An effort to educate (world airline strategy)

[typhoonpilot]

A decade ago, how many islands in Hawaii did Alaska fly to? Was JetBlue doing premium transcontinental service at that time as well? Were these even in the cards of these airlines to look at these markets? Doubtful.

Businesses change over time. As you keep saying 'airlines need to evolve' and the natural progression for these carriers could have included larger equipment for longer haul international flights. But as they 'farm it out', who knows?

You almost make my point for me. There could be hope for you yet. Now go read the Emirates response to the subsidy allegation and you'll really start to get an understanding how the U.S. airlines need to evolve in order to remain relevant.

Here's the linky:

http://www.emirates.com/us/english/about/open-skies-rebuttal-download.aspx


Typhoonpilot

 

[Seggy]

You know as well as I do that United States airlines aren't going to evolve to be supported by our country such as is happening with the ME3.

They are doing things globally. It just doesn't fit your agenda so you are conveniently ignoring it.

 

[PeanuckleCRJ]

On one flight on the jumpseat, from the mouths of the Delta pilots

"Delta hates the 717. We are losing our asses on them!"

On the commute home from that trip, 4 days later, different set of Delta pilots

"Delta loves the 717, we are making a crap ton of money with them!"

Moral of the story, don't believe a word someone on the outside has to say. It's most likely a bunch of b.s. And yes, pilots are on the outside with this kind of knowledge.

Watch the company's feet for the real story... we just bought more 717s a few months ago.


In regards to @typhoonpilot 's initial post- those charts look a whole lot like real estate charts in the US in 2007. I don't doubt that there is upside to the markets there, but those charts are selling something that will not be realized fully.

 

[MikeD]

You know as well as I do that United States airlines aren't going to evolve to be supported by our country such as is happening with the ME3.

They are doing things globally. It just doesn't fit your agenda so you are conveniently ignoring it.

If these governmental supported/subsidized airlines are so bad, why then do US airlines enter into partnerships with them? Just looking at some of the partnerships of the domestic carriers, and some of those they're partnered with: South African is a Star Alliance carrier, while it's state funded. Saudia is a Skyteam member. Can't imagine that US carriers would partner with airlines like these without getting some kind of gain from it.

 

[MikeD]

You know as well as I do that United States airlines aren't going to evolve to be supported by our country such as is happening with the ME3..

I guess degrees of subsidies can be argued. But subsidies come in all forms, whether here or abroad. Under the Fly America Act, I know that as a US government employee, for US goverment travel, I'm required to purchase tickets only on US airlines, and a primary one at that (which changes every few years....currently SWA, was AA for many years). That could be seen as a form of subsidy, and one if you consider how many US government employees there are who travel commercially, is a substantial legally-U.S. codified revenue stream.

I thought there was some or a few who received fuel tax breaks too. Again, these may not be to the degree some foreign carriers may be subsidized, such as those wholly subsidized by the government like Malaysian (a OneWorld carrier, btw), but everyone seems to be getting sugar of some kind from the governments somewhere.

 

[Seggy]

If these governmental supported/subsidized airlines are so bad, why then do US airlines enter into partnerships with them? Just looking at some of the partnerships of the domestic carriers, and some of those they're partnered with: South African is a Star Alliance carrier, while it's state funded. Saudia is a Skyteam member. Can't imagine that US carriers would partner with airlines like these without getting some kind of gain from it.

The ME3 don't want to be partners with legacy US Airlines. They want them out of business.

 

[MikeD]

The ME3 don't want to be partners with legacy US Airlines. They want them out of business.

Do the other partner-carriers....some of whom seem to be on their own life support......want to be partners with US airlines, or do they just want to "be part of the club" and have some name recognition cred? (We're Skyteam too! Look who our friends are! Meanwhile, they aren't shouldering any load of their own).

 

[hook_dupin]

The ME3 don't want to be partners with legacy US Airlines. They want them out of business.

I disagree. Having the price-sensitive, crappy service airlines remain is incredibly good for business if a firm (like the ME3) is going for a high touch approach.

The global reality is that economic power is shifting eastward. It seems unlikely that the US3 will grab a significant piece of that pie.

 

[Seggy]

Do the other partner-carriers....some of whom seem to be on their own life support......want to be partners with US airlines, or do they just want to "be part of the club" and have some name recognition cred? (We're Skyteam too! Look who our friends are! Meanwhile, they aren't shouldering any load of their own).

Huh?

 

[Baronman]

Do the other partner-carriers....some of whom seem to be on their own life support......want to be partners with US airlines, or do they just want to "be part of the club" and have some name recognition cred? (We're Skyteam too! Look who our friends are! Meanwhile, they aren't shouldering any load of their own).

Being "part of the club" basically means you're in one of the 3 alliances that monopolizes routes. Better to be in it...

 

[MikeD]

Being "part of the club" basically means you're in one of the 3 alliances that monopolizes routes. Better to be in it...

Ah. So these partner airlines who are part of these alliances....the ones who are subsidized or state funded, how much are they contributing to the whole of the alliance, as compared to the US carries that are part of same alliance? Are their standards of service, etc, anywhere near the US carriers? Better? Worse?

Would having an alliance with an ME carrier be better than one of these other carriers like Air India, South African, Saudia, etc? If even in a "keep your enemies close" way of thinking, from a business or protection perspective?

 

[typhoonpilot]

Ah. So these partner airlines who are part of these alliances....the ones who are subsidized or state funded, how much are they contributing to the whole of the alliance, as compared to the US carries that are part of same alliance? Are their standards of service, etc, anywhere near the US carriers? Better? Worse?

Would having an alliance with an ME carrier be better than one of these other carriers like Air India, South African, Saudia, etc? If even in a "keep your enemies close" way of thinking, from a business or protection perspective?

I, for one, would not ride on Air India, Saudia, or South African for various reasons if there were other options available. I would ride on Delta, and do quite often. They have the best and most consistent international product in business class as well as a good frequent flyer program so they keep my loyalty as a U.S based business traveller. American flies clap trap 767s around with the same overhead bins they were delivered with 25 years ago and use foreign cabin crew who think all passengers speak Spanish.

For what it's worth in this ongoing debate, those foreign cabin crew make 1/3 of the salary and benefits of their U.S. counterparts. I know because my sister-in-law was one of them. A Buenos Aries based flight attendant for Braniff, Eastern, and then American for over 30 years. Both Delta and United also have foreign based cabin crew. Funny that fact does not come up when they talk about employee cost advantages of foreign competitors.

.....and Mike Qatar is now in the OneWorld Alliance with American.



Typhoonpilot

 

[MikeD]

.....and Mike Qatar is now in the OneWorld Alliance with American.


Typhoonpilot

If Qatar is in the OneWorldAlliance with AA, why is AA one of the US3 speaking out against them? Makes no sense.

 

[typhoonpilot]

If Qatar is in the OneWorldAlliance with AA, why is AA one of the US3 speaking out against them? Makes no sense.

Exactly

The U.S. airline pilots at ALPA and APA should be looking more closely at the alliances and how that reduces their potential international flying more than what they are currently doing. Go back to the first post and look at the percentage decrease in Europe and North America flying compared to the world total from 1994 to 2014. The ME3 are not the boogy men they are being made out to be by ALPA, et al. They are taking advantage of the growth in global travel from countries that previously had very little and serving markets that the US3 have not effectively served. Read the 200 page document I have linked more than once. It shows a lot of fact and figures which sort of prove how comically incompetent U.S. airline management are being in regards to international travel trends. That incompetence is what will hurt U.S. pilots over the long run, not foreign government owned competition which has existed ever since airline travel started.



Typhoonpilot

 

[Boris Badenov]

not foreign government owned competition which has existed ever since airline travel started.



Typhoonpilot

I don't disagree with what you've said vis a vis US airline management being inept. Even comically so. But weren't you making the claim not too many pages back that foreign carriers were Oh my goodness no not in any way state owned, totally subject to the same whims of markets as imperialist yankee pig-dog airlines, etc etc? I just think it's important to know what words mean.

 

[Seggy]

If Qatar is in the OneWorldAlliance with AA, why is AA one of the US3 speaking out against them? Makes no sense.

It makes perfect sense actually!

Exactly
Typhoonpilot

Not exactly and you know it.

The ONLY reason Qatar is in One World is that they bought their way in by purchasing 9.99% of IAG (they own British Airways and Iberia) earlier this year. While this deal was finalized this year, it was a few years in the making. Willie Walsh pushed Qatar into One World shortly before this deal was finalized.

 

[typhoonpilot]

I don't disagree with what you've said vis a vis US airline management being inept. Even comically so. But weren't you making the claim not too many pages back that foreign carriers were Oh my goodness no not in any way state owned, totally subject to the same whims of markets as imperialist yankee pig-dog airlines, etc etc? I just think it's important to know what words mean.

I would have said Emirates is not "subsidized". That is a big difference from there not being State owned carriers. There are dozens of State owned and/or supported carriers flying. Air Canada is protected by the Canadian government. Lufthansa is protected by the German government even though they are not "owned" by the government. Air China is partially owned and certainly supported by the government of China. The list is endless and has been ever since airline travel started. For most of that time though those state owned carriers tend to be narrowly focused and also incompetently run to the point that they are losing money. Saudi Arabian is a good example as is Gulf Air. Two other airlines in the Middle East.


Typhoonpilot

 

[Bernoulli Fan]

http://www.msn.com/en-us/travel/news/the-not-so-friendly-skies-of-america/ar-AAcSIy0?

I flew United this week and managed to escape the mayhem Wednesday. WiFi was available on 1/2 flights that it was supposed to be. On average, the flights were 15 minutes late. That is about the highest praise that I can offer.

 

[FloridaLarry]

mshunter said, re DL 717 profitability:

Moral of the story, don't believe a word someone on the outside has to say. It's most likely a bunch of b.s. And yes, pilots are on the outside with this kind of knowledge.

They may not have a direct line to their CFO, but they can judge from load factors. Which they can see.

It's still one of those blind-men-and-the-elephant things. Generalizing should be demoted back to 2nd Looie.

 

[Ecl!pse]

mshunter said, re DL 717 profitability:

They may not have a direct line to their CFO, but they can judge from load factors. Which they can see.

It's still one of those blind-men-and-the-elephant things. Generalizing should be demoted back to 2nd Looie.

Please, I beg you, do not judge profitability in any way, shape, or form based on load factor. I've seen plenty of high load factor markets get cancelled/cut because they are not remotely profitable. Load factor is determined by what you can't see -- market supply and pricing.

I could have 100% load factors if I sold tickets at $0. Obviously, that won't be profitable - it's an exaggerated example, but you get the point. Often times, if you see load factors that are consistently > 90% (this is a generalization - it depends on the carrier), carriers are likely leaving money on the table.