Frontier Airlines Files for Chapter 11
- Thread starter mpenguin1
- Start date
Patrick
Well-Known Member
Velocipede
New Member
Re: Frontier files Ch.11
:yeahthat::yeahthat::yeahthat::yeahthat::yeahthat::yeahthat::yeahthat:
:yeahthat::yeahthat::yeahthat::yeahthat::yeahthat::yeahthat::yeahthat:
ready2fly
Well-Known Member
Re: Frontier files Ch.11
Okay....I'll plead my ignorance here:
What, exactly would be the impact of re-regulation? How did regulation affect the industry before?
I ask because I'm not what some would call an "aviation geek." I was happily, ignorantly, working in the legal world before I got bitten by the aviation bug and frankly have NO CLUE what regulation WAS or what it would be.
Thanks, and my apologies.
R2F
Okay....I'll plead my ignorance here:
What, exactly would be the impact of re-regulation? How did regulation affect the industry before?
I ask because I'm not what some would call an "aviation geek." I was happily, ignorantly, working in the legal world before I got bitten by the aviation bug and frankly have NO CLUE what regulation WAS or what it would be.
Thanks, and my apologies.
R2F
SlumTodd_Millionaire
Most Hated Member
Re: Frontier files Ch.11
Regulation was basically a system of government control of the airline business. The system was still privatized, meaning no government ownership, but the government controlled route authority, fare controls, new entrants, etc... The Civil Aeronautics Board (CAB) was responsible for all of this. Let's say UAL wanted to fly from JFK to LGW. They would go to the CAB and request route authority for that flight. In this example, the CAB would likely refuse them that route because PanAm and TWA already have that route authority, and demand doesn't require another airline to service the route. So you can see how this affects pricing power. With airlines not able to start up service on a whim and only a few carriers (sometimes only one carrier) operating a route, they are able to keep their fares up because of the lack of competition. The routes all still receive service at a reasonable price, but not at ridiculously low prices that don't allow anyone to make a profit. On routes that simply aren't able to produce a profit, the CAB would approve subsidies to keep the airline from incurring losses for serving that city pair. This is why you used to see 727s serving places like Key West and Akron, OH. The customer got good service, good frequency on good equipment, and a reasonable price.
Regulation was basically a system of government control of the airline business. The system was still privatized, meaning no government ownership, but the government controlled route authority, fare controls, new entrants, etc... The Civil Aeronautics Board (CAB) was responsible for all of this. Let's say UAL wanted to fly from JFK to LGW. They would go to the CAB and request route authority for that flight. In this example, the CAB would likely refuse them that route because PanAm and TWA already have that route authority, and demand doesn't require another airline to service the route. So you can see how this affects pricing power. With airlines not able to start up service on a whim and only a few carriers (sometimes only one carrier) operating a route, they are able to keep their fares up because of the lack of competition. The routes all still receive service at a reasonable price, but not at ridiculously low prices that don't allow anyone to make a profit. On routes that simply aren't able to produce a profit, the CAB would approve subsidies to keep the airline from incurring losses for serving that city pair. This is why you used to see 727s serving places like Key West and Akron, OH. The customer got good service, good frequency on good equipment, and a reasonable price.
Velocipede
New Member
Re: Frontier files Ch.11
Regulation was administered by a government agency called the Civil Aeronautics Board. The CAB determined who could fly city pairs. An airline could not just decide to fly between, say, Kansas City and Dallas.
The CAB limited competition between city pairs. That way, the airlines could basicly charge the cost of operating the airplanes between the city pairs.
The upside for pilots was that the costs of labor contracts could be passed directly on to the public. Ticket prices reflected the cost of producing the transportation.
Competition was limited by the government.
The along came, believe it or not, the Carter Administration. They were the original champions of Deregulation, although the concept was embraced by the Republicans as well. It was all in the name of providing "cheap" transportation for the public.
When oil was cheap, the idea was pretty good. Now, however, we have foreign carriers using front men to invade our transportation system. And the spiking price of oil is killing off the weaker competitors.
The problem is the threat to our aviation infrastructure is not just a threat to the livelihoods of us pilots. It has become a threat to the entire economy. There is no longer a substitute for air transportation. The railroads are primarily freight haulers. Busses? That's a laugh.
The reluctance of the public to actually pay for the cost of air transportation is a by product of Deregulation. Now, Mom and Pop think they have an inalienable RIGHT to cheap tickets. Somehow, I missed that in my last reading of the Bill of Rights.
Yes, its time for reregulation. BEFORE the air transportation system is completely destroyed. People will pay $5 for a cup of coffee. Let them pay a standard fuel surcharge that is REQUIRED by the government.
Regulation was administered by a government agency called the Civil Aeronautics Board. The CAB determined who could fly city pairs. An airline could not just decide to fly between, say, Kansas City and Dallas.
The CAB limited competition between city pairs. That way, the airlines could basicly charge the cost of operating the airplanes between the city pairs.
The upside for pilots was that the costs of labor contracts could be passed directly on to the public. Ticket prices reflected the cost of producing the transportation.
Competition was limited by the government.
The along came, believe it or not, the Carter Administration. They were the original champions of Deregulation, although the concept was embraced by the Republicans as well. It was all in the name of providing "cheap" transportation for the public.
When oil was cheap, the idea was pretty good. Now, however, we have foreign carriers using front men to invade our transportation system. And the spiking price of oil is killing off the weaker competitors.
The problem is the threat to our aviation infrastructure is not just a threat to the livelihoods of us pilots. It has become a threat to the entire economy. There is no longer a substitute for air transportation. The railroads are primarily freight haulers. Busses? That's a laugh.
The reluctance of the public to actually pay for the cost of air transportation is a by product of Deregulation. Now, Mom and Pop think they have an inalienable RIGHT to cheap tickets. Somehow, I missed that in my last reading of the Bill of Rights.
Yes, its time for reregulation. BEFORE the air transportation system is completely destroyed. People will pay $5 for a cup of coffee. Let them pay a standard fuel surcharge that is REQUIRED by the government.
WestIndian425
Well-Known Member
Re: Frontier files Ch.11
While studying both the regulatory aspects of the air transportation industry and basic economics there were two principles that I see applying here.
The first is that it was inevitable when deregulation came for lots of new-entrant carriers to enter the market to the point where there will be many carriers. However, in the end, consolidation an/or liquidation will take place as only the strongest businesses will survive. In other words, things would balance itself out, without any interference by the government.
The second is Adam Smith's theory of the invisible hand as it applies to the capitalist economy. Now we understand our economy isn't 100% capitalist, but the forces of the invisible hand is definitely at work. Market forces (which does include supply and demand but is not limited to that) are affecting the businesses and this industry as a whole. Oil, national economy, dollar value, globalization, security -- all these things have a part to play in affecting this industry.
That being said, I do not believe this system or this industry will be destroyed. People still need to travel, and our field still is the fastest way to do so. I do not believe in the laissez-faire approach by the government since these people were placed in power for the good of the country both as a whole and the individual parts (meaning the individual), but full re-regulation is not something I support.
While studying both the regulatory aspects of the air transportation industry and basic economics there were two principles that I see applying here.
The first is that it was inevitable when deregulation came for lots of new-entrant carriers to enter the market to the point where there will be many carriers. However, in the end, consolidation an/or liquidation will take place as only the strongest businesses will survive. In other words, things would balance itself out, without any interference by the government.
The second is Adam Smith's theory of the invisible hand as it applies to the capitalist economy. Now we understand our economy isn't 100% capitalist, but the forces of the invisible hand is definitely at work. Market forces (which does include supply and demand but is not limited to that) are affecting the businesses and this industry as a whole. Oil, national economy, dollar value, globalization, security -- all these things have a part to play in affecting this industry.
That being said, I do not believe this system or this industry will be destroyed. People still need to travel, and our field still is the fastest way to do so. I do not believe in the laissez-faire approach by the government since these people were placed in power for the good of the country both as a whole and the individual parts (meaning the individual), but full re-regulation is not something I support.
SlumTodd_Millionaire
Most Hated Member
Re: Frontier files Ch.11
The problem is that this cycle never ends. A rush of new entrants come in, damage the industry for a time, and then they either fail or are swallowed up by the bigger carriers. Then there's peace for a few years, but then a bunch of new entrants come back in again. Each time it happens, the major carriers are damaged more and more until we've reached the point we're at now where everybody is on the brink of financial ruin. The major carriers with an international route network are absolutely essential to the strength of our economy and the world economy. Allowing them to be destroyed in the name of almighty capitalism is economic suicide. The normal "free-market" system doesn't work in this industry. Time to go back to what does work.
The problem is that this cycle never ends. A rush of new entrants come in, damage the industry for a time, and then they either fail or are swallowed up by the bigger carriers. Then there's peace for a few years, but then a bunch of new entrants come back in again. Each time it happens, the major carriers are damaged more and more until we've reached the point we're at now where everybody is on the brink of financial ruin. The major carriers with an international route network are absolutely essential to the strength of our economy and the world economy. Allowing them to be destroyed in the name of almighty capitalism is economic suicide. The normal "free-market" system doesn't work in this industry. Time to go back to what does work.
Airdale
Well-Known Member
Here's my take on Re-regulation, I posted this in another thread but don't feel like rewording it. Its also nice to dream. For now we're just in for the ride. Strap up.
Nobody's job is safe, from Regional to Legacy. What would be nice is if the Government re-regulates, cans the majority of the Regional operators and moves those aircraft and pilots up to Mainline seniority lists and reduces RJ capacity. RJ's can still play an important role in filling voids in the travel market, especially in high priced oil markets, but they need to be on mainline seniority lists and eliminate the cut throat operators, like Mesa.
This will reduce the congestion, bring our wages back up to something decent and restore confident, reliable air transportation. The sacrifice would be those on the bottom of the pole (myself) and those trying to get into the industry. It would be ugly at first, but I think in the long run we would all benefit. Then maybe I'd be getting double the salary for flying a should-be mainline aircraft.
Then again, I don't know squat so take it for what its worth.
Nobody's job is safe, from Regional to Legacy. What would be nice is if the Government re-regulates, cans the majority of the Regional operators and moves those aircraft and pilots up to Mainline seniority lists and reduces RJ capacity. RJ's can still play an important role in filling voids in the travel market, especially in high priced oil markets, but they need to be on mainline seniority lists and eliminate the cut throat operators, like Mesa.
This will reduce the congestion, bring our wages back up to something decent and restore confident, reliable air transportation. The sacrifice would be those on the bottom of the pole (myself) and those trying to get into the industry. It would be ugly at first, but I think in the long run we would all benefit. Then maybe I'd be getting double the salary for flying a should-be mainline aircraft.
Then again, I don't know squat so take it for what its worth.
fly4food84
New Member
Re: Frontier files Ch.11
That sucks. Frontier will be fine though. I have high hopes.
Their commercials always make me laugh! Go Frontier!!
That sucks. Frontier will be fine though. I have high hopes.
Their commercials always make me laugh! Go Frontier!!
Maximilian_Jenius
Super User
Re: Frontier files Ch.11
Agreed. Lets remember that it's hard enough to make it to a major now. If regulation is brought back it will be even harder.
Plus, I don't like the idea of the government telling corporations where they can operate, and what to charge.
De-regulation isn't a perfect science. But, I like it.
Agreed. Lets remember that it's hard enough to make it to a major now. If regulation is brought back it will be even harder.
Plus, I don't like the idea of the government telling corporations where they can operate, and what to charge.
De-regulation isn't a perfect science. But, I like it.
Velocipede
New Member
Re: Frontier files Ch.11
Well, Max then you'd better be prepared to work for RJ wages for a LONG time. Because as long as pilots are uniformly "me firsters" we wil NEVER real bargaining power again.
Well, Max then you'd better be prepared to work for RJ wages for a LONG time. Because as long as pilots are uniformly "me firsters" we wil NEVER real bargaining power again.
Kingairer
'Tiger Team' Member
Ive flown for no less then 4 bankrupt airlines. Ive never had a passenger say "it would be a real shame if F9 goes under, or i hope "you" make it"...But thats what ive heard from multiple passengers this week. Denverionianites love F9, and passenger loads are not the problem.
Velocipede
New Member
But they don't love you enough to pay an extra $50 to fly on you. SWA coming to Denver was F9's death knell.
Maximilian_Jenius
Super User
Re: Frontier files Ch.11
Well, since this is an educational site. Educate me, I'm willing and open to some learning.
Me, I don't get how regulation is good for piloting careers if it severley limits pilots from making it to a major.
Let me guess bargining power only due to smaller numbers 121 pilots?
More especially if re-regualtion again brings back the ole boys club to aviation.
Didn't really ever leave per se, but it's a bit more PC these days.
I can't personally comment, but I have been told by airline pilots at majors that more than half of the pilots at legacies wouldn't be at their job if not for de-regulation.
Well, since this is an educational site. Educate me, I'm willing and open to some learning.
Me, I don't get how regulation is good for piloting careers if it severley limits pilots from making it to a major.
Let me guess bargining power only due to smaller numbers 121 pilots?
More especially if re-regualtion again brings back the ole boys club to aviation.
Didn't really ever leave per se, but it's a bit more PC these days.
I can't personally comment, but I have been told by airline pilots at majors that more than half of the pilots at legacies wouldn't be at their job if not for de-regulation.
Velocipede
New Member
Re: Frontier files Ch.11
Max,
Its all about leverage. Sure, there may be fewer Regional jobs, but there will be more major airline jobs since the majors can pass the costs along to the public.
There will be bigger airplanes serving marginal markets.
So, the question is: Do you want to be a major airline pilot or a regional airline pilot? I suspect that most people who get into this business want to fly big jets.
Max,
Its all about leverage. Sure, there may be fewer Regional jobs, but there will be more major airline jobs since the majors can pass the costs along to the public.
There will be bigger airplanes serving marginal markets.
So, the question is: Do you want to be a major airline pilot or a regional airline pilot? I suspect that most people who get into this business want to fly big jets.
SlumTodd_Millionaire
Most Hated Member
Re: Frontier files Ch.11
Those pilots have been sniffing too much glue. Deregulation didn't cause the rapid expansion in the airline business, the explosive growth in the overall economy during the '80s and '90s did. The airline industry would be the same size today, possibly bigger, if it had stayed regulated. Re-regulation would not cause the loss of a single pilot job. To the contrary, it would probably cause a growth of jobs at the mainline level opening up more opportunities for pilots to move on from the commuters, as Velo pointed out.
Those pilots have been sniffing too much glue. Deregulation didn't cause the rapid expansion in the airline business, the explosive growth in the overall economy during the '80s and '90s did. The airline industry would be the same size today, possibly bigger, if it had stayed regulated. Re-regulation would not cause the loss of a single pilot job. To the contrary, it would probably cause a growth of jobs at the mainline level opening up more opportunities for pilots to move on from the commuters, as Velo pointed out.
SlumTodd_Millionaire
Most Hated Member
Huh? I think you meant you don't agree with me. I'm a big supporter of re-regulation.