bigshooter107
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CTS
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- Aug 27, 2003
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There have been an estimated 189 airline bankruptcy's since deregulation in 1979. That's an average of 5.9 per year! Just because seats are full does not mean anybody is making money. Tough industry to work in!
http://news.yahoo.com/american-airlines-parent-seeks-ch-11-protection-130619191.html
http://news.yahoo.com/american-airlines-parent-seeks-ch-11-protection-130619191.html
damnflyboy
Well-known member
- Joined
- Dec 8, 2007
- Posts
- 456
Interesting article on this topic:
The High Price of Airline Deregulation
In the last quarter-century, the rate of bankruptcy among air carriers has been as much as 10 times higher than that of the general business community.
*****
September 15, 2005
*****
*****
*****
*****
A month ago, I was searching online for a nonstop flight from Albany, N.Y. to Washington, D.C. United's flight was full, but a direct flight was available from a company called Independence Air and it was $100 cheaper. I was intrigued. Having never heard of that airline, I did what any seasoned traveler would do -- I googled it. A story from USA Today, dated the day before, reported that Independence Air's CEO had just notified the securities community that the airline might file for bankruptcy, perhaps even before my flight was to take off.
Independence Air: born 2004, died 2005, a remarkably common corporate tombstone in the era of deregulated airlines.
This July, the Government Accounting Office issued a report discussing the dismal financial state of the industry. "While the airlines industry was deregulated 27 years ago, the full effect on the airline industry's structure is only now becoming evident," it concluded.
In the 27 years before airline deregulation, no airline went bankrupt. Since 1978, 160 airlines have come and gone. In the last quarter-century, the rate of bankruptcy among air carriers has been as much as 10 times higher than that of the general business community. In 2005, virtually all major airlines are either in bankruptcy (United and US Air were joined Wednesday by Delta and Northwest) or on the verge of bankruptcy. How did we come to this?
In the late 1970s, the airline system was straining under an inflexible and cumbersome regulatory system. A long, drawn-out proceeding was needed simply to get permission from the Civil Aeronautics Board (CAB) for employees of two affiliated airlines to wear similar uniforms! Something needed to be done.
The liberals in control of Congress, the White House and the CAB opted for revolution rather than evolution. Rather than mend the existing system, they blew it up. By the early 1980s, federal controls over the entry and exit of airlines, over flight schedules and airfares were abolished. Quality of service requirements ended. Financial oversight was abandoned. Only airline safety remained under federal regulation.
Today, conservatives control Congress and the White House, and they fight even the tiniest move to reestablish some federal control over airlines. A near consensus exists that airline deregulation, in the words of The Economist, has been a "virtually unqualified success."
From my perspective, the cost-benefit analysis of airline deregulation depends on how wide a lens one is using.
Advocates of deregulation point to the fact that the number of air passengers has soared since 1978. They rarely note that it soared just as fast in the years before deregulation. They point out that airline rates have dropped significantly since deregulation for most (but not all) passengers. They rarely divulge that rates fell just as fast in the 27 years before deregulation.
Indeed, the use of price alone as a measure of success is looking increasingly suspect. In the last four years, for example, airfares have dropped more than 15 percent. In the same time frame, 20 airlines have gone bankrupt. United and US Air have walked away from their pension obligations. Northwest just imposed a 25 percent unilateral wage reduction on its machinists. The industry as a whole has lost $25 billion. This is not healthy competition.
The most ardent proponents of airline deregulation argue that as much as half the price decrease since 1978, or about 20 percent overall, is a result of deregulation. Others argue that this figure is wildly exaggerated. For example, the emergence of internet booking alone may have had a substantial impact on ticket prices, since it all but eliminated the 10 percent commission travel agents had earned for booking flights.
So let's split the difference and say deregulation has resulted in a 10 percent ticket price reduction; perhaps $35 on a typical round-trip flight. That's the benefit. What's the cost?
In 1978, when you bought a ticket, it was fully refundable. You could change flights without penalties. No Saturday night stayovers were required. Today most people who receive steep discounts must spend more time on the road, either staying over extra days or traveling from more distant airports. People fly into Baltimore or Dulles rather than Washington National. They save money on the ticket, and spend another hour or so and $30-$45 more for the cab.
Airline passengers may have saved 10 percent, but hundreds of thousands of people have lost their jobs or their job security or their pensions.
From the perspective of 2005, some of the horror stories bandied about by those who argued for deregulation in the 1970s seem less, well, horrible. One regulation critic noted that the CAB approved fewer than 10 percent of airline applications to open new service routes between l965 to 1978. But in the 1970s the load factor on planes (the number of seats filled for an average flight) was about 50 percent. Why should new routes have been approved?
In 1973-74 oil prices quadrupled. But there were no bankruptcies in the airline industry. The operational cost increases were passed through to the customers.
Yes, we paid a price for airline stability and continuity and job security (and pretzels, pillows, meals and movies). But the price was modest. Overall, if we take into account the full costs to employees, customers and communities, the regulatory era almost surely had a more positive cost-benefit ratio than the one in which we now live.
The High Price of Airline Deregulation
In the last quarter-century, the rate of bankruptcy among air carriers has been as much as 10 times higher than that of the general business community.
*****
September 15, 2005
*****
*****
*****
*****
A month ago, I was searching online for a nonstop flight from Albany, N.Y. to Washington, D.C. United's flight was full, but a direct flight was available from a company called Independence Air and it was $100 cheaper. I was intrigued. Having never heard of that airline, I did what any seasoned traveler would do -- I googled it. A story from USA Today, dated the day before, reported that Independence Air's CEO had just notified the securities community that the airline might file for bankruptcy, perhaps even before my flight was to take off.
Independence Air: born 2004, died 2005, a remarkably common corporate tombstone in the era of deregulated airlines.
This July, the Government Accounting Office issued a report discussing the dismal financial state of the industry. "While the airlines industry was deregulated 27 years ago, the full effect on the airline industry's structure is only now becoming evident," it concluded.
In the 27 years before airline deregulation, no airline went bankrupt. Since 1978, 160 airlines have come and gone. In the last quarter-century, the rate of bankruptcy among air carriers has been as much as 10 times higher than that of the general business community. In 2005, virtually all major airlines are either in bankruptcy (United and US Air were joined Wednesday by Delta and Northwest) or on the verge of bankruptcy. How did we come to this?
In the late 1970s, the airline system was straining under an inflexible and cumbersome regulatory system. A long, drawn-out proceeding was needed simply to get permission from the Civil Aeronautics Board (CAB) for employees of two affiliated airlines to wear similar uniforms! Something needed to be done.
The liberals in control of Congress, the White House and the CAB opted for revolution rather than evolution. Rather than mend the existing system, they blew it up. By the early 1980s, federal controls over the entry and exit of airlines, over flight schedules and airfares were abolished. Quality of service requirements ended. Financial oversight was abandoned. Only airline safety remained under federal regulation.
Today, conservatives control Congress and the White House, and they fight even the tiniest move to reestablish some federal control over airlines. A near consensus exists that airline deregulation, in the words of The Economist, has been a "virtually unqualified success."
From my perspective, the cost-benefit analysis of airline deregulation depends on how wide a lens one is using.
Advocates of deregulation point to the fact that the number of air passengers has soared since 1978. They rarely note that it soared just as fast in the years before deregulation. They point out that airline rates have dropped significantly since deregulation for most (but not all) passengers. They rarely divulge that rates fell just as fast in the 27 years before deregulation.
Indeed, the use of price alone as a measure of success is looking increasingly suspect. In the last four years, for example, airfares have dropped more than 15 percent. In the same time frame, 20 airlines have gone bankrupt. United and US Air have walked away from their pension obligations. Northwest just imposed a 25 percent unilateral wage reduction on its machinists. The industry as a whole has lost $25 billion. This is not healthy competition.
The most ardent proponents of airline deregulation argue that as much as half the price decrease since 1978, or about 20 percent overall, is a result of deregulation. Others argue that this figure is wildly exaggerated. For example, the emergence of internet booking alone may have had a substantial impact on ticket prices, since it all but eliminated the 10 percent commission travel agents had earned for booking flights.
So let's split the difference and say deregulation has resulted in a 10 percent ticket price reduction; perhaps $35 on a typical round-trip flight. That's the benefit. What's the cost?
In 1978, when you bought a ticket, it was fully refundable. You could change flights without penalties. No Saturday night stayovers were required. Today most people who receive steep discounts must spend more time on the road, either staying over extra days or traveling from more distant airports. People fly into Baltimore or Dulles rather than Washington National. They save money on the ticket, and spend another hour or so and $30-$45 more for the cab.
Airline passengers may have saved 10 percent, but hundreds of thousands of people have lost their jobs or their job security or their pensions.
From the perspective of 2005, some of the horror stories bandied about by those who argued for deregulation in the 1970s seem less, well, horrible. One regulation critic noted that the CAB approved fewer than 10 percent of airline applications to open new service routes between l965 to 1978. But in the 1970s the load factor on planes (the number of seats filled for an average flight) was about 50 percent. Why should new routes have been approved?
In 1973-74 oil prices quadrupled. But there were no bankruptcies in the airline industry. The operational cost increases were passed through to the customers.
Yes, we paid a price for airline stability and continuity and job security (and pretzels, pillows, meals and movies). But the price was modest. Overall, if we take into account the full costs to employees, customers and communities, the regulatory era almost surely had a more positive cost-benefit ratio than the one in which we now live.
labbats
Zulu who?
- Joined
- May 25, 2003
- Posts
- 2,593
Sheesh. So who is better off now? The 20 year Eagle captain who elected Eagle Rights and is senior at the top of a bankrupt regional or the 20 year Eagle captain who finally flowed up to an equally bankrupt AA and is at the bottom of the seniority list?
This industry is a bigger drag than full speedbrakes sometimes.
This industry is a bigger drag than full speedbrakes sometimes.
Taco Rocket
Well-known member
- Joined
- Aug 9, 2005
- Posts
- 303
You mean after AA parks aircraft and furloughs another 3,000 guys?
damnflyboy
Well-known member
- Joined
- Dec 8, 2007
- Posts
- 456
Figures. It sounded too good to be true. I hope the Eagle guys get to keep it.
spudskier
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- Joined
- Dec 29, 2004
- Posts
- 565
amcnd
Well-known member
- Joined
- Oct 1, 2003
- Posts
- 901
I was on my iphone with 3 kids yelling at me... Got other things going on.. But like to atleast see whats going on with GL every day?... And put my .02 cents in. Sorry. Double...
American declares bankruptcy. CEO bails out the night before bankruptcy with his golden parachute. Pilots will have their pension terminated. Their CBA could be tossed like garbage by a BK judge, but most likely, they will have many concessions and pay cuts shoved down their throats. Scope will be eroded further to outsource 70-90 seaters to regionals other than Eagle. Management will award (bonus) to their executive management, and then they will emerge out of bankruptcy as a "new, lower cost" airline.
Seriously........ THAT is the reality of airlines in the US today. The last place anyone should rip on is Emirates. The pay/compensation package is good, the checks clear, and they've always made money. Who's more likely to be around for the next 50 years. American, Delta, United, US Air, or Emirates, Qatar, Etihad? I'd put my money on a Middle Eastern airline any day.
The airline pilot profession in the United States is dead.
Seriously........ THAT is the reality of airlines in the US today. The last place anyone should rip on is Emirates. The pay/compensation package is good, the checks clear, and they've always made money. Who's more likely to be around for the next 50 years. American, Delta, United, US Air, or Emirates, Qatar, Etihad? I'd put my money on a Middle Eastern airline any day.
The airline pilot profession in the United States is dead.
Citjok
Well-known member
- Joined
- Jun 12, 2005
- Posts
- 173
The airline pilot profession in the United States is dead.[/QUOTE]
The airline pilot profession in the US is not dead. It is just very different from what it was. Between corporate raiders(CEO's) and unions our job has turned in being basically "glorified bus drivers", so we get treated like such. With that being said the next couple of years will be very interesting considering the upcoming retirements.
The airline pilot profession in the US is not dead. It is just very different from what it was. Between corporate raiders(CEO's) and unions our job has turned in being basically "glorified bus drivers", so we get treated like such. With that being said the next couple of years will be very interesting considering the upcoming retirements.
SpaceShipEarth
Well-known member
- Joined
- Jun 15, 2011
- Posts
- 167
james1
Life"r"regionalFOsuckar
- Joined
- Oct 6, 2003
- Posts
- 24
Well it's official now every major (legacy) airline have gone down in BK and it always those damn greedy pilots fault, or so they would like you to believe. I love the press releases don't you? And the press themselves? Having been at Eagle and Comair myself, I know a thing or two about getting the very short end of the stick. I bailed. I don't fly anymore. After 11 years in the right seat of regional A/C I saw no "light" at the end of the tunnel. There will be NO pilot shortage, more BK's and mergers will take care of that. Every professional pilot needs to reevaluate themselves and ask one simple question "is it really worth it"?
Is it worth it to be topped out at $40,000 for the rest of your career?
Is it worth it to only see your family 2 times a month?
Is it worth it to be held to a higher standard than everyone else, but then not be respected as such?
Is it worth it to be told day in and day out "you cost too much, but you better fly safe or we'll fire you"? (you might die too)
Is it worth it to fly with an unsafe as#$%! in the left seat that could care less about your future because he got there first?
Is it worth it to be told by all major airline pilots you are not a REAL pilot?
Is it worth it to be treated like a second class citizen every where you go (airports, hotels, the bunny ranch
?
Is it worth it to sacrifice what you sacrificed and get nothing but disrespect in the end?
My answer was finally NO. It took me 11 years to see the light that the airlines are not worth it for me. The dream job is dead as previously stated, and it continues to die with every BK and quarterly report showing a "loss".
When are the pilots in this country going to stand up and say, "enough"! We all deserve more respect than what we receive. The fat cats at the top will ALWAYS GET PAID WHAT THEY DON'T DESERVE. When they ask for more cuts to your profession when are you going to say "no, it's not worth it. Thanks for playing." When they say take this cut or we'll shut it down, when will you say, "go ahead and shut it down, it's not worth it".
I don't know how else to say it guys and gals, but it time you all stood up and said it's not worth it anymore. How much more do these people have to take from you before you do???? I did. Good night and good luck.....you all need it in this profession. Oh and by the way... fly safe.
Is it worth it to be topped out at $40,000 for the rest of your career?
Is it worth it to only see your family 2 times a month?
Is it worth it to be held to a higher standard than everyone else, but then not be respected as such?
Is it worth it to be told day in and day out "you cost too much, but you better fly safe or we'll fire you"? (you might die too)
Is it worth it to fly with an unsafe as#$%! in the left seat that could care less about your future because he got there first?
Is it worth it to be told by all major airline pilots you are not a REAL pilot?
Is it worth it to be treated like a second class citizen every where you go (airports, hotels, the bunny ranch
?Is it worth it to sacrifice what you sacrificed and get nothing but disrespect in the end?
My answer was finally NO. It took me 11 years to see the light that the airlines are not worth it for me. The dream job is dead as previously stated, and it continues to die with every BK and quarterly report showing a "loss".
When are the pilots in this country going to stand up and say, "enough"! We all deserve more respect than what we receive. The fat cats at the top will ALWAYS GET PAID WHAT THEY DON'T DESERVE. When they ask for more cuts to your profession when are you going to say "no, it's not worth it. Thanks for playing." When they say take this cut or we'll shut it down, when will you say, "go ahead and shut it down, it's not worth it".
I don't know how else to say it guys and gals, but it time you all stood up and said it's not worth it anymore. How much more do these people have to take from you before you do???? I did. Good night and good luck.....you all need it in this profession. Oh and by the way... fly safe.
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