Congressmen may bring back airline regulation

[SlumTodd_Millionaire]

There are limitless ways that regulation could work, but what I advocate is a return to the days of the Civil Aeronautics Board (the CAB). Basically, the function of the CAB in the later days was to ensure competition on routes, but not to allow "seat dumping," which means airlines being able to go into a market and dump a ton of seats into the market to try to kill the competition. The CAB wanted competition, but only productive and realistic competition, not never-ending fare wars.

So, let's say we have the ATL-MLI market, currently served by AirTran and Delta. This market has actually been a fight over the past decade or so. When AirTran first started flying there, Delta had a few flights with outrageously high fares, because they had been the monopoly player. When AirTran first came in, we opened up with reasonable fares that allowed for a profitable operation. Rather than simply matching our fare, Delta decided to kill us on the route, because they wanted to maintain the monopoly. They added several new flights (seat dumping) and dropped the fares to levels that would allow neither they nor us to turn a profit. After the first year or so, AirTran management decided that this was a money-losing proposition, so we dumped the route. What happened the next day? Delta jacked their fares up to the previous astronomical level. Is this the kind of competition that is good for the consumer? I think not.

What would the CAB have done in this circumstance? Well, the CAB liked to have at least two carriers on every route in order to pressure the two carriers into controlling their costs. However, the CAB did not allow seat dumping. So, under the CAB, AirTran would have applied to the CAB to begin operating the new route, providing a business plan and a bid for what they would want to charge. The CAB would review the application, and as long as it appeared that the market wouldn't be over-saturated, the application would be approved. Any changes to the fares by either airline would require approval by the CAB. Delta would likely apply to reduce their fare to match the AirTran fare, and that would almost certainly be approved. However, a fare war would not likely be approved.

That's the kind of system that I would like to see, and it's the kind of system that I believe would benefit the consumer through responsible and realistic competition, while providing stability for the industry.

 

[Patrick]

To me, there are two ways to solve the current mess: either allow the industry to operate truly unregulated- which means no bailouts, but obviously complying with the FAA in terms of safety, etc. and let the losers drop out of the market, while the winners compete for market share; or to go back to a regulatory environment, which perhaps may be similar to how the CAB operated, and as ATN_Pilot has just outlined.

As a business guy and capitalist, I'd ideally wish for the former, but as a realist, I'm not sure that's ever going to work. It certainly does concern me, however, that with the way the government runs everything else it has its hands in (i.e. not very well), things wouldn't be any better if there was added regulation.

 

[SlumTodd_Millionaire]

I'm not sure exactly what the complaint is about how the government runs "everything else it has its hands in." My mail certainly gets where it's going, and for cheap, and quickly. The military certainly seems to do a very good job of killing people and blowing stuff up when it's necessary. The PBGC has done a great job of making sure that people's pensions aren't completely stolen from them.

No, overall, I'm quite happy with my government services, and quite unhappy with private corporations. After all, when was the last time that I had to cancel a July 4th trip to the beach because the federal government had, through incompetence and penny-pinching, dumped hundreds of millions of gallons of toxic waste into the ocean? Nope, can't remember that happening.

 

[WacoFan]

No, overall, I'm quite happy with my government services, and quite unhappy with private corporations. After all, when was the last time that I had to cancel a July 4th trip to the beach because the federal government had, through incompetence and penny-pinching, dumped hundreds of millions of gallons of toxic waste into the ocean? Nope, can't remember that happening.

Be fair here - the governmment regulated this business...handed out an astronomical amount of violations to BP...and yet still this well was operating and it blew up. The government DID fail in its job of oversight in this case. Not taking a side one way or another and would love to keep this thread within the confines of airline regulation - but government had dirty hands in this matter as well.

 

[KLB]

To me, there are two ways to solve the current mess: either allow the industry to operate truly unregulated- which means no bailouts, but obviously complying with the FAA in terms of safety, etc. and let the losers drop out of the market, while the winners compete for market share; or to go back to a regulatory environment, which perhaps may be similar to how the CAB operated, and as ATN_Pilot has just outlined.

This is exactly how I view it. You can have one or the other. Either one would be better than what is happening now. I prefer the latter for job security. I prefer the former as to actually make it to the "big show", but there's no use in getting there if my future's not secure.

 

[Patrick]

I'm not sure exactly what the complaint is about how the government runs "everything else it has its hands in." My mail certainly gets where it's going, and for cheap, and quickly. The military certainly seems to do a very good job of killing people and blowing stuff up when it's necessary. The PBGC has done a great job of making sure that people's pensions aren't completely stolen from them.

No, overall, I'm quite happy with my government services, and quite unhappy with private corporations. After all, when was the last time that I had to cancel a July 4th trip to the beach because the federal government had, through incompetence and penny-pinching, dumped hundreds of millions of gallons of toxic waste into the ocean? Nope, can't remember that happening.

I'll admit that you have some valid points here- yes mail does come plenty fast and cheap- but realize that the USPS is a federally subsidized service, and at the face to face level, I'd much rather talk to a customer service agent at the Fedex counter than at the Post Office. The military does a great job of "killing people and "blowing stuff up" when it's "needed" (emphasize the quotations around that word), but at what cost to the tax payer?

The problem with capitalism is that it benefits those who figure out how to make the system work for them and rewards them extremely well, while in effect, punishes those who don't figure the system out. Within the past 100 years, despite the notion of the "American Dream" and upward mobility, the rich have gotten richer, while particularly in the past 30 years, the poor have gotten MUCH poorer, and the middle class has effectively ceased to exist.

Within our industry, airline executives certainly are well compensated while the rest of the workforce isn't (at least at most companies). This also holds true across a good percentage of industries in this country right now so it's not an isolated problem.

I'm not sure that it's entirely the answer, but you can't argue that the average person with an "average job" (I'll use pilots, nurses, teachers, engineers, etc as some examples) isn't better off in those countries who have more socialist-oriented governments. It's also worth noting that in those countries, aside from people of true nobility, you simply don't have the kind of wealth amassed by one person the way you do in the US. There's a reason why the top 5% control over 90% of the wealth in this country.

 

[Blackhawk]

What would the CAB have done in this circumstance? Well, the CAB liked to have at least two carriers on every route in order to pressure the two carriers into controlling their costs. However, the CAB did not allow seat dumping. So, under the CAB, AirTran would have applied to the CAB to begin operating the new route, providing a business plan and a bid for what they would want to charge. The CAB would review the application, and as long as another airline with more clout did not pressure them to kill the route, the application would be approved.

Fixed it for you to reflect how it actually operated under the CAB with the likes of Juan Trippe.

 

[Blackhawk]

I'm not sure exactly what the complaint is about how the government runs "everything else it has its hands in." My mail certainly gets where it's going, and for cheap, and quickly. The military certainly seems to do a very good job of killing people and blowing stuff up when it's necessary. The PBGC has done a great job of making sure that people's pensions aren't completely stolen from them.

No, overall, I'm quite happy with my government services, and quite unhappy with private corporations. After all, when was the last time that I had to cancel a July 4th trip to the beach because the federal government had, through incompetence and penny-pinching, dumped hundreds of millions of gallons of toxic waste into the ocean? Nope, can't remember that happening.

Then you truly have not experienced government services. Such as the BOIA losing billions of dollars... like they have no idea where it went.
Or government medical care. My wife can only get about 2 surgeries done per day at the government medical center due to inefficiencies (why work hard when you get paid the same for being lazy). In the private sector she has done more than 8 of the same surgeries at 3 different hospitals in one day.
Mail service in my parts is pathetic. No competition, locals love the "government" job.
Ever shopped at a commissary or PX? Makes Walmart look great.
My brother's company took over the bus service in El Paso. At the time there were "ghost workers", workers on the payrolls who had not been to work in some cases for years but were still getting paid. Other workers loved it as they made boat loads of over time- bus drivers in some cases were making over $80k in a city where the median income is $37k. Buses never ran on time and the little guy was getting royally hosed as he/she could not rely on the bus system for transportation. Within a year of taking it over from the city the buses actually run on time and poor people can rely on it. Of course now that the system works there is a move to take the system away from the "greedy, money making" private company.
I could go on. At least in the private sector poorly run companies can fail. In the public sector poorly run sections... get more money. I've actually run a government budget, so I know how they run.

 

[SlumTodd_Millionaire]

Be fair here - the governmment regulated this business...handed out an astronomical amount of violations to BP...and yet still this well was operating and it blew up. The government DID fail in its job of oversight in this case. Not taking a side one way or another and would love to keep this thread within the confines of airline regulation - but government had dirty hands in this matter as well.

You're absolutely right! The problem was lack of regulation. I'm glad you're finally seeing the light on this, Waco. Proper regulation would have prevented this mess. Simple rules that are in place in most other westernized countries in the world, including our neighbor to the north, and BP's own country, require far more extensive safety improvements to their drilling operations. But no, not here in the US. We've allowed swindlers like Dubya and Reagan to deregulate every industry to the point of true catastrophe. What a mess.

and at the face to face level, I'd much rather talk to a customer service agent at the Fedex counter than at the Post Office.

Seriously? Not me. It's five minutes to my local Post Office, but a half hour to the closest real FedEx counter. Everything else is a FedEx Kinko's, with limited services and dimwitted high schoolers working the counter. I'd rather go to the Post Office any day of the week.

The military does a great job of "killing people and "blowing stuff up" when it's "needed" (emphasize the quotations around that word), but at what cost to the tax payer?

I think the defense budget could easily be cut in a quarter, so you don't have to talk to me about cost, but the effectiveness is unmatched anywhere in the world. I think the government has proven quite capable of managing the largest organization of any type on the entire planet, and there isn't a chance in hell that a private military organization could ever do the same.

It's also worth noting that in those countries, aside from people of true nobility, you simply don't have the kind of wealth amassed by one person the way you do in the US.

Seems to work pretty well for them. I don't hear too many people in Sweden complaining about their quality of life.

Fixed it for you to reflect how it actually operated under the CAB with the likes of Juan Trippe.

The early days of the CAB were quite different. The system was working incredibly well for its last few decades.

Or government medical care.

My father goes to the VA and couldn't possibly be happier. He loves the service, and feels that he gets better care there than he ever did in the private sector. The myth doesn't match reality.

 

[Patrick]

Seems to work pretty well for them. I don't hear too many people in Sweden complaining about their quality of life

That was exactly my point.

 

[Blackhawk]

You're absolutely right! The problem was lack of regulation. I'm glad you're finally seeing the light on this, Waco. Proper regulation would have prevented this mess. Simple rules that are in place in most other westernized countries in the world, including our neighbor to the north, and BP's own country, require far more extensive safety improvements to their drilling operations. But no, not here in the US. We've allowed swindlers like Dubya and Reagan to deregulate every industry to the point of true catastrophe. What a mess.



Seriously? Not me. It's five minutes to my local Post Office, but a half hour to the closest real FedEx counter. Everything else is a FedEx Kinko's, with limited services and dimwitted high schoolers working the counter. I'd rather go to the Post Office any day of the week.



I think the defense budget could easily be cut in a quarter, so you don't have to talk to me about cost, but the effectiveness is unmatched anywhere in the world. I think the government has proven quite capable of managing the largest organization of any type on the entire planet, and there isn't a chance in hell that a private military organization could ever do the same.



Seems to work pretty well for them. I don't hear too many people in Sweden complaining about their quality of life.



The early days of the CAB were quite different. The system was working incredibly well for its last few decades.



My father goes to the VA and couldn't possibly be happier. He loves the service, and feels that he gets better care there than he ever did in the private sector. The myth doesn't match reality.

He does not see the inefficiency of the VA and how poorly it is run. My wife sees it on a daily basis. Waiting list for a knee or hip replacement runs in the years. Again- they only do a few a day as there is no incentive to do any more. In the private sector my wife did 8-10 a day with fewer staff members; VA side 1-2 a day with more staff.
Back to your first point. The financial sector was regulated, but the regulation was part of the problem. There were never problems with sub-prime mortgages until Uncle Sam got into the mortgage business and forced banks to make subprime loans. Fanny and Freddy are government run agencies with major problems.
Mail here gets lost on a regular basis.
Finally, with government run agencies you essentially have theft and loss of freedom. If I want to send my child to a good school I have the freedom to chose the school and pay for it. If the school does not meet my standards I can take my money elsewhere. Yet on an annual basis I have money taken from me at the point of a gun and given to corrupt and wasteful schools that are not permitted to fail.

 

[O&M]

If "proper regulation" was the cure to everything, then everything should be running smoothly. That's obviously not the case because we still have problems with mail delivery, oil rigs blowing up, and health care delivery, despite ever increasing amounts of government regulation.

I ask you which is better for the "little guy?" The free market? Or government control. Consider this:

Drive through a poor neighboorhood. You will find some nice houses, some nice cars, some nice clothes. How many nice schools will you find? None. Clothes, cars, and houses are distributed by the free market. Schools are distributed by the political mechanism

 

[WacoFan]

You're absolutely right! The problem was lack of regulation. I'm glad you're finally seeing the light on this, Waco. Proper regulation would have prevented this mess. Simple rules that are in place in most other westernized countries in the world, including our neighbor to the north, and BP's own country, require far more extensive safety improvements to their drilling operations. But no, not here in the US. We've allowed swindlers like Dubya and Reagan to deregulate every industry to the point of true catastrophe. What a mess.
.

Umm....no. What I was saying was that the regulation they had, which seemed at least in some way sufficient (in numbers and amount only - I mean, BP was getting lots of "violations") was in the end very incompetent and poor. The problem wasn't lack of regulation - it was lack of good regulation. You have much more trust in the government to come up with "good regulation" than I do. You bring up "W" and Reagan (of course...blindly liberal will do this as they face east and pray to FDR) - but what about Jimmy Carter? He created the Department of Energy - what do we have to show for this great expenditure and growth of government? Is this "good regulation"? And Clinton and Obama are completely free and clear on this? What about the massive campaign contributions Obama took from BP?

Todd...even Olbermann and Matthews went off on Obama last week. It's ok...nobody will question your lib bonafides if you are objective once in a while.

 

[O&M]

The problem with capitalism is that it benefits those who figure out how to make the system work for them and rewards them extremely well, while in effect, punishes those who don't figure the system out.

That's not "the problem" with capitalism, that's its virtue. And that is pretty much the way life works. If you work hard and learn your lessons, you have a chance to succeed. If you don't, well....

 

[Patrick]

That's not "the problem" with capitalism, that's its virtue. And that is pretty much the way life works. If you work hard and learn your lessons, you have a chance to succeed. If you don't, well....

Very true, on both counts. The "problem" I argue, however, is that 95% of the masses never learn those lessons

 

[stuckingfk]

So, let's say we have the ATL-MLI market, currently served by AirTran and Delta. This market has actually been a fight over the past decade or so. When AirTran first started flying there, Delta had a few flights with outrageously high fares, because they had been the monopoly player. When AirTran first came in, we opened up with reasonable fares that allowed for a profitable operation. Rather than simply matching our fare, Delta decided to kill us on the route, because they wanted to maintain the monopoly. They added several new flights (seat dumping) and dropped the fares to levels that would allow neither they nor us to turn a profit. After the first year or so, AirTran management decided that this was a money-losing proposition, so we dumped the route. What happened the next day? Delta jacked their fares up to the previous astronomical level. Is this the kind of competition that is good for the consumer? I think not.

When did Air Tran start doing the route again?

I know they're currently flying ATL-MLI a couple times a day.

 

[SlumTodd_Millionaire]

If "proper regulation" was the cure to everything, then everything should be running smoothly. That's obviously not the case because we still have problems with mail delivery, oil rigs blowing up, and health care delivery, despite ever increasing amounts of government regulation.

"Ever increasing?" Are you kidding?! We've just finished 30 years of the most rampant and extreme deregulation in American history! That is the problem.

And Clinton and Obama are completely free and clear on this?

Absolutely not. They should stand up and demand greater regulation. Instead, they are scared of people like you calling them "socialist," so in the interest of smart politics, they soft peddle it. And as a result, the American people suffer.

When did Air Tran start doing the route again?

I know they're currently flying ATL-MLI a couple times a day.

It started again about four years ago, I think, when Delta was more concerned with the merger than they were with a fare war. When we went back into the market, they slashed their fares to match ours, but they didn't get involved in a fare war again. Anderson seems to be less interested in such things, but he's still refusing to raise fares on the markets we compete, even though it's likely that we would match reasonable fare increases.

 

[jynxyjoe]

"Ever increasing?" Are you kidding?! We've just finished 30 years of the most rampant and extreme deregulation in American history! That is the problem.



Absolutely not. They should stand up and demand greater regulation. Instead, they are scared of people like you calling them "socialist," so in the interest of smart politics, they soft peddle it. And as a result, the American people suffer.



It started again about four years ago, I think, when Delta was more concerned with the merger than they were with a fare war. When we went back into the market, they slashed their fares to match ours, but they didn't get involved in a fare war again. Anderson seems to be less interested in such things, but he's still refusing to raise fares on the markets we compete, even though it's likely that we would match reasonable fare increases.

Hey, from what I've been reading of your posts, can I safely assume that you agree with the following:
-The dismantling of unions happened because of President Reagan and President Bush (II). Not, at all, because Americans were already running away from unions in the 80's and continuing to all the way up to now, and those two politicians views reflected a majority of Americans?
-Deregulation is occuring because a minority of loud "conservative" (what you would call) voters are so powerful that even the majority party (executive and legislative branch) are still bending to their whims? This minority of voters steered, not the elections for all 20 years, but the agenda of both parties.

If I'm correct in the above, that those are your views, then corporations or some nameless entity is steering the course of the US.

/side note
It might be more likely, that most American's did and still do blame unions for all the economic woes. Rightly or wrongly, we as Americans got ourselves in this mess and that the majority, not the minority, are continuing to drive the agenda of this country and the politicians are just happy to cash the checks and let us drive over a cliff. Perhaps the conservative tendency of this nation are what drive us to be anti labor and anti worker.
/end side note

 

[Getburned]

Give an example where Americans ran from Unions? I think CEO's ran from Unions and were allowed to during this the past 30 years. Outsourcing was their answer and continues to be, as they did this, they got richer and more powerful thus controlling much of what goes on politically... Left or Right, its still politics and politicians need money and corporate backing to stay in power all the while the little guy gets left out to hang and we all fend for the scrapes... Its sad that 30 years ago a CEO made 20 times the average worker where its in the ballpark of 400 times of the average now. Wages have been stagnate and have hardly kept up with inflation over the past 30 years.

 

[Getburned]

Doesn't matter when the 5% of people own 90% of the country, the minority in this case is the ultra rich, money talks unfortunately and not the people in my opinion...