commavia
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 9:13 pm

Quoting FlyPNS1 (Reply 199):
The DOT data shows average fares rising. Of course, the DOT doesn't even factor in fee revenue.

Source? And over what time horizon? Adjusting for inflation or not?

Quoting FlyPNS1 (Reply 199):
It's pretty unusual in a "competitive industry" to have fares rise while costs are declining.

It's not unusual at all when one considers the incredibly low base they are coming off of. When airfares - including fees - fell as much as they did up until a few years ago, and that was so insanely unprofitable for the industry, I fail to see why on earth it would be "unusual" that at some point the industry would simply stop destroying itself (let alone capital).

Quoting FlyPNS1 (Reply 199):
But whose fault is it for conditioning customers to these money losing low fares?

It's the fault of many factors. One that I, personally, would particularly single out would be regulators - who didn't let the industry consolidate and rationalize, to a greater degree, sooner. Had they, I suspect that fares would never have gotten quite as low, and consumers wouldn't have been conditioned to expect as much.
 
alfa164
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 9:50 pm

Quoting MSPNWA (Reply 197):
Also, there's virtually an unlimited amount of price options for those who want transportation and don't want luxury. Neither of those exist in the airline industry today.

Besides Spirit and Frontier, there is Greyhound. There is nothing in the Constitution - or anywhere else - that guarantees you a right to fly on an airline.
 
DCA-ROCguy
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 9:55 pm

Quoting commavia (Reply 186):
We've gone from a system where essentially 100% of the economic value from the U.S. air transportation system accrued to consumers at the direct, express expense of other stakeholders, and today we've simply swung back somewhat on the continuum to where airlines are producing high-single-to-low-double digit margins. That, to me, seems like a fairly reasonable balance in spreading the value produced by the air transportation system among all the stakeholders to said system.

This discussion's still going on?  

I've got to hand it to you for tenacity, Commavia, but in the end the above argument isn't correct. We have gone from:

a) a situation in the last decade where consumers had the opportunity to reap their share of benefit from air travel, and shareholders and employees could get their own share if they cared to discipline costs, which was finally happening, to:

b) a situation where value now accrues mostly to shareholders, less to employees, all at the express and direct expense of consumers.

Which merging carrier decided to adopt the cost structure of the lower-CASM merger-buyout partner? [crickets chirping] Costs, which were disciplined in the last decade, are creeping up again, and shareholders are demanding an unreasonable share. Especially now while oil prices are somewhat lower. Those savings should be passed along to passengers.

Consolidation should never have been allowed to happen in the late 1980's, and it should not have been allowed to happen again in 2008-2010. This industry requires at least five legacy carriers and 3-4 large low-fare carriers in order to have appropriate cost-structure, fare, and seat-capacity competition. What current cost-structures are doesn't autonomously define "what air travel costs." It means managements and unions aren't doing their job of disciplining costs properly. *Cost* discipline, not capacity "discipline," is what's needed.

Quoting frmrCapCadet (Reply 182):
Utilities, transportation, and medical care are all areas in which major market failures occur. And regulations to correct or mitigate those failures are difficult. And specifically keeping air travel competitive and profitable are difficult. Which doesn't mean that the public should bow out and take whatever airlines want.

  

Quoting alfa164 (Reply 172):
The last time I looked, there was no Constitutional right to an airline seat. As a matter of fact, I couldn't even find a right to a bus ticket or to ownership of a car. Maybe I define my portion of the "common good" as owning a big-screen TV; does that mean the manufacturers are obligated to provide me with one?

Transportation--getting around--is part of the common good. What types of entertainment one chooses, isn't. Not difficult to figure out.

Jim
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 10:18 pm

*just daydreaming* imagine if the DOJ ordered American,United,Delta to split up all mergers made within a certain timeframe - say 20 years?? hahaha....CO,AW,NW,FL,TW,AT all returning. and the only way to get back into service shortterm was for NW to bring the DC9s back....back to spotting heaven again

Sorry I digress - profits have been returning worldwide to well-run airlines who have made necessary cutbacks since fuel temporally dropped, but it will return higher one day in the not so distant future. Farmers get subsidies against drought, Airlines and people alike have to save for a time when times won't be so condusive to making money. They rely on fossil fuels like farmers need rain. Surely maintaining a viable airlink longterm is more important than one you keep only until the price of oil goes up again..

There will be a time when oil will be so prohibitive in cost that the Airline industry will implode and not have enough in reserve to last until the next technological advance with regard to running on non-fossil fuels has been made. The Airline industry is not perfect but at least it isn't banking/finance in terms of immoral business practise.
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ual777
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 10:32 pm

Quoting DCA-ROCguy (Reply 202):

Sorry, but you are just wrong on this one. I'll give you a pilot's perspective on all of this. The past decade saw the consumer receive an outsized benefit from the airline industry that is being right-sized. This "cost discipline" saw almost every major enter bankruptcy, pensions were destroyed, and thousands upon thousands of employees were laid off...some of them twice.

It's also created huge pilot supply issues at the regional level. A decade of stagnant careers and low wages nuked the pilot supply and with good reason. The pilots were squeezed so hard that nobody wanted to do it. The supply is so tight that pilots are being hired that 4 years ago wouldn't have been looked at twice and it personally scares me. When I started at a regional I was given a $1,700 dollar check for the first two months and a double occupancy hotel room. I then commuted to NYC for just under a year, slept in a crash pad, and made just over $18,000 dollars. After 4 years in the right seat because my regional was "too high cost" to win additional business, my W2 was right at $40,000 dollars. I have met people whose entire careers were absolute horror stories simply because they had bad luck. It is rediculous and they are bitter with good reason.

It is in the public's interest to have a healthy industry with well-compensated pilots. It helps attract the best and brightest to the field and helps ensure we have the safest transportation possible. It also isn't fair to have to play career roulette.

Economically, having healthy carriers allows the airline to invest in a better hard product, buy newer aircraft, and invest in better facilities. The profit margins are not obscene, and neither is the recent small rise in air fares. There should be no reason that major airlines should be marginally profitable or show profits for half the year.
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Mon Jul 06, 2015 10:51 pm

Quoting Cubsrule (Reply 198):
Ever hear of a not-so-little airline called Spirit?

Incorrect comparison. NK is not a used car that's half the price versus a new one. The vast, vast majority of what people buy on NK is what they buy with the big 4--safe transportation from point A to point B. What you're comparing is like buying a new Kia versus a new Ford. Both serve the same main purpose--road transportation. One just does it with more features and amenities and a slightly higher price. You can't buy a used ticket in the airline market.

Quoting alfa164 (Reply 201):
Besides Spirit and Frontier, there is Greyhound. There is nothing in the Constitution - or anywhere else - that guarantees you a right to fly on an airline.

Is the bus going to get me across the Atlantic? Or is going to get me across the country in a day?

You see, this is why air transportation has to be tightly watched by regulating authorities. There's no direct substitute, little to no indirect substitutes, and high barriers to entry. It's easy to exploit.

[Edited 2015-07-06 15:51:40]
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 12:17 am

Quoting commavia (Reply 200):
Source? And over what time horizon? Adjusting for inflation or not?
http://www.rita.dot.gov/bts/airfares

Lots of data here. And again, fee data doesn't even get included.

Quoting commavia (Reply 200):
One that I, personally, would particularly single out would be regulators - who didn't let the industry consolidate and rationalize, to a greater degree, sooner.

There was lots of consolidation in the industry or just out right bankruptcies during the 80's and early 90's. Almost every merger was approved.

Quoting DCA-ROCguy (Reply 202):
Transportation--getting around--is part of the common good.

So you are ok with the government regulating car prices? Auto transportation is vastly more important than air travel, so the government should set car prices??

Food is common good and essential to survival (unlike air travel which is a luxury). Should the government set the price of the apple I'm eating?

Quoting DCA-ROCguy (Reply 202):
*Cost* discipline, not capacity "discipline," is what's needed.

I don't think cost discipline is the problem. Costs are plenty low. Outside of the pilots (whose jobs require considerable training), most airline employees are barely middle class and plenty of regional/contractor employees make welfare wages. So if you think airline employees are overpaid, you must want employees to live in poverty to subsidize your inability to buy tickets.
 
alfa164
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 2:19 am

Quoting DCA-ROCguy (Reply 202):
Transportation--getting around--is part of the common good. What types of entertainment one chooses, isn't. Not difficult to figure out.

Owning a big-screen TV is part of the common good; do you think the manufacturers - and retail stores - owe us a lower price because it is beneficial to us? And "transportation" is far different from "airline travel"; sorry, but when entitlement generation may believe they are owed jet transport at whatever price they deem desirable... they are wrong.

Quoting FlyPNS1 (Reply 206):
So you are ok with the government regulating car prices? Auto transportation is vastly more important than air travel, so the government should set car prices?? Food is common good and essential to survival (unlike air travel which is a luxury). Should the government set the price of the apple I'm eating?

  

Quoting MSPNWA (Reply 205):
Is the bus going to get me across the Atlantic? Or is going to get me across the country in a day?

So... where did you find that god-given right to fly across the Atlantic... or to get across the country in a day? The Constitution? Bill of Rights? Or is it just something you want... you want it so much you think it should be given to you?

Quoting ual777 (Reply 204):
Economically, having healthy carriers allows the airline to invest in a better hard product, buy newer aircraft, and invest in better facilities. The profit margins are not obscene, and neither is the recent small rise in air fares. There should be no reason that major airlines should be marginally profitable or show profits for half the year.

         It is hard to believe that attitude - "These airlines all owe me a cheap flight!" - that some posters exhibit here. I have complained about many things some airlines have done, but to whine and cry because they have finally returned to profitability.... it is almost pitiful to read.
 
DCA-ROCguy
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 4:15 am

Quoting FlyPNS1 (Reply 206):
So you are ok with the government regulating car prices? Auto transportation is vastly more important than air travel, so the government should set car prices?? Food is common good and essential to survival (unlike air travel which is a luxury). Should the government set the price of the apple I'm eating?

Both cars and food are industries with plenty of competition and variety in prices and availability. Air travel has far, far fewer options and far greater susceptibility to market failure. One can buy a used car for a reasonable price. One can't buy a used airline ticket, for instance.

Quoting FlyPNS1 (Reply 206):
I don't think cost discipline is the problem. Costs are plenty low. Outside of the pilots (whose jobs require considerable training), most airline employees are barely middle class and plenty of regional/contractor employees make welfare wages. So if you think airline employees are overpaid, you must want employees to live in poverty to subsidize your inability to buy tickets.

As I said, exactly which legacy or big-LCC that merged opted for the lower-cost contracts of the two? And which legacy employees live in poverty? I for one am more concerned about all the talk I've read here about unions wanting to essentially go back to before 2003. I have absolutely not argued that anyone should live in poverty. And as far as my own ability to buy tickets, how would you know about that, since I haven't discussed it? For the record, I buy the tickets for the trips that fit my life and means just fine, but I don't like overpaying.

As Commavia correctly said, there should be a fair spreading of value among stakeholders. My only disagreement is whether we are currently in that situation; I don't think we are.

Quoting mayor (Reply 195):
And I suppose you don't blink an eye at a car that costs $20k today that cost $10k a mere 15 years ago?

There are so many options in new and used cars available, across a vast span of price range, that there isn't any comparison.

Quoting alfa164 (Reply 207):
Owning a big-screen TV is part of the common good; do you think the manufacturers - and retail stores - owe us a lower price because it is beneficial to us? And "transportation" is far different from "airline travel"; sorry, but when entitlement generation may believe they are owed jet transport at whatever price they deem desirable... they are wrong.

Same with TVs as with cars....so many options available in screen sizes across a wide price range, that even if TVs were a common good in the same way transportation--including air transportation--is, there isn't any comparison.

Being able to do business, visit loved ones, and maybe occasionally see someplace else, seems to me not a luxury. It is part of the common good, and hardly an 'entitlement' mentality.

Quoting ual777 (Reply 204):
It is in the public's interest to have a healthy industry with well-compensated pilots. It helps attract the best and brightest to the field and helps ensure we have the safest transportation possible. It also isn't fair to have to play career roulette.

If I had a dime for every time a union pilot said at this site that travelers would be endangered if they weren't paid what they want, I'd be very wealthy. I wonder if UA union leadership said that in 2000 before holding one of the world's largest airports hostage through thunderstorm season to extort a 37 percent raise? The safety statistics speak for themselves. Also, if pilots could change employers without going to the bottom of a seniority list, like most professionals can do in their fields, their jobs would not be career roulette. Collective bargaining is a two-edged sword.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 5:09 am

Quoting DCA-ROCguy (Reply 208):
Both cars and food are industries with plenty of competition and variety in prices and availability. Air travel has far, far fewer options and far greater susceptibility to market failure.

The government and regulatory hurdles required to go into the car manufacture or food production industries are far, far lower.
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 6:17 am

Quoting DCA-ROCguy (Reply 208):
tickets

Actually, a better comparison is probably taxi prices which have been heavily regulated to prevent price gouging. Uber is changing that, but only slowly.

Transportation is really a lot like health care. In many cases the customer doesn't really have a choice. True, you don't have to visit your dying grandmother or make one last pitch to win that big customer or be home to see your daughter's soccer game, but it's not like upgrading your phone or getting a bigger tv or a watch or a nicer dinner. Transportation, like medicine, is really a necessity. I don't want regulation, but I think th case I'm making is that it must be a competitive industry and it is no longer. Yes, there are tens of thousands of price changes per day, but everybody electronically matches everybody else nearly instantly which over time disincentives discounting among the biggest carriers. The LCCs are fighting the hard fight, but people need to know that part of the reason F9 and NK have terrible service reputations is intentional to prevent being matched and driven out of business by the largest carriers. The more they make themselves non threatening, the less likely they get matched and are allowed to breath.
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 7:32 am

Quoting mayor (Reply 195):
And I suppose you don't blink an eye at a car that costs $20k today that cost $10k a mere 15 years ago?

What car is that?

Cars are only getting cheaper.

A Mercedes-Benz C-Class cost $35,000 new in 1994, and a comparable CLA-Class cost $31,000 today (and even a C-Class is $38,000). A Mercedes SL320 cost $90,000 new in 1992, and an SL350 cost $85,000 new today. Swaying away from luxury examples, you can buy a Nissan Versa for $12,000 today and it is far better equipped, safer and more high-tech than a then-$12,000 1994 Ford Escort. A base Dodge Grand Caravan today is around $23,000, and far better equipped than a loaded 1996 Dodge Grand Caravan, which would cost in excess of $30,000.

It may seem like cars have gotten more expensive because brands have let some nameplates grow-up. A 1994 Honda Accord is more comparable in dimensions to a 2015 Honda Civic; and a 1991 Ford Explorer is much closer to the size of a 2015 Ford Escape than a 2015 Ford Explorer.

[Edited 2015-07-07 00:36:36]

[Edited 2015-07-07 00:37:00]
a.
 
ual777
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 7:58 am

Quoting DCA-ROCguy (Reply 208):
I had a dime for every time a union pilot said at this site that travelers would be endangered if they weren't paid what they want, I'd be very wealthy. I wonder if UA union leadership said that in 2000 before holding one of the world's largest airports hostage through thunderstorm season to extort a 37 percent raise? The safety statistics speak for themselves. Also, if pilots could change employers without going to the bottom of a seniority list, like most professionals can do in their fields, their jobs would not be career roulette. Collective bargaining is a two-edged sword.

The IOE numbers don't lie either and they have shot up at the regionals because they are hurting for pilots and will take almost anyone. Some were even doing phone interviews to fill seats. The fact also remains that a well compensated group attracts talent. The class breakdowns at the majors right now for new hires are very impressive. The question also presents how do you choose a captain of not by seniority?
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mjoelnir
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 8:07 am

Quoting ual777 (Reply 212):
The question also presents how do you choose a captain of not by seniority?

By his/her experience, flight hours and so on?
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 10:39 am

Quoting enilria (Reply 210):
The LCCs are fighting the hard fight, but people need to know that part of the reason F9 and NK have terrible service reputations is intentional to prevent being matched and driven out of business by the largest carriers. The more they make themselves non threatening, the less likely they get matched and are allowed to breath.

  

I have no evidence to the contrary (and I can't imagine you have supporting evidence), but this can't possibly be true.
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 12:19 pm

Quoting DCA-ROCguy (Reply 208):
I have absolutely not argued that anyone should live in poverty.

But you are. You're complaining that airlines need to lower their costs when a substantial number of airline employees are already making poverty level wage OR are currently above poverty, but would be pushed into poverty if you got the cuts you wanted.

Quoting enilria (Reply 210):
Actually, a better comparison is probably taxi prices which have been heavily regulated to prevent price gouging.

Which has failed miserably. Taxi prices are horrifically high and make air travel a relative bargain.

Quoting DCA-ROCguy (Reply 208):
Being able to do business, visit loved ones, and maybe occasionally see someplace else, seems to me not a luxury. It is part of the common good, and hardly an 'entitlement' mentality.

But it is an entitlement mentality when you want others to work in poverty in order to subsidize your lifestyle.
 
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RE: Airlines Stocks Plunge After DoJ Probes Collusion

Tue Jul 07, 2015 3:31 pm

Thread now archived. Please click on this link to continue:

Airlines Stocks Plunge After DOJ Probes Col - P2 (by American 767 Jul 7 2015 in Civil Aviation)

Ben Soriano
Ben Soriano
 
commavia
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 1:43 pm

Given the news out today, as reported by WSJ, I thought it worthwhile to take a trip down memory lane back to 2015 when the DOJ - to much media and Wall St attention - opened a probe into collusion among the largest U.S. airlines.

Now, eighteen months later, we have this:

Obama Antitrust Enforcers Won’t Bring Action in Airline Probe

"After a lengthy probe, the Justice Department hasn’t found evidence that merits an antitrust case against the airline industry for collusion between carriers, according to people familiar with the matter.

[...]

Justice Department investigators still harbor concerns about what they view as cozy relationships in the industry, but haven’t found conduct that clearly crossed the line into an antitrust violation that the department should address, people familiar with the matter said.

The investigation, though largely at a standstill, hasn’t been formally closed, these people said, meaning the airlines aren’t officially in the clear. However, the odds of a case materializing in the future are minimal."


Point out the obvious, the WSJ authors conclude that if the current administration was unable to find any actionable evidence of illegal behavior, it's unlikely the next administration is going to keep pursuing this investigation much further. As many said back in July 2015 - I'm happy the investigation was conducted, and not surprised in the slightest that this was the outcome. I continue to look forward to anyone - in or out of government - providing the slightest shred of evidence that actual collusion has been taking place in the U.S. airline industry.
 
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enilria
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 2:24 pm

DOJ has a long history of doing nothing with the airlines.

I think if Trump felt "the big guys" are the reason his airline failed we'd absolutely see a prosecution. I don't know whether he feels that way or not. Aviation journalists have been remiss to not ask.
 
commavia
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 2:41 pm

enilria wrote:
I think if Trump felt "the big guys" are the reason his airline failed we'd absolutely see a prosecution. I don't know whether he feels that way or not. Aviation journalists have been remiss to not ask.


Prosecutions are made - or at least are supposed to be made - on the basis of evidence, not feelings. So if career lawyers at the DOJ investigated collusion among America's largest airlines and found no actionable evidence upon which to base a prosecution, on what basis would any future administration do the same? Will the Trump DOJ find evidence that the Obama DOJ missed?
 
Indy
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 5:06 pm

What we have in the airline industry, and I believe the same could be said for the gas station market, is implicit price collusion. The lack of any verifiable agreement is likely what keeps executive out of prison, but the follow the leader strategy which such limited competition is clearly a form of collusion. It just doesn't meet the standards of being criminal.
Indy = Indianapolis and not Independence Air
 
commavia
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 5:43 pm

Indy wrote:
What we have in the airline industry, and I believe the same could be said for the gas station market, is implicit price collusion. The lack of any verifiable agreement is likely what keeps executive out of prison, but the follow the leader strategy which such limited competition is clearly a form of collusion. It just doesn't meet the standards of being criminal.


That doesn't sound to me like "collusion" at all. What it sounds like is a market with near-perfect information, in the form of near-total price transparency, which leads multiple providers with approximately similar costs to - independently - arrive at essentially the same conclusions about supply and demand.
 
compensateme
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 5:48 pm

commavia wrote:
Indy wrote:
What we have in the airline industry, and I believe the same could be said for the gas station market, is implicit price collusion. The lack of any verifiable agreement is likely what keeps executive out of prison, but the follow the leader strategy which such limited competition is clearly a form of collusion. It just doesn't meet the standards of being criminal.


That doesn't sound to me like "collusion" at all. What it sounds like is a market with near-perfect information, in the form of near-total price transparency, which leads multiple providers with approximately similar costs to - independently - arrive at essentially the same conclusions about supply and demand.


LOL
You're not the CEO; you were a menial aircraft support mechanic intern, and that was four years ago.
 
Indy
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 6:08 pm

commavia wrote:
That doesn't sound to me like "collusion" at all. What it sounds like is a market with near-perfect information, in the form of near-total price transparency, which leads multiple providers with approximately similar costs to - independently - arrive at essentially the same conclusions about supply and demand.


Google the term "implicit price collusion"
Indy = Indianapolis and not Independence Air
 
commavia
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 6:32 pm

Indy wrote:
Google the term "implicit price collusion"


The key to "collusion" is intent. Airlines aren't colluding - tacitly or explicitly - with the intent of constricting competition. Each airline is independently arriving at profit-maximizing decisions about supply given demand.

Some airlines - specifically those with higher costs - have concluded that it is no longer profit-maximizing to cater to the most price-sensitive band of consumers, and so they simply aren't any more. These higher-cost airlines are reducing capacity and simply no longer selling to those passengers if they can avoid it. Other airlines - specifically those with lower costs - are coming in and soaking up that latent demand from price-sensitive consumers who can be profitably served at their (lower) costs. These seems like the entirely rational and reasonable behavior of independent, profit-maximizing producers in a free market.

And, as has been said time and again, in the aggregate, this market is producing returns in the high-single-to-low-double-digit range, which I personally consider to be exceedingly reasonable. I still fail to see what the problem is that so many people are complaining about. But, alas, that's just me. So, as I said 18 months ago, I'm happy the investigation was conducted, and today I'm happy - though not at all surprised - that it amounted to no actionable evidence of collusion.
 
sagechan
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Re: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 6:56 pm

Commavia's above reply is exactly like,except airline profits are probably still below "optimal" for a sustainable industry, but they are close. The changes since 2008, including consolidation and ancillary revenue is exactly what was needed. In most markets I'd be more in favor of a larger number of competitors to be closer to a "pure" competitive market in econ 101 talk. However, airlines are 1) insanely capital and labor intensive, and 2) provide a public good that large scale is beneficial too, because of those reason and the differentiation between ULCC/LCC/full-service carriers providing segmented price points is a healthy market.
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superjeff
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Re: RE: Airlines Stocks Plunge After DoJ Probes Collusion

Wed Jan 11, 2017 8:24 pm

Confuscius wrote:
Nothing new, Bob Crandall to Richard Branson:

“Raise your g—– fares 20%. I’ll raise mine the next morning. You’ll make more money and I will too.”[Edited 2015-07-01 11:51:53]


Not Branson. That was Bob Crandall when he was CEO of American to Howard Putnam, the President of Braniff Airways.
 
psa188
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Re: RE: Airlines Stocks Plunge After DoJ Probes Collusion

Fri Feb 03, 2017 4:40 pm

Confuscius wrote:
Nothing new, Bob Crandall to Richard Branson:


It wasn't Branson, it was Howard Putnam of Braniff.

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Special Paint Schemes Aircraft painted in beautiful and original liveries

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Tails and Winglets Tail and Winglet closeups with beautiful airline logos