U.S. Airways/American suing FAA
- Thread starter Pilotforhire587
- Start date
z987k
Well-Known Member
Does the safety have anything to do with de-regulation or an improvement in technology or any number of other things? Correlation != causation and all that.
wheelsup
Well-Known Member
No of course not. However even with the growth and expansion the industry has experienced, safety is still excellent. It's not like it has been sacrificed.
wheelsup
Well-Known Member
Regular families can afford to take flights on vacation now. Not like it was 30 years ago where $2k bought you one round trip ticket. Deregulation proved that passengers as a whole didn't care about the free $10 meal, they wanted the $300 RT ticket vice the $2k one.
I will agree that some barrier to entry is important in this sort of environment. However outright monopoly is a bad idea and does not encourage any sort of innovation or gain in efficiency.
As to the people working in the industry. About the only folks who have come out ahead in any industry are the CEOs.
SlumTodd_Millionaire
Most Hated Member
First, bringing safety into the discussion is pretty ridiculous. Safety has improved largely because of technology, which has nothing to do with deregulation.
As far as the rest of the stats, correlation does not equal causation. You have to look logically at the outcome and the surrounding factors, plus look at the trajectory of those things prior to 1978 when deregulation was enacted. Throughout the 1970s, airfares were already starting to come down pretty quickly, long before deregulation was even suggested. What happened following 1978 was a continuation of that trend. Now, what was the overall reason for it? Look no further than the largest economic expansion in history, stretching for over two decades. It was mere coincidence that deregulation happened just prior to this period of economic expansion. As incomes and the GDP grew relentlessly, airfares, airline jobs, and the number of new entrant carriers were bound to be seriously affected.
To credit deregulation is simplistic. Alfred Kahn has beaten that drum to a pulp to pat himself on the back for the past thirty years, but the numbers tell a different story.
SlumTodd_Millionaire
Most Hated Member
wheelsup
Well-Known Member
I think it's relevant. Despite cutting of costs, safety has remained high and only gotten better. Regardless of reason, a lack of guaranteed profit hasn't made flying less safe.
You do bring up good points. However I do take issue with some assumptions on your part. Typically, as demand goes up so does the price. You are inferring that due to expansion (demand) price fell. That does not fall in line with basic economic theory.
A Life Aloft
Well-Known Member
If you want a true understanding/look at what happened at all the carriers after deregulation, (and I mean all the factors, events, history, the CEOs, the financials/economics, including safety and maintenance) which occurred before and after deregulation, I suggest you read the book Hard Landing by Thomas Petzinger. You can find it in paperback on Ebay and Amazon.
This also a good read:
http://www.columbia.edu/~lnp3/mydocs/economics/airline_deregulation.htm
"Looking back in retrospect, it is easy to see how deregulation would lead to new monopolies. Indeed, the same big business interests that took advantage of government regulation in the first place were some of the first to benefit when the 1978 Airline Deregulation Act was passed by Congress. If pigs hang around the trough long enough, they can recognize the farmer's footsteps.
So this was how business took place under the free market reforms unleashed by the deregulation act of 1978: sharks would eat sardines as they always had. Braniff eventually went out of business, just the way that Bill Gates's competitors would, one after another."
The sources cited in that paper (at the bottom of the page) are all excellent reads.
wheelsup
Well-Known Member
Given time, any self imposed monopoly will attract competitors. A government mandated monopoly cannot, that is the issue I take. Microsoft still has a large foothold in the PC market, however Apple is gaining ground. The Big 3 Detroit automakers had a large share (well over 70%) of the US domestic market, now that figure is a little over half that.
A Life Aloft
Well-Known Member
Again, if you are truly interested in this subject, read the entire paper and then read Hard Landing for a complete perspective. This is also a very good read:
Paul Dempsey & Andrew Goetz, "Airline Deregulation and Laissez-Faire Mythology", Quorum, 1992
Paul Dempsey & Andrew Goetz, "Airline Deregulation and Laissez-Faire Mythology", Quorum, 1992
wheelsup
Well-Known Member
I'm reading that paper now. Well skimming. Honestly, there is a lot of bias and untruthfulness in it.
I got a kick out of this quote:
Bernoulli Fan
Controller
NavCanada is a non-profit, in which the Canadian government has approximately a one fifth governance stake.
Serco, by contrast, is listed on the London Stock Exchange. I'm going to surmise that there are differences between how the two corporations charge for their services, and how they control costs.
wheelsup
Well-Known Member
So what is stopping the US from setting up the system in a similar manner
Bernoulli Fan
Controller
Probably a mountain of bureaucracy. Honestly, I don't think it would be a bad thing if the US did manage to transition to NavUSA. There's plenty of fat to be cut off the top. Having the government, airlines, and others with members on the board is probably a good way to go. If US ATC did go private, however, I have a sneaking suspicion that someone more like Serco would get the job.
wheelsup
Well-Known Member
No way to tell. I've said that multiple, multiple times on this thread. I would like to see numbers. I have to assume it was cheaper however, otherwise why would it have been done? Why did the FAA contract out the manning of those towers? To spend more money or less?
I don't think the entire thing should be privatized/"nonprofitted" but surely a large amount of it could. You'd still want to have federal inspectors with enough power/bite to put a squash on shenanigans.
The nice thing about the Canadian system is supposedly it's entirely self funded.
🦈💜
Well-Known Member
The companies which outsourced are suffering mightily. It may not be apparent, but competence and quality plunged. It'll be obvious in a few more years. The problem is that to executives everyone beneath them is a cog, easily replaced by anyone remotely similar.
I have had executives try to tell me that I should cross-train as a developer and DBA, and vice versa, so that we could all fill the same roles if we needed to. For those of you who don't know, that's about the equivalent of having airlines cross-train pilots, cabin crew and gate agents, so that any of them could do the others' job, in a pinch.
So yes, the companies who have offshored have suffered, are suffering, and will continue to suffer due to the gross incompetence of the offshored personnel.
-Fox
SlumTodd_Millionaire
Most Hated Member
Of course it hasn't. Because regulation of safety wasn't removed, only regulation of route authority. The government is still heavily regulating aviation safety.
Your economic theory is too simplistic, and one could come up with multiple examples of where it doesn't work. For example, my family bought out first personal computer in 1991. At that time, demand was very low for PCs. Hardly anyone had them. The computer we bought cost over $1,000, and it was one of the cheaper models. Over the following decade, demand skyrocketed, competitors were killed (remember Wang Computers?), and....prices fell through the floor. Economies of scale and innovation in technology allowed for prices to drop while demand soared. You have to look at the individual industry to see how increasing demand affects pricing. Increased demand does not always yield higher pricing.
For the airlines, you have to look at how the business model has to function. You aren't able to just cherry-pick certain routes that you think are the most profitable. For example, a ton of people from all over the country need to get to New York for business. So, obviously, the New York market will always be profitable. But those people who need to get to New York are coming from hundreds of cities all over the country. Flights have to feed those people from smaller markets into a route structure that will get them to New York where they need to be. And a whole lot of those flights are unprofitable when demand is low. But when demand is high, airplanes fill up, and suddenly unprofitable routes are quite profitable.
The problem with deregulation is that it created dozens upon dozens of new-entrant carriers just as air travel demand was starting to skyrocket. These new carriers forced the trunk carriers to slash pricing to match, but even with the increased demand and now-low CASM, the prices prevented profitability for the large carriers that actually provided a real product. So the bankruptcies started. Or, more accurately, the bankruptcy cycle started, because it was a cycle that is never to end. And those small carriers flourish for a bit, but then their high debt catches up with them, because starting an airline is most certainly a high debt activity, and they themselves go bankrupt. But a new group of new entrant carriers springs up to replace them, and the whole things happens again. The consumer isn't really helped by this, because service is trashed. Without deregulation, prices still would have been incredibly low (albeit maybe $100 to go from ATL to MIA instead of $90, which is the difference between profitability and bankruptcy), but service would have been far improved. Not to mention the value of stability, as customers go absolutely crazy when they buy a ticket six months in advance only to see their carrier of choice file bankruptcy, leaving them to wonder whether they'll get to Grandma's house or not.
queeno
Ward of the Guberment
yea lets privitize the US ATC system its worked so good for FSS with lockmart, in sept 2005 just before FSS went non FED the system did 150,000 flight services.... one year later in sept 2006 lockmart did a whoooopping 75,000 flight services with their sterling service. yea nothing like driving 50% of your customers away and costing double what it cost when the FFA ran it.and the only reason the contract towers are cheep is because they cut staffing but thats what you guys want right less controllers working, it worked real good the last week ....right?
TFaudree_ERAU
Mashin' dem buttons
I'm going to sue all the airlines because they don't have enough legroom and I get back aches and have to go to the doctor.