Why the industry is sinking..

[ATR-DRIVR]

Travel section, today, the Al Jazeera Constriction, er a the Atlanta Urinal and Constipation er a the AJC....airline ticket prices from ATL to 16 major destinations, started at $45 and the most expensive was LAX and SFO, a whopping $109. Yeah sure, there were the usual restrictions and fees in there somewhere, but STILL, how is this ever going to get better if the fares stay where they are? The LCC guys are not immune to financial problems either at this rate. The prices HAVE to start going up. Somewhere, somehow. With the oil situation not getting any better for the foreseable future, and cost's in general, the train is headed down the hill and the brakes are starting to fade....

 

[AMRCostUnit]

Travel section, today, the Al Jazeera Constriction, er a the Atlanta Urinal and Constipation er a the AJC....airline ticket prices from ATL to 16 major destinations, started at $45 and the most expensive was LAX and SFO, a whopping $109. Yeah sure, there were the usual restrictions and fees in there somewhere, but STILL, how is this ever going to get better if the fares stay where they are? The LCC guys are not immune to financial problems either at this rate. The prices HAVE to start going up. Somewhere, somehow. With the oil situation not getting any better for the foreseable future, and cost's in general, the train is headed down the hill and the brakes are starting to fade....

Someone researched this last week:

FLL-LGA on AA = $135 R/T
FLL-LGA on Greyhound - $209 R/T

And AA wasn't the cheapest. I believe Spirit was $124.

Unit

 

[Jetjockey]

It's exactly like a war, whoever can stand the attrition longer wins. The attrition is money. Who has the biggest pile? We all know it's SWA. Right now they are going to win this war, however nothing last forever. (i.e the Holy Roman Empire). It was neither, Holy, Roman, or an Empire...........Discuss.

 

[Clyde]

The industry is sinking because of horrible mismanagement from the people upstairs.

 

[Big Duke Six]

Not trying to start a flame war here, but here's a good place to start. Reform the bankruptcy laws!

United has been in bankruptcy for what, 22 or 23 months now. During this time, they have engaged in predatory pricing, i.e offering fares that don't even come close to covering their costs. As an example, $59 RT DEN-RNO over this last summer. But why? It doesn't make sense, even in bankruptcy, to fly a full jet that is losing money. No, the sole purpose is to put financial pressure on their competitors to try to force them out of business first. The fact that they are allowed to do this at all tells you there is something seriously wrong with our system. A carrier should not be able to engage in these practices during a time when they are clearly NOT responsible for their bills. To offer fares like that on a route as a competitive move is one thing, because the airline understands that it will cost them real money, and it is a legitimate business move if you're still paying your bills. This is far from the case here.

We all know there is excess capacity in the system. Some of it needs to go away. So nearly two years ago, United succumbs to the pressure and files Chapter 11. We all feel for the employees and families on a personal level, but on a professional level we also see this as the first step in the recovery of the industry. A possible light at the end of the tunnel.

Oh, but wait! No, sorry, the bankruptcy court will go ahead and ALLOW them to undercut other carriers who are still operating legitimately and paying their bills. Overnight, United became an LCC not because they truly have low costs, but because they simply aren't RESPONSIBLE for their costs. They just don't have to pay their bills. How clever.

So now, we see the result. Now, it's not just the employees of United who are in a dire situation. Now, the employees of Delta, US Airways and ATA are looking at losing everything. In addition, the jobs of nearly all the airline employees in the nation are more tenuous than perhaps they have ever been.

While one can question the morals and ethics of the leadership at United regarding these practices, in the end you can't blame them, because they are merely taking full advantage of the system. It's the system that is broken!

 

[vetteracer]

"Not trying to start a flame war here, but here's a good place to start. Reform the bankruptcy laws!"


AMEN TO THAT.

 

[capt. megadeth]

"FLL-LGA on AA = $135 R/T
FLL-LGA on Greyhound - $209 R/T

And AA wasn't the cheapest. I believe Spirit was $124."



That's just completely insane!

 

[canyonblue]

Southwest from ISP to FLL......$175.20 R/T


But only a few seats left at that price.

 

[lostplnetairman]

No it's US Airways at $124. Spirit is at ~ $160 for the off peak fares using the AirBus with 198 seats with excellent loads--with 16 of them as Spirit Plus for extra revenue.


HR Diva

 

[Delville]

I think SWA is probably a major factor in all of this. SWA is significantly hedged through the end of '05 and somewhat so beyond that I believe. All of the airlines have to compete to match SWA or face the prospect of permanently ceding market share to them. Until SWA's advantages with hedging expire, I think that the pressure to keep prices artificially low will remain.