I don't think that it is a "race to the botom", I think that the industry has changed. Sorry. Air travel has become a commodity. It has been happening ever since deregulation.
I could just as easily make the statement that the LCC's could pay their pilots more, if they did not have to compete with airlines that were living beyond their means in "la-la land" this includes both those who are operating in bankruptcy (UAL, USAirways, and previously CAL, TWA, AWA, etc) and those like Delta, who are content to lose over $4 million a day, while dumping seats into our routes at prices below their cost.
"What?" you sputter . . . "The LCC sets the low price in the marketplace- it's their fault! And their pilots!".
Puh-lease.
It's pretty simple. The cost of a ticket is not just set by the LCC, as some would think. We've opened up proprietary [monopolistic] markets to competition. That's it, and what happens after that is largely the result of the re-action of the "Dominant" major.
See, what happens after we enter a market is that Delta responds by increasing, sometimes doubling, the number of seats they are flying into that market, in an attempt to keep people off of our airplanes, and they are offering the seats at a price below their cost. That's right- a company that is losing over $4 million a DAY is dumping seats into our markets BELOW THEIR COST. This, of course, means that we can't raise the price . . . . so, at this point, THEY are actually keeping the price low . . . so what they are doing, basically, is functioning as a "high-cost, low-fare airline" . . . and losing the difference.
Now, if the commodity in question were computer chips, or shrimp, or any other product, it would be considered "dumping" but since it is airline seats we are talking about, it is called "competition".
And the stupidest thing about it is that we are making money, while Delta is losing money . . . . which means that, if things don't change, they will eventually go bankrupt. It may take a few years instead of a few months, but they will run out of cash.
So why are they doing it? Because they somehow feel that it is THEIR marketshare. So they are dumping seats below their cost, hoping to bide their time until the business traveler comes back.
Well, I don't think that the business traveler, as they know him, is ever coming back, because they abused that customer by gouging him repeatedly, charging rates that would make a crack dealer blush.
So, to me, unless there is a paradigm shift in the opposite direction, like re-regulation, those salad days aren't coming back.
Obviously, what I have written will go against what most "legacy" carrier pilots want to believe. And I don;t expect you to agree with me . . . . but time will tell.
Anyone interested in seeing this in action need look no further than right here:
http://biz.yahoo.com/prnews/030407/atm003_1.html
Eachone of those is a city served by AirTran, and none of those rates are above Delta's cost. They are, however, above our cost, so we will make money at those prices. . . . . prices set by- DELTA.