|Quoting alfa164 (Reply 148):|
Now that airlines are finally able to "make their investors money while being good stewards of their public trust", you claim that the public is being gouged - ignoring the fact that average airline fares, adjusted for inflation, have barely risen in two decades.
People keep saying this (although it ignores a lot realities; but we'll pretend it's true for the time being), but what never gets addressed is is this actually a bad thing?
Out of control labor, fuel, and operational costs were a staple of the airline scene for so long after de-regulation that there is this assumption that fares being rationalized down to appropriate levels must somehow not be a good thing.
|Quoting commavia (Reply 149):|
Any system that deems levels of competition and airfares that bankrupt companies and wipe out shareholders and employees as "appropriate," or believes that any "visible" hand of regulation should determine what constitutes "reasonable and proper" pricing, is simply not a view I subscribe to, or ever will. As a consumer, taxpayer and citizen - I simply completely, 100% disagree.
I think blaming BKs on competition and fares overlooks an awful lot of what caused these insolvencies to happen. I'm not saying regulation is the answer (especially when we're probably at least half a dozen years from the next time BK becomes likely for any of the big three anyway), but if your contention is that regulation shouldn't
be a factor, then you would need to accept the reality that that can mean rational fares and competition that take larger airlines out of their comfort zones is also a possibility/probability.
|Quoting commavia (Reply 149):|
I'm quite happy with the system we have now, where the market sets prices based on supply and demand, I do not want to live in a country where any such systems of artificial market manipulation by politicians or unelected bureaucrats exist. And as I said, I will be telling my elected representatives as much.
Enjoy it while it lasts, I guess. A lot of the exact same mistakes that caused the turbulence of the last few decades are still happening. Again, not saying regulation is necessarily an answer, but it's not as stable a marketplace as it looks.
|Quoting WPIAeroGuy (Reply 152):|
If airlines are making healthy profits, and aren't actively trying to either undercut prices or increase capacity to increase competition, is that not tacit collusion? It's literally the definition.
That it is, as a practical matter. As a legal one (as you mention), is probably an entire other story. They would need to be able to show internal communication supporting the same.
|Quoting commavia (Reply 153):|
Because I don't think the current industry structure is "working against the free market." "Free market" doesn't mean that consumers are guaranteed goods and services priced below cost such that they destroy shareholder value and every other stakeholder gets screwed.
I'll buy that. But I think the opposite extreme (in this case that would be small, thin markets where regional flying dominates as well as fortress hubs where incumbents have a lot of "pricing power") also isn't covered by the term "free-market".
|Quoting rdh3e (Reply 160):|
If you plan ahead, great deals are still available on airfare.
I don't doubt that for a second. But there a lot of folks that don't have that luxury.
|Quoting commavia (Reply 164):|
Okay, but once again, I don't consider an industry that produces unprofitable fares for one stakeholder (consumers) and uncertainty, upheaval and chaos for other stakeholders (investors, employees, etc.) to be "just and proper" in the slightest.
The problem with that is that consumers are not only the largest piece of that puzzle, but they also fund the entirety of it. No one's saying investors and employees should be screwed, but they are also absolutely not the DOJ's problem when collusion charges come up as a possibility.
|Quoting commavia (Reply 164):|
Airlines aren't "purposely being anti-competitive" - they're purposely being profitable.
ATI JVs and merging away competition to consolidate markets and operations are the literal definitions of the first. Are there any of the US3+WN that don't do this (excepting for the obvious that WN
doesn't have ATI runs at this time)?
|Quoting william (Reply 167):|
Or maybe we should ask why couldn't we have this "capacity" discipline when there were 6 majors instead of 3 ?............Pathetic.
Good point. Even better still when we remember that most even managed to share alliances for a while before pairing off for real.
|Quoting commavia (Reply 169):|
The more competitors, the more chance there is that one of them will act in its own self-interest but to the detriment of the industry overall by attempting to steal market share through undercutting, etc.
And what then?
I honestly don't understand how you can make an argument based on the need for less regulation, but then postulate that competition is a problem when there are so many of them that they start to... compete.
Again, I'm not sure that the gov't breaking up these quasi-monopolistic carriers is the best idea. There are significant volumes from below with the ULCC market picking up a lot of steam, with LCC operators delivering equal or better products and from above with foreign operators finally being able to make serious inroads here where the int'l markets are concerned. But all of that suggests that there will only be more competition in the future (with all the opportunities for various carriers to leverage their operating costs/advantages against each other that that comes with).
There's no minimum level of margin the airlines are entitled to here, and while we might be in a soft spot just now, there's nothing to suggest that will last long term. If you wanted to regulate that somewhat to insure profits while maintaining higher cost structures (this would necessarily act in the industry's overall self interest) that would be one thing, but if you're going for a much more liberalized approach, that's not going to happen. I guess that's why I'm a little confused by some of your postings.
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