Bygone era of commercial aviation

Prior to 1978, the Civil Aeronautics Board (CAB) regulated airline competition. The CAB had authority over where an airline could fly, what it could charge, and whether or not it could even exist. All fine and good; it probably helped the airline industry get up and running. The problem is that the CAB only regulated the revenue side. They asserted no control over the cost side. Since competition was controlled, airlines had little incentive to keep costs in-check. The result was "the glory days" of aviation.

Following Deregulation in 1978, airlines were free to compete in the open marketplace. They could choose where to fly and how much to charge for it. The market grew with new entrant carriers. Most couldn't survive against the established carriers, but over time there have been enough successes that the "legacy" carriers, as they're now called, found themselves at a competitve disadvantage. Thus the competitive environment that exists today.

Some will tell you that Deregulation destroyed the industry. I say that it was regulation that caused the problems. I think that, had airlines been forced to compete from day one, we'd have ultimately ended up with a much more stable and vibrant airline industry than we do today.

Government interference in the free market always has unintended consequences.
 
I am always baffled at those - on this thread and even Derg will mention "Customers what xyz for $50!!1!" - as if the customers have any control at all. To the extent that the "public" has any kind of unrealistic expectations, it is the businesses themselves that have fed that. SWA has operated for years as a "no-frills" airline. They do not set expectations that are unrealistic to what they can deliver, they price their product in a way that allows them to achieve their business plan, and they execute their plan. The customer can choose to buy or not buy - that's it.
 
WacoFan said:
SWA has operated for years as a "no-frills" airline. They do not set expectations that are unrealistic to what they can deliver, they price their product in a way that allows them to achieve their business plan, and they execute their plan. The customer can choose to buy or not buy - that's it.
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Sadly, it seems that free baggage is now a frill.
 
MQAAord said:
People demand $99 airfare, what the industry has become today is what they get.

They need to be elated and grateful that flying is as safe as it is.
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Just went shopping for two round trip tickets from BDL to ATL. Opened up expedia, Southwest.com, and some other sites for comparison. Chose the cheapest direct flights. Total cost $300 per person.

I "demanded" nothing. I took the best, most convenient deal that was available to me.
 
For comparison sake...if we the consumer could "demand" a price for a product - why isn't case twenty-five cents per gallon? Why aren't iPhones $30 dollars with $10 unlimited call/text/data packages? I could see inept management (read as "Airline management save SWA") using this alleged power of the consumer as an excuse for their pitiful performance, or as a wedge-excuse in negotiations with pilots ("But...but...the consumer DEMANDS $99 fares!1! We can't pay you this much!1!") - but it is somewhat distressing to see pilots buy-in to blaming the consumer for the price of the product. You aren't helping your own cause here...
 
Ian J said:
Just went shopping for two round trip tickets from BDL to ATL. Opened up expedia, Southwest.com, and some other sites for comparison. Chose the cheapest direct flights. Total cost $300 per person.

I "demanded" nothing. I took the best, most convenient deal that was available to me.
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I'm actually glad you did that.

I have paid less than $300 for a RT ticket once in the last year, and it was for an Airtran flight from DCA-ATL. Not exactly an under-served city-pair. The bulk of my air travel has been taking me down to the Carolinas quite a bit. Because I hate flying US Airways, I try and go Delta when I can, or Airtran direct to RDU from DCA. In all of those cases, those tickets are averaging me about $375 if I'm 14 days or more out. Less than that, and it's a REALLY expensive ticket, forcing me to fly out of BWI due to corporate travel policies.

I remember when there were these amazing "99 dollar coast to coast!" fares but those days are over.
 
I will say that if people are complaining so much, there IS the option of business or first class. Of course... I'm laughing right now because neither of those is remotely affordable.

I'd like a class between business and farm animal coach. And no... I don't mean paying $50 extra for 1.5" of extra pitch, but still have to share an arm rest with Large Marge and deal with little Timmy kicking the back of my seat, which is only 2.3" deep.
 
"Prior to 1978, the Civil Aeronautics Board (CAB) regulated airline competition. The CAB had authority over where an airline could fly, what it could charge, and whether or not it could even exist. All fine and good; it probably helped the airline industry get up and running. The problem is that the CAB only regulated the revenue side. They asserted no control over the cost side. Since competition was controlled, airlines had little incentive to keep costs in-check."

Well, I still don't get it. To focus on small New England airports and assuming the principle(s) apply to other areas of the country: There MUST have been a perceived market of some sort for NE to fly into New Bedford, Executive into Auburn-Lewiston and so forth, no? Maybe the DC9 was the best option in some way for EWB at one point (or the only one. Twin Otters into LEW, btw) but I guess I wonder how the business model was developed. How were decisions to serve an airport made in the "glory" days. If the market was never really there, why did the service exist at all?

As an aside, I don't recall my entire family ever flying together but the airfare of the time didn't seem onerous to a single passenger (me) who could only pay for the ticket by dint of hard work and saving school lunch money. Was it honestly that exclusive?
 
mastermags said:
The glory days of this country are behind us. Aviation is just one reflection of that.
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Errrr, yeaahhh, I'm not entirely sure about that. ;)
 
Bob Ridpath said:
As an aside, I don't recall my entire family ever flying together but the airfare of the time didn't seem onerous to a single passenger (me) who could only pay for the ticket by dint of hard work and saving school lunch money. Was it honestly that exclusive?
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It was to me & my family. My parents were small business owners and the lion's share of what the business brought it went right back into the business in necessary equipment upgrades & upkeep. My parents never "brought home" more than about $15k a year. Air travel, to me when I was growing up, was a novelty, something far out of reach and not a part of my life.

Perhaps it wasn't "that exclusive" to many, as most grew up with more money than I. But it was to me. That's just the perspective I grew up with. A very few of the other kids in my small school had flown on an airline, but not most. We were over an hour's drive from the closest airline airport, airline travel just wasn't a part of our daily lives.
 
I flew to Bemidji, MN where Skywest is operating that as a pro-rate city with two flights a day. We had a Mesaba jumpseater who told us that when he started it was 8 flights a day in the early 2000's, all Saab's of course. Note that BJI is not an EAS city. From what I remember the flights had about 35 to 40 on board so not exactly empty, but what happens when fuel starts going up again?

Before deregulation, lots of even smaller cities were served, but after they simply weren't profitable. To my understanding that's why the EAS program was started.

Anyway, a Facebook friend of mine is always posting anti-airline stuff and telling me airlines as we know it will be gone in 5 years. A little extreme, yes, but still a perspective to read about:


Running on empty: big airlines in big trouble
by Andrew McKay
I have a joke with a friend of mine that airline pilots are nothing but glorified bus drivers. As cynical as this may be, for the majority of us with regular jobs who fly economy air travel is increasingly becoming like its land-based cousin: cramped, overcrowded and at times downright unpleasant.
Most people living in our modern industrial society take air travel for granted. We think very little about hopping on a plane and travelling around the world for little more than a couple of weeks wages. As jet fuel prices bounce along with the price of crude however many airlines are increasingly struggling to break even. Fuel prices now account for 35 percent of operating costs compared to 15 percent a decade ago. Air travel has always been a fickle business, earning an average net profit of one to two percent, compared with an average of over five percent for U.S. industry as a whole. Research from the 1980s found that some carriers would have zero profitability if they had lost just one out of ten business passengers.
So how does the future look for the airline industry? If recent trends are anything to go by, not good. Not good at all.
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http://www.energybulletin.net/stories/2012-08-18/running-empty-big-airlines-big-trouble
 
WacoFan said:
The customer can choose to buy or not buy - that's it.
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Why can't an airline exist with higher fares and better service? Continental tried this when everyone else were shedding services and yet they couldn't survive. They ended up having to cut services in order to compete.

In every other industry better quality has allowed for premium prices except the airlines. Can you answer why?
 
Maurus said:
Why can't an airline exist with higher fares and better service? Continental tried this when everyone else were shedding services and yet they couldn't survive. They ended up having to cut services in order to compete.

In every other industry better quality has allowed for premium prices except the airlines. Can you answer why?
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Because most customers aren't willing to pay for the premium services. They don't value the higher quality product enough to be willing to pay for it. The other industries that offer better quality for higher prices have enough customers willing to pay for the higher quality; the air travel business doesn't.
 
Maurus said:
Why can't an airline exist with higher fares and better service? Continental tried this when everyone else were shedding services and yet they couldn't survive. They ended up having to cut services in order to compete.

In every other industry better quality has allowed for premium prices except the airlines. Can you answer why?
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Not sure - I always flew Midwest whenever I got the chance no matter what it cost. I would pay more to fly Delta than AA (not that it was better, I just have deep-seated hatred of AMR...plus connecting in ATL allows me to smoke in the smokers lounges). I will pay more for something nicer, many won't. Perhaps it is that the biggest drag on flying today is the total cluster F that is security/TSA. Another is that people, for some reason, will act badly on airplanes/airports than they used to. The whole thing has been devalued to the point that it is hard to view anything as a premium service anymore unless you're really going international first-class. Just my guesses - but the customers didn't do that. Airlines allowed themselves to become a price-based commodity.
 
upup89 said:
Wallybird!
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The only piece that really remains is a bunch of ex-Western mainline Delta pilots...and a certain airline Western built. :)
WacoFan said:
Not sure - I always flew Midwest whenever I got the chance no matter what it cost. I would pay more to fly Delta than AA (not that it was better, I just have deep-seated hatred of AMR...plus connecting in ATL allows me to smoke in the smokers lounges). I will pay more for something nicer, many won't. Perhaps it is that the biggest drag on flying today is the total cluster F that is security/TSA. Another is that people, for some reason, will act badly on airplanes/airports than they used to. The whole thing has been devalued to the point that it is hard to view anything as a premium service anymore unless you're really going international first-class. Just my guesses - but the customers didn't do that. Airlines allowed themselves to become a price-based commodity.
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It might sound odd coming from my lips, but the government (in the form of TSA) killed whatever grace or class we had left.
 
Maurus said:
Why can't an airline exist with higher fares and better service? Continental tried this when everyone else were shedding services and yet they couldn't survive. They ended up having to cut services in order to compete.

In every other industry better quality has allowed for premium prices except the airlines. Can you answer why?
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It can, I just don't think it can at the domestic level. Look at Virgin Atlantic, Emirates, and Singapore Airlines as an example. For domestic trips, I usually spend more time in the airport terminal than I do on the airplane. As a result, the service that I get at the airport (TSA screening, check-in, waiting areas, etc) shape my experience more than the time in the seat. If an airline wants to survive on service, they'll have to offer more than free booze and a wider seat at the front of the airplane....they'll need to offer a headache-free total airport experience.
 
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