This is why passenger airlines aren't making money

[Midnight Flyer]

I ran across an old Braniff fare ad from over 20 years ago. It's from Dallas to Kansas City, one way for $99. (see link) http://img334.imageshack.us/my.php?image=braniff1jpg9vp.jpg

Here is a similar fare from just last week on American Airlines:

AA Net SAAver Fares
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To: Dallas Love, TX (DAL)From (round trip):Kansas City, MO (MCI)Fare:$79
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The AA fare is cheaper and round trip to boot. ($79 for r/t or $39.50 each way).

AA normally wouldn't cut their fare nearly that much, but they're forced to compete with a LCC. I can remember when the same fare was 5 times that.

Over the past 20 years, everything has become more expensive (gasoline, groceries, houses, etc) The price of an airline ticket is the only thing I can think of that is about the same, if not lower in some cases. I can remember when a first class ticket across the country was in the thousands of dollars.

Thanks to the greedy LCC's, ticket fares have been driven down to the point that a large profit simply can't be made by the majors.

The cost of running an airline and basic aircraft operating costs have obviously increased over the past 20 years (higher price of fuel, higher minimum wage, higher utility costs for company buildings, higher lease rates for company buildings, higher property taxes, higher maintenance costs, etc)
Mathmatically speaking, they just can't make money.

 

[big_al]

greedy lccs? or companies who have found a way to keep costs down while concentrating on certain market segments? the greedy companies are the big carriers who think they can dominate EVERY aspect, from international, to feeder, to cross country, etc. every big company thinks they can do everything and do it better, and now they are realizing how wrong that is. whos greedy again? doesnt SWA have some of the highest pay for each department?

 

[skiandsurf]

The true solution to this problem is a lose/lose situation for all pilots. Raise the fares so that this $39 flight is $799. Reduce the number of flights (and planes and pilots). Make the supply much lower and the demand higher. But this means that AA, UAL, SWA will only have 500 pilots each. They will make the big bucks the rest of us will have to get jobs in another field.

 

[FN FAL]

This is why passenger airlines aren't making money:

Title 18, Part I, Chapter 25, § 471 Of the United States Code:

Obligations or securities of United States


Whoever, with intent to defraud, falsely makes, forges, counterfeits, or alters any obligation or other security of the United States, shall be fined under this title or imprisoned not more than 20 years, or both.

 

[100LL... Again!]

How, exactly, are the LCC's "greedy"?

 

[AerroMatt]

This was the precise intent of Congress when they Deregulated the airlines way back in 1977. The whole idea was to allow new start-ups to compete with the established carriers and bring ticket prices down. One of the few examples of where Congress' intent succeeded beyond anyone's wildest dreams. Nevermind the side effects, it actually worked.

 

[redd]

Isn't SWA growing and adding pilot's? I haven't heard of any furloughs, and if some of their departments are the highest paid and are the happiest to work there, why don't the rest of the Majors redefine their business model to compete?

Look at IBM versus Apple in the 70's; personal pc's vs. big blue, IBM reformated it's business strategy and is still a contender. Didn't Howard Hughs have the same problems with his TWA vs. the monopoly of Pan Am??

What is the problem with being flexible toward the interest of your customers and the world travel markets?

Southwest is one of the few companies out there that treats it's pilots well.

Maybe the rest of the majors would do well if they adopted such practices. If they did, it might even stabilize aviation employment in that sector of the industry. I'd rather see that than watch a slow death of the companies that do not flex with changing markets and changing business practices.

 

[The_Russian]

I don't call working 19 days a month "treating the pilots well"!

 

[mhcasey]

I flew from Love Field to Austin yesterday (as a passenger), and cannot figure out Eagle made any money there. The ERJ was half empty to begin with, but the worst part was that they had to fly the plane from DFW to Love with no passengers aboard. Is that a normal thing, or is AA just desperately trying to compete with SWA out of Love Field?

 

[navigator72]

SWA is much smarter than all the others. Read the book "Nuts" about herb Kelleher and the creation of SWA.
Here are the key points to his success:
One type of plane (Boeing 737) Pilots are qualified to fly all planes in the company.
Mechanics only have to be concerned with working on one kind of plane, only need to stock parts on this one type of plane.
SWA locked in fuel prices years ago.
and many many many more smart moves by Herb and the SWA team.