pilotyip
Well-known member
- Joined
- Nov 26, 2001
- Posts
- 13,629
I was thinking pax, with big cargo probably less elasticSo...
With regards to air commerce, the moving of air freight, whether for AMC, the Chinese, the Arabs or otherwise falls in this area. It is macro economically dependent, but not in and of itself a factor of the business cycle; rather it's driven by it. Moving Business travelers (the only profitable segment of airline travel) is also dependent on the business cycle and not a factor in the demand curve (to the chagrin of all those on-line business meeting companies). So, the only segment that could be argued to be "Elastic" is personal/vacation or recreational travel... and thanks to Priceline.com, Travelocity, et al, that's been the bane of every non-rev airline employee and for all I care .. good riddance!
In the end, pilot labor is insignificant as a cost, compared to the capital costs and fuel costs of running an airline... however, what managers love is that labor costs are flexible (thus why we have unions)... but when you drive a regulatory wedge into the mix... that flexibility is reduced in favor of labor.. squeezing the manager's profits, and their bonus.