Re-Regulating the US Airline Industry

[BeeVee]

OK - the US Government has now stepped in and bailed out Fannie Mae, AIG, and others.

Does anyone think it may be possible to reverse the De-Regulation Act of the late 1970's and subsidize the airline industry?

I'm fairly certain that British Air, Lufthansa, and Air France are all subsidized by their respective governments.

Doing so would be rough on consumers...airfares would rise significantly and choices would decrease -- but for us IN the industry, it might return this profession to the glory days....thoughts??

 

[Daedalus]

I'm sorry for being so blunt dude, but you need to go educate yourself on the history of the airline industry, and get your facts straight about European airline subsidies and the foolish idea that the government's re-regulation of the airline industry will make our profession better.

 

[Cpt Oveur]

Daedalus said it right. I don't think many of us understand what reregulating the airlines pricing and route structure would do to the airline industry. It's very possible it would furlough more pilots. European, Asian, and South American airlines aren't subsidized any more than US airlines are. If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

Being competitive is the only real job security anyone can hope for their company. A company/organization's ability to adapt and react to the market, technology, economy, etc, etc will do more to ensure its survival than any piece of legistlation.

 

[AC560]

If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

And stop all those US pilots flying in India, China, Emirates, etc. at the same time. Far more US pilots have benefited from the liberalization of routes then have lost.

 

[AA767AV8TOR]

If you really want to protect airline pilots jobs, then get them to repeal Open Skies, and stop Air India from operating the shuttle from DCA to LGA, because there isn't anything stopping them.

Capt,


Isn’t what you’re truly advocating a form of re-regulation?? Stopping or impeding international carriers from competing here in the US is not true capitalism. It’s called protectionism which is basically the same thing.


I thought the industry could have been on a course for re-regulation with gas at $135/barrel but with lower oil now and with the US Government up to its eyeballs in trouble with bailing out Wall Street, I don’t see the push for it.

If oil spikes again and the entire industry sliding into bankruptcy, the government will have no choice. Pretty much the same deal that is going on with Fanny, Freddy, and AIG.

AA767AV8TOR

 

[waveflyer]

WHY WOULD THE GOV'T BAIL OUT AIRLINES WHEN WE DO IT FOR THEM?

the problem is in how we have set up our career- there are plenty of professions that have not seen the wage losses that we have - b/c they have leverage. Our system was designed to have leverage in a gov't protected system where we could expect our company to last our entire career.
Our seniority system hampers the free hand of competition b/c none of us can say- "FedEx is offering $XXX<XXX- what can you offer me?" We are all married to our companies and have no system to allow the airlines to fail.
We must either employ a national seniority list of some kind- and/or flatten out payrates industry wide so that it won't destroy our lives if our company fails. If we were confident that the next job paid a livable wage- maybe we'd be stronger.

btw- Herb and I are democrats that argue against the current level of regulation. To say this industry needs more regulation is laughable- you apparently haven't noticed how ineffective/unfair the current regulation and tax situation is.
The appropriate role of gov't is oversight to avoid fraud and ensure safety. (something it has failed at repeatedly under republican rule)(Guess what? when CEO's know the gov't will let them get away w/ whatever- they proceed and line their pockets.)

You want better job security and a fairer distribution of revenues-(ie more money for pilots) VOTE DEMOCRATIC- Don't wish for gov't to bail you out- just make sure they do their job and stop the corruption.

 

[123]

Capt,


Isn’t what you’re truly advocating a form of re-regulation?? Stopping or impeding international carriers from competing here in the US is not true capitalism. It’s called protectionism which is basically the same thing.AA767AV8TOR

Actually, capitalism is a social experiment currently being conducted to some degree in many countries throughout the world, much like socialism, communism, marxism, etc. What YOU are talking about is Globalism.

If oil spikes again and the entire industry sliding into bankruptcy, the government will have no choice. Pretty much the same deal that is going on with Fanny, Freddy, and AIG.

AA767AV8TOR

No choice? Can you tell me how the financial industry is the same as the airline industry, specifically in relation to the crisis that the financial market is in and how our industry problems are similiar. I don't see it, but I could always be wrong.

 

[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 90% military 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 there reduce the number of pilots needed. BTW SWA the low cost provider has near the top wages, this was done under de-reg.

 

[Bringupthebird]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

 

[maru657]

Yes, there is a case for re=regulation being made. The former head of AMR is requesting a look at it along with others. The expansion of the airline industry was coming with or without de-regulation and many of the majors were heavily ex-militry because that's where the preponderance of the pilots were then. With de-regulation the most potent weapon of labor, the strike, is dead and if US airlines are not subsidized, explain United, Us Air, America West etc.

 

[BoilerUP]

If a financial giant fails, the other financial giants that hold that failed giant's debt takes a massive hit...causing their rating to fall and a call on their debts, making them default...and the parade cascades down the line until most if not all the giants (who manage your 401k, are institutional traders, and provide credit for everybody from F100 companies to mom and pop shops to Average Joe Mainstreet for a mortgage) have fallen. And guess who provides credit to most if not all of the small local and regional banks...

Failures of that magnitude would collapse the US financial system and therefore the economy, and cause us all a REAL world of hurt.

If an airline, even one like UAL or AA fails tomorrow, within days and weeks there will be other airlines to fill in some (but not all) of that airline's capacity and routes. The employees without jobs will no doubt be hurt, but with less capacity and competition fares will rise, improving the profitability of the remaining airlines.

One can't reasonably make an argument that a bailout of Fannie/Freddie and a bailout of UAL or any other airline are even somewhat similar as to their effect on the national economy.

 

[Amish RakeFight]

-- but for us IN the industry, it might return this profession to the glory days....thoughts??

Who besides a few pilots (small seemingly powerless group in the grand scheme of things) really care about the "glory days." Not a fan of John Cougar Melloncamp, are you? The glory days are NOT coming back. Handle it.

Automation along with the contemporary pragmatic business models have a LOT to do with it not returning.

There was a reason pilots were paid more and treated with more dignity and respect. The dynamics (the myriad facets of aviation) of the airline revolution have progressed to a point where it's never going back to what's been perceived as the glory days.

heck, I remeber when PC's first came out and programmers were making well over 6 figures right out of a 4 yr program. Now that salary is nothing like it used to be. The field is saturated and computers can do more themselves. Technology builds on technology and in the process, inevitably alienates many things such as wages, workers and so forth.

 

[BoilerUP]

Who besides a few pilots (small seemingly powerless group in the grand scheme of things) really care about the "glory days." Not a fan of John Cougar Melloncamp, are you?

Bruce Springsteen did "Glory Days", not Mellencamp.

 

[Amish RakeFight]

Bruce Springsteen did "Glory Days", not Mellencamp.

You're right. I get them confused!

Thanks.

 

[BoilerUP]

You're right. I get them confused!

Thanks.

:beer:

/likes both JM and da Boss

 

[Bringupthebird]

Yes, there is a case for re=regulation being made. The former head of AMR is requesting a look at it along with others.

What they are saying is that the airline system (due to there being no viable long-haul competition vis a vis rail) has become a national interest of sorts and should be protected.

What it has actually become is a commodity, with no real distinction among players. The internet distribution has helped hasten the erosion of yields by stoking hyper-competitiveness. Add the fact that the airline biz is all about cash and that it's profit margins are grocery-store thin and you can see why the best and brightest aren't attracted to this dead-end industry.

And they aren't about to pay a penny more for labor than they have to.

 

[waveflyer]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

It's always been that way grumps, we just got lazy w/ our unions and had corrupt nmb and gov't officials w/ an agenda interferring w/ our negotiating ability.
To say that it's young guys fault - it's ridiculous- united has had several periods where they hired and trained pilots w/ 200 hours and a commercial license. The military takes zero time guys and gets them up to speed in a year- It can always be done. Our problems lie in our lack of leverage and the fact that the old do not look out for the young.

 

[cjdriver]

Nothing will happen that does not benefit your management. If it behooves them to re-regulate they will have it done by their lackies in the legislature/administration.

 

[waveflyer]

would you give up that easily in an emergency, CJ?

 

[milky]

Pilot wages have dropped because the conditions that brought them about in the first place (industry expansion and the race for market share, the lack of pilots with the skill sets necessary to transition from props to jets) have changed and permanently. Qualifying for a position on the flight deck of a jet can be done in 6 months from zero hours. How much is someone like that worth?

Sorry, but Obama isn't your Hope here.

This has been my exact point on so many posts. In a market sense, our value is not so good right now. Some would argue that there is something to be said for experience in the cockpit, but the market does not seem to agree much right now. So, pay your big money to get your big ATP and make $20,000/year. That's the way it is going these days...