Another Merger, Another Bankruptcy whens it gonna end!

[8sugarsugar]

"Yes, the legacies will have massive retirements, but won't hire to replace them. In 10 years time, you will see the legacies only flying widebody and all the narrow body flying being outsourced to the Skywests and pinnacles. Sure, there will be tons of hiring at those levels, but at low wages. RyanAir is already paying its 737-800 FO's about $27,000/year and mngt in USA is foaming at the mouth to declare bnkrupt and break the contracts.

after the AMR bankruptcy, you will see the beginning of the end. Contracts will get broken and Eagle will be flying A-320s in a couple years.

So Majors only flying wide body int'l? Qantas did the exact same thing, outsourced the narrow body, but now the Emirates' of the world are destroying Qantas. So damn...a canary in the coal mine for Major's?

So what do you do? What about UPS and FedEx? They have a lot of retirements too, but in 20 years you'll see pilotless cargo planes."

quote from "http://forums.flightinfo.com/showthread.php?t=145444"

 

[Varmint]

So Majors only flying wide body int'l? Qantas did the exact same thing, outsourced the narrow body, but now the Emirates' of the world are destroying Qantas. So damn...a canary in the coal mine for Major's?

So what do you do? What about UPS and FedEx? They have a lot of retirements too, but in 20 years you'll see pilotless cargo planes."

quote from "http://forums.flightinfo.com/showthread.php?t=145444"

I beg to differ on the Emirates' of the world destroying Qantas. Qantas destroyed itself because of shoddy management, possibly shoddy service onboard, bad timings of flights, or work stoppages that inconvenienced their customers to the extent that customers didn't trust the reliability of the airline anymore.

Emirates, Qatar, Etihad all offer above US average pay packages, better retirement savings, and a better product to the customer. All without the threat of a work stoppage. If you compare costs of tickets online you will see that most of the middle eastern carriers actually charge more for their tickets than their western counterparts. If you don't like the pay and working conditions over here you vote with your feet and take a hike. The same mentality should hold true at the unionized airlines in the US paying substandard wages to their employees. People still take jobs at those carriers....whose fault is that....the airlines? Those same low paying carriers in the US are the ones taking passengers away from the well paying airlines by charging LESS for their tickets, not more.

 

[Lear70]

No. I'm saying deregulation destroyed the career expectations of just about every employee group in the airline industry to allow for the general public to fly as fares naturally decreased with increasing competition.

The unexpected byproduct is that to compete, an airline will price a route at a loss to protect market share, to the point they are unprofitable, file bankrupty, void contracts, and start all over again.

I guarantee you that this scenario wasn't planned when deregulation was passed.

 

[SIG600]

I've yet to see anyone talk about the fact that the int'l carriers everyone is comparing US carriers too; are all backed by their gov'ts. Singapore, Qatari, Emirates, etc. Maybe if we just roll everyone up into one, and have uncle sam cover the costs.

 

[igneousy2]

No. I'm saying deregulation destroyed the career expectations of just about every employee group in the airline industry to allow for the general public to fly as fares naturally decreased with increasing competition.

The unexpected byproduct is that to compete, an airline will price a route at a loss to protect market share, to the point they are unprofitable, file bankrupty, void contracts, and start all over again.

I guarantee you that this scenario wasn't planned when deregulation was passed.

The airline industry is far larger now than it ever was or would have been under regulation. A large amount of jobs would not exist were it not for deregulation.

Besides, this argument is a waste of time...although in your view it has hurt the careers of pilots (and it did IF you happen to be one of the few to get the very few jobs out there) it has been highly successfully for the economy overall.

 

[Lear70]

Successful for the economy? Debatable, once the costs of multiple trips into bankruptcy court has been included.

Successful for the average consumer through severely depressed ticket prices? Certainly. The average ticket price is down nearly 60% compared to pre-deregulation prices, adjusted for inflation.

The average traveler may rejoice. I shall not, until incomes are restored back to 1960's -era income levels, adjusted for inflation.

YMMV

 

[redflyer65]

To Lear's point, I'd say most domestic airfares have stayed flat for how many years now?

The public doesn't really know what inflation is when talking about airline tickets. They still expect to pay 250-300 for transcon, and not a penny more.

 

[Fly-By-Cable]

Successful for the economy? Debatable, once the costs of multiple trips into bankruptcy court has been included.

Successful for the average consumer through severely depressed ticket prices? Certainly. The average ticket price is down nearly 60% compared to pre-deregulation prices, adjusted for inflation.

The average traveler may rejoice. I shall not, until incomes are restored back to 1960's -era income levels, adjusted for inflation.

YMMV

Ill add that the reason for such high payrates in the 60s was due to the pilot pay formula established in arbitration back in the 40s. As aircraft productivity went up, so did the pilots pay rate. When larger faster jets were introduced, naturally the pay sky rocketed.

 

[Lear70]

That explains the history, but doesn't address the reality that pilot pay has not kept pace with inflation, and I fully expect it to.

I love to fly, but I could have been an attorney or doctor and still done that on the side. I expected to be properly-compensated for it when I made the decision to become a professional pilot, according to what the pay scales were even in the 80's, and I still expect that.

If people can't understand pay raises never being LESS than inflation-adjusted wages of what they made in years past adjust for the value of the dollar, then maybe they deserve what they get. I don't need to strangle the golden goose, but getting back to where pilots were before their companies' 1113(c) filings and continuing to adjust yearly for inflation should not be thought of as an unreasonable goal.

 

[HalinTexas]

That explains the history, but doesn't address the reality that pilot pay has not kept pace with inflation, and I fully expect it to.

I love to fly, but I could have been an attorney or doctor and still done that on the side. I expected to be properly-compensated for it when I made the decision to become a professional pilot, according to what the pay scales were even in the 80's, and I still expect that.

If people can't understand pay raises never being LESS than inflation-adjusted wages of what they made in years past adjust for the value of the dollar, then maybe they deserve what they get. I don't need to strangle the golden goose, but getting back to where pilots were before their companies' 1113(c) filings and continuing to adjust yearly for inflation should not be thought of as an unreasonable goal.

Unless the market won't bear it. Doesn't matter what you think you're worth. If there isn't someone out there to pay it, you won't make it. Scarcity vs. intrinsic value, i.e. the value of something decreases if everyone has it, not matter how much that "something" costs to produce.

This is what those OWS students are finding out. Bless their hearts. Five years ago, their degree was probably worth something. Now it's not, because no one is hiring. Five years from now, it might again, be worth something. Kodak, real estate agents and computer chips are related, yet seemingly incongruous examples.

 

[Lear70]

Unless the market won't bear it. Doesn't matter what you think you're worth. If there isn't someone out there to pay it, you won't make it. Scarcity vs. intrinsic value, i.e. the value of something decreases if everyone has it, not matter how much that "something" costs to produce.

This is what those OWS students are finding out. Bless their hearts. Five years ago, their degree was probably worth something. Now it's not, because no one is hiring. Five years from now, it might again, be worth something. Kodak, real estate agents and computer chips are related, yet seemingly incongruous examples.

Which brings us right back to deregulation.

The issue is that an airplane seat is not a perfectly elastic commodity, and deregulation allowed the airlines to flood the market with seats, thus depressing their value. Unfortunately, the airlines (with notable exceptions) don't seem to care if many routes are operated at a loss, therefore everyone involved loses... except the consumer... and management.

The whole idea that airlines would compete on customer service was, is, and will be in the future, completely ludicrous. Unfortunately, the people who get pinched aren't the consumer, it's the employee. If the company can't increase prices or decrease direct costs such as aircraft leases, gate space, etc, they'll squeeze the middle (read employee), and with unions being hobbled by the RLA (and a much weaker membership than decades past), there's nothing to stop them.

Notice how everything ELSE involved in running an airline increases equal to or more than inflation? Fuel, aircraft and equipment leases, interest rates, gate leases, catering, maintenance parts, taxes, etc, etc. Everything except labor rates.

Again, deregulation is a failure economically (as proven by just about every airline in existence for any length of time having been through bankruptcy court AT LEAST once - SWA the notable exception) and professionally (for the employees)... the only people who benefit are the public with their cheap seats and the senior management drawing large salaries and bonuses.

 

[suupah]

Successful for the economy? Debatable, once the costs of multiple trips into bankruptcy court has been included.

Successful for the average consumer through severely depressed ticket prices? Certainly. The average ticket price is down nearly 60% compared to pre-deregulation prices, adjusted for inflation.

The average traveler may rejoice. I shall not, until incomes are restored back to 1960's -era income levels, adjusted for inflation.

YMMV

Bankruptcies have been quite beneficial for Lawyers and Executives. This puts lots of money into peoples hands. they are people too. says Mitt Romney.

 

[Lear70]

*chuckle*

 

[learherkjay]

Which brings us right back to deregulation.

The issue is that an airplane seat is not a perfectly elastic commodity, and deregulation allowed the airlines to flood the market with seats, thus depressing their value. Unfortunately, the airlines (with notable exceptions) don't seem to care if many routes are operated at a loss, therefore everyone involved loses... except the consumer... and management.

The whole idea that airlines would compete on customer service was, is, and will be in the future, completely ludicrous. Unfortunately, the people who get pinched aren't the consumer, it's the employee. If the company can't increase prices or decrease direct costs such as aircraft leases, gate space, etc, they'll squeeze the middle (read employee), and with unions being hobbled by the RLA (and a much weaker membership than decades past), there's nothing to stop them.

Notice how everything ELSE involved in running an airline increases equal to or more than inflation? Fuel, aircraft and equipment leases, interest rates, gate leases, catering, maintenance parts, taxes, etc, etc. Everything except labor rates.

Again, deregulation is a failure economically (as proven by just about every airline in existence for any length of time having been through bankruptcy court AT LEAST once - SWA the notable exception) and professionally (for the employees)... the only people who benefit are the public with their cheap seats and the senior management drawing large salaries and bonuses.

I am not trying to stir the pot here, but I fail to see your logic. Without de-regulation, most of us on here would not have airline jobs.

Regardless, while you mention bankruptcy and lawyers making money from it, you are failing to see that bankruptcy, not deregulation, is the problem. We have a flood of seats in the market because we have carriers kept artificially alive through the bankruptcy system. Then, those carriers are allowed to shed their debt obligations, maintain piles of cash while not paying those bills so they can "compete" with other carriers who do not get to shed their debts. So now we have bankrupt airlines running fire sales on seats - that's unfair competition and is against the purpose of deregulation.
Deregulation would not be a problem if the government actually allowed the market to run its course. United, Delta, US Airways - they should have been gone 8 years ago. But, companies that do it right are punished by having to compete with carriers who are "too big to fail." Deregulation is not the problem; but we don't have true de-regulation - bankruptcy laws will not allow the market to run its course....

 

[The Prussian]

I am not trying to stir the pot here, but I fail to see your logic. Without de-regulation, most of us on here would not have airline jobs.

Regardless, while you mention bankruptcy and lawyers making money from it, you are failing to see that bankruptcy, not deregulation, is the problem. We have a flood of seats in the market because we have carriers kept artificially alive through the bankruptcy system. Then, those carriers are allowed to shed their debt obligations, maintain piles of cash while not paying those bills so they can "compete" with other carriers who do not get to shed their debts. So now we have bankrupt airlines running fire sales on seats - that's unfair competition and is against the purpose of deregulation.
Deregulation would not be a problem if the government actually allowed the market to run its course. United, Delta, US Airways - they should have been gone 8 years ago. But, companies that do it right are punished by having to compete with carriers who are "too big to fail." Deregulation is not the problem; but we don't have true de-regulation - bankruptcy laws will not allow the market to run its course....

Forget it, learhercjay,...our government's involvement in business decisions will work. We just need to give it time.

 

[outerlimits]

Forget it, learhercjay,...our government's involvement in business decisions will work. We just need to give it time.

That should be put on the 100 dollar bill.

 

[e=mc2]

Well with all the doom and gloom the best way to get a 2% pay raise is to dump ALPA. After all they only help management work out the details of the give backs.

 

[HalinTexas]

I am not trying to stir the pot here, but I fail to see your logic. Without de-regulation, most of us on here would not have airline jobs.

Regardless, while you mention bankruptcy and lawyers making money from it, you are failing to see that bankruptcy, not deregulation, is the problem. We have a flood of seats in the market because we have carriers kept artificially alive through the bankruptcy system. Then, those carriers are allowed to shed their debt obligations, maintain piles of cash while not paying those bills so they can "compete" with other carriers who do not get to shed their debts. So now we have bankrupt airlines running fire sales on seats - that's unfair competition and is against the purpose of deregulation.
Deregulation would not be a problem if the government actually allowed the market to run its course. United, Delta, US Airways - they should have been gone 8 years ago. But, companies that do it right are punished by having to compete with carriers who are "too big to fail." Deregulation is not the problem; but we don't have true de-regulation - bankruptcy laws will not allow the market to run its course....

Beat me to it. I might add, that if we return to a regulated industry, the ramifications to our economy as a whole would make this "recession" persists or worsen for a decades, until it's modified again.

Certain congressional districts who are represented by very powerful members are deemed "to important" to not have a major airline hub. This, as well as other things, will keep the RLA from changing. A managed liquidation of AMR will help the industry as a whole, but it will decimate those employees financially. I kind of see Pan Am, the airline, and maybe TWA of the Icahn days being repeated here.

 

[CRAWDADDY]

Ill add that the reason for such high payrates in the 60s was due to the pilot pay formula established in arbitration back in the 40s. As aircraft productivity went up, so did the pilots pay rate. When larger faster jets were introduced, naturally the pay sky rocketed.

Pretty well explained in Flying the Line Vol 1

 

[Lear70]

And then, if bankruptcy were allowed to work properly and weed out the companies that couldn't run an airline properly, we'd STILL be out of work.

It all works around the same premise: to many seats in the air at too cheap a price, brought on by the fact that there's no accountability for bad business decisions and labor is the only party that has to pay the consequence.