What would "re-regulation" mean?

[TOGA]

I'm beginning to see & hear this subject brought up more & more . . . Oberstar on the Hill, Crandall on MSNBC, etc. I'm interested to hear everyone's thoughts on what this would mean . . . to the industry, us, pax, etc . . . talk amongst yourselves.

 

[Raoul Duke]

It will never happen, not worth wasting the time thinking about it.

 

[CitationUltra]

I'm beginning to see & hear this subject brought up more & more . . . Oberstar on the Hill, Crandall on MSNBC, etc. I'm interested to hear everyone's thoughts on what this would mean . . . to the industry, us, pax, etc . . . talk amongst yourselves.

It would mean the government setting fares and determining who flies which route. That was the way it was prior to 1978, e.g., prior to "deregulation" which was actually only a partial deregulation, and not a successful one at that.

 

[Lear70]

It would mean:

1. Fewer aircraft, overcapacity is a major problem, and regulation would set frequency and aircraft size for everyone.

2. Fewer pilots, for that reduction in capacity.

3. Angry, angry citizens, either from steep increase in ticket prices or the increase in taxes that would be needed to subsidize fares to keep them low enough to avoid public outcry.

Something has to give, this insanity has got to end, but I don't think the house or the senate, who rely on their constituents to vote them back into office come re-election time, will ever follow through on it.

Too much fallout to suffer.

 

[vtwo]

I know it won't happen BUT

I know it won't happen but the Bankruptcy laws need to be rewritten. No airline should be allowed to file for BK and then operate for years at a competitive advantage while the others are forced to pat stadard prices. then when the airline exits BK the ones who put it there get bonuses while those who have invested money( share holders), careers(employees). are fleeced. al the wile forcing the other wel run and managed companies to do the same if they are to stay competitive.

Bottom line is Bk should equal liquidation.
then maybe these thieves would not be so fast to rush to the pro business courts. crying " it's 9/11, or the fuel prices, or it's the economy or labor cost"
just sell your product for what it cost plus your profit margin desired.
If you won't do that it could be self induced business suicide.
If the politicians are so worried about preserving jobs in their sector then may some sort of pricing limits should be imposed. After all they set minimum prices for drugs, milk and cigarettes why not airfare?

 

[inline]

I'm beginning to see & hear this subject brought up more & more . . . Oberstar on the Hill, Crandall on MSNBC, etc. I'm interested to hear everyone's thoughts on what this would mean . . . to the industry, us, pax, etc . . . talk amongst yourselves.

Would be a giant step backwards. Hardly anyone flew before deregulation.

 

[Jmoney]

Great point!

I know it won't happen but the Bankruptcy laws need to be rewritten. No airline should be allowed to file for BK and then operate for years at a competitive advantage while the others are forced to pat stadard prices. then when the airline exits BK the ones who put it there get bonuses while those who have invested money( share holders), careers(employees). are fleeced. al the wile forcing the other wel run and managed companies to do the same if they are to stay competitive.

Bottom line is Bk should equal liquidation.
then maybe these thieves would not be so fast to rush to the pro business courts. crying " it's 9/11, or the fuel prices, or it's the economy or labor cost"
just sell your product for what it cost plus your profit margin desired.
If you won't do that it could be self induced business suicide.
If the politicians are so worried about preserving jobs in their sector then may some sort of pricing limits should be imposed. After all they set minimum prices for drugs, milk and cigarettes why not airfare?

I have told people this for a long time......

Regulation is still alive and well. Just think of regulation as "corporate welfare." All we have done is replace one type of "corporate welfare" with another-simply known as "bankruptcy." There is no minimum standard for airlines anymore-you can simply run a company into the ground and still profit.

 

[Otto77]

Would be a giant step backwards. Hardly anyone flew before deregulation.

good that is the way it should be. Its a privilege... It should cost more than 200 bucks for the average joe blow to fly in a pressurized aluminum tube 30,000 feet in the air. Something is jacked up when it costs more to drive my car on vacation than flying.

 

[buckeyes95]

It would be stability for communities, for employees, and for the passengers. It would mean fewer pilots and planes in the air, but we are headed there anyway. It would mean ending the race to the bottom. Deregulation has been a complete and total failure. Besides, the airlines were not truely deregulated anyway.

 

[Otto77]

It would be stability for communities, for employees, and for the passengers. It would mean fewer pilots and planes in the air, but we are headed there anyway. It would mean ending the race to the bottom. Deregulation has been a complete and total failure. Besides, the airlines were not truely deregulated anyway.

agreed!

 

[Way2Broke]

It would mean that the government would be admitting that is made a mistake. Our government is not good at that, so even if it would be a good thing, it may never happen.

 

[Hamburger]

Hardly anyone flew before deregulation.

More along the line of airlines made money and poor people had to ride the goddamn bus.

 

[Jonny Sacko]

I know it won't happen but the Bankruptcy laws need to be rewritten. No airline should be allowed to file for BK and then operate for years at a competitive advantage while the others are forced to pat standard prices. then when the airline exits BK the ones who put it there get bonuses while those who have invested money( share holders), careers(employees). are fleeced. al the wile forcing the other well run and managed companies to do the same if they are to stay competitive.

Bottom line is Bk should equal liquidation.
then maybe these thieves would not be so fast to rush to the pro business courts. crying " it's 9/11, or the fuel prices, or it's the economy or labor cost"
just sell your product for what it cost plus your profit margin desired.
If you won't do that it could be self induced business suicide.
If the politicians are so worried about preserving jobs in their sector then may some sort of pricing limits should be imposed. After all they set minimum prices for drugs, milk and cigarettes why not airfare?

I think even more, we need employee benefits paid BEFORE creditors. That little change would STOP bankruptcies, if not forever, slow them way down. Right now, anything the company owes employees, gets tossed the day they file.

As for re-regulation, it doesn't state the cost per leg, it allows the companies to BID on each route. The cost of the route designates the cost per flight. The PRICE charged passengers can fluctuate greatly, since they have NO competition. What the government SHOULD do, (like the funny faced guy said) at major cities JFK,LGA,EWR etc. split off maybe 5% to companies that aren't based there. Leave the rest for the Hubbed airline, but they MUST pay for those routes from there. If they can't pay the cost per route, sell them back to the government, who will find another airline to purchase those routes. It's an excellent way to bring back dignity in this industry. ALPA should be banging for this, but Prater is such a sellout he can't understand anything like this. I wish anyone of you guys were in charge of ALPA National before that looser. The pilots unoion has a lot of clout if USED. It's all a pipe dream, too bad.

 

[GogglesPisano]

I know it won't happen but the Bankruptcy laws need to be rewritten. No airline should be allowed to file for BK and then operate for years at a competitive advantage while the others are forced to pat stadard prices. then when the airline exits BK the ones who put it there get bonuses while those who have invested money( share holders), careers(employees). are fleeced. al the wile forcing the other wel run and managed companies to do the same if they are to stay competitive.

?

I believe the BK laws were changed back in 2005. The same laws that affected personal filings also affected business filings. DL and NW just made it in under the wire.

 

[pilotyip]

Life was good for a few pilots under regulation. There are probably 4-5 times as many pilot’s jobs now as there was in 1977. Back in reg time it was about 75% military hiring that went to the majors. Dereg opened up a lot of airline job to non-military pilots. To return to regulation would raise ticket prices, reduce the number of passengers, and therefore reduce the number of pilots needed.

 

[Vne]

Re-regulation means one thing to Government and Airline executives.
Foreign ownership and cobotage.(sp?)

The "set-up" was the English-proficient endorsement....20 yrs from now all pilots will be Indian and Chinese.Flying JFk to LAX. Airlines will go the way of the US Merchant fleet..jmho

 

[Lear70]

I believe the BK laws were changed back in 2005. The same laws that affected personal filings also affected business filings. DL and NW just made it in under the wire.

But not by enough to really change the way things are done by MOST of the carriers.

This is one of the reasons I think Frontier is on the fence; the timelines required and new DiP financing and exit financing structure requirements are pretty strict, and they'll be hard-pressed (not impossible, just very difficult) to get it all lined up in time.

Most Ch. 11 bankruptcies are a very thought-out process, and their suitors (creditors for DiP and exiting) are lined up before they go in.

I would like to see legislation that does 3 things with the airlines:

1. Requires each airline to charge AT LEAST the cost of producing their ticket ON EACH SEGMENT individually, not "taking a loss on leg 1 to drive someone out of business then making it up on leg 2".

2. Restricts airlines from filing bankruptcy more than once every 20 years. If they can't make it, they liquidate.

3. Restrict ANY senior management official (from V.P. of ANY department on up) from holding ANY position at an airline for 20 years from the date of the EXIT of that airline from bankruptcy. You mis-managed a carrier that badly? Get treated like Frank Lorenzo - get out and STAY OUT!

Responsible management combined with harsh penalties for failure combined with forced responsibility in fare pricing would accomplish nearly as much as re-regulation. Maybe not for the individual employees but, again, the average taxpayer doesn't give a rat about us.

I personally believe this is an easier "sell" on the Hill than full re-regulation of this industry, which would cost BILLIONS our government doesn't really have to be throwing around. We're already in debt with the rest of the world badly enough as it is...

 

[RockyMnt1]

FedEx would have to resort to flying the Falcon 20's again!! 4-5 Falcon 20's flying wing tip to wing tip all headed for LAX....That really sounds efficient.....

 

[Way2Broke]

FedEx would have to resort to flying the Falcon 20's again!! 4-5 Falcon 20's flying wing tip to wing tip all headed for LAX....That really sounds efficient.....

Whats wrong with flying Falcon 20s in formation? :laugh:

 

[CitationUltra]

It would mean:

1. Fewer aircraft, overcapacity is a major problem, and regulation would set frequency and aircraft size for everyone.

2. Fewer pilots, for that reduction in capacity.

3. Angry, angry citizens, either from steep increase in ticket prices or the increase in taxes that would be needed to subsidize fares to keep them low enough to avoid public outcry.

Something has to give, this insanity has got to end, but I don't think the house or the senate, who rely on their constituents to vote them back into office come re-election time, will ever follow through on it.

Too much fallout to suffer.

Yes. All that too.

Capacity would have to decrease, as it is excessive now, and there would be fewer flights on any given city-pair. And probably a lot fewer pilots working, which may happen anyway, as things are going.

As to the angry people, I'm not sure they would be any angrier than they are now with the execrable service. You can't have it both way, i.e., superb service and cheap, cheap fares like they are now. You get what you pay for.

 

[pilotyip]

lousy formation airplane

Whats wrong with flying Falcon 20s in formation? :laugh:

The DA-20 has a AFU flight control system, combined with AQ varible geomerty off of the co-pilots pitot tube, and bungee strings, I don't think I would like flying the DA-20 in parade formation. BTW AFU = (Artifical Feel Unit)

 

[CitationUltra]

But not by enough to really change the way things are done by MOST of the carriers.

This is one of the reasons I think Frontier is on the fence; the timelines required and new DiP financing and exit financing structure requirements are pretty strict, and they'll be hard-pressed (not impossible, just very difficult) to get it all lined up in time.

Most Ch. 11 bankruptcies are a very thought-out process, and their suitors (creditors for DiP and exiting) are lined up before they go in.

I would like to see legislation that does 3 things with the airlines:

1. Requires each airline to charge AT LEAST the cost of producing their ticket ON EACH SEGMENT individually, not "taking a loss on leg 1 to drive someone out of business then making it up on leg 2".

2. Restricts airlines from filing bankruptcy more than once every 20 years. If they can't make it, they liquidate.

3. Restrict ANY senior management official (from V.P. of ANY department on up) from holding ANY position at an airline for 20 years from the date of the EXIT of that airline from bankruptcy. You mis-managed a carrier that badly? Get treated like Frank Lorenzo - get out and STAY OUT!

Responsible management combined with harsh penalties for failure combined with forced responsibility in fare pricing would accomplish nearly as much as re-regulation. Maybe not for the individual employees but, again, the average taxpayer doesn't give a rat about us.

I personally believe this is an easier "sell" on the Hill than full re-regulation of this industry, which would cost BILLIONS our government doesn't really have to be throwing around. We're already in debt with the rest of the world badly enough as it is...

Wow, I couldn't agree more on this. The points about "two strikes you're out" for companies and the time bar on management would cause people to think twice about pursuing short-term policies and cavalierly entering bankruptcy as a business strategy, the way things are now.

I believe that carrier should be able to continue operations under bankruptcy only under very limited circumstances, not to use the procedure to lower bloated costs. And yes, one BK to a customer.

 

[Propsync]

I wish you all would look at it from the point of the consumer. Deregulation sucks for you as you look at your career. But it also got the travel/hotel/car rental/cruise/etc. off the ground as well. You re-regulate and you will leave a black hole where the travel industry used to be. I guarantee it will be at least five times the jobs lost from overcapacity in the airlines just so YOUR job is stable. Consumers have spoken, there will be no going back.

 

[Way2Broke]

The DA-20 has a AFU flight control system, combined with AQ varible geomerty off of the co-pilots pitot tube, and bungee strings, I don't think I would like flying the DA-20 in parade formation. BTW AFU = (Artifical Feel Unit)

http://www.youtube.com/watch?v=HY6fohrKL5s

These guys do it, why can't FedEx?

 

[suupah]

good that is the way it should be. Its a privilege... It should cost more than 200 bucks for the average joe blow to fly in a pressurized aluminum tube 30,000 feet in the air. Something is jacked up when it costs more to drive my car on vacation than flying.

remember when flying was the most expensive part of a vacation?

 

[nyboilermaker]

It would be stability for communities, for employees, and for the passengers. It would mean fewer pilots and planes in the air, but we are headed there anyway. It would mean ending the race to the bottom. Deregulation has been a complete and total failure. Besides, the airlines were not truely deregulated anyway.

I'll second that.

 

[PCL_128]

Come on Lear, don't tell me that you've fallen for the Alfred Kahn lies, too!

It would mean:

1. Fewer aircraft, overcapacity is a major problem, and regulation would set frequency and aircraft size for everyone.

We don't have an overcapacity problem. We have an under-priced-fares problem. Reregulation would not require a reduction in capacity.

2. Fewer pilots, for that reduction in capacity.

Again, no need for a reduction in capacity, no need for a reduction in pilots.

3. Angry, angry citizens, either from steep increase in ticket prices or the increase in taxes that would be needed to subsidize fares to keep them low enough to avoid public outcry.

At some point, congress will realize that there is going to be huge backlash either way, and they'll go for the real fix of reregulation. I think the current merger-palooza might delay the inevitable return to regulation, but it'll come eventually. This industry simply can't survive without some government controls of fares and route authority.

 

[Lear70]

Come on Lear, don't tell me that you've fallen for the Alfred Kahn lies, too!

We don't have an overcapacity problem. We have an under-priced-fares problem. Reregulation would not require a reduction in capacity.

OK... which came first, the chicken or the egg?

Are fares low because we have over-capacity and airlines pricing their product below what it costs to produce it in order to compete for the traveler?

Or do we have over-capacity that needs to be fed resulting in lower and lower ticket prices until we reach the point that the 80's leftover with the mullet is going to see that "hot" chick he met on MySpace for $39 each way?

Again, no need for a reduction in capacity, no need for a reduction in pilots.

Can't have it both ways, buddy...

If you raise fares on the scale that is needed to solve airline liquidity problems LONG-term, INCLUDING getting your employees back into realistic incomes and putting money into their savings and retirement plans, you're talking about likely doubling them... or more.

Sure, a short-term $10 or $20 fare hike will solve the fuel problem for many carriers, but those carriers will eventually have to buy new airplanes, invest in infrastructure, and that's expensive.

So what happens when regulation comes and doubles all the fares? People who were doing those $49-109 internet fares (about 1/3 of the traveling public) will think twice at their discretionary travel plans, especially if fuel stays high and other commodities get more expensive as a result.

That WILL drive down loads which, if regulated, would automatically pull down capacity when a load on a certain route reaches a cutoff point and the carrier no longer wants to run it.

So, prices go up, loads go down, capacity goes down. I don't think it would be as dramatic as Propsync does, but there WOULD be capacity drops, job loss, and a lot of general angst and gnashing of teeth.

At some point, congress will realize that there is going to be huge backlash either way, and they'll go for the real fix of reregulation. I think the current merger-palooza might delay the inevitable return to regulation, but it'll come eventually. This industry simply can't survive without some government controls of fares and route authority.

I wish... I don't think they'll react soon enough to do anything meaningful.

You have these four carriers get together to make 2 mega-carriers, there WILL be cuts in capacity, through either a gate/slot forced selloff by the DOJ or through the BoD's at each airline paring down bases after a couple of "honeymoon" years or both.

Any talk of anything else is just crowd appeasement.

The politicians on the Hill will look at all of it combined with the losses of 6 airlines in 30 days (likely another filing or two before the end of the summer) and say, "This looks like it might sort itself out, let's see what happens with some mega-carrier mergers and less competition".

Then they'll step back and watch us go through another 7-10 year gyration of profit, loss, bankruptcy, and THEN start thinking about it again except, next time, if the wrong people are on the Hill and in the White House, their answer might be increased Cabotage: "If American companies can't make money at it, we'll let foreign companies take a whack at it. We'll still get the taxes, people still get to fly, it's just a few more outsourced jobs."

Like I said before, I think this career is train wreck quickly approaching critical velocity and the point of no return for the employees.

 

[PCL_128]

OK... which came first, the chicken or the egg?

Are fares low because we have over-capacity and airlines pricing their product below what it costs to produce it in order to compete for the traveler?

Or do we have over-capacity that needs to be fed resulting in lower and lower ticket prices until we reach the point that the 80's leftover with the mullet is going to see that "hot" chick he met on MySpace for $39 each way?

Low fares are the result of management chasing market share while ignoring profits. Capacity isn't the problem. If a new CAB came in and controlled fares to end the fare wars, load factors would reduce slightly, but profits would soar, and no capacity would need to be cut.

 

[Lear70]

Low fares are the result of management chasing market share while ignoring profits. Capacity isn't the problem. If a new CAB came in and controlled fares to end the fare wars, load factors would reduce slightly, but profits would soar, and no capacity would need to be cut.

You're assuming people would still buy tickets at that highly-increased price in the same number they do now...

I'm pretty certain they did a study not too long ago that showed a price cutoff of around $200 per person for most leisure travel. Anything more than that and they took a huge hit on how many leisure travelers fly that segment (domestically of course).

Increases have to come up long-term and they have to be substantial, in small steps certainly to avoid "sticker shock" with new ticket prices but, eventually, we're going to hit a mark where people will just say "We'll go to Disney next year, this year it's the 4 hour drive to (insert 6-Flags type of water park near you)".

Supply and demand is never perfectly elastic.