zhiao
Topic Author
Posts: 441
Joined: Fri Jan 21, 2011 4:52 am

Proposal: Allow Premium Airlines To Do US Transcon

Tue May 17, 2011 7:21 pm

My proposal, of course. Competition is always a good thing, and I think the US airline industry needs an infusion of competition from premium airlines on long domestic routes. Allow Emirates, Qatar, Singapore, Cathay, etc., to bid on US transcon routes (or any route over 3 hrs long), awarding two of them with multiple frequencies each. This I think will force US airlines to offer better services, while still competing on price. Of course, none of the airlines will be able to compete in terms of pure frequency, but if EK offers for instance a 777-300er from JFK-LAX at peak hour, you can't tell me that the typical high yielding passenger is still going to choose an AA 762ER.

Could it work?
 
LAXtoATL
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RE: Proposal: Allow Premium Airlines To Do US Tran

Tue May 17, 2011 7:34 pm

I like the idea. There are certainly a lot of issues preventing that scenario from playing out, the biggest one is that you don't want to run all domestic airlines off of crucial routes and be at the mercy of foreign airlines providing key service between critical markets. However, I think it would be a great idea to open up a very limited number of city-pairs with a very limited number of frequencies for a limited time (5 years?) for bid by foreign carriers and see what happens.
 
LAXintl
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Joined: Wed May 24, 2000 12:12 pm

RE: Proposal: Allow Premium Airlines To Do US Tran

Tue May 17, 2011 7:35 pm

Cabotage will never be allowed.

Anyhow how many foreign countries allow 3rd nation carriers to service domestic routes? Its a very rare thing in the world.
Even in the world of ocean transportation cabotage is rarely allowed by nations.
From the desert to the sea, to all of Southern California
 
ozglobal
Posts: 2524
Joined: Tue Nov 09, 2004 7:33 am

RE: Proposal: Allow Premium Airlines To Do US Tran

Tue May 17, 2011 8:44 pm

Quoting LAXintl (Reply 2):
Anyhow how many foreign countries allow 3rd nation carriers to service domestic routes? Its a very rare thing in the world.

"Australian government policy and legislation currently permits airlines that are 100% foreign-owned to operate domestic airline services within the country.[4] The change in regulations originally applied only to New Zealand-owned airlines in 1996,[5] but were later relaxed, resulting in the establishment of Virgin Australia. Australian international airlines are still subject to ownership rules limiting foreign ownership to 49%.[6]"

http://en.wikipedia.org/wiki/Tiger_Airways_Australia


Looks like the US is still more protectionist than some other OECD nations...
When all's said and done, there'll be more said than done.
 
BD338
Posts: 576
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RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 12:01 am

Quoting LAXintl (Reply 2):
Cabotage will never be allowed.

Anyhow how many foreign countries allow 3rd nation carriers to service domestic routes? Its a very rare thing in the world.

The EU under the last Open Skies agreement with the US allowed US airlines the right to operate intra European routes while the US under the same agreement denied the same right to EU airlines in the US market. Equalize that agreement is something that needs to happen. As to the original OP, great idea, ain't gonna happen. Forget the political opposition (which would be huge) but the US airlines would also likely campaign against it, they wouldn't have a hope of competing on service against the likes of EK, SQ etc, the less price concious (ie the people who make the airlines money) traveler would be ditching AA, DL, UA etc. in a heartbeat for a better experience on EK etc.
 
Transpac787
Posts: 1349
Joined: Mon Jul 30, 2007 12:47 pm

RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 3:58 am

Quoting zhiao (Thread starter):
My proposal, of course. Competition is always a good thing,

Actually it's not.

You do realize that industry consolidation is the name of the game these days, right?? That's the only way the airlines may return to consistent profitability. Your proposal would tank any chance of that.

Quoting zhiao (Thread starter):
This I think will force US airlines to offer better services, while still competing on price.

It would actually force them to file Chapter 7, not better services.

Nice thought though!!  

Quoting LAXintl (Reply 2):
Cabotage will never be allowed.

        

Quoting OzGlobal (Reply 3):
Looks like the US is still more protectionist than some other OECD nations...

Good for us.
 
jetblast
Posts: 950
Joined: Fri Nov 05, 2004 11:19 am

RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 3:59 am

Quoting zhiao (Thread starter):
but if EK offers for instance a 777-300er from JFK-LAX at peak hour, you can't tell me that the typical high yielding passenger is still going to choose an AA 762ER.

What about all those AA and Oneworld frequent fliers?
Speedbird Concorde One
 
BD338
Posts: 576
Joined: Sun Jul 04, 2010 3:00 am

RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 5:33 am

Quoting Transpac787 (Reply 5):

Quoting LAXintl (Reply 2):
Cabotage will never be allowed.



Quoting OzGlobal (Reply 3):
Looks like the US is still more protectionist than some other OECD nations...

Good for us.

..and at some point in the next 5-10 years when the US is no longer the largest market that attitude is going to come back and hurt them big time. The protectionist US Congress will have succeeded in isolating a low yield domestic market, which no one will really want (except the likes of WN or B6), but the international market will be kicking butt of the legacy carriers. Cabotage and foreign ownership of US airlines will have to occur to allow a US carrier to survive as either a global alliance partner with intra US flights by non-US airlines or as the US operating unit of a global airline brand. (which if you asked most US legacy airline CEOs they would vote for today IMHO)
 
AR385
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Joined: Fri Nov 07, 2003 8:25 am

RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 9:12 am

Quoting LAXintl (Reply 2):
Cabotage will never be allowed.

Exactly

Also, what about airlines in the same alliance, that would be a problem.

What about the frequencies. Are you suggesting EK etc. base aircraft in the US and start flying like any domestic US carrier.

There´s also the issue of making money. If American airlines are struggling, whose to say market conditions for those premum carrier you mention are not different? Margins are slim as it is, what makes you think those other airlines will make money. They´ll just add cycles to the frame.

What about working permits? The crews would effectively be operating flights within the US transporting US passengers from US point A to US point B. That is awfully close to working in the US. and I´m not sure those premium carriers could afford all the ICE requirements plus American labor laws.

Now, if the airline strictly have to fly from LAX to NYC, for example like Qantas does, then I see no reason why in that case they don´t allow such airline to carry domestic passengers. But those are very particular cases.

Cabotage? In the US? Never.
 
Transpac787
Posts: 1349
Joined: Mon Jul 30, 2007 12:47 pm

RE: Proposal: Allow Premium Airlines To Do US Tran

Wed May 18, 2011 3:12 pm

Quoting BD338 (Reply 7):
..and at some point in the next 5-10 years when the US is no longer the largest market that attitude is going to come back and hurt them big time.

I see.

So when we are no longer the largest market, it would make sense to.... allow even MORE carriers to serve it on the basis of cabotage??

Quoting BD338 (Reply 7):
The protectionist US Congress will have succeeded in isolating a low yield domestic market, which no one will really want (except the likes of WN or B6), but the international market will be kicking butt of the legacy carriers.

While you're at it... what numbers should I select for the lottery drawing this weekend??

[Edited 2011-05-18 08:14:56]

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