Deregulation....Success or Failure??

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

I get so sick and tired of everyone blaming the industry's problems on oil and overcapacity.

Airlines have managed to lose money even when oil was not an issue. They continue to price their product below cost, which is creating a price floor, one that does not allow them to maintain consistent profits.

If oil is such a significant variable, then why don't we see Corporate and Cargo companies laying off and furloughing en masse?

There is not an excess of capacity, just an excess of cheap capacity.
The airline industry is a volume based one, which is partly why they cannot turn a profit with cumulative load factors around 85%.
 
An excess of cheap capacity is the excess in capacity that our management teams are fighting right now.

Hence the large numbers, ranging from 7 to 15% capacity reductions this fall. Significantly larger than previous Summer to Winter transition periods.

Even SWA is making adjustments, reducing their fall schedule by 400 flights. Not sure how many they operate on a daily basis, or even through the next three months - but at least they are also following suit.

Excess cheap capacity, is a capacity issue. And it is being addressed.
 
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.


My friend, in a capitalist system the only real security you have is your ability to go out and earn a living with your skills. You must not be dependent on a company or union for your security because as you are probably finding out security can not be found in either. I understand because of the seniority system that you are royally screwed and have to start at the bottom if you ever enter another airline. Because of this I'd say you've been screwed by not just your company but by your union as well.
 
I get so sick and tired of everyone blaming the industry's problems on oil and overcapacity.

Airlines have managed to lose money even when oil was not an issue. They continue to price their product below cost, which is creating a price floor, one that does not allow them to maintain consistent profits.

If oil is such a significant variable, then why don't we see Corporate and Cargo companies laying off and furloughing en masse?

There is not an excess of capacity, just an excess of cheap capacity.
The airline industry is a volume based one, which is partly why they cannot turn a profit with cumulative load factors around 85%.

Economics 101 my friend. The problem as been explained by airline executives and industry experts over and over again on CNN.

Prices need to be raised to X. When prices are raised to X, Y amount of people won't be able to fly. So the current about of people flying - Y is what we need to be at in terms of capacity. Relatively speaking the capacity reduction the industry needs is the size of American Airlines.

Higher oil prices meant prices needed to be raised which resulted in a state of overcapacity. Overcapacity as a result of too much competition. This is why the prices below the actual cost. The solution is not so simple as "raise ticket prices!" They've already tried that and ticket sales dropped immensely.

Corporate and Cargo companies do not have massive layoffs because one, they don't have excess capacity, and two, they have a consumer base that fuel cost can be passed on to. A business traveler can always telecommute. That lug nut that just broke on the factory machine in Hong Kong today NEEDS to be replaced by tomorrows or we're going to have serious production problems.
 
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.

Before 9/11 there were ramp agents at NWA that made $85k+. It used to be a decent career. Charlie Bryan wanted to keep it that way. The bastard! :rolleyes:

We can argue about this all night, but the bottom line is that Eastern is gone because it wasn't a competitive company

The bottom line is that EAL was destroyed by Frank Lorenzo. Period. If you can't see that, then again, you still haven't done your research. I can recommend some books if you're interested in actually getting educated before you go off on your anti-labor rants.
 
Before 9/11 there were ramp agents at NWA that made $85k+. It used to be a decent career. Charlie Bryan wanted to keep it that way. The bastard! :rolleyes:



The bottom line is that EAL was destroyed by Frank Lorenzo. Period. If you can't see that, then again, you still haven't done your research. I can recommend some books if you're interested in actually getting educated before you go off on your anti-labor rants.
:yeahthat: The gov't deemed Lorenzo unfit to run an airline and removed him from Eastern. Shugrue tried to save Eastern after that but it was already a sinking ship. Funny thing is Lorenzo tried to start another airline later and was DENIED by the Department of Transportation:D

Eastern was in bad shape when Lorenzo took over but I believe a competent executive could pull it off. Concessions were needed but not on the massive scale Lorenzo was demanding.
 
My friend, in a capitalist system the only real security you have is your ability to go out and earn a living with your skills. You must not be dependent on a company or union for your security because as you are probably finding out security can not be found in either. I understand because of the seniority system that you are royally screwed and have to start at the bottom if you ever enter another airline. Because of this I'd say you've been screwed by not just your company but by your union as well.

Uh. . .I don't think I ever mentioned relying on a union for security.

Perhaps you assumed that was what I was talking about.

Nevertheless, the questions were posed to Skydog.

Unless of course you also would be willing to allow the free market to downgrade your profession of choice beyond that which is able to support ones family or your own ability to live a comfortable life.

I just want to make sure I know where some of us stand.

I'm well versed in that some of us (professional pilots) are more than happy to watch our respective companies fall into the free market trap and as such are willing to allow our respective companies to pay us below industry standard rates for our respective airframes, or provide below industry standard work rules, etc.

I also know that in no small terms there are those who are willing to protect what we have left, instead of falling into the "free market" trap.

But to you planesiscool; nice attempt at trying to drag unions and unionized workers into the discussion. These questions though are personal ones that are not associated in any way shape or form with a collective group of like-minded thinkers.
 
Economics 101 my friend. The problem as been explained by airline executives and industry experts over and over again on CNN.

Prices need to be raised to X. When prices are raised to X, Y amount of people won't be able to fly. So the current about of people flying - Y is what we need to be at in terms of capacity. Relatively speaking the capacity reduction the industry needs is the size of American Airlines.

Higher oil prices meant prices needed to be raised which resulted in a state of overcapacity. Overcapacity as a result of too much competition. This is why the prices below the actual cost. The solution is not so simple as "raise ticket prices!" They've already tried that and ticket sales dropped immensely.

Corporate and Cargo companies do not have massive layoffs because one, they don't have excess capacity, and two, they have a consumer base that fuel cost can be passed on to. A business traveler can always telecommute. That lug nut that just broke on the factory machine in Hong Kong today NEEDS to be replaced by tomorrows or we're going to have serious production problems.

There is an article recently in ATW that explained the whole mess of Deregulation and basically what a failure it has become. The biggest thing that stuck out was the airline industry profit margin. It has been dropping considerably even before Deregulation and much more so afterwords. The airline industry (minus SWA of course) can't seem to make consistent profits. When the economy is strong they make large profits, and when it is bad they end up losing it all, or so it seems that way.

It would just be nice if the price floor was regulated, so that airlines could at least make a modest profit, even if it means fewer people flying. And of course some barriers to entry would be nice, so that some fool and his money do not decide to start an LCC, charge $10 fares with hopes of making "millions" only to enter bankruptcy 6 months later.
 
But but but. . .CAPITALISM!!1 FREE MARKET!!!1

Capitalism and this free market ######## will be the ultimate death to great companies who are being chopped off at the knees due to their bottom feeding competitors who lack the ability to enter the playing field on a fair level.

I welcome competition. But when that competition is simply to inject a certain market with leased planes, under paid crew members, and selling the seats with no frills from MCO-CMH, or JFK-CLE, and to sell the seats at a loss 75% of the time, you have no room to talk when you fail in less than 2 or three years time. But for the overall impact to be a negative towards the rest of the industry because these #######s thought they wanted to play Airline executive for three years is absolutely ridiculous.

Just so we're clear here, that means never trying to compare a legacy to a start-up.
 
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.



With all due respect, your I-don't-know-where-it-comes-from elitism is annoying, and above all selfish. Not to mention that the generalization (you do that often) is close to the realms of bigotry.

Let's see: Who is "Joe Twelvepack"?, maybe you can answer that for me..

Are "Joe Twelvepack" and "Joanne Twelvepack" (you know women travel too) your way of referring to the working class Americans who don't have a big inconme, and who have to look for cheap fares to let's say....take their three kids to Disneyland, have a romantic weekend with their lover, visit their families for the holidays, or visiting their dying mother.

Everyday millions of Americans do just what I wrote above. And they can do it thanks to the fact that air travel is affordable.

Regularizing? HA....Just as an example......the day "Joe twelvepack" from Minnesota can't fly their family to Florida for a theme park vacation, then that day get ready to say good bye to the tourism industry in Florida, and the thousands and thousands of direct and indirect jobs generated by this industry.


Like a poster said above "pilots aren't the only people in the world", many of you got into this profession knowing perfectly what the deal was.
And know that you realized that it was as they told you, you whine about it. Being an airline pilot is not just a job, is a lifestyle. If you are not cut for it then just leave, get another job and be happy.

I'm in the National Guard, in an infantry unit. Imagine if when I get deployed, I start to complaint to my peers that "this is not right man, I'm getting shot at" I know what I'm getting into, so did you.

The golden times of the airlines are over, period. The sooner you accept that, and the sooner you stop bitching about it the better for your well-being as a person and a professional will be. Live changes, the World changes, is just the way it is.


Attitude is everything, some of you could take a lesson or two from Lloyd.
 
With all due respect, your I-don't-know-where-it-comes-from elitism is annoying, and above all selfish. Not to mention that the generalization (you do that often) is close to the realms of bigotry.

Let's see: Who is "Joe Twelvepack"?, maybe you can answer that for me..

Are "Joe Twelvepack" and "Joanne Twelvepack" (you know women travel too) your way of referring to the working class Americans who don't have a big inconme, and who have to look for cheap fares to let's say....take their three kids to Disneyland, have a romantic weekend with their lover, visit their families for the holidays, or visiting their dying mother.

Everyday millions of Americans do just what I wrote above. And they can do it thanks to the fact that air travel is affordable.

Regularizing? HA....Just as an example......the day "Joe twelvepack" from Minnesota can't fly their family to Florida for a theme park vacation, then that day get ready to say good bye to the tourism industry in Florida, and the thousands and thousands of direct and indirect jobs generated by this industry.


Like a poster said above "pilots aren't the only people in the world", many of you got into this profession knowing perfectly what the deal was.
And know that you realized that it was as they told you, you whine about it. Being an airline pilot is not just a job, is a lifestyle. If you are not cut for it then just leave, get another job and be happy.

I'm in the National Guard, in an infantry unit. Imagine if when I get deployed, I start to complaint to my peers that "this is not right man, I'm getting shot at" I know when I'm getting into, so did you.

The golden times of the airlines are over, period. The sooner you accept that, and the sooner you stop bitching about it the better for your well-being as a person and a professional will be. Live changes, the World changes is just the way it is.


Attitude is everything, some of you could take a lesson or two from Lloyd.

Wow...:yeahthat:...Bravo...Bravo!
 
I want to know where are all of the 60 to 64 year old captains at on this board? I want to hear someones take on the industry who has been with it for 40 years and is flying at a major. Are there any here?
 
Are "Joe Twelvepack" and "Joanne Twelvepack" (you know women travel too) your way of referring to the working class Americans who don't have a big inconme, and who have to look for cheap fares to let's say....take their three kids to Disneyland, have a romantic weekend with their lover, visit their families for the holidays, or visiting their dying mother.

Everyday millions of Americans do just what I wrote above. And they can do it thanks to the fact that air travel is affordable.

And they'll do it the way they did it prior to cheap air travel - taking a train, or driving the family tank.

Such is life.

Time cost money, pay up or don't use it.
 
You can call it elitism if you want.

My viewpoint is that if you can't afford to pay a price which allows the company to continue providing the service, then you can't afford that service. And unless it is an essential service, such as police and fire protection, you shouldn't get it.

I cannot afford to pay the price for a fractional share of a private jet.

Is it elitism for Netjets to say to me, sorry, we can't take you on as a customer?

Is it elitism for the folks who make Teslas to say to me, I'm sorry, the amount of money you can put down for a car isn't enough for one of ours?

Is it elitism for the folks who sell houses in Aspen to say to me, nope, you can't buy a house from us?

Is it elitism for the folks who build yachts to say to me, nope, the amount of money you bring to the table isn't enough?

What makes what these companies would say to me not elitist and what I'm saying elitist?

In both cases, someone who is providing a product says you can't afford it and we're not going to sell it to you.

What's the problem with that?

Now, do I blame the people for taking advantage of the lower fares?

Of course not. If someone says, hey, you want to buy a million dollar home for $100K do you think I'll turn them down?

But what I'm saying is that fares need to come up, and if that means air travel becomes unaffordable for some people, so be it.
 
The problem is that the economy as we know it depends on the cheap airfare. If we forget that, get ready for a market collapse greater than the housing crises.
 
But what I'm saying is that fares need to come up, and if that means air travel becomes unaffordable for some people, so be it.

:yeahthat:

BUT......

I think your original post did rub me the wrong way, it was kinda pretentious. Being a "Joe Twelvepack" has nothing to do with your bank account. After having a little corporate flying under my belt I have me a lot of "Joe Twelvepacks" that could buy every seat on an airliner. ;)

I would bet that there are more "30K millionaires" in their mastercard owned suits on their way to the $5 blackjack tables in Vegas that are searching for the cheapest fares possible.
 
You can call it elitism if you want.

My viewpoint is that if you can't afford to pay a price which allows the company to continue providing the service, then you can't afford that service. And unless it is an essential service, such as police and fire protection, you shouldn't get it.

I cannot afford to pay the price for a fractional share of a private jet.

Is it elitism for Netjets to say to me, sorry, we can't take you on as a customer?

Is it elitism for the folks who make Teslas to say to me, I'm sorry, the amount of money you can put down for a car isn't enough for one of ours?

Is it elitism for the folks who sell houses in Aspen to say to me, nope, you can't buy a house from us?

Is it elitism for the folks who build yachts to say to me, nope, the amount of money you bring to the table isn't enough?

What makes what these companies would say to me not elitist and what I'm saying elitist?

In both cases, someone who is providing a product says you can't afford it and we're not going to sell it to you.

What's the problem with that?

Now, do I blame the people for taking advantage of the lower fares?

Of course not. If someone says, hey, you want to buy a million dollar home for $100K do you think I'll turn them down?

But what I'm saying is that fares need to come up, and if that means air travel becomes unaffordable for some people, so be it.

Dream on man, dream on.
 
No dream, man. Airfares are rising and it's about time.

If the American economy depends on low fares, then we're doomed.

I don't think it does.

What did people do before deregulation? They still managed to travel and they still managed to go on vacation.

Okay, so they won't be able to take all the rugrats to Disneyland. So now they'll take them to Six Flags.

It's not the end of the world.

Besides, if they took the money and actually, omigawd, saved it, we'd be better off.
 
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