What he said.
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Obama Team Will Look To "Fix" Airlines
- Thread starter yak52driver
- Start date
I completely agree with this - but just to play devil's advocate, isn't what the low budget carriers do in perfect alignment with capitalism? Should we regulate the price of tickets to ensure that employees are paid a good wage (and us pilots paid a SHIT ton because we're so good looking?).
I don't like to fly budget carriers because my experiences on them have been generally bad - I much prefer to pay a few extra bucks and get the perks and the good pilots. But Americans don't want to pay more, they want the same old service at low prices and if they don't get it they'll bitch - but they'll still flying the cheapest ticket. This makes it difficult for legacy carriers to compete without cutting services on their flights. Net result - flying as pax sucks and nobody really wins.
Not sure what the resolution for this is. I'm hesitant to think that regulation is the solution - but damn, flying during that era had perks! I remember when you got a STEAK in COACH! At least on Alaska Airlines.
What other service industry doesn't nickel and dime you? Everyone I can think of has added fees for added services. Hotels charge you for movies, the mini bar, all kinds of stuff. If you ride Amtrak do you a free meal? Fuel costs are way up for airlines since the 1970s, but you still pay a lower price.
I would also have to say that "good service" in every industry has decreased since then. When was the last time (outside NJ) that you saw a full service gas station?
The airlines have a huge systemic problem that the price you pay for a ticket is determined by demand, not supply. The marginal cost to fly another passenger is almost zero. This is further complicated because they cannot carry an inventory of unsold tickets once the plane leaves.
Flights from LA to NY cost anywhere from $200 to $400 nonstop today. If you take 1977s price and adjust it for inflation it would be about $1400-1500. A first class ticket ($1600-$2200) is not that much more expensive, but most people can't afford that.
While not good for pilots, deregulation has been beneficial to the country as a whole.
No sir.
Under the economy flexible fare which is considered a Y class fare if we're speaking SABRE, there is no baggage charge. This fare is also considered a full fare economy ticket.
I've included a screenshot of the chart that describes it.
To my knowledge most airlines follow this same pattern, but I only worked for American.
Let's also not forget the CiC is an office to be held. Nobody really 'works' for Barack Obama, they work for the American People/Congress and The POTUS. Right now that just happens to be President Obama. Throughout a 20 year career that can change many times. It's just like when you salute. You're not necessarily saluting the man, you're saluting the rank and for what it stands.
And to be more specific, I really just don't agree with the man's politics or those of the Pelosi-ish left-wingers either. I'm not some psycho right winger myself, but I definitely don't like the way the some are hell-bent on taking the country. That said, I would still be proud to defend it and make sure that my kids and your kids have the same rights and freedoms that every American should have and I'll continue to vote and voice my opinion. That is what this freedom and democracy thing is all about, right?
So just out of curiosity...do you fell the airline industry has gotten 'too big for it's britches' so to speak? Too much overhead and not enough passengers/paying customers? I can understand the expense in running an airline. A frickin' cessna can cost an arm and a leg, so God knows what keeping a fleet of MG-80's or 747's in tip-top shape would run ya.
Actually, if you get a sleeper car, you do get a free meal.
I think that the landscape of the industry has changed. A lot of airlines have cut their fleets down. They've got to fill every seat to meet costs whereas 10 years ago I would fly as a standby passenger on a 727 with no other people on board. Airlines can't afford to do that. I've seen flights get cut because they weren't profitable even when they were always full.
The regionals have really blown up. These CRJs and ERJs are making a huge impact on the industry itself. I'm the wrong guy to ask about what should be done though because I've never worked in a flight management or flight ops position at a hub.
The thing that I think few people tend to realize or at least recognize is that airlines like Southwest, Airtran, and JetBlue can't take them to Europe, Asia, or South America.
They rave about them here and wonder why the majors aren't like them. They are two very different types of airlines.
I think the seats are getting filled as I've never seen so many people flying in my life, but I think the prices are too low.
That's one reason American is retiring their Super 80 fleet and opting for the 737-800 to replace it. Better fuel economy. The reason they've operated that aircraft for so long though is because all those Super 80s are paid for.
It's a lot to wrap your head around. It's not just about putting passengers in the seats. There is a freight operation involved with many of the airlines and that's also another area to examine. I'll be the first to admit that it's a little too much for me to try to offer a bonafide solution to the problem. There's a lot of problems one of which is prices.
We'll see what happens though.
Yeah, steak in coach & Chateaubriand and lobster in 1st.
It's capitalism to a degree, but if so -- then did the low cost carriers that fell by the wayside not get crushed by the pressures from their better-heeled 'capitalist' survivor/competitors (amongst other factors), too?
I don't pretend to be an economist, but the price of an airline passenger seat (a consumer good?) is only one of many variables that have to interact to make the airline 'model' emulate a classic, workable capitalist endeavor. The list of failed airlines since the 1978 Airline Deregulation Act -- both those in existence and those 'start-ups' -- is truly staggering. There are many reasons for the demise of so many airlines, but the bump in the price of fuel was certainly the leading edge of a wave of challenges that's beset the industry starting in 1973.
Something like 35% of the cost of a passenger seat mile is related to unfunded government mandates, taxes, and government regulation. While some think the airline industry 'deregulated' in 1978 -- it really became a hybrid in which routes, fares, and route entry were deregulated from control of a bureaucratic-bound CAB . Hybrids seldom work as designed and many don't work very well.
^ One of my 'favorite' modern Presidents signing the Airline Deregulation Act of 1978, while the man second from the right is manipulating the strings attached to the pen.
So while we ended up with is a quasi-'deregulation' in domestic routes and fares, everything else in the industry is regulated, recorded, and checked by 'da MAN.
The airline industry is neither 'regulated' or 'deregulated' in the pure sense of the words. It's a compromise created by and promoted by interest groups and politicians. And that usually means the role of government in civil aviation is a 'reaction' to perceived problems, rather than an 'anticipation' of a situation and its possible solutions.
Just my $20 worth ...
Any time I fly between Houston and LAX on Continental (frequently over the past two years) and it's close to "meal time," they usually give out some sort of packaged meal. It's not gourmet by any means, and they even heat up part of it if necessary. Certainly a lot more than pretzels or peanuts, though.
Clux4
Banned
Free market breeds competition and there is no way the front office is going to look out for the little man if they are pre-occupied with the competition. So if you agree that the little man is being trampled in the mix, who should look out for the little man?
From your previous post, it appears that greed and Capitalism go in the same sentence. So are you then supporting a better alternative, one that will look out for the little man?
If you accuse Obama of hating capitalism, then were do you both differ?
Wading warily into a discussion that is very personal to most of you but of academic(I hope)interest to me.
There are really two points to make
1) why airlines are a horrible investment
2) which makes them a horrible industry to work in
Warren Buffett famously declared that if some far sighted capitalist had been at Kitty Hawk in 1903 he would have owed it to capitalists everywhere to shoot Wilbur down. Not even Karl Marx has done as much damage to capitalism.
http://www.biggerbooks.com/bk_detail.aspx?isbn=9780553384611
(Scroll to "U.S Horse Population")
Why? Airlines require large capital investments. If you are a large legacy carrier you are then burdened with pension/pay obligations from the unions. Next fuel prices, a major component of your costs, are unpredictable. When you're finally ready to sell your product, it is a commodity(moving people from A to B) where the average consumer cares(rightly so) only about getting the cheapest seat.
As if that wasn't bad enough, any airline in bankruptcy is allowed to keep operating, which means they are able to lower their labor costs. Those lowered costs undercut their competitors who are then forced into bankruptcy.
So why if you are not a poor airline shareholder should you care? In "Ten commandments for business failure" Don Keough recommends viewing yourself as CEO of ME Inc. You have to first find an industry to get into. Next you have to get as much of a competitive edge(education/training) as you can. Finally work as hard as you can to make ME inc an irreplaceable company.
Unfortunately being an airline pilot is selling a commodity used to make another commodity. There is no meaningful way to distinguish one pilot from another hence the need for seniority. The allure, prestige of the "Airline Pilot" means that there are people that are willing to work for $22K per year. College educated, expensively trained people! The first thing most companies seem to do in banruptcy is shred the pay scales, and lets not even talk about furloughs.
Even worse the threat of technology. Does anyone seriously doubt that we will achieve the technological ability to remotely and safely fly airplanes from the ground with social norms being the showstopper?
Personally I would avoid becoming an airline pilot. IF you have to be in the business then sadly capitalism is NOT your friend. Capitalism is "creative destruction" buggy whip makers, coopers, stage coach drivers, the salting industry have all vanished unlamented. If the free market decides Airline pilots need to go, then they will go! Use of laws can slow it down, but do we really think anything could have stopped kerosene decimating the harpooning industry?
If I was an airline pilot I would be looking for a strong union, refusing to allow foreign pilots, banning the development of any unmanned or remotely piloted airplanes and lobbying(paying) congress to enact laws that guarantee minimum hours, pay etc. But in the end so long as the airline industry does poorly, the long term prospects will be bleak.
There are really two points to make
1) why airlines are a horrible investment
2) which makes them a horrible industry to work in
Warren Buffett famously declared that if some far sighted capitalist had been at Kitty Hawk in 1903 he would have owed it to capitalists everywhere to shoot Wilbur down. Not even Karl Marx has done as much damage to capitalism.
http://www.biggerbooks.com/bk_detail.aspx?isbn=9780553384611
(Scroll to "U.S Horse Population")
Why? Airlines require large capital investments. If you are a large legacy carrier you are then burdened with pension/pay obligations from the unions. Next fuel prices, a major component of your costs, are unpredictable. When you're finally ready to sell your product, it is a commodity(moving people from A to B) where the average consumer cares(rightly so) only about getting the cheapest seat.
As if that wasn't bad enough, any airline in bankruptcy is allowed to keep operating, which means they are able to lower their labor costs. Those lowered costs undercut their competitors who are then forced into bankruptcy.
So why if you are not a poor airline shareholder should you care? In "Ten commandments for business failure" Don Keough recommends viewing yourself as CEO of ME Inc. You have to first find an industry to get into. Next you have to get as much of a competitive edge(education/training) as you can. Finally work as hard as you can to make ME inc an irreplaceable company.
Unfortunately being an airline pilot is selling a commodity used to make another commodity. There is no meaningful way to distinguish one pilot from another hence the need for seniority. The allure, prestige of the "Airline Pilot" means that there are people that are willing to work for $22K per year. College educated, expensively trained people! The first thing most companies seem to do in banruptcy is shred the pay scales, and lets not even talk about furloughs.
Even worse the threat of technology. Does anyone seriously doubt that we will achieve the technological ability to remotely and safely fly airplanes from the ground with social norms being the showstopper?
Personally I would avoid becoming an airline pilot. IF you have to be in the business then sadly capitalism is NOT your friend. Capitalism is "creative destruction" buggy whip makers, coopers, stage coach drivers, the salting industry have all vanished unlamented. If the free market decides Airline pilots need to go, then they will go! Use of laws can slow it down, but do we really think anything could have stopped kerosene decimating the harpooning industry?
If I was an airline pilot I would be looking for a strong union, refusing to allow foreign pilots, banning the development of any unmanned or remotely piloted airplanes and lobbying(paying) congress to enact laws that guarantee minimum hours, pay etc. But in the end so long as the airline industry does poorly, the long term prospects will be bleak.
I think the biggest problem for the airline industry is that the business models most of these airlines have are failures. This ordinarily wouldn't be a problem in a capitalist market... One business fails, another one that can do the job (or at least thinks they can) steps up to bat.
The 'legacy' carriers in this country have failed REPEATEDLY. Our tax dollars have been used time and time again to bail them out. What happens after we bail them out? Their same FAILED business model drags them down into the red again.
For those that aren't familiar with the airline industry in this country (or internationally for that matter), there are a very limited number of resources. The most precious commodity in the airline industry isn't airplanes, it is the very finite number of gates and routes that are available.
The carriers with the failed business models are hogging up all the capital in the market (the popular routes and gate space at popular airports). New entrepreneurs with fresh business models and new ideas simply can't enter the market and compete.
Apparently it has been deemed 'unAmerican' to let big businesses fail in this country. While I don't like a business that is employing tens of thousands of Americans to go belly up, it, in the end, is the best thing for the consumer, and resultantly America as a whole.
It's as if the average joe thinks, "If we let the big airlines just go out of business, we'll have to take trains everywhere!".
No way Jose. There is a tremendous need in this country for air transportation. Wherever there is a need, there is a business that is willing to step in to fulfill that need for a price. Simple economics.
The 'legacy' carriers in this country have failed REPEATEDLY. Our tax dollars have been used time and time again to bail them out. What happens after we bail them out? Their same FAILED business model drags them down into the red again.
For those that aren't familiar with the airline industry in this country (or internationally for that matter), there are a very limited number of resources. The most precious commodity in the airline industry isn't airplanes, it is the very finite number of gates and routes that are available.
The carriers with the failed business models are hogging up all the capital in the market (the popular routes and gate space at popular airports). New entrepreneurs with fresh business models and new ideas simply can't enter the market and compete.
Apparently it has been deemed 'unAmerican' to let big businesses fail in this country. While I don't like a business that is employing tens of thousands of Americans to go belly up, it, in the end, is the best thing for the consumer, and resultantly America as a whole.
It's as if the average joe thinks, "If we let the big airlines just go out of business, we'll have to take trains everywhere!".
No way Jose. There is a tremendous need in this country for air transportation. Wherever there is a need, there is a business that is willing to step in to fulfill that need for a price. Simple economics.