Deregulation....Success or Failure??

I would suggest though that SWA, Air Tran, Allegiant offer solid stable employment.

SWA has a great PR campaign.

Air Tran excels in controlling market share without going crazy and stooping to a silly Low Cost Carrier level.

Allegiant owns their jets, and can well - fly them for extremely cheap with very little concerns in regards to lease payments - and only fly to locations that offer profitable route structures.

Clearly though, I stand by the opinion that deregulation that while it did create more jobs, it's much like outsourcing American jobs to China and India. The quality of the jobs has been on the decrease SINCE deregulation.
 
It's entirely possible that the new carriers wouldn't have been created, but the demand for air travel would have been largely unchanged. The existing legacy carriers (known as "trunk" carriers during the regulation days) would have simply grown that much bigger to accommodate the increased demand, which would have actually created more and better jobs. The so-called LCCs employ fewer people to produce the same revenue because of a leaner structure, and they pay less. Pointing to the creation of a bunch of LCCs, most of which have failed since deregulation, isn't a great way to point to a growth of good jobs. It's the exact opposite.

Gotcha, now that makes sense.

Now can someone tell me how Allegiant is making money with the gas guzzling MD-80s?
 
Why do people refer to "deregulation" as though it is some kind of entity? Deregulation is a verb, not a noun. It was something that occurred, not something that exists.

That said, deregulation worked just fine. It did exactly what it was supposed to do: It allowed airlines to compete compete, succeed, (and fail) in the market place on its own merits. It made air transportation more accessible to the general public, and provided more choices for the consumer. It must also be said that it created more opportunities for pilots (and other employees) than ever existed during the regulated era. Following the act of dereulation, airlines expanded to more than twice their size, increasing the number of jobs. There are pilots at the majors today who have enjoyed entire careers of relative sucess and prosperity because of the act of deregulation

Thee "problem" was not with deregulation. It was with the incumbents who would not or could not adapt to free market competition. On this point, both management and labor share the blame. On the management side, you had guys like Frank Lorenzo who's entire strategy rested on cost-cutting and undercutting the industry; not realizing that such a strategy has practical limits beyond which you end up with a poor operation and a poor product. On the labor side, you had organizations like the IAM at Eastern, that simply refused to accept the changes in the competitive landscape, and demanded top dollar, regardless of whether or not the market supported it. Both parties shoulder their fair share of blame in this particular example.

From the perspective of a consumer, I can tell you that I can fly pretty much anywhere in this country, for what I consider to be a reasonable fare. That was the point of deregulation: market competitive fares and service options.

It's not the consumers' fault that the airlines can't figure out how to make money at it. Perhaps when the last of the "old guard" (airlines, management, and labor) is gone, the airlines who were born in the deregulated era will have better success.

Couldn't have said it better myself. The last paragraph sums up the situation pretty well.
 
You need to do some more studying before you start crucifying the IAM about EAL. Charlie Bryan and EAL IAM were not demanding "top dollar." They were refusing to accept some of the most draconian paycuts and working conditions in industry history. That is why ALPA decided to back them and sympathy strike, even though Jack Bavis and the rest of the ALPA reps really didn't care for Bryan or the IAM.

That is exactly the point I was trying to make. The IAM (and the other unions) refused to accept the fact that the competitive landscape had changed. In the regulated era, Eastern didn't have to worry about costs. With government controlling competition and price, management and labor had little or no incentive to keep costs down. It was easier to just agree to wage increases than risk a strike. Cost increases were passed along to the consumer, and the Civil Aeronautics Board got the blame. As a result Eastern's costs were relatively high compared to their main competitors competitors. Then deregulation happened, and the company was poorly positioned to compete in the marketplace. Those "draconian" cuts, as you describe them, were probably needed to keep Eastern viable. But managment and labor couldn't see eye-to-eye, and the result was the strike, bankruptcy, and shutdown.
 
You can't make money with airplanes unless you cherry pick your routes like Southwest, AirTran and the other LCC's have done.

This country has a choice to make, make sure the legacy carrier survive or lose the air transportation infrastructure that currently exists. If we just let it all fall apart, then commerce will grind to a halt and the economy is going to tank. It's great that Southwest makes money, but oil men that need to go from Houston to New York don't fly on LUV when they could take Delta or Continental to Newark or JFK instead of flying all the way out to Islip and then having to drive back in.

The air transportation structure we have in this country is vital to our economy. We can let it fail and scream "CAPITALISM!!!! IT'S JUST CAPITALISM!" and then we'll be rallying with pitch forks when the economy tanks because business can't run.

Seems pretty simple to me. We'll have to reregulate at some point.
 
If you want a meal and no checked bag fee buy a first class ticket. Hey first class ticket prices today are the same as coach prices back in the "good ole days" right?

I fly first when I can.

Now, if you could come up with a solution for all the delays we're dealing with, that'd be great.

Oh, yeah, if you could do something about the lack of redundancies in the system so that if something goes wrong there will be options, that'd be great, too.

Those things cost money. And if Joe Twelvepack isn't willing to pay for them, I say throw his garbage bag toting ass off the plane and shove it onto a Greyhound bus.
 
That is exactly the point I was trying to make. The IAM (and the other unions) refused to accept the fact that the competitive landscape had changed. In the regulated era, Eastern didn't have to worry about costs. With government controlling competition and price, management and labor had little or no incentive to keep costs down. It was easier to just agree to wage increases than risk a strike. Cost increases were passed along to the consumer, and the Civil Aeronautics Board got the blame. As a result Eastern's costs were relatively high compared to their main competitors competitors. Then deregulation happened, and the company was poorly positioned to compete in the marketplace. Those "draconian" cuts, as you describe them, were probably needed to keep Eastern viable. But managment and labor couldn't see eye-to-eye, and the result was the strike, bankruptcy, and shutdown.

You still haven't done your necessary research, my friend. EAL's labor costs were below industry average. They had been for quite some time prior to the '89 strike. The IAM workers had already taken multiple large paycuts and work rules concessions, but Lorenzo was too greedy and wanted more and more and more. Hence the "A" in BOHICA - Bend Over, Here It Comes Again. That phrase was coined by Charlie Bryan and the IAM at EAL because they had taken so many cuts already. You need to study your labor history before you talk a bunch of crap about EAL.
 
You still haven't done your necessary research, my friend. EAL's labor costs were below industry average. They had been for quite some time prior to the '89 strike. The IAM workers had already taken multiple large paycuts and work rules concessions, but Lorenzo was too greedy and wanted more and more and more. Hence the "A" in BOHICA - Bend Over, Here It Comes Again. That phrase was coined by Charlie Bryan and the IAM at EAL because they had taken so many cuts already. You need to study your labor history before you talk a bunch of crap about EAL.

Eastern's cost may have been below industry average, but that in and of itself doesn't mean anything. By definition, the average includes all airlines, not just their competitors. There were many companies that Eastern did not directly compete with (Pacific Southwest, Western, Republic to name a few). What good does it do to have lower costs than the companies you are not competing with? The real question is what were Eastern's costs compared to their competitors (People Express, Delta, New York Air)?

But even that is irrelevant. What is relevant is that, whatever their costs, Eastern was still losing money. Clearly something had to change, which brings me back to my original point. The old timers at Eastern (management or labor, take your pick) refused to accept that something had to be done differently. And therein lies the root cause of Eastern's failure, and what I believe to be the root cause of the current industry turmoil: The veterans simply cannot or will not accept that the industry has changed.
 
Eastern's problem had nothing to do with labor. It had to do with many, many years of completely incompetent management. Frank Boreman was a good astronaut, but a horrible CEO. Lorenzo was nothing but a corporate raider that used EAL to build up what he viewed as his real prize, Continental. Are you aware that Lorenzo took EAL's computer system, System One, and sold it to himself at Continental for virtually nothing, then charged EAL millions of dollars per month for the privilege of using the very software that they created? It was all a scheme to funnel money from EAL to CAL. He fully intended to destroy EAL in order to build up CAL. Nothing that any employee group at EAL would have done would have stopped the destruction of Eastern Airlines. Get educated and get back to me.

And yes, by the way, EAL's labor costs were below that of their competitors. In many cases, far below.
 
The air transportation structure we have in this country is vital to our economy. We can let it fail and scream "CAPITALISM!!!! IT'S JUST CAPITALISM!" and then we'll be rallying with pitch forks when the economy tanks because business can't run.

Seems pretty simple to me. We'll have to reregulate at some point.

I think any right winger with a brain would have to agree there. It is obvious the airlines can't turn a buck and really, they have no motivation to. I lean pretty far to the right, but I would rather have a regulated system that works than what we have now. The question is, will it work in today's economy? I'm not smart enough to make that decision, but I don't see how it can be much worse.
 
Guys we don't need reregulation. The airlines were making decent profits the past couple years. Oil prices screwed that up. Due to the increase in oil price it means ticket prices will have to go up to make money.

Ticket prices can't go up right now because there is too much competition and too much capacity. Not everyone that flies now will be able to afford to fly when ticket prices to go up to the appropriate level.

It will be a "survivor of the fittest" battle. Capacity will be reduced by mergers AND/OR airline failures. Whoever is left will be able to raise ticket prices and make money.

IMO quite a few LLCs will fail and maybe one Legacy. Either way the market will stabilize itself. No need for gov't interference, unless it has to do with reducing the price of oil:D
 
Eastern's problem had nothing to do with labor. It had to do with many, many years of completely incompetent management. Frank Boreman was a good astronaut, but a horrible CEO. Lorenzo was nothing but a corporate raider that used EAL to build up what he viewed as his real prize, Continental. Are you aware that Lorenzo took EAL's computer system, System One, and sold it to himself at Continental for virtually nothing, then charged EAL millions of dollars per month for the privilege of using the very software that they created? It was all a scheme to funnel money from EAL to CAL. He fully intended to destroy EAL in order to build up CAL. Nothing that any employee group at EAL would have done would have stopped the destruction of Eastern Airlines. Get educated and get back to me.

And yes, by the way, EAL's labor costs were below that of their competitors. In many cases, far below.

You're telling me that a company who paid their ramp agents 40K a year back in the mid-Eighties had the lowest labor costs? I'd hate to see who had the highest.

I don't believe for a minute that labor was solely responsible for killing Eastern, any more than I believe it was "incompetent management." But labor certainly was holding a knife when Eastern died. Et tu Charlie?

Full pay to the last day? Burn the f*%$er down? Those aren't management chants.

We can argue about this all night, but the bottom line is that Eastern is gone because it wasn't a competitive company, and one of the reasons was because people on both sides of the aisle couldn't or wouldn't change work to change the status quo. That is the point I ws trying to make in my orignal post.

I stand by what I said at the beginning. Deregulation did exactly what it was supposed to do: subject airlines to market forces and give consumers more and better choices. Deregulation worked.

In free market competition you are going to have winners and losers. Airlines are no different. The only difference is that airline unions, thus airline employees, are longevity/seniority based systems. Change that, and airline shutdowns might not have such drastic consequences for line employees.
 
Deregulation created more airline jobs=success

I was thinking about this on the way to work as I was talking to a 40 year UA FA. I am not so sure there is more airline jobs today then there was before deregulation. Look at the number of FA on the planes today to compared to the old days. Look at how many big pre-deregulation airlines are gone. Look at all the city's that lost service after deregulation. Look at the amount of outsourced work.
 
I was thinking about this on the way to work as I was talking to a 40 year UA FA. I am not so sure there is more airline jobs today then there was before deregulation. Look at the number of FA on the planes today to compared to the old days. Look at how many big pre-deregulation airlines are gone. Look at all the city's that lost service after deregulation. Look at the amount of outsourced work.

I haven't looked yet but off the top of my head I would say more cities gained flying than lost today compared with back then. Deregulation opened up flying to many in the general public who otherwise would not be able to afford. Not so sure if you could catch a flight from Dubuque, IA to ORD back in the day:)
 
Change

I haven't looked yet but off the top of my head I would say more cities gained flying than lost today compared with back then. Deregulation opened up flying to many in the general public who otherwise would not be able to afford. Not so sure if you could catch a flight from Dubuque, IA to ORD back in the day:)

There wasn't 300,000,000 people back in the day either.

In the past 35 years, the United States population has increased by one hundred million.


100,000,000 new passengers since the 747 rolled out of Everett.​


A 30% increase in the number of human beings means that even if regulated commercial aviation had continued the way it was going in the 70s and early 80s, there would be at least 30% more flying today. I bet Dubuque would probably have had service to ORD today if regulation was still in effect. The route would be profitable for the carriers that fly it.

Aside from that there is the fact that even without deregulation it would still be cheaper per seat today to move people from one place to another as technology has increased.
 
I haven't looked yet but off the top of my head I would say more cities gained flying than lost today compared with back then. Deregulation opened up flying to many in the general public who otherwise would not be able to afford. Not so sure if you could catch a flight from Dubuque, IA to ORD back in the day:)

DBQ got AA, UA, and I think NW 727's. So more jobs. More ground crew, more FA's and more pilots. 727 doesn't need a lot of runway.
 
I stand by what I said at the beginning. Deregulation did exactly what it was supposed to do: subject airlines to market forces and give consumers more and better choices. Deregulation worked.

In free market competition you are going to have winners and losers. Airlines are no different. The only difference is that airline unions, thus airline employees, are longevity/seniority based systems. Change that, and airline shutdowns might not have such drastic consequences for line employees.

So you'll stand by your friendly opinion of the free market theory while, your company provides you with the lowest amount of pay and lowest quality of work rules right? Because you know, that whole free market thing - everyone gets theirs at some point.

No desire to protect your pay, benefits, and work rules then right? You'll take it on the chin like so many others have prior to you. Right?

Just want to make sure I have what you have been saying through this whole thread correct.
 
The regionals all need one contract/one payrate for each type of RJ or prop or whatever it is. None of this fragmented crap anymore. If that were to happen, it would take away a lot of the competitieness of the newer, less established regionals and level the playing field come RFP time.
 
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