Senators suggest re-regulation.

[YourPilotFriend]

http://money.cnn.com/2007/01/24/news/companies/airline_hearings/index.htm?source=yahoo_quote

This is probably needed to protect small cities from mergers and price gouging.

 

[ATLDRVR]

I like the senator from Alaska that said his constituents are complaining about a lack of service. What kind of service do you expect in Alaska?

 

[Lear70]

If it brought the government minimum wage back into the picture for pilots, I wouldn't argue.

Adjusted for inflation since 1970, the wages would almost double!

Would that it was *THAT* easy.

 

[YourPilotFriend]

If it brought the government minimum wage back into the picture for pilots, I wouldn't argue.

Adjusted for inflation since 1970, the wages would almost double!

Would that it was *THAT* easy.

This would just boost prices on the over competitive LCC low RASM routes to ease the economic burden on larger carriers with extensive regional networks so they can continue to offer service to small communities while supporting the hub and spoke system.

 

[ferlo]

I like the senator from Alaska that said his constituents are complaining about a lack of service. What kind of service do you expect in Alaska?

This coupled with the "service" supplied by Alaska Airlines and the situation becomes unbearable.

 

[SDF2BUF2MCO]

Ted Kennedy's "hard work" to de-regulate shot to hades........I do agree though the "gravy train" lines the LCC's serve while the "Majors" serve the smaller markets hurts their competitiveness.

 

[scoreboard]

I like the senator from Alaska that said his constituents are complaining about a lack of service. What kind of service do you expect in Alaska?

Hey "Denied Service Citizen in Alaska", why not use some of that oil fund money to pay for your essential air service? Oh, thats right, you want me to pay for it...:smash:

 

[Groucho]

Alaska, the state, has the highest number of essential service routes in the nation. Most of the routes are served by Alaska Airlines with jet equipment.

It has been this way for years, Alaska Airlines is the largest receipent of essential service money in the US. I am not critizing this, it worked for many communities in the US. If not direct subsidy then regualtion with limited competition and allowed for higher yield for carriers.

In a completely degregulated market fares will higher and service less in small markets.

 

[tomgoodman]

Off by a few decades

Historical note: When deregulation was announced, Harding Lawrence of Braniff immediately filed for hundreds of new routes. He expected that consumer howls would quickly force re-regulation, grandfathering his airline into a giant. He lost the bet and fatally bloated the company.

 

[HalinTexas]

This would probably ruin a lot of careers should it come to pass.

 

[Flopgut]

Historical note: When deregulation was announced, Harding Lawrence of Braniff immediately filed for hundreds of new routes. He expected that consumer howls would quickly force re-regulation, grandfathering his airline into a giant. He lost the bet and fatally bloated the company.

I disagree Tom. He was completely right! Just off by a few (er, uh 3+) decades. Re-regulating this business is a great idea.

 

[Flopgut]

This would probably ruin a lot of careers should it come to pass.

It would be great for careers!

If we had never been deregulated in the first place, US airlines would look something like the cargo business. Two or three huge, multinational companies that dominate the world market. There would also be a few other successful smaller companies.

 

[PCL_128]

This would probably ruin a lot of careers should it come to pass.

Doubtful. Any new version of the CAB would make sure that flight frequency wouldn't be hurt by a re-regulated industry in the interest of consumers. With the same number of flights, jobs wouldn't be lost. This would be win-win.

 

[afres bum]

Not to mention the pension burden and defaults on loans passed on to the tax payer by ailing or now defunct airlines! Also included is the loss of spending power by airline employees over the years. It still costs a certain amount of money to fly an airplane from point a to point b; but that cost has been subsidized by airline employees, airline creditors, and by the taxpayers unknowingly!

The sooner we regulate the better, no matter what Alfred Kahn thinks!

 

[pgcfii2002]

It would be great for employees...pilots especially...bad for the consumer.

I think the industry would definately be more stable.

 

[YourPilotFriend]

It would be great for employees...pilots especially...bad for the consumer.

I think the industry would definately be more stable.

No this wouldn't hurt consumers, fares are this low because capacity is way up.

 

[Lear70]

This would just boost prices on the over competitive LCC low RASM routes to ease the economic burden on larger carriers with extensive regional networks so they can continue to offer service to small communities while supporting the hub and spoke system.

Au contraire, mon frere,,,

Regulation doesn't come without a price. The government's median base income levels would again apply to the pilots, as well as all the other employees.

Pensions would be safeguarded and backed by the U.S. Treasury.

You can't JUST regulate the routes, structures, service, and set min and max ticket prices, they'd have to re-regulate the entire kit and kaboodle.

I've been preaching this for years, but I doubt we'll see it anytime soon. Anti-trust being what it is...

But it's nice to dream.

p.s. Ticket prices have been artificially deflated for DECADES. We have the airline woes we have because pax have been getting CRAZY low fares for WAY too long.

 

[pilotyip]

It would be bad for most pilots, go to re-reg, tickets prices go up, passengers go down, not as many airplanes needed, not as many pilots needed. This would be very good for a few pilots and very bad for a whole bunch of pilots. We will go back to the 60's and 70's where 80% of the pilots being hired are military. Remember we have 5 times as many flying jobs as we did in 1978

 

[YourPilotFriend]

It would be bad for most pilots, go to re-reg, tickets prices go up, passengers go down, not as many airplanes needed, not as many pilots needed. This would be very good for a few pilots and very bad for a whole bunch of pilots. We will go back to the 60's and 70's where 80% of the pilots being hired are military. Remember we have 5 times as many flying jobs as we did in 1978

And your point...............the jobs that would be lost aren't worth having anyway. You can't compare the 60's and 70's to right now, the entire world relies on air travel. Tickets will go up on LCC routes that have prices that are way out of line. Spirit had 5 cent fares last week.

 

[NuGuy]

Heyas,

From a historical perspective, most capital intensive industries that are deemed "essential" are regulated in some fashion or another.

A couple of good examples are electricity and telephone service. Like the airlines, the infrastructure is extremely capital intensive. A regulated industry ensures that the capital for essential improvements and service remains available, instead of pissed away in pointless competition or other financial shenanegans (the California energy "shortage", for example).

Do we pay more? Most certainly. Each part of your phone, gas or electric bill goes to insure that that grandma living on rural route 3 in East Butthole, Minnesota has utility service. If not, could you imagine trying to get utility servce in the boonies? Why run a line to serve 4 people when you can just stick to the cities and serve 1000 times that number with the same run of pipe.

In the end, we all have to decide if air service is indeed "essential". If not, fine, but accept the fact that only places that meet a certain threshold are going to get serivice, there will be destructive competition, and service will deteriorate to the lowest common denomenator.

By "service", I don't mean steak and lobster served on linen, but rather the ability to stock spare parts and airplanes, spare crews to fly when others time out, and excess capacity to get people where they're going when things do get messed up, flown by pilots who don't think that there is little to learn after 1500 hours.

Nu

 

[PCL_128]

It would be bad for most pilots, go to re-reg, tickets prices go up, passengers go down, not as many airplanes needed, not as many pilots needed. This would be very good for a few pilots and very bad for a whole bunch of pilots. We will go back to the 60's and 70's where 80% of the pilots being hired are military. Remember we have 5 times as many flying jobs as we did in 1978

Your argument might actually make sense if ticket prices were low due to lack of demand. That's simply not the case. Ticket prices are low because airline managements have convinced themselves that fighting for market-share at any cost is better than letting the "other guy" gain a single percent more in market-share. Load factors are at all-time highs. Airlines can't put enough seats out there to cover the loads. Yet the fares remain rock-bottom because every airline is convinced that raising prices to a reasonable level that is supported by demand would allow the "other guy" to pick up a few more pax if he lowered his price by $1. The system is broken, and since this system is essential to the world economy the government needs to step back in and regulate it. Pilot jobs will not suffer from it.

 

[Flopgut]

Heyas,

From a historical perspective, most capital intensive industries that are deemed "essential" are regulated in some fashion or another.

A couple of good examples are electricity and telephone service. Like the airlines, the infrastructure is extremely capital intensive. A regulated industry ensures that the capital for essential improvements and service remains available, instead of pissed away in pointless competition or other financial shenanegans (the California energy "shortage", for example).

Do we pay more? Most certainly. Each part of your phone, gas or electric bill goes to insure that that grandma living on rural route 3 in East Butthole, Minnesota has utility service. If not, could you imagine trying to get utility servce in the boonies? Why run a line to serve 4 people when you can just stick to the cities and serve 1000 times that number with the same run of pipe.

In the end, we all have to decide if air service is indeed "essential". If not, fine, but accept the fact that only places that meet a certain threshold are going to get serivice, there will be destructive competition, and service will deteriorate to the lowest common denomenator.

By "service", I don't mean steak and lobster served on linen, but rather the ability to stock spare parts and airplanes, spare crews to fly when others time out, and excess capacity to get people where they're going when things do get messed up, flown by pilots who don't think that there is little to learn after 1500 hours.

Nu

Nice post.

 

[Lear70]

It would be bad for most pilots, go to re-reg, tickets prices go up, passengers go down, not as many airplanes needed, not as many pilots needed. This would be very good for a few pilots and very bad for a whole bunch of pilots. We will go back to the 60's and 70's where 80% of the pilots being hired are military. Remember we have 5 times as many flying jobs as we did in 1978

Again, completely incorrect.

You are, once again, making assumptions that have NOTHING to do with our current reality.

First and foremost, Senators and Congressmen are worried that any consolidation will result in a DECREASE in service. TO THAT END, they are suggesting re-regulation should consolidation occur.

In simpler terms: they want regulation to ENSURE that those routes / cities REMAIN COVERED. You have to have the SAME NUMBER OF PILOTS, if not more, to cover those SAME CITIES / ROUTES / FREQUENCY.

It's a simple math game.

Think before you post next time, you usually come up with better arguments than this (but I love debating you).

I actually agree with YPF for a change... LOL Just kidding, man...

..."East Butthole, Minnesota"... ROFLMAO!

That was classic!

 

[afres bum]

Originally Posted by NuGuy
Do we pay more? Most certainly. Each part of your phone, gas or electric bill goes to insure that that grandma living on rural route 3 in East Butthole, Minnesota has utility service. If not, could you imagine trying to get utility servce in the boonies? Why run a line to serve 4 people when you can just stick to the cities and serve 1000 times that number with the same run of pipe.
​

I agree and would argue that in a regulated industry, people using the service are going to pay more. How much have tax payers subsidized the industry? Government bailout loans, PBGC? How much trickle-down is there from bankruptcy and default loans on the rest of the economy? I think if smarter people than me quantify these numbers to the American public, re-regulating is an easy sell!

 

[mdf]

I am not saying re-regulation wouldn't work, but isn't that like moving back in with your parents?

 

[HalinTexas]

I can't believe that y'all think the airlines and the number of jobs they supply now would remain the same if the industry is reregulated.

There's no way that would be allowed. Part of the problem the industry is having is too much supply, not enough demand. RJ's lose money, they only protect market share, and keep a given airline from losing still more money using larger aircraft. So, if competition is eliminated, there's no need to protect that much market share. The gov't shouldn't and probably won't support such money losing operations. This is one reason why they were deregulated in the first place.

Every airline will have to reduce some amount of their operation to benefit form rereg. Whole airlines might be force out of business, or absorbed by another, thereby adding to the bloated staffing. All the growth that happened in the 1980's as a result of dereg. would be taken back.

I can see 25-30% of pilots losing their jobs at all levels. There won't be a need for that many pilots or airlines to employ them.

The overriding question(s) is: What airlines get to keep their markets? How will it be determined? What happens to the airline(s) and their employees that lose those routes?

If you think all will be protected you're a fool. The employees will bear the brunt of this change.

A better idea would be to reform BK laws even further. Don't let them operate for three years in BK or file twice in as many years.

 

[pilotyip]

Stop dealing in reality

Halin stop dealing in reality this is a pilot board. Rereg would allow the airlines to set rates on routes they owned, if pilots wanted more money the airline would tell the Fed's we need to raise the rates on our routes in order to remain profitable. There would be little competition on those routes so they would not be undercut and pilot’s pay would go up. However the passengers would start shifting back to the bus, train and private auto. This is the same place they were in 1978. They were a lot fewer pilot jobs in 1978 than there is today.

 

[YourPilotFriend]

Halin stop dealing in reality this is a pilot board. Rereg would allow the airlines to set rates on routes they owned, if pilots wanted more money the airline would tell the Fed's we need to raise the rates on our routes in order to remain profitable. There would be little competition on those routes so they would not be undercut and pilot’s pay would go up. However the passengers would start shifting back to the bus, train and private auto. This is the same place they were in 1978. They were a lot fewer pilot jobs in 1978 than there is today.

If unregulated mergers are allowed to happen 25-30% of the good jobs in aviation will be taken away anyway. They are gone and lost already, re-regulation is just damage control. re-regulation is to keep capacity shrink from price gouging customers. If the majors start combining, the only service lost will be to the small cities. Routes like JFK LAX prices will remain low because the LCC competition would expand those routes in a merger situation. The only way to make that money up is to charge the small communities higher prices or end their service altogether.

 

[scoreboard]

Yes, lets re-regulate the airlines. Right after we bring back prohibition, restrict the right of women to vote and drive, bring back the draft, allow slavery, etc, etc, etc. Yes, those are great ideas....

You essential air service guys kill me, you don't see essential bus service to thousands of small communities do you? The one who pointed out that the masses pay for the electricty to the rural lot, false. Rural electricity is bought and transmitted via a co-op of rural folks. NOT at all an expense to you big city folk, your not charged a dime to run the line to farmer Joe. In fact, farmer Joe pays for that line to the tune of 10's of thousands of dollars.

 

[YourPilotFriend]

There's no way that would be allowed. Part of the problem the industry is having is too much supply, not enough demand.

Totally wrong on that point, supply is way low compared to the days of regulation. In fact, during regulation load factors were in the 40% range. Today it is somewhere in the 80-90% range for most airlines. Regulation would hurt, if not kill the non hub and spoke carriers. We here at NWA see high capacity even on routes we charge regulation type prices. Air travel expanded because the time value of money has gone through the roof. Even if you charged double for fares, it's still way cheaper than sending your employee cross-country on a bus.