UK is the inner hub connected to the outer wheel by numerous spokes. USA travellers heading to the UK are confined to a small number of airports, UK travellers on the other hand heading to the USA have much more choices, its one of the reasons why the original Bermuda agreements where eventually abolished, they were always one sided to begin with.
Markam From United States of America, joined Jan 2008, 277 posts, RR: 2 Reply 71, posted (10 months 2 weeks 14 hours ago) and read 6031 times:
Quoting mogandoCI (Reply 14): Intra-Euro fares are extreme - the Big 3 gouge you on the upfront fare, while Ryanair trap you on fees.
While I agree with your point about fortress hubs (which IMHO is caused by later deregulation of the common air market in Europe than in the U.S., but also by the more heterogeneous business environment, with different languages, etc.), I do not think the above quoted claim is necessarily true. I am happy to be corrected if someone has figures, I do not find flying in Europe more expensive than flying in the U.S., on the contrary, I usually find it cheaper (and I have flown extensively on both continents). And I know that distances in the U.S. are bigger, but I am talking about comparing similar distances, and in any case fixed costs should be similar if not higher in Europe than on the other side of the pond.
superjeff From United States of America, joined Feb 2010, 101 posts, RR: 0 Reply 73, posted (10 months 2 weeks 14 hours ago) and read 5947 times:
Quoting DeltaMD90 (Reply 32): I think the biggest problem was propping up the dying airlines back in the early 2000s. There are too much capacity (not necessarily too many airlines) and if one legacy went under, maybe that would've reduced the capacity to a reasonable level. There were other problems, yes.
Are you for real? Nobody has "propped up dying airlines" , at least in the United States, since the early 2000's." Or even to the beginning of deregulation in 1978. Remember Braniff? Everybody thought they'd get rescued. Eastern? Pan Am? TWA, etc. etc.
Markam From United States of America, joined Jan 2008, 277 posts, RR: 2 Reply 75, posted (10 months 2 weeks 13 hours ago) and read 5836 times:
Quoting ElPistolero (Reply 74): Not necessarily true. The free market has no end state - its perpetually dynamic, responding to changing economic conditions.
Where has a free market led to a monopoly? Any examples?
Well, a free, friction-free market should not lead to a monopoly (and there is no reason why a friction free market should not be free), but apart from dirty play (e.g. see Rockefeller's and Standard Oil practices to build up a monopoly in a deregulated market), there are sometimes frictions in a market that justify some degree of regulation. For example, there are the so called "natural monopolies", which arise in those cases in which the fixed cost are so high that having two competitors would not be feasible (pardon the oversimplification, but I want to keep things simple on the economic front). A typical example of this are railroads, and that is why many failed and were taken over by governments, and why some countries have again liberalized the sector on the operating side (i.e. operating trains) but have kept the network as a monopoly enterprise.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 76, posted (10 months 2 weeks 13 hours ago) and read 5801 times:
Quoting superjeff (Reply 73): Are you for real? Nobody has "propped up dying airlines" , at least in the United States, since the early 2000's." Or even to the beginning of deregulation in 1978. Remember Braniff? Everybody thought they'd get rescued. Eastern? Pan Am? TWA, etc. etc.
Eastern, Pan Am and TWA were just the beginning of a long slow and massive re-shuffle that we are still witnessing to this day.
I feel sorry for these airlines because they basically suffered from being 'the first'
Maybe these carriers should have been supported and kept going until they modernized and slowly absorbed the carriers that we are left with today.
Instead of the other way around.
You had 3 then, looks like you're going to end up with 3 now.
But with the former you'd have kept all that wonderful and 'priceless' heritage.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
DCA-ROCguy From United States of America, joined Apr 2000, 4402 posts, RR: 37 Reply 77, posted (10 months 2 weeks 13 hours ago) and read 5686 times:
Quoting ElPistolero (Reply 69): Trust a Canadian to start a topic about too many airlines.The question itself is questionable. How does one define too many airlines? Shouldn't it be about capacity and not number of carriers? If there is oversupply, the market will correct it.
No time today to read every post of one of our usual slugfests about airline capacity and fares. I'll just second everything ElPistolero says in Reply 69 and add the following: there aren't "too many" airlines unless investors say there are and stop funding them. More competition is good and to be encouraged. Helps foster cost and price discipline.
The upward pressures on airfares in general in the US tend today to be stronger than the downward pressures, and things that help contain costs and fares--such as competition--are always to be encouraged. It's investors' problem if they make poor decisions, and they can answer to their shareholders.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 79, posted (10 months 2 weeks 12 hours ago) and read 5328 times:
Quoting mikey72 (Reply 72): Surely though you are speaking of a double edged sword ?
In other words what was once the right decision would be a mistake now or in the future.
Sometimes a 'wrench' away from one's 'comfort zone' is needed in order to secure a brighter future.
No double edge at all. Knowing what happened before means we can take the good and avoid the bad. It doesn't mean we should repeat what was done before. It means we should learn from it so we can make it better.
Not looking at history is like throwing darts blindfolded after having been moved to an unknown location. It is pure luck if you find the bulls eye.
Quoting ElPistolero (Reply 74): Not necessarily true. The free market has no end state - its perpetually dynamic, responding to changing economic conditions.
Where has a free market led to a monopoly? Any examples?
Why did you exclude oligopoly? They are far more common.
Also understand that monopoly is rarely defined as a single company any more. It is rather defined as a single company being so dominating that the few other companies in the market must follow.
For monopolies you usually need to look at reduced regions. Cable is a common example. Internet provider another. Not uncommon to find chains having regional monopoly. Undertakers very often have no competition. On a global scale diamond mining is probably the closest.
Don’t repeat earlier generations mistakes. Learn history for a better future.
NorthStarDC4M From Canada, joined Apr 2000, 2804 posts, RR: 40 Reply 80, posted (10 months 2 weeks 11 hours ago) and read 5179 times:
AIRLINERS.NET CREW CHAT OPERATOR
Quoting ytz (Reply 78): Quoting ElPistolero (Reply 74):
Where has a free market led to a monopoly? Any examples?
IT. Microsoft.
Untrue, Apple still holds a good chunk of the workstation software market, and there is still a small (ok very small) UNIX/Linux workstation wedge of the pie as well. And outside workstation software Microsoft is not even close to a monopoly, examples: Server software(UNIX, Linux, etc still hold large percentages), Email solutions (MS Exchange is actually dropping market share), anything hardware, virtual environments, etc etc etc...
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
I don't know if I d compare diamonds and airlines. Diamonds cannot be 'created'; aviation capacity can.
Cable is a more apt comparison, but even there I would challenge the notion of monopoly. There are viable substitutes and technological advancements can change the game constantly. Look at what ULH aircraft have done to the industry.
Nor is a small number of actors necessarily oligopolic - Airbus v Boeing is a pretty competitive rivalry.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 83, posted (10 months 2 weeks 10 hours ago) and read 5042 times:
Quoting ElPistolero (Reply 81): Huh? Ever heard of Apple, Oracle or SAP? All of them have a presence in Canada. What does Microsoft monopolize?
Desktop OS. Very close on server OS in small businesses. Also very close with word processing, spreadsheet and presentations. The competition in those sectors are so small they hardly matter.
That they don't have monopoly position in every segment they operate does not change that they are a de facto monopoly.
Quoting ElPistolero (Reply 81): I don't know if I d compare diamonds and airlines. Diamonds cannot be 'created'; aviation capacity can.
We create diamonds by mining for them. Before that they are only dreams.
Quoting ElPistolero (Reply 81): Cable is a more apt comparison, but even there I would challenge the notion of monopoly. There are viable substitutes and technological advancements can change the game constantly. Look at what ULH aircraft have done to the industry.
You're too fixed with monopoly meaning one company. The apt definition is one dominating company. Or in the more common case of oligopoly a limited number of companies for all practices providing identical services.
Technical advances can change the industry but when the dominating companies are so strong they can block new entrants it doesn't matter. Look at how cable companies are blocking internet companies from deliver equal content.
Free market is great but left alone it leads to companies being so dominating they stifle all future development in the sector and customers having to open wide. That is where regulation comes in. Sadly regulation often backfires when the dominating companies are so strong influence regulation.
Don’t repeat earlier generations mistakes. Learn history for a better future.
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 84, posted (10 months 2 weeks 7 hours ago) and read 4912 times:
Quoting cmf (Reply 83): Desktop OS. Very close on server OS in small businesses. Also very close with word processing, spreadsheet and presentations. The competition in those sectors are so small they hardly matter.
They dominate. They don't monopolize. There are also acceptable substitutes if everyone wants one. There is competition. It hasn't gone away.
That same competition forces Microsoft to stay on top of its game (an advantage of competiition). If there was no meaningful competition, Microsoft wouldn't keep trying to sell upgraded products. A hallmark of monopoly/oligopoly whatever is the lack of innovation among the key monopolists.
Thats hardly the case in software. Plenty of innovation going on on a daily basis. I've worked in software for a company other than Microsoft. I've seen it. This is the most bizzare example of monopoly I've seen to date.
Quoting cmf (Reply 83): We create diamonds by mining for them. Before that they are only dreams.
Not quite. They're chunks of carbon.
As an aside, I don't value artificial diamonds the same as naturally occuring diamonds (in much the same way as cultured pearls are not valued in the same way as naturally occuring pearls).
Quoting cmf (Reply 83): You're too fixed with monopoly meaning one company. The apt definition is one dominating company. Or in the more common case of oligopoly a limited number of companies for all practices providing identical services.
No, I m not. I live in Canada. We have oligopolies everywhere. Banks, Telcoms, Airlines.
Quoting cmf (Reply 83): Technical advances can change the industry but when the dominating companies are so strong they can block new entrants it doesn't matter. Look at how cable companies are blocking internet companies from deliver equal content.
How much are they succeeding? If you're right, then why is HBO outting out HBOGO for mobile phones and tablets?
Quoting cmf (Reply 83): Free market is great but left alone it leads to companies being so dominating they stifle all future development in the sector and customers having to open wide. That is where regulation comes in. Sadly regulation often backfires when the dominating companies are so strong influence regulation.
I m all for a marginally regulated free market with Competition Bureaus and laws against predatory pricing. I m not a liberatarian free marketeer. But that said, I still find it hard to believe that the free market will lead to oligopolies. If it does, those oligopolies will be hyper competitive, not collusive. Innovation will continue, not decrease. Examples? Boeing v Airbus. Engine producers. Etc.
On the other hand, where free markets do not exist, you're right - oligopolies do influence regulation. As we're seeing in Canada, with AC and Bell.
I fear this has veered too far off topic.
From an airline perspective, I think the relatively free market the US has is working just fine. Its certainly working a lot better than the regulated nonsense we have up north (based on metrics such as travel per capita, prices etc).
Therefore I don't subscribe to the notion that the US has too many airlines. It has enough. And its better off than other countries that don't. Like mine.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 85, posted (10 months 2 weeks 7 hours ago) and read 4861 times:
Quoting ElPistolero (Reply 84): Therefore I don't subscribe to the notion that the US has too many airlines. It has enough. And its better off than other countries that don't. Like mine.
Hang on.
From a customer perspective the US hasn't got a comparatively decent airline running out of the lot of them.
Been the case for a long time.
They've all been in and out of bankruptcy more times than Michael Jackson was in and out of the top 10. (RIP)
Something ain't working.
Now someone please tell me what it is ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 86, posted (10 months 2 weeks 7 hours ago) and read 4852 times:
Quoting mikey72 (Reply 85): From a customer perspective the US hasn't got a comparatively decent airline running out of the lot of them.
Southwest. Virgin America. Jet Blue.
You might want to expand your horizon to beyond the legacy carriers.
Quoting mikey72 (Reply 85): They've all been in and out of bankruptcy more times than Michael Jackson was in and out of the top 10. (RIP)
Who hasn't? BA's record is hardly stellar. Airlines like Southwest have done pretty well financially. The legacies are the one's who've been having trouble.
I'm going to go with legacy burdens and bad management for the airlines that are having a bad time. I mean, you only have to fly once on AA or UA to figure out why they're in such a mess. Their hard product is atrocious and they can't compete with the new comers who're doing things better. Thats a free market at action - newcomers coming in and catering to people who aren't happy with the incumbents.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 88, posted (10 months 2 weeks 6 hours ago) and read 4795 times:
Quoting ElPistolero (Reply 84): Microsoft wouldn't keep trying to sell upgraded products
Of course the will. That is how they get revenue. With better competition we would have windows computers booting much faster and less vulnerable to viruses.
Quoting ElPistolero (Reply 84): A hallmark of monopoly/oligopoly whatever is the lack of innovation among the key monopolists.
Hallmark of monopoly/oligopoly is to overcharge for their services and preventing new players. They will always deliver enough to make people feel they need to keep buying.
Quoting ElPistolero (Reply 84): Thats hardly the case in software. Plenty of innovation going on on a daily basis. I've worked in software for a company other than Microsoft. I've seen it. This is the most bizzare example of monopoly I've seen to date.
It is very much the case of SW. As an computer manufacturer why am I required to pay for a Windows licence for each computer I assemble no matter if I install windows or not? (Note: I have not looked at this in some 10 years so it may have changed since)
When MS found out we didn't use Exchange they offered me free licenses. When I said I was happy with Notes they offered a blank check if we switched. Do you think it had something to do with getting rid of a competitor? To become absolutely dominant? Why do you think Lotus gave us free licenses and provided man-years in installation and support resources?
Why is Apple locking in customers in the Apple store? The only reason companies give up 30% to them is because Apple have monopoly on all iPhone/iPod sales.
It is all about becoming dominant and be able to charge higher prices once they have become dominant.
They are nothing until you have them in your hand.
Quoting ElPistolero (Reply 84): No, I m not. I live in Canada. We have oligopolies everywhere. Banks, Telcoms, Airlines.
Point made
Quoting ElPistolero (Reply 84): How much are they succeeding? If you're right, then why is HBO outting out HBOGO for mobile phones and tablets?
You can only get HBOGO if you already have HBO from your local provider.
Quoting ElPistolero (Reply 84): I still find it hard to believe that the free market will lead to oligopolies
It is the natural progress of uncontrolled free market. One or a few companies become so powerful they are able to block anyone else from entering. At that time the hold all the cards and customers have no choice.
Aviation is a bit different because there are a very limited number of customers and they hold a lot of power. Customers are rarely that powerful.
Quoting ElPistolero (Reply 84): Therefore I don't subscribe to the notion that the US has too many airlines. It has enough. And its better off than other countries that don't. Like mine.
I have no opinion as to if US has too many airlines or not. I do however think they have some really stupid managers who have failed miserably at delivering value to owners. I also think they have some really stupid owners who keep pumping in good money with no real expectation of returns. There is too much bad passion involved.
Just as it isn't good when one or a few companies hold all cards it isn't good when they fold over and provide customers with services without reasonable return to owners. Balance is important.
Don’t repeat earlier generations mistakes. Learn history for a better future.
This is going way off track. Its all too hypothetical and non-aviation related, so its best saved for another day/forum.
Quoting mikey72 (Reply 87): Oh yes totally agree was thinking more of the legacies.
Its easy to look at an airline like AA going under and thinking the entire industry is in a mess, but really, its more about very poor product choices by some of these airlines. Look at UA's new business class. The most accurate description of it is "polarizing", which isnt good enough.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 90, posted (10 months 2 weeks 5 hours ago) and read 4695 times:
Quoting ElPistolero (Reply 89): This is going way off track. Its all too hypothetical and non-aviation related, so its best saved for another day/forum.
Not at all. It is very much on topic. You can't avoid the root causes..
Don’t repeat earlier generations mistakes. Learn history for a better future.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 91, posted (10 months 2 weeks 5 hours ago) and read 4663 times:
Quoting mikey72 (Reply 85): They've all been in and out of bankruptcy more times than Michael Jackson was in and out of the top 10. (RIP)
Lets see...........of all the legacies, NW has been in BK, once.......DL, once..........UA, once...........AA, once.........US, once........only CO has been in twice and that's over a span of more than 20 years...........hardly fits your description, does it? The others, that have folded after going into BK, did so for many different reasons.
The legacies are doing so much better than they were and I think, in DL's case, they're going on at least three full years in a row where they've been profitable.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
StarAC17 From Canada, joined Aug 2003, 3225 posts, RR: 9 Reply 93, posted (10 months 2 weeks 4 hours ago) and read 4564 times:
Quoting ElPistolero (Reply 69):
Trust a Canadian to start a topic about too many airlines.
Look at the history in Canada there is only a few players that can make the market sustainable and the government isn't stopping others from starting up in Canada.
Give some evidence to that, Canada consistently ranks in the top 10 in world free market economies often much higher than our southern neighbour. Airfares are higher in Canada mainly because of higher taxes.
Quoting ElPistolero (Reply 84): They dominate. They don't monopolize. There are also acceptable substitutes if everyone wants one. There is competition. It hasn't gone away.
Not if you require a specific piece of software than the developers only right code for windows.
Quoting ElPistolero (Reply 84): No, I m not. I live in Canada. We have oligopolies everywhere. Banks, Telcoms, Airlines.
Those with possibly the exception of banking are a result of the free market (Canada has the soundest banks also). No one is preventing anyone to challenge Rogers and Bell or AC and WS and new entrants are free to enter as long as their is Canadian ownership. In fact I would argue that the Harper government has allowed Rogers and Bell to be very anti-competitive.
Australia is strikingly similar: 4 big banks, 3 Telcos, 2-3 major airlines.
Quoting ElPistolero (Reply 81): Nor is a small number of actors necessarily oligopolic - Airbus v Boeing is a pretty competitive rivalry.
Airbus and Boeing are however when you have a high level or innovation and R&D required less competition is better because bigger companies have more money to invest. A lot of airframe manufacturers would have prevented the investment in new technology because if there were more players no one firm would have enough money to invest.
XJetflyer From United States of America, joined Apr 2007, 326 posts, RR: 0 Reply 95, posted (10 months 2 weeks 3 hours ago) and read 4499 times:
I think the problem is quality airlines in America. If someone builds a strong simple airline they will do great in the United States. If you do it with little care and just throw a bunch of money out there, then you will fail!
aa757first From United States of America, joined Aug 2003, 3338 posts, RR: 9 Reply 96, posted (10 months 2 weeks 1 hour ago) and read 4406 times:
Quoting mikey72 (Reply 76): Maybe these carriers should have been supported and kept going until they modernized and slowly absorbed the carriers that we are left with today.
Why?
Quoting mikey72 (Reply 76): I feel sorry for these airlines because they basically suffered from being 'the first'
To an extent, but there was also horrific mismanagement.
Quoting mikey72 (Reply 76): But with the former you'd have kept all that wonderful and 'priceless' heritage.
Realistically, "heritage" in the airline industry is probably almost worthless, not priceless.
Quoting cmf (Reply 83): You're too fixed with monopoly meaning one company. The apt definition is one dominating company. Or in the more common case of oligopoly a limited number of companies for all practices providing identical services.
In OS, the market encourages standardization and, thus, a few major players. Imagine if every piece of software had to be written so it could run on eight different operating systems. Instead, we have just two.
In the airline industry, there are some market forces towards a few big airlines, rather than many small airlines, mainly because of high fixed costs. However, the industry is clearly not monopolistic, nor ever headed in that direction.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 97, posted (10 months 2 weeks ago) and read 4367 times:
Quoting mikey72 (Reply 76):
I feel sorry for these airlines because they basically suffered from being 'the first'
Unless I'm mistaken, the legacies that are left, plus CO and NW, all started approximately the same time. So, why does that make EA, PA and WA Transworld Airlines (USA)">TW "the first"? DL started as a crop dusting company (and, indeed, did that up until '66) and even when I hired on in '71, wasn't much more than a "regional" carrier (old definition) and look where they are now.
Quoting mikey72 (Reply 76): Maybe these carriers should have been supported and kept going until they modernized and slowly absorbed the carriers that we are left with today.
Instead of the other way around.
You had 3 then, looks like you're going to end up with 3 now.
So, you're saying that 3 poorly run airlines should have been kept afloat, in the hope that they "might" modernize and turn themselves around and other carriers that may or may not have been succesful, should have not been supported and left to wither on the vine?
As I said, above, there were more than 3, then.............if you take the decade from '25 til '35, most of these carriers started within that time frame..........WA,NW,EA,PA,TW,UA,DL,BA etc. all started within that time.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 98, posted (10 months 1 week 6 days 23 hours ago) and read 4308 times:
Quoting StarAC17 (Reply 93): Look at the history in Canada there is only a few players that can make the market sustainable and the government isn't stopping others from starting up in Canada.
Our brilliant (and utterly risk-averse) banks don't like investing in anything involving the oligopolies, be it telecoms or airlines. Where are Canadians going to raise the funds from to get an airline up and running? Its not going to come from the banks.
Besides, there's not too many people who would want to take on an airline which the government has openly stated it will keep afloat come hell or high water. I don't think any private money is going to show up to fund an airline to compete with an airline that has had its survival virtually guaranteed by the Prime Minister, despite being financially unsustainable.
“I’ll be darned if we will now sit by and let the airline shut itself down,” Harper told reporters in Toronto, saying that Air Canada, Canada’s biggest airline, had requested federal government assistance during the global financial crisis.
Sure they're free to set up. If they're willing to compete with an airline that can count on the government to support it.
It just doesn't strike anyone as being a smart thing to do.
Quoting StarAC17 (Reply 93): Give some evidence to that, Canada consistently ranks in the top 10 in world free market economies often much higher than our southern neighbour. Airfares are higher in Canada mainly because of higher taxes.
"HIGHER taxes and fees are often blamed for the millions of Canadian passengers eschewing local airports for those in nearby American cities. But according to a new report from the University of Maryland, "Transborder Demand Leakage and the U.S.-Canadian Air Passenger Market", these charges accounted for just 17% to 37% of the difference in fares between Canadian-US cross-border routes and comparable US domestic routes."
Some sectors are competitve. Some are very competitive. Some are not competitive at all. Aviation would be one thats not competitive. If its all about taxes, then how come they only account for 17-37% of the difference. Where does the remaining 63-83% go?
Quoting StarAC17 (Reply 93): Those with possibly the exception of banking are a result of the free market (Canada has the soundest banks also). No one is preventing anyone to challenge Rogers and Bell or AC and WS and new entrants are free to enter as long as their is Canadian ownership. In fact I would argue that the Harper government has allowed Rogers and Bell to be very anti-competitive.
I ll keep it simple. Competitive economies are productive and innovative economies. Canada is being criticized from both within and without for being neither. I ll let you read up on it.
"Canadian productivity has been rising at an average annual pace of close to 1% over the past decade. This is one of the slowest rates in the industrialized world."
"The single-greatest contributor to Canada’s plight appears to be weak innovation, which economists refer to as multi-factor productivity. Businesses are simply not being creative enough with the capital and labour they have. One contributing factor could be that Canadian business leaders are more risk averse than their international counterparts."
"Canada’s stubborn lack of competitiveness resonates through the entire economy, impairing growth forecasts and limiting wages, meaning less disposable income, less consumer spending, fewer tax receipts, less government spending and higher deficits."
"“There’s something broken in Canada’s venture capital market,” said Mr. Hodgson.
A lot of venture capital “is driven by, not demand or by laws, but by talent. . . . You have to know how to pick winners, knowing how to have staying power.
“And a lot of our very good venture capitalist are living in Silicon Valley,” he said.
“So rather than being self-satisfied, it is time for Canada to re-focus on how to raise its game and truly be a global leader in innovation, adaptation and renewal.”"
The ironic part is that the commentators in these pieces are bank economists who're criticizing private companies for not being risktakers and innovative enough even as the banks congratulate themselves for being risk-averse. Are Canadian banks innovative? From a consumer stand point, the products are the same (the logos do, admittedly, differ in color and design). And their complaints about vanishing disposable income need to be balanced against their own policy of nickel and diming customers.
Suffice it to say, Canada's competitive economy is not as competitive as you make it out to be. Not in aviation. Not in telecoms. And in general, it's recording some of the lowest levels of productivity and innovation, both of which are linked to competitiveness.
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 99, posted (10 months 1 week 6 days 23 hours ago) and read 4258 times:
Quoting aa757first (Reply 96): In OS, the market encourages standardization and, thus, a few major players. Imagine if every piece of software had to be written so it could run on eight different operating systems. Instead, we have just two.
Every segment have reasons why it will go down to just a few number of suppliers.
Quoting aa757first (Reply 96): In the airline industry, there are some market forces towards a few big airlines, rather than many small airlines, mainly because of high fixed costs. However, the industry is clearly not monopolistic, nor ever headed in that direction.
Not heading in that direction? Look at the consolidation and bankruptcies taking place. Yes there are many new airlines starting but it is mostly in the least developed markets and most of them don't last long. Compare with sports equipment, computer industry, household appliances, car industry, aircraft manufacturing and so on. They all follow the same pattern. A lot of companies as the market develops consolidating toward very few offering very similar product with minimal price difference with only a few unimportant outliers finding a way to survive a bit longer. And this is despite frequent heavy regulation, protectionism and subsidies related to other aspects than the segment itself, e.g. jobs.
Don’t repeat earlier generations mistakes. Learn history for a better future.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 100, posted (10 months 1 week 6 days 21 hours ago) and read 4181 times:
Quoting mayor (Reply 91): Lets see...........of all the legacies, NW has been in BK, once.......DL, once..........UA, once...........AA, once.........US, once........only CO has been in twice and that's over a span of more than 20 years...........
Quoting poLOT (Reply 92): US entered bankruptcy twice (in 2002 and again in 2004), but other than that I agree with your post.
Oh well....that makes it alright then.
?
Look, I have every respect for the American airline industy and its airlines.
What they accomplish is no mean feat especially with all that's gone on in the world over the last 40 years involving the U.S.A politically.
Maybe that's part of the answer for the constant state of flux.
[Edited 2012-07-14 00:23:38]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
StarAC17 From Canada, joined Aug 2003, 3225 posts, RR: 9 Reply 101, posted (10 months 1 week 6 days 17 hours ago) and read 4094 times:
Quoting ElPistolero (Reply 98): Our brilliant (and utterly risk-averse) banks don't like investing in anything involving the oligopolies, be it telecoms or airlines. Where are Canadians going to raise the funds from to get an airline up and running? Its not going to come from the banks.
Well airlines give piss poor returns globally, so if banks and venture capitalists want to invest in something that gives concrete returns they will avoid airlines.
Quoting ElPistolero (Reply 98): "HIGHER taxes and fees are often blamed for the millions of Canadian passengers eschewing local airports for those in nearby American cities. But according to a new report from the University of Maryland, "Transborder Demand Leakage and the U.S.-Canadian Air Passenger Market", these charges accounted for just 17% to 37% of the difference in fares between Canadian-US cross-border routes and comparable US domestic routes."
It's low yield traffic mostly and AC and WS I don't think are worried, yes the tax policy should be changed but I personally like the fact that the people who fly in Canada pay the taxes that finance airport operations and upkeep. If I don't fly then why should I have to pay taxes to allow others to. Personally I look at the difference in fares from YYZ and BUF and I would pay more to fly out of YYZ because my family lives 20 minutes from it and to the US I will get there much faster and not have to drive an hour and a half.
Quoting ElPistolero (Reply 98): Some are not competitive at all. Aviation would be one thats not competitive
There is nothing preventing startups or new airlines in Canada in fact the I'm betting the Harper government would be inclined to allow a majority foreign ownership in new Canadian airlines provided the jobs created benefited Canadians. Sometimes its not always about competition its about sustainability and many airlines have gone bust in the last 10 years.
To list some: Canadian (acquired by AC), Royal/Canada 3000, Jetsgo, Skyservice to name a few. With Canada's size and population there is only room for two mainline carriers, a few charter companies like Sunwing and TS and regional carriers. You want more competition but more competition has to make actual sense.
Quoting ElPistolero (Reply 98): “So rather than being self-satisfied, it is time for Canada to re-focus on how to raise its game and truly be a global leader in innovation, adaptation and renewal.”"
I agree and maybe you should write your MP about the anti-science attitude of Stephen Harper which will only obstruct innovation in the future.
Quoting ElPistolero (Reply 98): Are Canadian banks innovative? From a consumer stand point, the products are the same (the logos do, admittedly, differ in color and design). And their complaints about vanishing disposable income need to be balanced against their own policy of nickel and diming customers.
Do you forget we didn't have to bail them out and they may be boring, the banks in Australia are as well but they rank as some of the most stable in the world. Banks also do not create anything they take money and lend it out essentially so that isn't an issue in Canada but a huge asset. They are not pissing away money on hedge fund losses which in the long run is good. Also perhaps you had forgotten that a few years ago those banks were stopped from merging to compete globally by Paul Martin which I think was a damn good idea.
Quoting StarAC17 (Reply 93): No one is preventing anyone to challenge Rogers and Bell or AC and WS and new entrants are free to enter as long as their is Canadian ownership. In fact I would argue that the Harper government has allowed Rogers and Bell to be very anti-competitive.
We have money and you don't? I am being facetious of course. In North America we seem to think that we are free to do what we want, but that is just not true. There are regulatory frameworks in all industries, telecoms and in transportation especially in Canada. The CRTC and Transport Canada are deep in control of their particular industry. The banking industry is another highly regulated industry. But I think that even though I am in favour of less government, some input should be allowed to control the industry so that the consumer may have some choice with out being burned by the unscrupulous robber barons that seem to run rampant in the US.
poLOT From United States of America, joined Jul 2011, 1499 posts, RR: 0 Reply 104, posted (10 months 1 week 6 days 14 hours ago) and read 3882 times:
Quoting mikey72 (Reply 103): LAX and SFO long-haul could be combined.
They are both large enough markets to have their own separate service. That is like saying LHR and CDG (which are closer together than SFO and LAX) should be combined.
Quoting mikey72 (Reply 103): ATL, DFW & IAH long-haul could be combined.
ATL is about 700 miles away from DFW and IAH and serves a completely different market.
Quoting mikey72 (Reply 103): JFK, EWR, PHL, BOS, IAD long-haul could be combined.
Aside from the fact that like LAX and SFO they are all large enough to have their own service, where would you combine them? None of those airports could handle all the long haul service in the Northeast, even if everything was on VLA.
You can't take major airports and say that the service should be combined just for the sake of having fewer international gateways and more VLAs. There has to be some reasoning behind it.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 105, posted (10 months 1 week 6 days 13 hours ago) and read 3859 times:
Quoting poLOT (Reply 104): They are both large enough markets to have their own separate service. That is like saying LHR and CDG (which are closer together than SFO and LAX) should be combined.
SFO and LAX combined handle nowhere near the longhaul traffic that CDG and LHR do.
In total SFO and LAX offer 337,000 seats a week compared to 1,500,000 at CDG and LHR.
Of those 337,000 alot of them must be domestic.
I'm only talking about pooling long-haul.
Quoting poLOT (Reply 104): ATL is about 700 miles away from DFW and IAH and serves a completely different market.
ATL is pushing it but a domestic flight covering 700 miles is no big deal as a commuter service to long-haul.
Quoting poLOT (Reply 104): Aside from the fact that like LAX and SFO they are all large enough to have their own service
Do they ? I'm pretty sure EWR, PHL, BOS and IAD don't handle that much long-haul ?
Quoting poLOT (Reply 104): None of those airports could handle all the long haul service in the Northeast, even if everything was on VLA.
Are you sure about that ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 106, posted (10 months 1 week 6 days 13 hours ago) and read 3856 times:
Quoting mikey72 (Reply 103): What's wrong with a little domestic commute before a long-haul flight ?
What in hell do you think the hubs are all about?
All the complaints on here about consolidation stifling competition and you propose to stifle it, even more. Maybe we should go down to just one auto maker or any other business you can think of that has multiple companies making products for us. After all, all those choices are just confusing, aren't they?
Quoting mikey72 (Reply 100): Oh well....that makes it alright then.
No one said that makes it alright, but to support your argument, you made it sound like the airlines were lined up, waiting to get into the BK court and when one came out, another went in. Not really true, is it?
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
Yes. They can barely handle the traffic they have now. Domestic traffic is just as important as international because it helps fill those international flights, especially if you want to consolidate everything. You just can't ignore it because it isn't as "sexy" as international traffic or VLAs. You don't seem to have an understanding of traffic patterns in the US or why airlines have the hubs where they do, because to you it is all about VLAs, and an airline is not a proper airline if it is not flying a huge fleet of them. Just because it is one country doesn't mean you can just shift all international traffic to a handful of airports.
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 111, posted (10 months 1 week 6 days 12 hours ago) and read 3762 times:
Quoting StarAC17 (Reply 101): Well airlines give piss poor returns globally, so if banks and venture capitalists want to invest in something that gives concrete returns they will avoid airlines.
Oh, for sure. Except for the fact that we don't really have VCs in Canada. Oh and banks aren't willing to loan out money for anything other than mortgages and resource development. Its not just airlines they don't want to loan out money for. Its telecoms too. Why do you think foreign investment has become such a big issue.
I can't find the exact article, but I read one by a university professor chiding Canadian banks for loaning out money almost primiarly for mortgages and natural resource development. And not a lot other than that.
Quoting StarAC17 (Reply 101): It's low yield traffic mostly and AC and WS I don't think are worried, yes the tax policy should be changed but I personally like the fact that the people who fly in Canada pay the taxes that finance airport operations and upkeep.
Ok, but if thats the case, why did you, yourself ,insinuate, that airfires are mostly higher because of taxes. As noted, they are higher, but only 17-37% of that difference can be attributed to taxes. The remaining 63-83% is just a mark up by airlines. Seeing as 63>37, its a bit disingenuous to mark the difference down to "taxes".
Quoting StarAC17 (Reply 101): Personally I look at the difference in fares from BUF and I would pay more to fly out of
Quoting StarAC17 (Reply 101): There is nothing preventing startups or new airlines in Canada in fact the I'm betting the Harper government would be inclined to allow a majority foreign ownership in new Canadian airlines provided the jobs created benefited Canadians.
Quoting StarAC17 (Reply 101): Sometimes its not always about competition its about sustainability and many airlines have gone bust in the last 10 years.
Quoting StarAC17 (Reply 101): Do you forget we didn't have to bail them out and they may be boring
Quoting StarAC17 (Reply 101): Banks also do not create anything they take money and lend it out essentially so that isn't an issue in Canada but a huge asset. They are not pissing away money on hedge fund losses which in the long run is good.
No, you're quite right. We didn't have to bail them out. The only problem is that we now have to bail out some of our own economy - or at the very least, get some of it up and running. Banks do, in fact, only loan money out. They loan it out on the basis of what it is being used for. They don't have an appetite for risk, which is why I find it very, very ironic that they're criticizing Canadian companies for being risk-averse. Maybe the people running Canadian companies were trained at the banks? I say that in jest, but that shouldn't undermine the very obvious problems we're having with productivity and innovation. Innovation is a risky business. Risk-averse banks don't like risky business. Where is the money - and corresponding innovation - going to come from?
I also find it supremely ironic that our "safe", "solid', "sound" banks are making noise about declining disposable income. The best way to kill disposable income in any country is by overcharging for products that are increasingly becoming necessities. That is a massive structural inefficiency in Canada. We have banks that charge both for chequing accounts (on a monthly basis) and for chequebooks (lump sum) separately. If you exceed the number of transactions, you get hit with a fine. Use another companies ATM - get hit with a "fee". Does it really cost a bank $1.50 everytime a Canadian uses another bank's ATM? Probably not. Its a cash grab. It dents disposable income. The same disposable income that these bank economists claim is decreasing. Well, in the immortal words of Homer J Simpson, "Duh". The bank is taking the disposable income. The big problem here is that it isn't loaning that money back out to to risk takers and innovators. And the venture capitalists who normally would...well they don't seem to like to invest in Canada. This isn't just about hedge fund losses.
At the end of the day, if Canadians lose disposable and discretionary income because of protected industries and a lack of competition in some sectors, how are we supposed to be productive and competitive on a global scale? IHow do you propose to compete with a US company that pays less on its airfares, its telecoms and its banking fees (to name but a few). All those things contribute to the bottom line, no? All of them have an impact on the amount of money left to spend/invest/use for R&D, no? That, essentially, is the gist of the many articlesand studies coming out these days. Its not that we aren't a capable nation. Far from it. We've just made a hash of our domestic policies. Our companies need to be able to compete abroad. Many of them can't. Can they afford to rely solely on a Canadian or US market? I'm not so sure about that.
Therefore, this notion of sustainability is a bit flawed. Here in Canada, we have an airline that, by most measures, isn't sustainable. But its too big to fail, therefore it has to be sustainable. So the government gets involved, by keeping competition out, bailing the company out on one occassion, and devaluing (think labor troubles) the same Canadian jobs that the Airline (and the government) insisted were the reason they were keeping foreign competition out. At the end of the day, airfares in Canada are amongst the highest (if not the highest) in the advanced economies. Ditto for telecoms. That's not so great for businesses based in Canada, is it? Or for consumer's disposable income? Instead of putting a little bit more money in R&D, they end up giving it to Air Canada, which flushes it into the red hole of losses.
Has sustainability become too expensive? What is the point of it anyway? That we let the rest of the economy subsidize its inefficiencies? Is that good for the rest of the economy? That is one of the questions that should be asked.
And what if AC goes under? Well, our economy won't survive. Or so we claim. Why not? There are plenty of regions in which airlines are flying routes that AC isn't. Sure it ll take them a little while to acquire aircraft to serve the considerably more lucrative routes that AC currently dominates (with a mean predatory instinct, no less - Air Canada hs been found guilty of predatory pricing vis-a-vis WS before). But it can be done. However, in the name of sustainability, we insist on propping up this unsustainable airline.
At the cost of Canadian taxpayers (bailout loans are, after all, money that chould have earned higher returns elsewhere), industries, consumers. So no, I don't buy the sustainability argument. Competition brings efficiency, innovation, prodcutivity and price discipline. I daresay we seem to be missing all four here in Canada. And there seem to be a fair number of economists who agree with me. Including, ironically, the economists of banks that contribute directly to the flaws they're pointing out now.
KGRB From United States of America, joined Sep 2010, 614 posts, RR: 1 Reply 114, posted (10 months 1 week 6 days 12 hours ago) and read 3700 times:
Quoting mikey72 (Reply 67): No one gives a toss if US becomes AA or NW becomes DL or CO becomes UA.
You must not read Flyertalk very much, then.
Quoting mikey72 (Reply 112): Well we all know where to build the first Mega Hub in the United States for long-haul.
Except that you need good O&D to drive long-haul demand. NYC, LAX, ORD, DFW, SFO etc. all have this. CVG and CLE do not. That's why one airline has completely slashed their hub in Ohio (well Kentucky, actually) and the other is rumored to do so all the time.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 115, posted (10 months 1 week 6 days 12 hours ago) and read 3693 times:
Quoting poLOT (Reply 113): We will then also know where the world's newest ghost airport well be. It will be Mid America all over again.
Nobody knows what the future may bring.
There may be a very high speed mode of ground transportation connecting the country 'and' its airports.
I'm sure passengers on the Queen Mary would have scoffed at the notion that in 40 years time they would be able to cross the Atlantic in 3 hours at twice the speed of sound.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 118, posted (10 months 1 week 6 days 11 hours ago) and read 3618 times:
Quoting mikey72 (Reply 103): LAX and SFO long-haul could be combined.
ATL, DFW & IAH long-haul could be combined.
JFK, EWR, PHL, BOS, IAD long-haul could be combined.
My question would be how would the USA Federal and State government enforce this long haul hub restriction, you would have to ensure that foreign carriers operating into the USA have the same restriction, that could only be accomplished by eliminating Customs and Border Patrol and converting some massive airports into domestic traffic only.
Good luck getting policitians in the states who all pay Federal taxes to maintain those CBP services to close them down so that they can one stop to get out of the country for business and or vacation.
It would be good to see only airline attempt such consolidations with say A380's / 748i's and see how fast international carriers decimate their market share. Americans will jump on the most convenient flight which will be a one stop offered by some competitor.
SuperCaravelle From Netherlands, joined Jan 2012, 219 posts, RR: 0 Reply 121, posted (10 months 1 week 6 days 7 hours ago) and read 3407 times:
What's the obsession with a mega-hub? Aside from the fact that there are multiple cities that can sustain long-haul traffic on their own, it would be an organizational disaster and not very comfortable from a pax perspective either.
If I were an airline in the US, I would love the day all other airlines would do the sensible thing and create one mega-hub in Ohio. The joy one would have from transporting New Yorkers to Europe, being able to set prices at will, would be immense.
It's like saying all Londoners should go to Frankfurt first, as it is perfectly fine to have one European hub for flights to the US.
ElPistolero From Canada, joined Feb 2012, 620 posts, RR: 2 Reply 122, posted (10 months 1 week 6 days 7 hours ago) and read 3365 times:
Quoting mikey72 (Reply 120): So it's ok to stop say in DXB on your way to BOM rather than change and get on a non-stop flight in your own country ?
What's wrong with it?
Shouldn't it be up to the consumer to decide what works for him? If a consumer is willing to take a one-stop option, he must see some utility in doing so. In most cases, this utility is financial savings. If he thinks saving $X00 dollars is more valuable than 3 hours of his time, that's his call to make, no?
'
Or would you like to decide for him?
Shouldn't it be up to the consumer to decide what works for him? If a consumer is willing to take a one-stop option, he must see some utility in doing so. In most cases, this utility is financial savings. If he thinks saving $X00 dollars is more valuable than 3 hours of his time, that's his call to make, no?
You're missing the point.
What difference does it make whether you stop in the States and then board a non-stop flight or stop outside of the States to your final destination.
It's still only one stop.
All i'm saying is that maybe some routes would be possible non-stop on American carriers with VLA's if traffic was pooled from various airports.
Markets are changing as are aircraft options.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 124, posted (10 months 1 week 6 days 6 hours ago) and read 3316 times:
Quoting mikey72 (Reply 123): What difference does it make whether you stop in the States and then board a non-stop flight or stop outside of the States to your final destination.
I thought this was about too many airlines in the U.S.? Are you talking about the entire U.S. being a transfer point or what? The airline system, as it is, now is primarily NOT based on this..........it's based on bringing in people, via foreign departure points, to transfer them to their destination in the states OR people from the U.S. flying to a gateway and flying longhaul to their destination.....and oh, yeah.....people from the U.S. traveling to other destinations within the U.S.
Am I wrong or right?
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
What difference does it make whether you stop in the States and then board a non-stop flight or stop outside of the States to your final destination.
It's still only one stop.
All i'm saying is that maybe some routes would be possible non-stop on American carriers with VLA's if traffic was pooled from various airports.
Markets are changing as are aircraft options.
One stop is worse than no stops, for a lot of people. If people can fly to Frankfurt from both Miami and New York, it's better than only from Kansas City, isn't it?
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 127, posted (10 months 1 week 6 days 3 hours ago) and read 3145 times:
Quoting mikey72 (Reply 120): So it's ok to stop say in DXB on your way to BOM rather than change and get on a non-stop flight in your own country ?
Quoting mikey72 (Reply 123): What difference does it make whether you stop in the States and then board a non-stop flight or stop outside of the States to your final destination.
Since 9/11, security and air travel in general in the USA has become a pain, so if you are doing the one stop you still have to go through the security lines since you are going from domestic to another domestic then international. Why do the extra lines when you can get a direct flight and just go through two lines, one when you leave and another when you arrive at your foreign destination, those two are mandatory, anything else is a inconvenience to the traveller.
It's another reason why some pax would choose to overfly Dubai if the intransit experience is a strain, do you have to go thru immigration and customs, how long is your layover, how comfortable is the waiting area?
Why should pax bear the inconvenience of security lines just so they can pay higher fares to the airlines to allow them to offer widebody flights from single hubs?
dfambro From United States of America, joined Nov 2009, 254 posts, RR: 0 Reply 129, posted (10 months 1 week 6 days ago) and read 2984 times:
Quoting mikey72 (Reply 123): What difference does it make whether you stop in the States and then board a non-stop flight or stop outside of the States to your final destination.
It can make a big difference. Having once made the mistake of flying Icelandair and having my one stop occur in Reykjavik in the middle of the night, I know not to do that again. It's also a lot more pleasant to do a quick hop in the States and then longhaul to your Europe or Asia destination, vs longhaul to a European or Asian hub and then connect from there to your final destination when you're tired and jet-lagged. I still usually do it the hard way for Europe (but not Asia), but I have other reasons for that. In any event, where the stop is can definitely matter.
spink From United States of America, joined Aug 2005, 148 posts, RR: 0 Reply 131, posted (10 months 1 week 5 days 22 hours ago) and read 2877 times:
Quoting mikey72 (Reply 105):
SFO and LAX combined handle nowhere near the longhaul traffic that CDG and LHR do.
In total SFO and LAX offer 337,000 seats a week compared to 1,500,000 at CDG and LHR.
Of those 337,000 alot of them must be domestic.
I'm only talking about pooling long-haul.
Both SFO and LAX have enough O&D to support their long haul. If the airlines tried to shift the long haul to one or the other, some other airline would just come in and make a killing. No one from the bay area is going to fly to LAX if they can fly out of SFO. Likewise for LA Metro area. In addition, the load factors from my experience are very high on the SFO/LAX - EU routes and SFO/LAX - Asia routes.
Quote:
ATL is pushing it but a domestic flight covering 700 miles is no big deal as a commuter service to long-haul.
700 miles is basically the longest flight you can take intra-EU. ATL has a large population base to draw from already, you have to factor in that it would require people to take generally take 2 hops just to get to this South/SouthEast mega-hub.
Quote:
Are you sure about that ?
You would be looking at an airport that made LHR look underutilized. It probably would be a dream market however for the 380-1100!
spink From United States of America, joined Aug 2005, 148 posts, RR: 0 Reply 132, posted (10 months 1 week 5 days 22 hours ago) and read 2856 times:
Quoting mikey72 (Reply 120): So it's ok to stop say in DXB on your way to BOM rather than change and get on a non-stop flight in your own country ?
I used to fly back and forth to India all the time. Right now I can wake up, drive 15-25 min to the airport, board a plane and make a stop either in the EU(LHR or FRA) or the pac-rim. In both cases, I can board a plane at the intermediate stop to go to any number of Indian cities. All the while maintaining international class service.
What you are proposing would require me to take a 5-6 hour domestic flight, then have enough of a layover for an international flight, then either hit another intermediate in the EU/Pac-rim or possible india. For india, I would likely fly into either mumbai or bombay, then I would have to go through customs, transit to the domestic terminal, then board an intra-india flight to my final destination. It would take longer. It would be a much less pleasant experience. Your suggestion isn't helping my travel needs.
There is a reason that airlines run 757s TATL.
The current international hubs in the US didn't just pop up because someone thought it would be cool to have lots of them. They popped up because that is what the market demanded.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 133, posted (10 months 1 week 5 days 21 hours ago) and read 2818 times:
So basically what you are all saying is that in the future there will never be any non-stop services by U.S carriers using VLA's bar what we have now.
The country will continue to be bombarded by foreign carriers using VLA's from 'their' big hubs to suck all the juice out of the American industry.
Without any kind of 'effective' home grown competition.
Even though in only 8 years time the boot will be on the other foot in terms of China surpassing the U.S in aviation volumes with India not far behind it.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
IndianicWorld From Australia, joined Jun 2001, 2403 posts, RR: 0 Reply 134, posted (10 months 1 week 5 days 20 hours ago) and read 2770 times:
Simply put, yes there are.
The fact that most US carriers struggle to be profitable on an ongoing basis points to the fact that the current situation is not sustainable and something will have to give eventually. The mix of carriers and the number of competitors will likely radpidly shift over coming years.
In Europe there is still continued consolidation occurring, and losses are stacking up for quite a few carriers, so its hardly a great example to use to point to in suggesting there are not enough carriers in the US.
spink From United States of America, joined Aug 2005, 148 posts, RR: 0 Reply 135, posted (10 months 1 week 5 days 17 hours ago) and read 2678 times:
Quoting mikey72 (Reply 133): So basically what you are all saying is that in the future there will never be any non-stop services by U.S carriers using VLA's bar what we have now.
There may or there may not be, it depends on what customers want and what makes business sense. Both Delta and UA run 747s on hub to partner hub trunk routes. Almost no one runs VLAs outside of trunk routes. And as we've seen with orders for the two current VLA aircraft, the WW market for planes that size is very limited. For them to be profitable, they need to be full almost all the time.
For many airlines it makes more sense to run smaller planes (330/787-350/777) and go with a more distributed route network. In order for VLAs to thrive, countries(region in the case of EU) would either need to restrict international travel to 1 or 2 megahubs and handle all other destinations via domestic travel (not going to happen) or carriers/traffic patterns/costs would have to change such that using VLAs would make more sense.
In many cases, the airlines through their partnerships (UA/LH, AA/BA, DL/AF-KLM being the best examples) have gone to a frequency approach which makes more sense from a risk standpoint and presents more options to their customers.
If you look at the orders for VLA there is a distinct trend that all the large orders are dominated by airlines with a single hub (QF, SQ, EK) where distributed frequency from multiple airports isn't an option or by airlines competing of massive trunk lines (UK-AUS). The US market on the other hand is fairly different with both a large landmass and a distributed population. It makes little sense for a US airline to trunk in a large number of people to one hub and then fling them back out. Instead they distribute the incoming and outgoing load across the country to multiple airports.
The other major difference is the setup of US airports vs many foreign airports. The US airports aren't setup as international transit locations. You cannot get off your flight and go directly into the terminal and board another plane. All passengers arriving into the US must go through customs and immigrations. In order for VLAs to work, you need airports that support international transit. And there aren't really any routes where the US makes a good transit point from either asia or the EU, so it doesn't make the US really a viable long haul transit point. So quite naturally as an effect of geography and worldwide population distributions, the US long haul market is almost entirely O&D.
Quote:
The country will continue to be bombarded by foreign carriers using VLA's from 'their' big hubs to suck all the juice out of the American industry.
Due to geography, a US airline would need to be able to exercise a lot of 5th and 7th freedom rights in order compete with the internationals. Basically, a carrier like UA would have to setup a hub in FRA and SIN in order to compete. Or in the case of AA, in LHR and HKG. It doesn't make sense for either UA or AA to do this due to their close ties with LH/BA respectively. Now if foreign ownership laws were relaxed the world over, we'd see some pretty interesting mergers and some pretty fundamental changes in the airline industry.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 136, posted (10 months 1 week 5 days 15 hours ago) and read 2609 times:
Quoting mikey72 (Reply 133): The country will continue to be bombarded by foreign carriers using VLA's from 'their' big hubs to suck all the juice out of the American industry.
Without any kind of 'effective' home grown competition.
The airline industry is not about competition, it is about making money while serving a customers needs / desires. Competition keeps the market place fair, allows consumers more choices, innovation and stable prices at least those within the industries control, I think you will agree that fuel is more than just under aviation control. Competition is desired in the industry but it is not why the industry exist, indeed, in times when government created and controlled airlines, competition was not an issue, competition was forced on countries by politicians from other countries, country A would not let country B access their airports unless the revese was made possible. Most airlines in world history started off offering domestic not international service.
But to continue your point, what exactly happens to those pax arriving in the USA on those VLA's from those mega international hubs are they all going to the city where the USA mega hub is located in which case the USA needs larger cities to accomodate, do those international carriers just dump their pax in NYC for example and say how you get to PHL, BOS, CLE, ATL, MCO or MIA region (not the airport) is your business?
Infrastructure is the issue and at present in the USA that infrastructure is a/c, as you mentioned in your earlier post, USA carriers have very few of what you call long haul VLA a/c, so since they each have fleets of hundreds of a/c with associated crews, how are they being used?
Quoting mikey72 (Reply 133): Even though in only 8 years time the boot will be on the other foot in terms of China surpassing the U.S in aviation volumes with India not far behind it.
To be polite, so what, are you saying that Europe should launch measures to prevent Chinese and Indians from travelling, or you want the USA to do that for you?
Chinese and Indian aviation industries are developing, they have the ability to view what is / was done in both Europe and the USA and implement what is best for their environment. Neither can make their physical locations mimic Europe or the USA, politics and laws can only do so much. Politics can be used to put in a high speed rail system, but when you consider the size of the population and the country, how many decades do you think that will take, and how will the government keep its citizens bottled up waiting for train access?
The domestic aviation market in China and India has the potential to be as large or larger than the USA, that is a market that under our current political environment will be closed to foreign carriers, no cabbotage, so is that something foreign countries should now be looking at preventing?
Look beyond international traffic when looking at large developed and developing countries of major size.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 137, posted (10 months 1 week 5 days 14 hours ago) and read 2545 times:
Quoting par13del (Reply 136): The airline industry is not about competition, it is about making money while serving a customers needs / desires.
Is the American legacy airline industry in its current guise making enough money to re-invest and become high quality so it can meet its customer needs and more importantly retain those customers ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 138, posted (10 months 1 week 5 days 14 hours ago) and read 2533 times:
Quoting par13del (Reply 136): do those international carriers just dump their pax in NYC for example and say how you get to PHL, BOS, CLE, ATL, MCO or MIA region (not the airport) is your business?
MIA in itself would remain a hub.
It is just an idea to be explored and tinkered with nothing more.
Quoting par13del (Reply 136): To be polite, so what, are you saying that Europe should launch measures to prevent Chinese and Indians from travelling, or you want the USA to do that for you?
No.
I'm saying that in a few years time you will have markets of equal large size connecting with each other.
What a Chinese or Indian carrier can do so to can an American.
Is it now not possible to fly from JFK to DFW on AA and then onto SYD with QF ?
What's to stop AA flying DFW to SYD on its own metal fed by its domestic network at DFW ?
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
Is it now not possible to fly from JFK to DFW on AA and then onto SYD with QF ?
What's to stop AA flying DFW to SYD on its own metal fed by its domestic network at DFW ?
Why would they if QF is doing it for them? Airlines, like any sensible business, are profit-seeking. If one airline does what you propose and create a single big hub in say Raleigh-Durham, to be able to fly with A380s to London and Frankfurt, airline 2 will say thank you very much and start a route from New York to London and Frankfurt. It may well be with a spare 767, but as long as that plane is full and profitable and the A380 is empty, because New Yorkers don't want to backtrack to fly with the big airline, with the big "sensible" hub, but follow their own preferences, resulting failure for the big airline and success for the small one.
In a sense, most airlines based in America already operate with the single hub principle, DL has New York for TATL traffic, with Atlanta only working because of the massive domestic operations and the inevitable international spill-over resulting from that (and even there, DL is cutting back European flights from Atlanta). The only difference is that DL also offers flights to European hubs from other airports, like Seattle and Minneapolis. So, a "sensible" airline will operate an A380 from New York, the single hub, to Paris, DL chooses to fill two A330s, from New York and Seattle. The customer wins, as does the airline: people from Seattle are now more likely to choose DL than they would when they had to transit in New York (in which case one can assume, in a perfect world, that the passengers to Europe would be perfectly split between the big three/four).
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 140, posted (10 months 1 week 5 days 12 hours ago) and read 2385 times:
Quoting mikey72 (Reply 138): What's to stop AA flying DFW to SYD on its own metal fed by its domestic network at DFW ?
Probably nothing except for the fact that, if, they have ATI with QF, the flight is metal neutral........doesn't make a difference who flies it........both airlines profit. If their partner already flies it, why go to the trouble of having a flight on your own metal?
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
Quoting mayor (Reply 140): Probably nothing except for the fact that, if, they have ATI with QF, the flight is metal neutral........
Excuse me but I must have missed the moment the balls were cut off the American airline industry.
DocLightning said...
But that doesn't change the fact that it doesn't make sense to fly 27 737/A320/757 between SFO and ORD every day.
And i'll add.....
Look at JFK/LAX...3 legacy carriers...god knows how many flights on relatively small aircraft. (and the LCC's)
Maybe mega-hubs aren't such a good idea but I still think there's a hell of alot of streamlining that could be done and 'some' consolidation of longer-haul flights (particularly in the future) involving catchment areas.
[Edited 2012-07-15 09:29:27]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 142, posted (10 months 1 week 5 days 11 hours ago) and read 2331 times:
Quoting mikey72 (Reply 137): Is the American legacy airline industry in its current guise making enough money to re-invest and become high quality so it can meet its customer needs and more importantly retain those customers ?
Well according to A.net they are meeting the needs of their customers which is to provide basic transportation from point A to point B at the lowest possible cost, the majority of Americans travel domestically not internationally. Any current USA legacy can try to minimize their domestic market and focus more on the international with higher service levels and fares, but without a significant domestic network providing feed they will quickly become a niche carrier and get run over by the rest who continue on same old same old.
Quoting mikey72 (Reply 138): I'm saying that in a few years time you will have markets of equal large size connecting with each other.
Quoting mikey72 (Reply 138): What a Chinese or Indian carrier can do so to can an American.
Is it now not possible to fly from JFK to DFW on AA and then onto SYD with QF ?
What's to stop AA flying DFW to SYD on its own metal fed by its domestic network at DFW ?
Nothing, they can do so now and provide competition to QF, indeed any USA carrier can run the same number of flights down under from LAX for example as QF does, that would be competition and would probably drive a carrier or two out of business. What they have done is to use globalization to essentially eliminate competition on the route by sharing the profits with one carrier providing feed an the other the VLA.
As long as they do not use nefarious means to prevent other carriers from entering the market it is a good case of partnerships allowing a market to flourish.
Quoting mayor (Reply 140): Probably nothing except for the fact that, if, they have ATI with QF, the flight is metal neutral........doesn't make a difference who flies it........both airlines profit. If their partner already flies it, why go to the trouble of having a flight on your own metal?
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 143, posted (10 months 1 week 5 days 11 hours ago) and read 2319 times:
Quoting mikey72 (Reply 141): Excuse me but I must have missed the moment the balls were cut off the American airline industry.
It goes both ways, tho. The foreign partner might not operate the flight because their American partner already does. So, how does that equate with the industry's balls being cut off?
But that doesn't change the fact that it doesn't make sense to fly 27 737/A320/757 between SFO and ORD every day.
And I said
That it does if the market calls for it. And, if you're flying from hub to hub, some of these may not be necessarily needed out of the departure hub, but they might be needed at the destination hub for scheduling purposes.
A/C don't just appear, magically, you know.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 145, posted (10 months 1 week 5 days 11 hours ago) and read 2288 times:
Quoting par13del (Reply 142): As long as they do not use nefarious means to prevent other carriers from entering the market it is a good case of partnerships allowing a market to flourish.
Yes I do agree with and understand that.
As long as the American legacies don't end up as solely domestic operators feeding their foreign alliance partner carriers.
Or disappear all together to leave the LCC's feeding the hubs and smaller airports and providing domestic service.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 147, posted (10 months 1 week 5 days 11 hours ago) and read 2271 times:
Quoting mikey72 (Reply 145): As long as the American legacies don't end up as solely domestic operators feeding their foreign alliance partner carriers
I thought of this after my last post, which your questions triggered, if USA legacies carriers can sign / join an alliance with foreign carriers to provide international feed, why can't AA for example, sign an agreement with WN to provide domestic feed while AA does international only, is it because they only see themselves as competitors within country?
Gotta go look at that in more detail.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 148, posted (10 months 1 week 5 days 11 hours ago) and read 2268 times:
Quoting par13del (Reply 147): I thought of this after my last post, which your questions triggered, if USA legacies carriers can sign / join an alliance with foreign carriers to provide international feed, why can't AA for example, sign an agreement with WN to provide domestic feed while AA does international only, is it because they only see themselves as competitors within country?
Gotta go look at that in more detail.
Oh god don't ask me....I'm out of my depth........i'm sure someone will have some answers though.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
spink From United States of America, joined Aug 2005, 148 posts, RR: 0 Reply 149, posted (10 months 1 week 5 days 11 hours ago) and read 2261 times:
Quoting par13del (Reply 147): I thought of this after my last post, which your questions triggered, if USA legacies carriers can sign / join an alliance with foreign carriers to provide international feed, why can't AA for example, sign an agreement with WN to provide domestic feed while AA does international only, is it because they only see themselves as competitors within country?
Gotta go look at that in more detail.
ATI is, as far as I understand, only available between carriers of different countries. Without ATI, it becomes hard to due a domestic to international partnership without a full on merger.
poLOT From United States of America, joined Jul 2011, 1499 posts, RR: 0 Reply 150, posted (10 months 1 week 5 days 10 hours ago) and read 2243 times:
Quoting mikey72 (Reply 144): Seems though that in more cases it's the foreign partner ?
Not really. Look at AF/KL. You have DL operating EWR-AMS instead of KL, AF giving DL SEA-CDG, PHL-CDG and ORD-CDG (in the winter). None of those US airports are DL hubs. I'm sure there are other cases between other airlines, but that is just off the top of my head.
Quoting mikey72 (Reply 144): I just don't know about having the 3 alliances operating hubs in 'one' country ?
The US is a big country, that is like saying there shouldn't be 3 alliances operating hubs in Europe.
Quoting mikey72 (Reply 148): Oh god don't ask me....I'm out of my depth........i'm sure someone will have some answers though.
In addition to the difficulty in getting that approved (as you are effectively merging the two carriers' operations) none of the LCCs replicate nor can they replace the legacy's domestic network. They all operate out of completely airports to completely different markets.
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 151, posted (10 months 1 week 5 days 10 hours ago) and read 2202 times:
Quoting poLOT (Reply 150): In addition to the difficulty in getting that approved (as you are effectively merging the two carriers' operations) none of the LCCs replicate nor can they replace the legacy's domestic network.
I'm not thinking of an airline witihin an airline but an expansion of the current joint ventures that AA has with B6 for example. Lets say the agreement covers NYC, AA only operates interntional flights into and out of NYC, pax going to BOS for example would be sent over to B6. So pax in LHR wants to go the BOS and all direct flights are full, and they choose AA, they would fly AA to NYC and B6 to BOS, not as a B6 flight operating as AA but as a B6 flight carrying a preferred AA pax. A certain number of seats would have to be negotiated between the carriers as I'm not thinking of B6 offering flights to LHR but B6 selling domestic seats to AA allowing them to reduce their NB fleet.
Does that violate advert rules or any local laws, international pax have had routings and tickets like this for many years when travel agents did your ticketing, they ensured that the appropriate airline was listed for that segment and the airlines resolved the fares based on proration or if they had any agreement.
I know small carriers like UP for example took hits on some of these as BA for example selling fares LHR-NAS-GHB-NAS-LHR would get something like 90% of the total fare, its another reason why travel agents are dying, airlines want to maximize their cost on every segment flown. Better to have a LHR-NAS-LHR on BA then a NAS-GHB-NAS on UP, cost the pax more.
Your background is clearly not economics or business.
An airline does not have to fly A380s to compete and there is a point where economies of scale cease to compound at a single facility...in fact, once a single facility gets too large, things start to go pear shaped. Just look at most western governments as an example.
Your underlying assumptions that you hold sacrosanct are flawed, therefore your logic and perceived solution are also flawed.
brilondon From Canada, joined Aug 2005, 3175 posts, RR: 1 Reply 154, posted (10 months 1 week 5 days 9 hours ago) and read 2149 times:
Quoting mikey72 (Reply 103):
LAX and SFO long-haul could be combined.
ATL, DFW & IAH long-haul could be combined.
JFK, EWR, PHL, BOS, IAD long-haul could be combined.
This would be like combining LHR, LGW, AMS, and CDG to be one hub airport and then saying CPH, DUS, and FRA could be one hub. Seriously, come on, that is ridiculous.
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 155, posted (10 months 1 week 5 days 8 hours ago) and read 2095 times:
Quoting DLPMMM (Reply 153): An airline does not have to fly A380s to compete and there is a point where economies of scale cease to compound at a single facility...in fact, once a single facility gets too large, things start to go pear shaped. Just look at most western governments as an example.
Seems that there is alot more rationality in fleet purchases, now, compared to what it was in the 70s. There were airlines (DL among them) that really, if you think about it, didn't need the 747 (or at least not as many), but bought them because everyone else was. By the time DL realized they didn't need them, they DID (or were at least getting close to needing them. A mere 3 years after the last one was gone, DL started service to London. Maybe they would have been better off to park them, temporarily.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
cmf From United States of America, joined Jun 2011, 2479 posts, RR: 35 Reply 156, posted (10 months 1 week 5 days 8 hours ago) and read 2065 times:
Quoting ElPistolero (Reply 122): Shouldn't it be up to the consumer to decide what works for him? If a consumer is willing to take a one-stop option, he must see some utility in doing so. In most cases, this utility is financial savings. If he thinks saving $X00 dollars is more valuable than 3 hours of his time, that's his call to make, no?
'
Or would you like to decide for him?
It isn't up to just the passenger. Airlines are not required to fly everywhere. Nor should they. Airports are not required to make every flight possible. Nor should they.
Quoting DLPMMM (Reply 153): An airline does not have to fly A380s to compete and there is a point where economies of scale cease to compound at a single facility...in fact, once a single facility gets too large, things start to go pear shaped. Just look at most western governments as an example.
You mean too large because they need to have a lot of gates to handle all small planes. You mean too large because they need to maintain six engines instead of four. You mean too large because they need three times as many pilots.
Don’t repeat earlier generations mistakes. Learn history for a better future.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 157, posted (10 months 1 week 5 days 6 hours ago) and read 2005 times:
Quoting brilondon (Reply 154): This would be like combining LHR, LGW, AMS, and CDG to be one hub airport and then saying CPH, DUS, and FRA could be one hub. Seriously, come on, that is ridiculous.
Quoting poLOT (Reply 150): The US is a big country, that is like saying there shouldn't be 3 alliances operating hubs in Europe.
Europe's top 5 airports by weekly seat capacity = 3.2M
U.S.A top 5 airports by weekly seat capacity = 1.1M
Quoting DLPMMM (Reply 153): Your background is clearly not economics or business.
With respect.....Pan Am-bankrupt, TWA-bankrupt, United Airlines-bankrupt, Delta Airlines-bankrupt, American Airlines-bankrupt, Continental-bankrupt, Northwest-bankrupt.
Quoting DLPMMM (Reply 153): An airline does not have to fly A380s to compete
Maybe but something is going wrong somewhere - not 1 order for the A380.
The aircraft is a marvel.
You've gone from Pan Am virtually biting Boeings' hand off for the 747.
I don't know when it happened but they took their foot off the gas at some point along the line.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
poLOT From United States of America, joined Jul 2011, 1499 posts, RR: 0 Reply 158, posted (10 months 1 week 5 days 6 hours ago) and read 1998 times:
Quoting mikey72 (Reply 157): With respect.....Pan Am-bankrupt, TWA-bankrupt, United Airlines-bankrupt, Delta Airlines-bankrupt, American Airlines-bankrupt, Continental-bankrupt, Northwest-bankrupt.
With respect, if you are going to start including Pan Am or Continental's bankruptcies, which happened over 20 years ago, then you also have to remember the state bailouts that Air France, Iberia, Alitalia, Olympic and other European airlines received.
Quoting mikey72 (Reply 157): You've gone from Pan Am virtually biting Boeings' hand off for the 747.
I don't know when it happened but they took their foot off the gas at some point along the line.
Pan Am was losing too much money with their oversized 747 fleet that were mostly flying empty prestige routes. That is what happened.
DeltaMD90 From United States of America, joined Apr 2008, 5309 posts, RR: 47 Reply 159, posted (10 months 1 week 5 days 6 hours ago) and read 1973 times:
So........ not having A380s bankrupts the US airlines? Someone better warn WN!
Most of your posts puzzle me. Artificial hubs with little O/D hardly ever work, and combining near markets like BOS, NYC, DC, PHL into one wouldn't work... there are people that prefer and will pay for non-stop flights.
What routes do you propose the US airlines fly VLAs on, taking frequency (a huge selling point) into account? There are a few, but not enough to warrant a fleet of them. If the A380 made economical sense for US airlines, you'd see orders
mayor From United States of America, joined Mar 2008, 9193 posts, RR: 14 Reply 160, posted (10 months 1 week 5 days 5 hours ago) and read 1929 times:
Quoting mikey72 (Reply 157): With respect.....Pan Am-bankrupt, TWA-bankrupt, United Airlines-bankrupt, Delta Airlines-bankrupt, American Airlines-bankrupt, Continental-bankrupt, Northwest-bankrupt.
You forgot US, EA & BN
You keep bringing this up, as though it's a millstone around the U.S. airlines neck. That list of airlines went into BK for any number of reasons and one of them, PA, went into BK and didn't come out because they were following a plan much like you propose............they had gateways but virtually no feed to or from those gateways. By the time they merged with National, it was too late.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
skipness1E From United Kingdom, joined Aug 2007, 2376 posts, RR: 0 Reply 161, posted (10 months 1 week 5 days 4 hours ago) and read 1889 times:
Quoting mogandoCI (Reply 14): Intra-Euro fares are extreme - the Big 3 gouge you on the upfront fare
Not true in UK to Europe, it's never been (much) cheaper, even on BA! We can discount the Ryanair penny fares as a useful comparison.
Pan Am wasn't really well served by feed from National, indeed the synergies were rubbish, Pan Am bought National in repsonse to the classic cry of "something must be done"!
The biggest issue in the US is that you have airlines still alive that the market would have allowed to die years ago. The Chapter 11 comedy club, in the most capitalist country on Earth (maybe China does it better) allowed the zombie-fied legacies to stagger in and out numerous times until they are "cured".
Pan Am died, as did TWA, Eastern, NWA got merged and now USAirways appears keen to become adopted and one with American. American Airlines will never be able to pay it's depts or reach an acceptable cost base for substantive growth, even in Chapter 11. It's no way to run a party in a brewery, never mind an industry.....
DeltaMD90 From United States of America, joined Apr 2008, 5309 posts, RR: 47 Reply 162, posted (10 months 1 week 5 days 4 hours ago) and read 1855 times:
Quoting skipness1E (Reply 161): The Chapter 11 comedy club, in the most capitalist country on Earth (maybe China does it better) allowed the zombie-fied legacies to stagger in and out numerous times until they are "cured".
I'm curious, if US (the first carrier to go into Ch 11 after 9/11 IIRC) went under, would that have allowed the other carriers to pick up slack with less competition and not go into Ch 11? Or would US, UA, DL, NW, and AA all have gone under (doubt that, but that would be really bad...)
I hear a lot about the Ch11 system and do agree that some need to go under, but how many would have gone under with the stricter laws, and would that have really been better than what we have now??
par13del From Bahamas, joined Dec 2005, 5901 posts, RR: 8 Reply 163, posted (10 months 1 week 5 days 3 hours ago) and read 1824 times:
Quoting skipness1E (Reply 161): The biggest issue in the US is that you have airlines still alive that the market would have allowed to die years ago. The Chapter 11 comedy club, in the most capitalist country on Earth (maybe China does it better) allowed the zombie-fied legacies to stagger in and out numerous times until they are "cured".
The market works in conjunction with Chpt.11, where exactly does the money come from to re-float the carrier, it is coming from private investors not the government.
The PGF is also funded by the private companies whose pensions they hold, the law of the land only gives these private companies a chance to find investors, if they cannot be found the market speaks and the carrier dies.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 164, posted (10 months 1 week 4 days 20 hours ago) and read 1668 times:
Quoting DeltaMD90 (Reply 159): Most of your posts puzzle me. Artificial hubs with little O/D hardly ever work, and combining near markets like BOS, NYC, DC, PHL into one wouldn't work... there are people that prefer and will pay for non-stop flights.
Yes that's fine.
It was just something I wanted to discuss and I did say a few posts ago that after hearing what you all have to say it probably isn't a good idea to have mega-hubs.
Well actually I didn't but I thought the point had been made.
Quoting mayor (Reply 160): You keep bringing this up, as though it's a millstone around the U.S. airlines neck
It's not I that I think it's a milestone as there is no reason why U.S airlines cannot be a roaring success in the future.
From afar though Chapter 11 and the recent mergers seem to be a case of a brand disappearing.....the juicy bits being sold on.....the can gets kicked further down the road....with nothing really changing.....at the moment it's AA's turn.
Alot of Americans on this site seem to run down AA but when every single one of your competitors has gone through Chapter 11 as opposed to simply going bust you are left at rather a disadvantage ?
Chapter 11 seems to have become a right of passage where those that don't pursue it are questioned ?
'oh they should have filed years ago'.....etc
However, hopefully this will be the 'last dance around the mulberry bush' and the likely three we are left with UA, DL and AA will make a go of it.
If not what are the options ?
[Edited 2012-07-16 01:17:09]
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
mikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2 Reply 165, posted (10 months 1 week 4 days 18 hours ago) and read 1615 times:
After some analysis I have identified a couple of examples where a single instead of 2 or more American carriers could operate larger than current aircraft. (if things had panned out differently of course)
LAX to LHR ( 1 x UA 777 and 1 x AA 777)
ORD to LHR (3 x UA 767 and 3 x AA 777, 1 x AA 767)
JFK to LHR (3 x DL 767 and 5 x AA 777)
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
delta2ual From United States of America, joined Dec 2007, 575 posts, RR: 1 Reply 166, posted (10 months 1 week 4 days 9 hours ago) and read 1434 times:
Quoting mikey72 (Reply 157): With respect.....Pan Am-bankrupt, TWA-bankrupt, United Airlines-bankrupt, Delta Airlines-bankrupt, American Airlines-bankrupt, Continental-bankrupt, Northwest-bankrupt.
Quoting poLOT (Reply 158): With respect, if you are going to start including Pan Am or Continental's bankruptcies, which happened over 20 years ago, then you also have to remember the state bailouts that Air France, Iberia, Alitalia, Olympic and other European airlines received.
Exactly. As much as people like to complain about the US BK laws, I would love to know how much money European governments have given their airlines over the years. Even now, with subsidization "illegal" we hear about countries getting their wrists slapped for giving their hometown airline money to stay afloat. Neither system is ideal, but to act like ONLY US airlines get help is complete rubbish and very short-sighted.
From the world's largest airline-to the world's largest airline. Delta2ual
DeltaMD90 From United States of America, joined Apr 2008, 5309 posts, RR: 47 Reply 167, posted (10 months 1 week 4 days 5 hours ago) and read 1366 times:
Quoting mikey72 (Reply 165): After some analysis I have identified a couple of examples where a single instead of 2 or more American carriers could operate larger than current aircraft.
Again, that's implying that frequency is not desirable. Sure, you could have Delta Shuttle be 2 or 3 A380s per day instead of the hourly flights on smaller aircraft but that obviously would not be successful (also negating the fact that LGA and DCA can't handle A380s.)
Consider this: (and I'm completely making flights up)
DL 100: JFK-LHR at 1000 on a 763
DL 102: JFK-LHR at 1400 on a 763
DL 104: JFK-LHR at 1800 on a 763
Let's merge them into DL 100: JFK-LHR at 1400 on an A380
Now anyone arriving at JFK at about 1315 is screwed and can't make the single flight (but they would have been able to make the 1800 763 flight.) Also, passengers arriving at 0800 have a 6 hour layover instead of a 2 hour layover.
Efficiency only goes so far. Convenience is a selling point, and having a steady flow of passengers in and out helps (versus plopping all of them at a few gates for the fewer international flights on A380s.)
If there are enough very-high density routes offered by a US airline, I'm sure 748is or A380s would eventually be ordered, assuming 773ERs or 787s don't steal their thunder
united319 From United States of America, joined Jul 2006, 513 posts, RR: 0 Reply 168, posted (10 months 1 week 4 days 5 hours ago) and read 1347 times:
Quoting mogandoCI (Reply 14): LAX has 3 airline hubs (UA, AA, WN), 1 focus city by DL, and another focus city/hub down the road at LGB.
LAX isn't a hub for WN, just a focus city. Also add VX to the list of Focus City Carriers from LAX. I also beleive AA considers LAX just a focus city as well even though it has overseas flights.
Quoting carpethead (Reply 40): Forget cheap fares or number of airlines, I just wish the days back when ORD-CLE/SFO/LAX was operated on DC10 or similar aircraft and ORD-ALB on 727 or 73S.
All those routes are now on narrowbodies and RJs respectively.
ORD-ALB has 2 A319's on the route today along with the mix of RJ's. Not too much of a step backwards from the 732 and 727 days.
usscvr From United States of America, joined Jan 2010, 60 posts, RR: 0 Reply 170, posted (10 months 1 week 4 days 4 hours ago) and read 1328 times:
Quoting brilondon (Thread starter): Given the current talk about AA merging with (insert airline of the day here), I was wondering if the current and foreseeable future market is too small for the number of airlines all vying for passengers and what the right number of airlines would be if you could have the right number?
The market will determine the number of US airlines that survive.
brilondon From Canada, joined Aug 2005, 3175 posts, RR: 1 Reply 171, posted (10 months 1 week 4 days 3 hours ago) and read 1282 times:
Quoting mikey72 (Reply 157): With respect.....Pan Am-bankrupt, TWA-bankrupt, United Airlines-bankrupt, Delta Airlines-bankrupt, American Airlines-bankrupt, Continental-bankrupt, Northwest-bankrupt.
You forgot about all the other bankruptcies in the airline business i.e. People express, Eastern, Braniff a few times, Freddy Laker's sojourn into the airline business and the countless airlines that are going bust in Europe.
Sponsor Message: 
From Canada, joined Aug 2005, 3175 posts, 
From United States of America, joined Apr 2005, 3529 posts, 
From Norway, joined Aug 2006, 3228 posts, 
From United Kingdom, joined Oct 2009, 1780 posts, 
From Bahamas, joined Dec 2005, 5901 posts, 
From Saudi Arabia, joined Jan 2000, 1787 posts, 
From France, joined Nov 2009, 4789 posts, 
From Tuvalu, joined Aug 2003, 5488 posts, 
From Germany, joined Sep 2006, 210 posts, 
From Singapore, joined May 2007, 1019 posts, 
From Christmas Island, joined May 1999, 3075 posts, 
From Japan, joined Aug 2004, 2771 posts, 
From Finland, joined Mar 2009, 612 posts, 
From Netherlands, joined Jan 2012, 219 posts, 
From Vatican City, joined Dec 1999, 2738 posts, 
From Australia, joined Jun 2001, 2403 posts, 
From UK - England, joined Nov 2011, 246 posts, 
Printer friendly format 
