FAA Reauthorization Bill Status

[DornierPilot]

PCL_128,

I understand your thinking, however my cynical side believes that as soon as that $25 savings occurs, some carrier will come along and try to increase market share on that route by dropping their price to $300 - now labor is back to the same place when all the competitors match the fares!

I was coming from the perspective of a slightly higher, level playing field in costs would just be passed on without reducing the number of tickets sold. The airlines revenue would stay the same in this scenario.

I'm certainly not an economist. I just believe that User Fees are not the answer for our Aviation Industry.

Regards,

 

[PCL_128]

PCL_128,

I understand your thinking, however my cynical side believes that as soon as that $25 savings occurs, some carrier will come along and try to increase market share on that route by dropping their price to $300 - now labor is back to the same place when all the competitors match the fares!

The current trends would indicate that that would not happen. Even SWA is raising ticket prices, and everyone else is following. The airlines would jump at the opportunity to keep current fare prices while increasing their profits.

I was coming from the perspective of a slightly higher, level playing field in costs would just be passed on without reducing the number of tickets sold. The airlines revenue would stay the same in this scenario.

Higher prices = fewer tickets sold. Yield management software is excellent at determining the highest yielding pricing point on a ticket. Theoretically, raising or lowering the ticket price by even one dollar will reduce profits. Once you know the proper pricing point, the goal is to reduce your costs to increase profits based on that pricing point. Reducing fees and taxes is one way to do that.

 

[BoilerUP]

Subsidizing an airline's profitability by taxing somebody else should be a horrible idea to anyone that's ever studied airline management. To think airlines would immediately pass 100% those savings through to the final cost of a ticket is wishful thinking at best.

 

[labbats]

Thank goodness "line item veto" went away. If it hadn't the bill might have passed with those few things veto'd. WHEW. I knew I still loved our President.

That's hilarious. I was thinking the same thing.

 

[NuGuy]

Heyas,

I agree. To think that the airlines would pass on ANY savings to their employees is naive.

They will simply cut fares another $25 to continue with their pointless competition or give themselves a nice fat bonus.

AOPA is right on the money with this one.

Nu

 

[flyer172r]

Subsidizing an airline's profitability by taxing somebody else should be a horrible idea to anyone that's ever studied airline management. To think airlines would immediately pass 100% those savings through to the final cost of a ticket is wishful thinking at best.

The airlines have already said that if they get what they want they're going to pocket the extra money. They won't be passing any savings onto their customers. And somehow I doubt they're planning on using that extra money to pay their pilots more. Hmmm, pay labor more or give themselves bonuses for increasing profitability, what will they do?

It's no secret why so many foreign pilots come to the US to learn to fly. User fees will destroy GA in this country and eventually hurt every pilot here. Oh wait, I'm an airline pilot who never flies GA, why should I care? Well, in that case enjoy it when the only FOs we can hire are those that are trained in simulators to that multi-crew only license because nobody can afford to fly a real airplane. Your worst safety nightmares just might start to come true.

 

[ivauir]

I don't buy that increasing ticket taxes across the board by a few dollars, removes significant numbers of customers to other modes of transport (or just not making the trip at all.)

Then you have not been paying attention to the market place.

Here is the reality: Everyone's favorite uncle already makes more on the ticket than my employer.

 

[DornierPilot]

ivauir,

I'm just saying that a $3 across the board ticket increase will not prevent the vast majority of airline customers from purchasing. Now, if you want to talk about $50 increments, that might begin to impact tickets sold.

In this example, a small increase in ticket taxes for all airlines tickets will not reduce the revenue to the air carrier in a significant amount, since the number of tickets sold is not impacted.

Regards,

(Just because I can read that, doesn't make me feel overeducated)

 

[The_Russian]

Dude, you have got to be kidding me.

Worst case scenario.