Why flying stopped being glamorous

SteveC said:
*Capitalism has entered the chat*

:smoke:
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Yup! But in this case, I’d say we’ve seen a rare failure of capitalism. Not only has the product become garbage, but shareholders aren’t even benefiting from it. Customers are getting screwed, and it’s not even generating profits. When no one is a winner, it might be time to consider that this particular industry is uniquely suited for a regulated environment, just like public utilities.
 
SlumTodd_Millionaire said:
Yup! But in this case, I’d say we’ve seen a rare failure of capitalism. Not only has the product become garbage, but shareholders aren’t even benefiting from it. Customers are getting screwed, and it’s not even generating profits. When no one is a winner, it might be time to consider that this particular industry is uniquely suited for a regulated environment, just like public utilities.
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You're forgetting that there is a high end product out there, and it's popularity has skyrocketed. (Prior to my retiring), our business in 2022 was running 40% above 2019 levels, and we were putting prospective customers on hold because we were oversold for our capacity.
 
SlumTodd_Millionaire said:
Yup! But in this case, I’d say we’ve seen a rare failure of capitalism. Not only has the product become garbage, but shareholders aren’t even benefiting from it. Customers are getting screwed, and it’s not even generating profits. When no one is a winner, it might be time to consider that this particular industry is uniquely suited for a regulated environment, just like public utilities.
Click to expand...

I mean air travel seems like the best example of capitalism doing what it's supposed to do. Consider:
  • Airfare has declined since deregulation when adjusting for inflation - one of the only mass utilized consumer services to see declining consumer prices
  • Declining airfare increased the share of Americans who've flown and the average frequency of air travel
  • Competition has led to product differentiation - a consumer who is willing to set their travel dates around a day of week flight schedule to save money can do so, while a business traveler who will pay whatever to get there tomorrow has ample options as well
  • Cabin class went from single class, to two-class to now four-class cabins, further increasing options for consumers based on preference
  • More private lounges for those willing to pay for the convenience of avoiding the general airport terminal
  • Private aviation (as Steve mentioned) has grown as an option for those who still seek another product - and we've even seen semi-private emerge with carriers like JSX that create a third option that bridges the two
Which customers are getting screwed? Those who paid the least. When I was a 1K United flyer doing a lot of international business class, things were pretty spectacular.
 
SlumTodd_Millionaire said:
Yup! But in this case, I’d say we’ve seen a rare failure of capitalism. Not only has the product become garbage, but shareholders aren’t even benefiting from it. Customers are getting screwed, and it’s not even generating profits. When no one is a winner, it might be time to consider that this particular industry is uniquely suited for a regulated environment, just like public utilities.
Click to expand...
CEO compensation becoming mostly stock based and allowing stock buybacks have misaligned the incentives of leaders. Their sole purpose in life is to pump the stock price by any means necessary, instead of running a sound business.

They should instead be focusing on using that money to build infrastructure and technology that allows them to operate more efficiently and at higher margins, but alas, the incentives don’t align with long term plans like that.
 
Wardogg said:
buh bye high end salaries. The bus driver moniker will become a reality.
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Quite the opposite, actually. Salaries plummeted after deregulation, and furloughs and concessions skyrocketed. I recommend reading Flying the Line, Vol. 2.

SteveC said:
You're forgetting that there is a high end product out there, and it's popularity has skyrocketed. (Prior to my retiring), our business in 2022 was running 40% above 2019 levels, and we were putting prospective customers on hold because we were oversold for our capacity.
Click to expand...

I’m sorry, but there’s simply no comparison here. Charter isn’t the Mercedes of flying, it’s the Rolls Royce. I’m usually in the top 1% or 2% of income earners, and charter is out of my reach for all but the shortest of flights. In the regulated days, middle class people could enjoy a premium product.

Murdoughnut said:
I mean air travel seems like the best example of capitalism doing what it's supposed to do. Consider:
  • Airfare has declined since deregulation when adjusting for inflation - one of the only mass utilized consumer services to see declining consumer prices
  • Declining airfare increased the share of Americans who've flown and the average frequency of air travel
  • Competition has led to product differentiation - a consumer who is willing to set their travel dates around a day of week flight schedule to save money can do so, while a business traveler who will pay whatever to get there tomorrow has ample options as well
  • Cabin class went from single class, to two-class to now four-class cabins, further increasing options for consumers based on preference
  • More private lounges for those willing to pay for the convenience of avoiding the general airport terminal
  • Private aviation (as Steve mentioned) has grown as an option for those who still seek another product - and we've even seen semi-private emerge with carriers like JSX that create a third option that bridges the two
Which customers are getting screwed? Those who paid the least. When I was a 1K United flyer doing a lot of international business class, things were pretty spectacular.
Click to expand...

You seem to be looking only at pricing outcomes and not at everything else. Capitalism only works when investors can generate profits. The fact that airlines are money incineration machines in the post-regulated environment has ensured that real competition on service isn’t a thing. It’s all a giant race to the bottom, with taxpayers frequently bailing out failed businesses, and investors and creditors getting screwed even more often. This is not functional capitalism.

CoffeeIcePapers said:
CEO compensation becoming mostly stock based and allowing stock buybacks have misaligned the incentives of leaders. Their sole purpose in life is to pump the stock price by any means necessary, instead of running a sound business.

They should instead be focusing on using that money to build infrastructure and technology that allows them to operate more efficiently and at higher margins, but alas, the incentives don’t align with long term plans like that.
Click to expand...

Agreed, this is a problem with publicly traded corporations in general.
 
SlumTodd_Millionaire said:
Quite the opposite, actually. Salaries plummeted after deregulation, and furloughs and concessions skyrocketed. I recommend reading Flying the Line, Vol. 2.



I’m sorry, but there’s simply no comparison here. Charter isn’t the Mercedes of flying, it’s the Rolls Royce. I’m usually in the top 1% or 2% of income earners, and charter is out of my reach for all but the shortest of flights. In the regulated days, middle class people could enjoy a premium product.



You seem to be looking only at pricing outcomes and not at everything else. Capitalism only works when investors can generate profits. The fact that airlines are money incineration machines in the post-regulated environment has ensured that real competition on service isn’t a thing. It’s all a giant race to the bottom, with taxpayers frequently bailing out failed businesses, and investors and creditors getting screwed even more often. This is not functional capitalism.



Agreed, this is a problem with publicly traded corporations in general.
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Though you're right that the industry has generally been a loser, the ten year period prior to the pandemic was characterized by some pretty solid profits.
 
zmiller4 said:
Are you going to complain about how miserable flying across the country for free on Spirit is because of their low class customers?
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Jennifer Dorow: “Once again, you’re doing this tactic, [makes hand motion with hands going off the side], when you try to go off what we’re talking about…”
 
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