Is Airline Re-Regulation Coming?

[Rez O. Lewshun]

What?

In this country, the market decides the price....not the producer, .

hmmmm WalMart..... I can't eat a gallon of pickels before the mold appears, but that price is way too tempting....

 

[atrdriver]

Actually it would be fairly easy to set a base price. Take an airframe, say the 737 since it is the most popular, and figure out what each seat costs per mile (they already do this). Then multiply this number by the route length. Add 10% or 20% for profit, and that becomes the least amount that a company can charge for a ticket. If SWA thinks they can charge more because they always run on time and have few bag problems, then they can charge a premium. If JB thinks they can charge a premium because they have hot F/A's, then they are welcome to. I maintain, and no one has disputed it yet, that a customer who demands to pay $29 for a round trip ticket from ATL to DEN isn't in our best interest to have anyway. Would some lose their jobs? Maybe in the short term, but at least they would have companies to some back to.

 

[NuGuy]

The difference is that the infastructure for telephone and electric services already exists and if you were to amortize the costs of building the systems over the time that they've existed, the initial costs have been recovered in some areas and are being recovered in less populated areas. Air service is not the same in the respect that the infastructure is in place, and continuing to use it is relatively inexpensive.

A squared must have a little knowledge about the Brookings plight. Brookings, Watertown, Aberdeen, Huron and Pierre have all been recipients of "essential air service" funds for some time, often thanks to SD's Senator, who happened to be Senate Minority/Majority leader. When Brooking's essential air finds were in peril because of they were within 200 miles of a major hub (MSP, by something like 2 miles), the city council had a FIT. Some of them even went so far as to drive the route themselves and report what THEIR odometer/tripometer said (which, of course, was different than the official measurement).

My point being is that some people have a different opinion of "essential". Life or death? Probably not, BUT, economic necessity is something else entirely.

Of course, some people are never satisfied. The airport manager in HON went on and on about how North Central used to fly Convairs into Huron, and now its a piddly little 1900. What he DIDN'T mention was that is was at least 4 stops to get to MSP on the Convair, while the 1900 may have stopped in BKX or MHE (home of the Corn Palace, don't ch'a know).

Of all the places, HON was one of the places that deserved EAS because it was WAY out in the prarie, and it really was a couple of hours on 2 lane roads to anywhere (except the bit going into FSD). Trecherous drive in the dead of winter. Goes double for Pierre.

While electric and telephone service function differently, the captial expenditure pattern is verys similar to that of air travel. Perhaps the ground infrastructure becomes inexpensive over time. But on the operational side, there is always long term maintenence, technological obsolesence to deal with.

With telephone and electric service that was regulated, the suppliers KNEW that there would be return on their investment, and thus there was incentive to develop the service....which is the whole point.

And I would guess that Pierre's daily boarding (with the exception of the month that the legislature is in session) is less than Brookings. (by the way, it's a 45 mile drive to Sioux Falls, which is bigger than Sioux City...hell, it takes me the same amount of time to get to PHX and I live IN TOWN!)

I just think that it's funny how "essential" these cities think this air service is. It be funny to watch them backtrack on their positions if they suddenly found themselves footing the bill.

I think it's considerably longer drive than 45 minutes from Pierre to Sioux Falls, but I think you know that.

Some cities HAVE ponied up the cash. AirTran has made a mint of cash by flying into cities that, in one way or another, have provided a subsidy to do so.

Nu

 

[JD2003]

Laissez Faire NINCOMPOOPS!

 

[sqwkvfr]

Laissez Faire NINCOMPOOPS!

As opposed to what? The type of system that fails everytime it's tried? Or perhaps a system that would still be subsidizing the horse buggy industry?

Why don't you tell us why walking, no RUNNING down the path toward state controlled industry is good for this country?.....also, please explain to us how doing so is gonna:

- lower costs
- improve service
- improve consumer choice
- encourge new ideas or modernization
- lead to MORE pilot jobs
- lead to more paying customers
- improve safety

The problem with what you propose is that it's not just a tweak in the way the airline industry does business, it is a method that, if applied in ANY private sector industry, is illegal. Not only that, but it denies and stifles the points that I made above and goes against everything that this country stands for.

It is not just a small adjustment...it is inherently un-American.

 

[sqwkvfr]

Some cities HAVE ponied up the cash. AirTran has made a mint of cash by flying into cities that, in one way or another, have provided a subsidy to do so.

Do you wanna tell me which of these AirTran served cities is anywhere near the size of any of these South Dakota Towns? Which of these South Dakota towns is gonna have the boardings to support a 717 or 737?

Do you seriously think that Watertown, Brookings, Huron, Pierre (pronounced "pier"-for all of you non-South Dakotans), Aberdeen or Mitchell have the funds laying around to pay those "essential air" subsidies? If you do, you're wrong.

Having worked for 2 of these city governments, I can tell you that if any one of these cities had to either guarantee full aircraft or pony up these "essential air" subsidies themselves, not a single one would have air service and you wouldn't hear a single two-bit city alderman bitching about it.

 

[NuGuy]

Do you wanna tell me which of these AirTran served cities is anywhere near the size of any of these South Dakota Towns? Which of these South Dakota towns is gonna have the boardings to support a 717 or 737?

Do you seriously think that Watertown, Brookings, Huron, Pierre (pronounced "pier"-for all of you non-South Dakotans), Aberdeen or Mitchell have the funds laying around to pay those "essential air" subsidies? If you do, you're wrong.

Having worked for 2 of these city governments, I can tell you that if any one of these cities had to either guarantee full aircraft or pony up these "essential air" subsidies themselves, not a single one would have air service and you wouldn't hear a single two-bit city alderman bitching about it.

Sheesh man, it sounds like you got a thing about SoDak.

When I lived there, I found it to be a very cold, windy place with odd tasting ice tea. If you lived outside of RAP or FSD, you could forget about choosing between McDonalds, BK or Wendy's for lunch, because there was only McD's, and the Dairy Queen was closed from October to May. Taco John's was open year 'round for your dinning pleasure.

HOWEVER, that aside, I found the people very friendly, and the cost of living to be a steal (no income tax, and most everything else was inexpensive). You could actually live there on a regional FO salary, and maybe take the girlfriend out to that McDonald's for dinner once in a while.

Speaking of women, I was warned that there was a pretty girl behind every tree in SD, however, I found there were considerably more pretty women than the 3 trees in SD would suggest. A VERY unusual concentration of stunning redheads was to be found in BKX.

But, back to the topic....didn't the State of SD subsidize an intra-state airline (called Wings, of all things)? I think they used 402s...not 717's, but it got you where you were going. Problem is people see a nice shiny jet that they HAVE to HAVE, when a 19 seater will do.

Nu

 

[sqwkvfr]

Sheesh man, it sounds like you got a thing about SoDak

See the "training" board...

...and in reference to Taco John's...I drove back for some pheasant hunting in the middle of OCT. As I was cruising through one little Nebraska town, I saw a TJ's on the street...a quick u-turn and 7 bucks later I was heaven...gulping down "potato oles" like they were going out of style.

They don't have TJ's in Phoenix.

 

[doh]

Hmm, Goggles, why regulate the safety side either? The manufacturer puts out the manual on that. The company is responsible for maintaining it. They get sued if they don't and somebody dies. Why should the airline have the expense of having inspectors around? They could save money. Also, why should airlines have to support the transportation system. Why not make everyone pay their own way? Remember, it's deregulated so why is the government still so involved? Of course my point is that the "airline bidness" is NOT deregulated at all!

 

[doh]

And nobody has explaned to me why we have to take pay cuts to fund all the mandates from the "gubment" to fund their security mandates when government employees haven't had to take a pay cut to finance the extra security measures in DC!