A return to regulation?

[SlumTodd_Millionaire]

Well, I doubt there are many more fools standing around waiting to start up an airline.

How many times have we heard that now over the past 30 years? There will always be idiots trying to start up new airlines, and in the process they rape investors, employees, and passengers, not to mention the damage they do to the other airlines.

 

[Chris_Ford]

Look around you. Five airlines have ceased operation in two weeks.

And how exactly would re-regulation help that? Skybus would never have entered the business (no more jobs). Champion wouldn't be part of this regulation as they're charter. ATA the same deal (save 10-15 flights to Hawaii essentially for SWA anyway). Skyway announced they were going Ch 7 way before 2 weeks ago (Back in January, IIRC). Aloha had been flirting with bankruptcy for 10 years...

AMR and UAL are on the verge of bankruptcy filings,

This is news to me. Last I heard they both had $1B in operating profit last year, and all the *inside* information I have on UA is they're in a pretty decent fiscal position.

Chairmen on the Hill wouldn't be talking about holding hearings on re-regulation if things weren't a complete mess.

Chairmen on the hill have also held hearings on: Steroids in MLB. Boycotting the 2008 Summer Olympics, etc.

So now I ask you to name ONE thing the government has done RIGHT in the last thirty years....

Fact of the matter is, the government is going to screw things up more than any private sector would anyway. And why exactly is it the government's job to regulate everything? Should they regulate the mortgage industry? They're doing way worse than airlines now...

 

[mpenguin1]

Proof?

Proof that management opposed deregulation, here is something from Robert Crandall, Former CEO of American Airlines:

When Crandall was first named president of American in 1980, airline deregulation had just been introduced by the Carter administration. American, under Crandall, was worried, pointing to the tendency of airlines, if unregulated, to compete by cutting price and, thus, continually wiping out all profits. When deregulation came to pass, however, American began to innovate. American, like every other carrier, knew that the way to make money in the airline business is to increase the percentage of seats occupied on any given flight. That's because it costs almost nothing to stuff an extra passenger into a plane. Every added fare is almost pure profit.

Of course, in present time, most management would not want to go back to the regulation days:

PAUL SOLMAN: Deregulation-is that the cause of all this-and if it is, why did you oppose it when the Carter administration was proposing it?

ROBERT CRANDALL: Well, I think it's fair to say that what I said when deregulation was proposed, I said, look, you got to make a choice; this is a choice of social values versus economic values. I think you probably will get economic benefits from deregulation. And, in fact, we have, and I think those economic benefits have been greater than I thought they would be. On the other hand, there will be some social offsets. Some employees will take a hit, and some communities won't get the kind of service they'd like to have. And that's what you're hearing in Congress today, that we'd like it better if all cities had about the same level of service, as was true in the days of regulation. But deregulation has paid big economic dividends at some social cost.

PAUL SOLMAN: Because the smaller communities can't afford to maintain major airline service coming in and out of-

ROBERT CRANDALL: Smaller communities don't have enough people to attract-to attract the service that they would really like to have.

http://www.pbs.org/newshour/bb/transportation/jan-june98/crandall_5-20.html

 

[phoenix 23684]

Something IS being done--businesses that don't know how to run their business go out of business! That's the way that capitalism works--do a good job, or you're gone.

As it should be....

You keep thinking that. Now what you will see in the next 10-20 years unless the gov't steps in is nothing but RJ flying CONUS routes at regional poverty salaries while pushing the majors to only fly large jets on the International routes or long haul routes. Demand will double that's a fact but as long as we keep having this cut-throat model, this I'm afraid is our future. Don't think so? Ask anyone in the late 80's early 90's what they thought of the idea of regionals flying mainline routes in little jets? Bet no one would have believed you.

Compare the size and number of jets of those days to what we have today.

 

[SlumTodd_Millionaire]

Chris, you have a laissez faire economic mindset, so you and I will obviously never agree on regulation in any industry. I'm sure you oppose increased regulation in the mortgage and credit businesses, you probably oppose universal healthcare, and many other forms of regulation and government assistance. That's fine, we can agree to disagree, but I'll keep voting for people that support these sorts of ideas. I'm not happy with the direction America has taken over the past three decades. Apparently you are. Suit yourself.

 

[Chris_Ford]

You're just looking at the fallout of the boom of the 90s as "everything crashing down"...

We'll be okay. I promise.

And you still can't name a thing the government has done in the last 30 years that's ended up working 1) well 2) as planned 3) on budget.

What makes you think regulation is any different?

 

[SlumTodd_Millionaire]

I happen to think that the government does most things well. I could name a bunch of social programs, but I'm sure you'd hate every one of them.

 

[Chris_Ford]

And my response would be "TSA"

 

[SlumTodd_Millionaire]

Sadly, the TSA is a hell of a lot better than it was under private contractors.

 

[Chris_Ford]

Maybe so, but at nearly thrice (if not more) the cost... That's what I was talking about. Pork pork pork.

 

[mpenguin1]

Maybe so, but at nearly thrice (if not more) the cost... That's what I was talking about. Pork pork pork.

Well yeah, there is always going to be pork in any government organization, but, to be fair, the TSA is doing a much better job than the independent security firms ever were.

I am a pro-business, small government type of guy, but, even I will admit that there are things that the government should take care of & not the private industry, but, I would not support to the return of the regulated airlines.

You mentioned what does the government do right? Look at the airport, the roads, the ports, these are things controlled by the government & they seem to work.

Sometimes it is easier to look for bad things & overlook the good things

 

[SlumTodd_Millionaire]

Maybe so, but at nearly thrice (if not more) the cost... That's what I was talking about. Pork pork pork.

I'm more concerned about quality than price on those sorts of things. If you want something cheap, you're going to get what you pay for. I was based in Miami prior to 9/11. Most of the contractors that did security then didn't even speak a word of English. The day after the TSA took over was a night and day difference. I don't trust contractors to handle things like this. "Cheapest bidder" isn't exactly a phrase I want to hear when airline security is involved.

 

[surreal1221]

I support local governments providing the security forces at city owned airports. I'm pretty damn sure our SIDA badges state the City of _______. Let's require the cities to put trained police officers at the security checkpoints, providing them with a 150% increase in pay to do the job.

Simple as that.

Get guys in there with real badges, a real education, and a real gun. Not some school drop out that we found on the corner who is going to have an ego trip every time someone in a higher socio-economic class comes through the machine.

This whole notion of being able to do things on the cheap in this country needs to come to a screeching halt.

If I need a body guard, I'm not going to find the cheapest drug dealer out there with a gun to come with me everywhere I go.

 

[cfii2007]

I would suggest reading the book Hard Landing as deregulation is discussed in length, but, let me see if I can find an objective article.

I have that book....very insightful.

 

[cfii2007]

I believe Crandall was pushing more towards revenue management during his tenure, getting the most revenue per seat mile.

Personally, I don't think the airlines can stay profitable unless they operate in some sort of oligopoly or monopoly.

 

[SlumTodd_Millionaire]

I support local governments providing the security forces at city owned airports. I'm pretty damn sure our SIDA badges state the City of _______. Let's require the cities to put trained police officers at the security checkpoints, providing them with a 150% increase in pay to do the job.

Simple as that.

Get guys in there with real badges, a real education, and a real gun. Not some school drop out that we found on the corner who is going to have an ego trip every time someone in a higher socio-economic class comes through the machine.

This whole notion of being able to do things on the cheap in this country needs to come to a screeching halt.

If I need a body guard, I'm not going to find the cheapest drug dealer out there with a gun to come with me everywhere I go.

:yeahthat:

 

[surreal1221]

I know I said 150% increase in pay. . .let me correct that.

150% of their street hourly pay rate.

 

[Maurus]

Just my two cents on re-regulation. If we need to head that way we should do it in steps. First restrict new airlines from opening and set a number of domestic airlines in the country to a level that would keep the industry getting overrun by airlines. It is one reason why the legacies are having problems, they weren't prepared for so many small airlines to open up after deregulation. Don't give out 121 certificates so liberally to stop the supply from going berserk.

After that just take one step at a time till the airlines can survive with the least amount of government involvement.

 

[cfii2007]

That solution just makes too much sense....the government would never go for it!

 

[mpenguin1]

Just my two cents on re-regulation. If we need to head that way we should do it in steps. First restrict new airlines from opening and set a number of domestic airlines in the country to a level that would keep the industry getting overrun by airlines. It is one reason why the legacies are having problems, they weren't prepared for so many small airlines to open up after deregulation. Don't give out 121 certificates so liberally to stop the supply from going berserk.

After that just take one step at a time till the airlines can survive with the least amount of government involvement.

Legacy airlines are getting in the way of the legacy airlines, every time they went into bankruptcy protection they hurt the other airlines.

In bankruptcy you need to raise cash, so, you lower fares, cost is not a problem since you are not paying your bills, in turn this decreases the yield at other airlines to decrease.

No need for regulation as long as the bankruptcy codes are strict & shortened.

Also, the Government run "Federal Essential Air Service program" should be abolished, it is things like this which affords Mesa to charge those low fares in Hawaii...