I don't know that you would see a huge increase in sold seats, but what you would see is what is more important, a decrease in capacity as the carriers who operate on ridiculous margins either change their business model or fail. Which will bring about a reduction in capacity and an increase in fares.

Which is not bad. This arguement that free markets will define business is total crap. It may work in a business where you can shift production to sweat shop countries, move the business offshore for tax purposes and the like, but the cold hard fact remains that unless you operate an airline or any business that produces a perishable commodity; like an airline seat, you can't operate the business on float. Selling seats below cost in one segment and trying to make it up by price gouging in another won't work because eventually you will sell more underpriced seats than you can recover. Demand for the cheap seats will by nature increase and the death spiral tightens until you have debt that you can't service with your assets and you run out of cash.

You are correct that service drove the market in the pre dereg days. And yes, badly managed companies did suffer and those managements should have been replaced.

If the only thing an airline can sell is low cost, better heeled competition will allow them to build a market, then come in and undercut them and push them out or out of business. Then the fares will go up.

This industry has more failed low cost, post dereg carriers than Corrosion Corner had junk planes in the late 70's. Every one was built on the idea that cheap was good, more capacity was better and float would make the bills and payroll until they became bigger and could charge more. And the ones still here play "chase the tail" and when one drops their fares, everyone else follows, lest they lost customers.

The question remains: Is an airline better off flying a plane at a loss that they can't recover, or setting a price that provides a reasonable profit margin and not budging? If they do the former, they lose their butt. If they do the latter, they may shrink their capacity, but will operate aircraft and the business profitably, providing shareholder returns and stability to their workforce and the community.

Just as we're seeing today in the global economy, we need to realize that air travel is not a right. Not everyone can afford it, nor can they afford trips to Disney World just because some marketing knob says so. That's why before there was People's Express, there were station wagons, busses, trains and Weber grills.

 

I agree with your sentiments, as I often wonder if some sort of government structure would work with the airlines. As to basic fundamental services, like police and fire, in Atlanta right now they've closed stations sometimes because of not enough staffing, but still have millions to spend on the arts. How smart is that?

 

Come on guys. You have to be kidding me to think that government could help the airlines. Look at Allitalia and the roller coaster that airline is to the country. That airline does not make money, it cannot make money but the government carries it along. Just what we need in the US. If you folks out there want a socialist nation than move to France and see your job move to another EU country that does it better. Move to Sweden and give the government 55% of your check to support the 150,000 imigrents that give nothing to the system but love to take. I have family in Sweden, this is not second hand info.

 

Actually how much is the government involved with the airlines now? Don't they charge airlines most if not all the TSA fees? How bout landing fees, gate fees, what else am I missing?

 

Don't forget the wonderful GOVERNMENT idea to take the gates away from airlines in Kennedy so they could then try to give them to foriegn carriers or just sell them back to the us carriers and make more money. The government is doing a great job there. You are right the government has stuck there nose in the airline industry before. lets see we still have United and US Airways besause of government intervention. That went so well lets have more of that. Yes those airlines are still around at the expense of all the others that were making good desisions. You are right on one think the government is already involved partly. But the answer is not more government but less. If the government takes over than they can say "NO AIRLINE PILOT WILL MAKE MORE THAN 200,000 A YEAR." I don't know how you see things but that WILL happen if the government gets their way even without regulation. People think we are over paid workers that just sit on our *** and drink coffee. You may be happy with regional pay rates or the major rates that are pittiful but I am not.

 

I agree 100%. I didn't mean to say that you guys were putting down truck drivers. I just meant to say before someone does, there are some smart guys making some good money there. And if you do your homework, it can be a really fun job making a decent paycheck.

Call me crazy, if I couldn't fly, I would probably drive a truck. I just can't ever see myself sitting in an office again.

 

Wow, unfortunately you are so right and it says volumes about our industry.

I think if we want to bring back high paychecks, we need to up the standards and education to be pilots. And that is a tough sell because some of us wouldn't make the cut. I mentioned in another post a few days ago about how a buddy of mine went the Australia and his FAA ATP wasn't recognized. He had to go through all sorts of classes and flight training before getting the Aussie ATPL.

But as you pointed out, if there are people lining up to do the job because its cool and exciting all while accepting lower and lower pay scales, we are doomed.

 

It may not be second hand info, but your facts are wrong. Alitalia is a state run airline. There has never been a state run airline in the US (except maybe Air America, but that doesn't count) and no one here has promoted that concept; the concept here was to return to some modified form of regulation to dampen out the cycles within the industry.

Anyone who looks will see the industry has followed a ten year boom and bust cycle since deregulation that is used by managements to file bankruptcy, break contracts, raid pensions, issue junk debt instruments, sign lousy lease deals for facilities and equipment, make money, bust and repeat. The industry constants since then have been breaking contracts as soon as labor begins to recoup the previous concessions, selling seats for less than cost and increasing capacity which leads to a repeat of demands for concessions because the company can't pay the bills with the insufficient fares they charge and once again they go back and demand that labor give back that which they just got back from the last round of lunacy.

With due respect, I don't know what your level of industry experience is, but the "free market" theories you espouse have a historical track record of failure in this business. Not just my opinion, but that of a guy by the name of Dr. Alfred P. Kahn...the father of airline deregulation.

And just in the off chance he's wrong, look around. Deregulating the financial industry was a real stroke of genius. From the same folks who wanted to privatize Social Security...Wonder where all those folks would be if that had happened. Do the words penniless and hopeless mean anything?

 

I have yet to see a proposal for raising wages by re-regulating the industry which would not cost thousands of poorly-paid pilots their jobs. Granted, many of them would wind up better off if they were forced into another career, but they don't see it that way, and who can blame them?

 

If you want to see how government would manage a logistics/transportation business just mosey on down to your local post office. There you can see what losing 2.5 billion dollars in a year looks like. This with an operating monopoly handed out by fiat.
How about retirement funding? Social Security is a ponzi scheme that would get the operators locked in jail if they tried to sell that garbage in the real world.
Education: poor quality at the highest possible price.

Why are most states and the federal government bankrupt? You guessed it, that wonderful government management and regulation.

In fact they once tried to run a *****house, the Mustang ranch and they failed to turn a dimes worth of profit despite the advantage of a pure monopoly in a very desirable product.

Have a great day and never give up your freedom to choose.