Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

A Crisis That Tops Them All

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web
Its official the writing is on the wall, dont believe all the government crap that the country is recovering, its not! its getting worse? How long does it take to get Canadian citizenship?
 
Dan Roman,
Be careful people might label you a conspiracy theorist if you connect the dots between ex oil execs running the country with unprecendented profits at the oil companies. Bush has to pay back all those who put him in office, and it sure as heck wasn't the workers.
 
JoeMerchant said:
This problem started in 1978 with deregulation. It has been accelerated by Sept. 11, the internet, and soaring fuel prices. ALPA has ignored the problem since 1978 and now you want us all to "stand together". Your a day late and dollar short.

Joe


The best EVER (in history) year (profit-wise) for the top 8 US airlines was 1999. That year the airlines made 5.3 Billion in profit. So I dont think we have been sliding down-hill since 78. Look at AMTRAK, they are regulated, how good are they doing? De-regulation was a good thing.
 
Watch out Comair Pilots....

If Delta files soon, I'll bet that a large number of CRJs will be parked very soon thereafter with RJs kept on only the most profitable connecting or point to point routes.... You can't make much money on those things in a low-fare environment with these stratospheric fuel prices. I am sure the 737-200s and the 300s will also be candidates for the parking lot. It might be a pretty tough road ahead.
 
Last edited:
Redmeat said:
This has been studied by ALPA up, down, side-ways, back-ward, forward and around in circles. The fact is if you raise fares 5% you lose 5% of the flying puIfblic, 10%, 10% of the flying public etc, etc. ALL with diminishing returns. It is NOT that simple to just raise fares. Do you think that if Steenland could make more money for his bonus by raising fares he would? YES! The LCC's will always have lower operating costs than the Legacy's, pure and simple. Their pay structure's are the future. It sucks but it is the "end of an era".

I don't agree that raising fares neccessarily equates to a proportional loss in passengers. Yes, there will be loss - simple economics. But people still need to travel. The public has come to expect $99 coast to coast fares and the airlines have been more than willing to offer them seats at this price even though it is well below their costs.

I think airline managments have become more preoccupied with cash flow than the P+L statements. As long has loads of cash are coming in the front door with 90% load factors, they can take bonuses, pay some of the bills, and squeez a little more out of their workforces. Tilton at United figured this out very early on. I don't think he has passed on a raise or bonus since United has been in BK protection.

Most successful companies find ways to pass on costs to the consumer.

If they didn't spend so much time and energy attacking labor, maybe they would figure out better business models?
 
To all you "just raise the fare" crowd, why doesn't Southwest "just raise their fare"? Wouldn't they make more money? Is Southwest management just dumb?

To cover the costs, the legacy carriers would probably have to raise their fares by 30-40%. Do you really think a carrier, who raises their fares that much, wouldn't see a dramatic drop in traffic?
 
Redmeat said:
The best EVER (in history) year (profit-wise) for the top 8 US airlines was 1999. That year the airlines made 5.3 Billion in profit. So I dont think we have been sliding down-hill since 78. Look at AMTRAK, they are regulated, how good are they doing? De-regulation was a good thing.

1999 was an anomaly. The whole dot-com bubble was an anomaly that created a very false sense of wealth that carried over to the airline industry. There were many expense accounts that could afford last minute walk up fares over a thousand dollars. Those days are over for good. Since 2000, the airline industry has lost more money than it has made since the Wright brothers first flew. De-regulation was good for the consumer, but it has changed things for the airline employee forever. Deal with it or move on.
 
JoeMerchant said:
To all you "just raise the fare" crowd, why doesn't Southwest "just raise their fare"? Wouldn't they make more money? Is Southwest management just dumb?

To cover the costs, the legacy carriers would probably have to raise their fares by 30-40%. Do you really think a carrier, who raises their fares that much, wouldn't see a dramatic drop in traffic?

Joe,

Maybe you didn't know this yet, but the legacies have been lowering their costs dramatically. The average Delta employee WAS paid 23% higher than the average Southwest employee in March of 2004. As of May 2005, the average Delta employee is now paid 7% less. Delta let go over 6000 employees in that time frame also, and increased efficiency. The problem we have is debt and pension payments. Those pensions payments will either be extended by Congress, or dropped. The debt looks like will be worked on in court. All of the legacies are having problems, but most are fixing them and after a stint in court could come out stronger. But, Southwest has a one type fleet and does domestic flying, whereas most legacies have INTL flying and hubs. You can't always compare Southwest to the others.


Bye Bye--General Lee
 
JoeMerchant said:
To all you "just raise the fare" crowd, why doesn't Southwest "just raise their fare"? Wouldn't they make more money? Is Southwest management just dumb?

To cover the costs, the legacy carriers would probably have to raise their fares by 30-40%. Do you really think a carrier, who raises their fares that much, wouldn't see a dramatic drop in traffic?

Southwest has been raising their fares. Every month or two they initiate a $3-4 increase.

Southwest prices their product to generate a certain margin - they aren't out to gouge the customer. They also want to maintain their low fare customer perception. No, Southwest management is far from dumb. They are quite smart.

Southwest also is paying quite a bit less for their fuel than most other airlines.

My airline is heavily hedged through the end of the year too and has been raising ticket prices independent of many of our competitors. We just reported record traffic for August and Kirby stated that we saw double digit revenue increases. He developed a peak day pricing structure and it seems to be paying off.

But our new airline partner is in BK court, has zero hedged fuel, and is really going to hurt from this crisis. They are also guilty of offering $49 seats from PHL to many Florida cities. This is just insanity to me.

We need all the airlines to rationally price their products for the industry not to totally self destruct.
 

Latest resources

Back
Top