sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:22 am

I was wondering why U.S. airlines are in such dire shape financially, as compared to the rest of the world? So many airlines in Europe and Asia seem to be reporting increased profits and better projections, even with the high fuel prices. I'm not saying the Europeans and Asians aren't restructuring, becoming more efficient, laying off employees, etc., to deal with the present challenges, but they seem to be weathering the storm better, recovering sooner, and ordering more airplanes.

Were U.S. airlines more effected by 9/11 than elsewhere? Is there more deregulation here than elsewhere, causing a glut of seats? Other airlines worldwide seem to be dealing better, on the whole, with the competition of low fare carriers, too. Do foreign airlines get more security for loans or financial guarantees from their governments? Do American CEOs make too much money?

(I'm not suggesting any of these possibilities are true, I am just trying to understand the discrepancy.)

I know there are exceptions (JAL, Alitalia, VARIG)

Any insights?
I come in peace
 
goingboeing
Posts: 4727
Joined: Sat Dec 04, 1999 1:58 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:27 am

The biggest reason is because US majors are still putting market share above profits. The underprice the LCC's to protect that "valuable" market share, and they can't cover the costs to operate the flights.
 
cedarjet
Posts: 8101
Joined: Mon May 24, 1999 1:12 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:31 am

I must admit, I don't get it either. Airlines like BA, Lufthansa, ANA et al operate in an environment that is more competitive than any US major - take it from me (or Southwest Airlines, who agree with me), easyJet and Ryanair are more hardcore than Southwest or any other US LCC. And yet BA, LH, NH and their brethren provide a service that is far superior to the US majors, and they make money doing it. Perhaps it's a symptom of a general malaise in the USA, although there are other industries that are doing well over there. So I don't get it. It is a shame though, US airlines have such a great history and were pioneers in many areas, and they're really damaging that heritage nowadays. Any Americans have some thoughts? I'm just repeating the opening post here.
fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
 
luv2fly
Posts: 11056
Joined: Tue May 13, 2003 2:57 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:34 am

The sad thing is, now the so called LCC's here in the United States actually deliver more on board service then the so called legacy carriers.
You can cut the irony with a knife
 
sk601
Posts: 896
Joined: Sat Jun 11, 2005 11:46 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:37 am

Quoting Luv2fly (Reply 3):
The sad thing is, now the so called LCC's here in the United States actually deliver more on board service then the so called legacy carriers.

 checkmark  that's exactly the answer to this question:

Quoting SSTsomeday (Thread starter):
Why Are U.S. Airlines In Worse Shape?
 
AGM100
Posts: 5077
Joined: Thu Dec 04, 2003 2:16 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:43 am

Quoting Cedarjet (Reply 2):
So I don't get it. It is a shame though, US airlines have such a great history and were pioneers in many areas, and they're really damaging that heritage nowadays. Any Americans have some thoughts? I'm just repeating the opening post here.

I agree with some of what you say Cedar, I have a theory that probably can not be proved. With the emergence of Southwest airlines "no frills" model and their obvious success. The Major's took one component of the Southwest model "non frills" and used it (saved alot of money). They forgot about all the other things Southwest does to be successful. Like I said its just a theory. The Majors keep charging the same ammount for less and less.
You dig the hole .. I fill the hole . 100% employment !
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:54 am

Quoting Goingboeing (Reply 1):
The biggest reason is because US majors are still putting market share above profits. The underprice the LCC's to protect that "valuable" market share, and they can't cover the costs to operate the flights.

Interesting. So how do the Europeans deal with the LCC challenge?

Quoting Luv2fly (Reply 3):
The sad thing is, now the so called LCC's here in the United States actually deliver more on board service then the so called legacy carriers.

Yes, this is so ironic. I think the U.S. airlines have a siege mentality - they have reduced service to ridiculous levels. NW has all those TV screens on board in the ceilings of the 757s and 320's, but they don't bother to play anything on them. AC (Canadian, I know) wants to sell pillows and blankets. The frequent flyer programs are much decreased in value due to fees and lack of available seats unless you fork over twice the miles. All sorts of non-ticket revenue schemes... etc. They are making themselves very difficult to fly. I still can't get over: "5 or more hours East Coast to West, and NO FOOD?!?!"
I come in peace
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 12:55 am

U.S. Airlines are just now discovering the second biggest secret behind LCC success (other than overall lower costs). Point-to-point travel results in HUGELY higher yields than hub networks. European carriers learned this several years ago, and while companies like BA, AF and LH still tout their worldwide networks, in reality they choose to sell a greater percentage of their seats on a point to point basis.

U.S. carriers are just learning this now, which is why we are seeing quite a few carriers de-hubbing their schedules (AA for example), and dumping of unprofitable domestic routes.

The comparison with Asia is not a valid one, because many Asian carriers are either still state owned and/or have labor costs that are only a fraction of their western counterparts.
It's been swell, but the swelling has gone down.
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:08 am

Quoting PA110 (Reply 7):
The comparison with Asia is not a valid one, because many Asian carriers are either still state owned and/or have labor costs that are only a fraction of their western counterparts.

Actually it's two good reasons, though, that they are not in such dire straits. They are supported by their governments, and low wages keep their costs down. I get it.

Quoting PA110 (Reply 7):
U.S. Airlines are just now discovering the second biggest secret behind LCC success (other than overall lower costs). Point-to-point travel results in HUGELY higher yields than hub networks. European carriers learned this several years ago, and while companies like BA, AF and LH still tout their worldwide networks, in reality they choose to sell a greater percentage of their seats on a point to point basis.

Thank you for this comprehensive insight. I hope there are more responses...
 bigthumbsup 
I come in peace
 
ken4556
Posts: 152
Joined: Sat Jun 12, 1999 5:28 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:29 am

I have found it hard to understand how I can be paying less for airfares now then I did 3 or 4 years ago. I live in Southwest Georgia and like to fly from the Albany, GA airport and usually fly to Denver 6-10 times a year for work. Delta is the only airline that serves Albany, GA.

Until 2005, I paid under $600 if I booked two weeks in advance and under $800 if I booked one week in advance, both with Saturday night stays. If I had less then a week notice, I would find another way to fly and not pay the $1200 round trip.

So far this year, I have made four trips to Colorado with anothe rone next week. I am paying between $530 and $570 and been booking some less then 7 days out without any Saturday night stay.

With fuel being double and Delta being in its financial situation, I am amazed at the price I am paying. While I like it, I know that it cannot countinue as they cannot keep flying at that price. It makes no sense to me....
 
icarus75
Posts: 751
Joined: Mon Oct 27, 2003 2:18 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:29 am

Quoting PA110 (Reply 7):
Point-to-point travel results in HUGELY higher yields than hub networks. European carriers learned this several years ago, and while companies like BA, AF and LH still tout their worldwide networks, in reality they choose to sell a greater percentage of their seats on a point to point basis.

Sorry but I do not really agree with you, at least for AF!!! Look at the daily percentage of people transiting through CDG every day!!!
Flying is amazing!
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:33 am

Quoting Icarus75 (Reply 10):
Sorry but I do not really agree with you, at least for AF!!! Look at the daily percentage of people transiting through CDG every day!!!


How do you quantify that? Can you compare the stats of transit vs O&D? Paris is a huge O&D market for many of AF's world wide destinations.
It's been swell, but the swelling has gone down.
 
icarus75
Posts: 751
Joined: Mon Oct 27, 2003 2:18 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:35 am

Quoting PA110 (Reply 11):
Can you compare the stats of transit vs O&D?

Sorry for this stupid question but what is exactely the meaning of O&D?  Wink
Flying is amazing!
 
User avatar
PA110
Posts: 1897
Joined: Sat Dec 06, 2003 1:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:37 am

O&D = Origin & Destination (local point-to-point travel)
It's been swell, but the swelling has gone down.
 
icarus75
Posts: 751
Joined: Mon Oct 27, 2003 2:18 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:40 am

Quoting PA110 (Reply 11):
How do you quantify that? Can you compare the stats of transit vs O&D? Paris is a huge O&D market for many of AF's world wide destinations.

First of all, thanks for your explanation!  Wink

I try to put my hands on the statistics about Transit vs O&D.As soon as I'll have them, I'll post.
Flying is amazing!
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:46 am

Quoting Ken4556 (Reply 9):
Until 2005, I paid under $600 if I booked two weeks in advance and under $800 if I booked one week in advance, both with Saturday night stays.



Quoting Ken4556 (Reply 9):
So far this year, I have made four trips to Colorado with anothe rone next week. I am paying between $530 and $570 and been booking some less then 7 days out without any Saturday night stay.



Quoting Ken4556 (Reply 9):
With fuel being double and Delta being in its financial situation, I am amazed at the price I am paying. While I like it, I know that it cannot continue as they cannot keep flying at that price. It makes no sense to me....

This kind of pricing used to take advantage of people who can not know in advance of their travels (business people mostly, whose companies pay for the tickets) but HAD to travel. It was very opportunist of the airlines and constitutes gouging, in my view. I believe that the low fare carriers (with deregulation) do not price gouge in this fashion, and so the majors now have to follow suit. I think the prices you pay are still kind of high. Perhaps Southwest has not yet made it to your neck of the woods?

Also, 9/11 brought business travel down quite a bit, if I remember correctly, it stayed deflated for a few years, and their was an increase in video conferencing, etc. I think the LLCs were instrumental in bringing the business travellers back. The majors are now paying dearly for their long-standing unfair business practices in that regard, until the LLC's came to shake things up, IMHO. The majors are being forced to operate much more efficiantly now - they were likely a little slack when they were "king of the hill."
I come in peace
 
icarus75
Posts: 751
Joined: Mon Oct 27, 2003 2:18 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:46 am

OK.My mistake!!!  white 

The last figure I've found for CDG is :
5% for charters
25% for transit
70% for O&D
Flying is amazing!
 
commavia
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:49 am

Quoting PA110 (Reply 7):
Point-to-point travel results in HUGELY higher yields than hub networks.

This is not necessarily true. If managed profitably, hubs can generate enormous yield premiums over other competitive models.

Quoting PA110 (Reply 7):
U.S. carriers are just learning this now, which is why we are seeing quite a few carriers de-hubbing their schedules (AA for example), and dumping of unprofitable domestic routes.

AA is not "de-hubbing" anything. Indeed, they are reducing point-to-point service and instead strengthening their hubs by depeaking them, to more effectively utilize more resources and push more capacity through their hubs using the same or less of their resources (i.e., gates, equipment, people, etc.).

Indeed, American has commonly attributed its huge improvement in year-over-year unit revenue, and their dramatic overperformance relative to the industry in unit revenue, to their effective management of their hub-based systems.

[Edited 2006-02-25 17:49:55]
 
CptGermany
Posts: 85
Joined: Sat Feb 25, 2006 7:50 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:51 am

I believe that the reason for the profitability of some European and Asian carriers lies in the fact that they have a larger percentage in international and intercontinental traffic. On this market, low cost carriers are still weak and do not offer many alternatives.

LH, for instance, loses money in their intra-Euroean ("KONT") network whereas their intercontinental/long-haul traffic makes all the money.

DL just realized that there is a much better profit in intercontinental traffic and hence they move all their widebodies to this market.

I predict, however, that once low cost carriers start to launch intercontinental traffic on a grant scale, legacy carriers such as BA, LH, AF, and KLM will see a new and dangerous challenge.
 
DeltaMIA
Posts: 1622
Joined: Wed Feb 04, 2004 11:53 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:53 am

Quoting SSTsomeday (Reply 6):
They are making themselves very difficult to fly. I still can't get over: "5 or more hours East Coast to West, and NO FOOD?!?!"

You get food. The airlines aren't out to provide you with a full course meal, but they provide you with supplements (peanuts, granola bars, crackers, chips, etc.) from your origin to destination where you can get much better food at either end. The airlines also don't prevent you from bringing food on board the aircraft where you can potentially bring on a full course meal freshly prepared from one of the airport vendors.
It's a big building with patients, but that's not important right now.
 
commavia
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:56 am

Quoting CptGermany (Reply 18):
I believe that the reason for the profitability of some European and Asian carriers lies in the fact that they have a larger percentage in international and intercontinental traffic. On this market, low cost carriers are still weak and do not offer many alternatives.

Agree 110%.

Domestic travel markets are the breeding ground for low-cost airlines, because of the inherent savings over flying internationally, and as such, the airlines with a higher exposure to their domestic market will come up against far greater low-cost competition. This is certainly the case in the U.S., by far and away the largest domestic air travel market on earth, whereas there is no other airline anywhere else on earth is simoultaneously faces an enormous domestic market that they are highly exposed to, and, secondly, a domestic market increasingly dominated by low-cost carriers.
 
georgiabill
Posts: 744
Joined: Sat Mar 01, 2003 11:53 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:08 am

I will give you the KISS(Keep it simple stupid)theory as to why so many US airlines are performing so poorly financially. They lack creative, pro active management. None of the so called legacy carriers with the exception of Continental and American have made significant changes in their operational philosophies. Most of the carriers see cutting service, ending flights and dropping cities as the cure all for their problems. Delta has decided more international routes is the key to their survival. America West if you can not beat them buy them theory reguardless of the labor mess you have created. Let's not forget the file for bankruptcy protection management theory. Delta perhaps is an example of how to lose significant money while operating under bankruptcy. Here's my theory for success put a good product at a reasonable fares and have your employees hold a portion of the stock so they will have a vested interest in the company. Happy employees + logical route structure + efficent fleet + good service at a fair price = success. Just my 2.5 cents worth.
 
INTENSS
Posts: 310
Joined: Mon Aug 30, 2004 9:25 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:13 am

Quoting CptGermany (Reply 18):
I believe that the reason for the profitability of some European and Asian carriers lies in the fact that they have a larger percentage in international and intercontinental traffic. On this market, low cost carriers are still weak and do not offer many alternatives.

LH, for instance, loses money in their intra-Euroean ("KONT") network whereas their intercontinental/long-haul traffic makes all the money.

I predict, however, that once low cost carriers start to launch intercontinental traffic on a grant scale, legacy carriers such as BA, LH, AF, and KLM will see a new and dangerous challenge.

CptGermany hits closest to the answer of the original question with the above statements.

Quoting CptGermany (Reply 18):
DL just realized that there is a much better profit in intercontinental traffic and hence they move all their widebodies to this market.

This is the only portion I disagree with. They didn't "just realize" anything....they've known what's more profitable for many many years now. However, only NOW have they decided to give up the domestic market share war and begin using these widebodies to generate more revenue (and hopefully profit) from the int'l routes.

Contrary to popular belief (from alot of the posts on this site) U.S carriers are some of the leanest airline companies from all over the world. European carrers have for years had higher cost structures. Obviously, the margin here has been eroding.

Larger "legacy/flag" carriers around the globe are in for a world of hurtin' if (WHEN!) typical LCC/LFC's begin to offer their products internationally over longer distances around the globe. Who would like to start up a LCC/LFC to feed JetBlue at JFK or LGB? Southwest @ PHX, MCO or BWI? AirTran @ ATL? It's only a matter of time people.....

-Rich
 
Oryx
Posts: 123
Joined: Fri Nov 18, 2005 9:25 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:14 am

Quoting SSTsomeday (Reply 8):
Actually it's two good reasons, though, thatnthey are not in such dire straits. They are supported by theirngovernments, and low wages keep their costs down. I get it.


I don not think so. Since the implementation and enforcing of the "one time and that's it rule" of the European community several carriers have been forced to exit the market (Sabena), have been swallowed (Swiss) or have merged (KLM + AF) which reduced or limited the number of available seats. On the other hand many USA carriers keep on flying under chapter 11 protection. There is just not that demand to fill all the available seats. I believe that if one of the big carriers went bankrupt a few years ago all the other would be healthy today.

[Edited 2006-02-25 18:16:16]
 
777fan
Posts: 2256
Joined: Wed Jan 04, 2006 12:09 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:15 am

Quoting PA110 (Reply 7):
The comparison with Asia is not a valid one, because many Asian carriers are either still state owned and/or have labor costs that are only a fraction of their western counterparts.

Bingo. I'm willing to bet that their landing fees are also less expensive and that some are at least partially government subsidized.
DC-8 61/63/71 DC-9-30/50 MD-80/82/83 DC-10-10/30 MD-11 717 721/2 732/3/4/5/G/8/9 741/2/4 752 762/3 777 A306/319/20/33 AT
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:41 am

Quoting DeltaMIA (Reply 19):
Quoting SSTsomeday (Reply 6):They are making themselves very difficult to fly. I still can't get over: "5 or more hours East Coast to West, and NO FOOD?!?!"



Quoting DeltaMIA (Reply 19):
You get food. The airlines aren't out to provide you with a full course meal, but they provide you with supplements (peanuts, granola bars, crackers, chips, etc.) from your origin to destination where you can get much better food at either end. The airlines also don't prevent you from bringing food on board the aircraft where you can potentially bring on a full course meal freshly prepared from one of the airport vendors.

I don't understand your point. I was speaking, in my post, to the reality of "no more reasonable service" on the majors.

I don't think peanuts or snacks constitutes a meal. I'm talking about a reasonable meal for a flight over 3 hours. The option to BUY food at the airport is not the same as airlines feeding you the way they used to.

Yes, I am aware I can buy a meal at the airport. How could the airlines dare not allow me to bring on food if they aren't serving it? ALLOWING me to bring my own food does not constitute service. Last time I bought a Caesar salad and Wolfgang Puck took 35 minutes to make it (because EVERYBODY knows they are not getting fed - EVERYBODY is forking out money for their dinner.) and the airline was calling my name by the time I got to the gate. And I had arrived early. And it cost me $9.

I have taken the red eye from LAX, by the way, arriving at a terminal at 11 PM where I found all the food outlets were closed. I went hungry. Oh, yes, I think I did get a granola bar on the plane, which I had to pay for.

This is not service.
I come in peace
 
AsstChiefMark
Posts: 10465
Joined: Thu Feb 05, 2004 2:14 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:54 am

Quoting SSTsomeday (Reply 25):
I'm talking about a reasonable meal for a flight over 3 hours. The option to BUY food at the airport is not the same as airlines feeding you the way they used to.

Someone who can't eat before or after a 3 hour flight is either a brittle diabetic or a waxing nostalgic.

Besides...Who really WANTS airline food? Anything you buy in the terminal is far better than the "Lean Cuisine" crap you get from an airline. I actually enjoy buying a made-to-order foot-long sub at Subway and bringing it onboard. It's a hell of a lot of food for a few dollars.

Mark
Red tail...Red tail...Red tail...Red tail...Red tail...Red tail...Red tail...Red tail...Damned MSP...Red tail...Red tail
 
burnsie28
Posts: 5035
Joined: Mon Aug 02, 2004 1:49 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:56 am

Quoting Cedarjet (Reply 2):
I must admit, I don't get it either. Airlines like BA, Lufthansa, ANA et al operate in an environment that is more competitive than any US major

Can't agree with you there, there are a lot more flights, cities, options and destinations in the US then europe. ANA operates in a very little LCC world, and Asia is always a lot more expensive. The US has more traffic then anywhere else in the world, with a lot more city options all served by carriers under one flag where as Europe several cities are mainly served by just the national flag carrier or what not.
 
DavidT
Posts: 461
Joined: Tue Oct 04, 2005 1:37 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:56 am

Quoting SSTsomeday (Reply 6):
Interesting. So how do the Europeans deal with the LCC challenge?

At least form what I see there's a distinct different between LCCs and mainline carriers here. LCCs are skimpy on the services and proud of it. They don't advertise the customer service or try and be a 'big boy airilne'. They know they are cheap and their main job is to get from A to B and the public know too. Hence, when businessmen fly they generally choose a full service airline - and when a couple of students want to go to amsterdam they're already on easyjets web site - and probably don't even price up full service airlines.

In the US its different - on a 1 hour route where jetblue and united compete, for instance, there probably isn't much to choose between them apart from price - so jetblue gets the custom.

Also the US industry is all within one country so you're going to end up with massive unweildy airlines trying to serve everywhere. In Europe there are generally a few airlines per country. Traffic into and from finland, say, is 90% Finnair. They've got their own patch of turf and can thrive.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 3:04 am

Quoting Commavia (Reply 17):
This is not necessarily true. If managed profitably, hubs can generate enormous yield premiums over other competitive models.

The yield premiums come from gouging the O&D passengers traveling non stop on hub routes. The LCCs take these yield premiums away when they fly the same routes. That's why we see hub airlines creating fortress hubs, or in the case of AA, trying to keep laws in place that limit competition out of a city.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
andaman
Posts: 2271
Joined: Wed Oct 05, 2005 5:29 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 3:29 am

Quoting DavidT (Reply 28):
Traffic into and from finland, say, is 90% Finnair.

I can see your point but but what comes to AY it's perhaps 50%
Chinese cookie in SFO: "You're doomed to a life of forever travelling abroad and to be able to afford it!"
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 3:30 am

Quoting AsstChiefMark (Reply 26):
Someone who can't eat before or after a 3 hour flight is either a brittle diabetic or a waxing nostalgic.

Well on a 7 AM flight... I want my EGGS!

Quoting AsstChiefMark (Reply 26):
Besides...Who really WANTS airline food? Anything you buy in the terminal is far better than the "Lean Cuisine" crap you get from an airline.

I see your point. When they DID serve food, we complained about the quality of it, didn't we?

I guess I am lamenting the "bus lines" service level in coach. The fact that you have to fork out exorbitant business fares to have an experience you don't have to "endure" is unfortunate to those of us who have enjoyed flying in the past. We remember when it was different, when customer service meant something.

There used to be a basic service standard, and low fares from advance bookings, stand-by, or red-eyes (and charters) were designed to fill the empty seats, but at the same service standard.
I come in peace
 
We're Nuts
Posts: 4723
Joined: Sun Jun 04, 2000 6:12 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 3:47 am

Quoting SSTsomeday (Thread starter):
I was wondering why U.S. airlines are in such dire shape financially, as compared to the rest of the world?

Because we're the USA, and what the rest of the world does, we do better!
Dear moderators: No.
 
QXatFAT
Posts: 2310
Joined: Fri Feb 24, 2006 3:51 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 3:47 am

Quoting AsstChiefMark (Reply 26):
Besides...Who really WANTS airline food? Anything you buy in the terminal is far better than the "Lean Cuisine" crap you get from an airline. I

Well yes that is true. We all complaind about the meals, I still complain about the meals on HP when I fly from FAT-PHX-DTW. It is a buy your own meal and it still bad. My personal opinon, international food is the best! My flight on DL from ATL-GRU was some good eating and on Tam airlines from MIA to GRU was really good as well. International food is good.

I hear things coming from friends in Germany that some airline only costs $1 (ERUO) to fly some flights in back seat coach with no drink or snack for 1 hour flights. I dont know if this is true or not. But how can they make money if they do? I think americans want higher class in Coach so the airlines try to do something about it and end up going further down the hole.
Don't Tread On Me!
 
Poitin
Posts: 2651
Joined: Wed Jan 25, 2006 6:32 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 4:11 am

Quoting Georgiabill (Reply 21):
I will give you the KISS(Keep it simple stupid)theory as to why so many US airlines are performing so poorly financially. They lack creative, pro active management. None of the so called legacy carriers with the exception of Continental and American have made significant changes in their operational philosophies. Most of the carriers see cutting service, ending flights and dropping cities as the cure all for their problems. Delta has decided more international routes is the key to their survival. America West if you can not beat them buy them theory reguardless of the labor mess you have created. Let's not forget the file for bankruptcy protection management theory. Delta perhaps is an example of how to lose significant money while operating under bankruptcy. Here's my theory for success put a good product at a reasonable fares and have your employees hold a portion of the stock so they will have a vested interest in the company. Happy employees + logical route structure + efficent fleet + good service at a fair price = success. Just my 2.5 cents worth.

That pretty much covers it all, I think and worth at least a quarter. Big grin
Now so, have ye time fer a pint?
 
amhilde
Posts: 628
Joined: Thu Oct 23, 2003 5:01 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 4:55 am

Yeah well, SK manages to do everything backwards- their food is disgusting AND they have high fares!

Regarding the fares in Germany- that sounds like a Ryanair ploy- and those fares are offered- before tax. Those flights tend to be at inconvenient times and from awkward airports, whereas at least with Southwest you end up pretty much in the city you were going to- except perhaps for Boston and NYC
Hang on tightly, Let go lightly
 
supa7E7
Posts: 1360
Joined: Fri Aug 27, 2004 2:05 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 5:09 am

Almost everything in this thread is wrong.



USA has the most flights of anywhere, FAR more than Europe which has more people. There is NO comparison whatsoever.

The USA also has more flights than Asia and Africa COMBINED. Regions which have around 10 times the population!

How would **anyone** make money in USA flying? The best-run airline in the USA, Southwest, loses money (on aviation) and will continue to.

However, the aviation sector in the USA is quite healthy. The airlines themselves have had to RADICALLY evolve their businesses. If you tell me ANA or Air China are more efficient than United Airlines, I would not agree for an instant. United is incredibly efficient now. The forefront of transportation science, network design, economics, and finance is in the USA, nowhere else.

And yes, in-flight cabin service stinks in the USA. Our culture is lacking compared to others. But not our business acumen.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 5:12 am

Quoting Cedarjet (Reply 2):
And yet BA, LH, NH and their brethren provide a service that is far superior to the US majors, and they make money doing it. Perhaps it's a symptom of a general malaise in the USA, although there are other industries that are doing well over there.

Unlike BA and LH, the U.S. legacies, besides putting market share and load factors ahead of profits, have added to their sorry state by dumbing down their service to the point where there is no differentiation from their LCC competitors. Also, speaking of "general malaise in the USA," BA and LH do not enjoy the benefit of being able to hide behind corrupted anything goes bankruptcy laws and coercing labor into subsidizing management incompetence. Which is to say that, unlike their U.S. counterparts, BA and LH have little choice but to manage well and offer a quality product -- or else. Something also tells me that, unlike in the U.S., there is no chance that a CEO and officers of BA or LH or any European airline would pocket millions of Euros and other costly perks in the process of walking away from an airline they led into bankruptcy or to the brink; which has a way of keeping their focus in the right places -- and their thinking proactive.

Quoting Luv2fly (Reply 3):
The sad thing is, now the so called LCC's here in the United States actually deliver more on board service then the so called legacy carriers.

In fact, if there is any differentiation to be made between the booking, airport and inflight services of the legacies and the LCCs in the U.S., it is indeed that, overall, the legacies' service (at least for the 80-90% of their pax not belonging to the elite levels of their caste systems) is typically inferior to that of LCCs like WN, B6 and FL. If one is not an elite caste member or aspiring to become one, why choose a legacy and all the nonsense of the convlouted games they play with customers when one can fly from the same point A to the same point B in the same amount of time or even less (skip the connecting hub) for the same fare or less in equal comfort (or better) with a LCC -- and even be made to feel that their business is actually appreciated.

Which raises the all-important question, why pay a fare "premium" for the legacy "full-service" (read high cost) product that is, at best, where it actually matters to 80% or more of U.S. airline domestic pax, no better than the "no-frills" products of the leading LCCs. Which is a huge contributing factor to the "price is everything" mindset -- might it be more proper to call it a "why pay more for the same or less" mindset? Yet the legacies' profitability utterly depends on a fare premium far more substantial than 80-90% of their potential customers are willing to pay for service that cannot be differentiated in any positively meaningful way from the no-nonsense product of the LCCs.

Quoting Oryx (Reply 23):
On the other hand many USA carriers keep on flying under chapter 11 protection. There is just not that demand to fill all the available seats.

Load factors and passenger numbers at all time highs in the U.S. equals not enough demand??? These numbers notwithstanding, overcapacity is, indeed, a reality in the sense that there are too many high cost "full-service" legacy seats chasing too few pax willing to pay fares that cover the true costs of the high-cost legacy product. On the other hand, there are too few low-cost "no frills" seats chasing too many pax who are/would be totally satisfied with the quality of the no-nonsense products offered by LCCs like WN, B6 and FL, and willing to pay fares at which true LCCs can be profitible. And yes, much if not most of this market distortion is brought to us "courtesy of" corrupted almost-anything-goes chapter 11 laws that have spawned a relatively new category of airlines: high cost, low wage (HCLW?) carriers which will serve far more to keep U.S. legacy airlines in their state of malaise than to lift them out of it.

Unfortunately, the well-managed LCCs and a legacy or two (AS and CO come to mind) who are capable of profitably providing a service product that is/would be completely satisfactory to 80% or more of U.S. domestic airline customers cannot escape from the need to deal with the effects of a market that has been grossly distorted by U.S. bankruptcy law, which is, as one spokesman for BA correctly observed, a form of government subsidization just as surely as the seemingly never-ending cash infusions European airlines were once able to depend upon to cover their seemingly never-ending losses which meant that management need not feel meaningfully accountable for their decisions.
 
User avatar
usdcaguy
Posts: 1036
Joined: Mon Jan 26, 2004 12:41 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 6:15 am

The main reason why European airlines have done so much better than their American counterparts is that they have been able to leverage international long-haul flying in markets with less competition to make the money they need to support their businesses. American carriers based in ORD, ATL, DTW or IAH are only able to offer a limited number of long-haul flights out of those cities and rely on the domestic market for their bread and butter. Low barriers to entry in the US market have enabled carriers to fly where they choose, and as a result, competition has soared within the US and ticket values are at an all-time low. Some carriers have decreased capacity, but I don't believe this will be enough to save them from the fate that awaits them, as fares will stay low as long as too many carriers serve any one market.
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 6:57 am

The airlines are in worse shape in America because of their excessive employee count and a long tradition of high overall employee costs. Compare number of RPMs per employee at WN versus at a legacy sometime, it's ridiculous.

Quoting Commavia (Reply 17):
This is not necessarily true. If managed profitably, hubs can generate enormous yield premiums over other competitive models.

The traditional hub and spoke model hasn't been profitable in the US for the last six years and won't be profitable this year either.

No one wants to connect at a hub. People want to fly direct. Point to point is the preferred system - see especially Boeings 20 year airline market forecast.

Yes, you CAN build yield premiums on some routes with a hub system, but you will lose money overall as the popular routes are in competition with the LCCs. You get a yield premium flying someone from CLL to DFW, then lose it all again when you have to fly them up to STL competing with WN.

The hub and spoke system traditionally operated by the legacies depended on overcharging some passengers to subsidize others. It depends on flying many routes which alone would not be profitable, and are 'profitable' only when they connect to another route - it is a very complicated model. It worked when buyers weren't very well able to comparison shop and there were few options available anyway.

LCCs only fly profitable routes. Period. There is no such thing as a route on WN that doesn't make money completely on its own. (although certainly some frequencies would be reduced if there were absolutely no connecting traffic). Legacies serve all manner of cities which wouldn't work by themselves, and frankly aren't working today even when combined with the profitable routes at the hubs.

Quoting Georgiabill (Reply 21):
They lack creative, pro active management. None of the so called legacy carriers with the exception of Continental and American have made significant changes in their operational philosophies.

So true. The same attitude of entitlement exists among all legacy airline employees I've ever seen to this day. There is room for a couple of hub and spoke carriers (CO and AA) and maybe even UA. But most people in this country live in the top 25 markets which are well served by the LCCs and don't need an airline that serves 250+ US destinations.

Quoting Supa7E7 (Reply 36):
The best-run airline in the USA, Southwest, loses money (on aviation) and will continue to

A legacy apologist.

WN has the superior capital and the superior credit to buy fuel hedges and in fact SETS THE FARE on virtually every route it flies. It is in fact profitable. If it makes you feel better to think they aren't profitable selling airline tickets, go ahead. The rest of the country uses WN for air transportation and Southwest makes money doing it.

The legacies are so miserable they can barely afford to hedge a tenth of their fuel bill, so it isn't really their fault they lose money, right? Since they drove themselves so badly for so many years no one on Wall Street will allow them to buy fuel hedges anywhere near like WN can because their credit is below investment grade and they are leveraged to the hilt. A key feature of any company's management is securing a good price for its raw materials - and yet you want to excuse the legacies for not doing so. I suppose if GM secures a great price on steel in the future through hedging you will say they are no longer in the car business.

Cairo
 
srbmod
Posts: 15446
Joined: Tue Mar 20, 2001 1:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 9:26 am

I can sum up why in six words:

The Airline Deregulation Act Of 1978

The CAB kept airfares realistic, so that airlines could actually make money. Before Deregulation, airlines didn't compete on air fares, they competed on service. The problem is that up until a few years ago, the legacies were still maintaining the type of service they had been using prior to Deregulation, and at the same time keeping their fares in line with what their LCC competition was offering. Airlines were basically on a slippery slope and a few slid right down the mountain. They kept their service levels so to keep the business passenger, but the current generation of LCCs are not like those of the past. When AirTran added a Business Class in the late 1990s, this indicated a sea change in the LCC market. Instead of just going after the leisure passengers, which are a dime a dozen, they started going after the bread and butter of the legacy carriers, the business traveler. The economic downturn that started in the latter part of 2000 caused companies to rethink their business travel plans and this really played into AirTran's hand, as companies began to take them seriously. Then you have JetBlue and Frontier, who have also helped to change the image of the LCC to something more along the lines of a better alternative to the legacy carriers.

One thing to also consider is the labor force. At airlines like AirTran, JetBlue, Frontier, and Spirit you don't too many employees with more than 6 years of seniority, and have very few employees that are even making the top-out pay in their employee class. Also these airlines don't offer pensions like many old the more senior employees at legacy carriers do; they offer 401Ks, which doesn't burden the airlines.
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 11:08 am

Quoting SSTsomeday (Thread starter):
I was wondering why U.S. airlines are in such dire shape financially, as compared to the rest of the world?

For starters, the legacy carriers in the United States have until VERY recently been paying wages and benefits based on the regulated environment that existed until 1979. It has taken nearly 25 years for the legacy carriers to start coming to terms (through bankruptcy) with this unregluated environment. Profits were previously almost guaranteed by government regulation which allowed for consistent pay (and fare) increases. Since 1979, all of these low cost carriers have come into existence paying much lower wages and are profitable charging fares that are a fraction of what the legacy carriers need to charge to be profitable.

Legacy airlines were able to handle the low cost carrier "problem" in the 80's and 90's by offering the below cost fares on markets where we competed with LCC's. Now we compete in every single major market in the US and must charge what the LCC's charge in order to keep the customers. The same $99 fare that Southwest charges creates a profit for them while creating a loss for the legacy carrier.

There are other issues as well. Legacy carriers fly enormous, hugely expensive airplanes that we are filling with people paying below cost prices. The LCC's are flying small planes that they fill at profitable (for them) fares.

Another problem is the legacy mentality of flying people "from anywhere to everywhere". Our route maps have gone crazy and we are flying into markets where our brands are the underdog.

There are lots of problems that need to be fixed in the US domestic market.

LCC's are not the problem. They are the future.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
Tango-Bravo
Posts: 2887
Joined: Sun Jun 17, 2001 1:04 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:40 pm

Quoting Jetdeltamsy (Reply 41):
There are other issues as well. Legacy carriers fly enormous, hugely expensive airplanes that we are filling with people paying below cost prices. The LCC's are flying small planes that they fill at profitable (for them) fares.

Hmmm... as in the legacies' crazed obsession with replacing mainline service with RJs on routes where it makes little or no sense while the LCCs offer 737/320/717 service on the same routes?

Quoting Jetdeltamsy (Reply 41):
Legacy airlines were able to handle the low cost carrier "problem" in the 80's and 90's by offering the below cost fares on markets where we competed with LCC's. Now we compete in every single major market in the US and must charge what the LCC's charge in order to keep the customers.

The legacies are, indeed, running out of markets in which they are able to get away with their game of "cross-subsidizing" (in Michael Boyd-speak) loss leader fares in markets where they face LCC competition by charging rapacious fare in captive markets. In plain English, it's called fare-gouging.

Quoting Jetdeltamsy (Reply 41):
LCC's are not the problem. They are the future.

Excellent point. It's not like the legacies can truthfully claim that they were blindsided by this reality. Deregulation of the U.S. airline industry was signed into law in 1978; by the early 1980s the proverbial handwriting was on the wall: price would become a paramount consideration of consumers and no airline could realistically afford, in the longrun, to offer services that customers will not support by the fares they are willing to pay.

For the better part of two decades the legacies attempted to deal with this reality by denial and all manner of ultimately self-defeating shenanigans against the LCCs and captive markets rather than face the reality that lower costs that were possible to achieve by simplifying their product while maintaining user-friendly, convenient, reliable service where demand justifies airline service. Instead, as the heat of LCC competition increased, the legacies moved in the opposite direction with high cost hub-and-spoke business models, hopelessly convoluted products and pricing schemes that are so irrational as to keep even the legacies' personnel in a state of confusion, to say nothing of their customers. And as if it weren't confusing enough as it was for all concerned, the legacies devised yet another non-cure for what ailed them -- still more convolution and confusion in the form of offering pax service "from everywhere in the world to everywhere else in the world," never mind that the majority of those routes to "more than 600 cities worldwide" are operated by other airlines masquerading as the airlines advertising such service, and vice versa between multiple airlines. It all adds up to high costs in more ways (many of which are very subtle yet very real), than could ever meet the eye of anyone not employed by a U.S. legacy. For that matter, I am by no means convinced that legacy management even understands the cost consequences of the convolution they have allowed -- and continue to allow -- to proliferate at their respective airlines. Until they do, and do something to reverse the trend, the malaise of the U.S. legacies will continue.
 
commavia
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:44 pm

Quoting Cairo (Reply 39):
The traditional hub and spoke model hasn't been profitable in the US for the last six years and won't be profitable this year either.

This is just simply untrue, and I think you'd find quite a few people who would tell you so. It has been a common myth expressed by many people in this country (Oregon Rep. Peter Defazio comes to mind) to simply say that the reason the U.S. legacy airlines are in trouble is simply because the "hub and spoke model is broken," and that -- as you (incorrectly) assert -- "people want to fly direct." However, in truth, hubs are enormously powerful and are immensely successful, even today. The hub and spoke model still works perfectly and won't go anywhere anytime soon for that reason.

The market realities tell us that if anything, the one hope that legacy airlines have in defense against low-cost carriers (besides getting their labor and other costs in line) is through strengthening their hubs. Hubs allow airlines to capture traffic over a much broader (and generally more yield-diverse) set of markets than they could if flying only on point-to-point. In addition, as you do correctly say, low-cost carriers have basically stuck mostly to point-to-point flying, which is continuing to drive relative yields down on these flights, and making the relative importance of smaller, hub-based markets higher and higher. Sure, the low-fare airlines can get you from JFK to Seattle, or from Baltimore to Orlando, but their systems and infrastructure -- which are generally geared to high-volume markets, cannot capture the enormous market represented by smaller cities that must be served through hubs.

Quoting Cairo (Reply 39):
People want to fly direct.

I would assert that, instead, "people want to fly cheap."

If legacy carriers can get customers to where they are going, at a competitive price, and do it because of the enormous efficiencies, revenue diversification and economies of scale that a hub system represent, than customers will fly via a hub. I travel very often, and I know many people who travel very often, and I would say that probably 95% of them are (happily) willing to make a stop if the price is right. Very few say, "it's nonstop or nothing." Price -- in today's market -- is a much bigger selling point than a nonstop flight for most people, and legacies can get competitive on price if they operate huge hubs.
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 1:47 pm

One thing people forget is that the price of oil hasn't affected European carriers to the degree that it has affected U.S. carriers. OPEC prices oil in U.S. dollars, so any changes in price has an immediate effect on U.S. carriers.

In Europe, the Euro has been very strong against the dollar. So, increases in oil prices are somewhat muted, after the price is converted into Euros..
 
INTENSS
Posts: 310
Joined: Mon Aug 30, 2004 9:25 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:02 pm

Too much to reply to on here....I'll just pick one:

Quoting Jetdeltamsy (Reply 41):
LCC's are not the problem. They are the future.

No kidding, every airline strives to be a LCC. Over the past couple of years and moreso into the next few the traditional legacy carriers will move closer to the realm of traditional (contemporary?) LCC's while these same LCC's of today will move more towards the cost structures of the legacies.

With United, Delta, Continental, et al lowering their costs siginificantly becoming more lean and mean in today's market it will be a little bit tougher for tomorrow's JetBlue, AirTran, and companies to compete with their ever increasing costs. Southwest has been able to avoid this problem over the course of its history, but its fuel hedges are slowly dissapearing. JetBlue is beginning to show red. AirTran's profits have dwindled. Don't count the legacies out just yet. We'll just have to see who rights theirs ships first.

-Rich
 
redflyer
Posts: 3882
Joined: Thu Feb 24, 2005 3:30 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 2:38 pm

Commavia: you bring up some interesting points in your posts. I'd like to address some of them...

Quoting Commavia (Reply 17):
If managed profitably, hubs can generate enormous yield premiums over other competitive models.

Perhaps, but it's a fact that P2P routes will always generate more money (I did not say "profit") because P2P allows for aircraft to stay airborne longer than a hub system. And as everyone knows, airplanes generate revenue only when they are airborne.

Quoting Commavia (Reply 43):
Hubs allow airlines to capture traffic over a much broader (and generally more yield-diverse) set of markets than they could if flying only on point-to-point.

Very true. But then that begs the question: why do airlines (legacies) feel the need to be everything to everybody? Why do they feel they need to serve a population center of 1,000 in Pigsknuckle, Arkansas, as well as a mega metropolis like New York city? Isn't this the downfall of the legacies -- holding on to their legacy market shares?

Quoting Commavia (Reply 43):
Sure, the low-fare airlines can get you from JFK to Seattle, or from Baltimore to Orlando, but their systems and infrastructure -- which are generally geared to high-volume markets, cannot capture the enormous market represented by smaller cities that must be served through hubs.

That enormouse "market represented by smaller cities" is represented by a conglomeration of smaller cities, not a single smaller city. In other words, NW or DL or AA will see their revenues impacted not by one smaller city or town but by several of them combined.

The point being, the F9's, and B6's and WN's do serve only the larger markets and not the outlying back woods. But then they don't strive, nor pretend, to serve anything but the markets that they do. And there is nothing wrong with that. That isn't to say their model isn't efficient or as admirable as the legacies. They do what they do very well. But the legacies, which serve the larger markets as well as the smaller ones are all ailing. And it's interesting how it is the legacies, with their traditional hub system, that are the ones that are suffering (although I will admit that the hub is not the ONLY reason that they are suffering).

Quoting Commavia (Reply 43):
Quoting Cairo (Reply 39):
People want to fly direct.

I would assert that, instead, "people want to fly cheap."

All things (e.g., price) being equal, people will want to fly direct.

Quoting Commavia (Reply 43):
and I would say that probably 95% of them are (happily) willing to make a stop if the price is right.

Perhaps 95% of leisure travelers. Business travelers such as myself are willing to pay a premium (albeit a small one) to fly direct. Indeed, the reason I gave up to a great extent flying the legacies domestically is because I just got fed up with transiting hubs. It goes beyond the old adage (and cliche), "time is money". I simply want to go where I'm going faster so that I can get home that much faster.

Quoting Commavia (Reply 43):
Price -- in today's market -- is a much bigger selling point than a nonstop flight for most people, and legacies can get competitive on price if they operate huge hubs.

I noticed that you said "competitive" but not "as low as" or "cheaper". Perhaps it was just an innocent use of wording; however, in business "competitive" when referring to price is a euphemism for "low price but still higher than the competition".

In any event, the one major drawback to a "huge hub" is WEATHER. That is the achilles heel of the hub system and why, if all other things are equal, a hub will never be as efficient. If inclement weather takes out a metro area hub, you'll have a ripple affect take out every single flight (even international) that are being fed into that hub.
My other home is in the sky inside my Piper Cherokee 180.
 
We're Nuts
Posts: 4723
Joined: Sun Jun 04, 2000 6:12 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 6:58 pm

Quoting Supa7E7 (Reply 36):
The best-run airline in the USA, Southwest, loses money (on aviation) and will continue to.

That's crap. I dare you to back it up.
Dear moderators: No.
 
sstsomeday
Posts: 821
Joined: Thu Oct 26, 2006 2:32 pm

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 7:04 pm

Quoting Supa7E7 (Reply 36):The best-run airline in the USA, Southwest, loses money (on aviation) and will continue to.[/quote]

How can that be true? What are they making their money on, then?
I come in peace
 
We're Nuts
Posts: 4723
Joined: Sun Jun 04, 2000 6:12 am

RE: Why Are U.S. Airlines In Worse Shape?

Sun Feb 26, 2006 7:10 pm

Quoting SSTsomeday (Reply 48):
How can that be true? What are they making their money on, then?

He thinks they are only making money because of their fuel hedging, even though a second grade understanding of mathematics would blow that "theory" completely out of the water.
Dear moderators: No.