Boeing743 From United States, joined Jun 2007, 406 posts, RR: 0 Posted (4 months 2 weeks 5 days 4 hours ago) and read 2376 times:
I am wonder what would airlines industries affect us in USA as several airlines are out of business. Along with some airlines are under trouble with FAA about inspections failed. Now with AA grounded many of MD-80 and another airlines too. Now F9 are on chapter 11.
Is it due to many airlines in America that spread so thin on many airlines by not have enough passengers or what?? Do you think that USA should have one national airlines, ie: Air Canada, Lufthansa or another airlines?? I really hope that FAA or Congress or CEO of all airlines would be able to work out this problems so that we would not have to face this again as we probably has been on all of those airlines in USA.
What do you think that they should do to help to protect us as passengers to have freedom to fly all over US and their business to carry us to any where we want to go.
Gsoflyer From United States, joined May 2001, 848 posts, RR: 1 Reply 1, posted (4 months 2 weeks 5 days 4 hours ago) and read 2348 times:
I'll make people mad by saying this. But I think it is due, in part, to many things.
1) Like the automobile industry, Unions are killing airlines. And I am sure it will make a ton of people mad that I say that. We are at the point in our society and economy where unions are really not offering anything but a way to strong arm employers instead of letting free market for resources work, like in most other fields. it just seems like there are too many problems in the industries where unions are a big presence: schools, airlines, railroads, autombile, steel
2) Management. It is poor management in so many cases. And it is the same types of things management is doing in so many other industries. Instead of looking to build a quality base, happy employees and serving customers. They are only looking to make shareholders happy quarter to quarter. When you manage so short-sighted, you see many companies falling into this pattern. Plus, take a look at management salaries while the same airlines are having problems. When management expects employees to take paycuts, they should be taking them too.
3) Fuel cost
4) The American love of the road. While in many countries, it is considered a long trip to drive 2-4 hours. In the US, many of us make this a day trip driving. And this isn't just an US thing, it is also a Canadian and Mexican thing too. People in North America love to drive. And prefer to drive because we'd rather travel on our schedule than someone elses.
5) We want it all when we fly. We want that cheap ticket. We want the leg room. We want the meal. We want everything and we don't want to pay anything for it.
And that just scratches the surface.
The real question we should be asking is, why is air travel here so expensive when compared to Europe? Why do Air Berline, EasyJet, RyanAir and others work there but not here? How do places like Paderborn, Germany have direct flights to London and other places all over Europe on large planes but we can't fill RJs in bigger markets here? And they do it for 1/4 of the fares we charge here?
Iloveboeing From United States, joined Oct 2005, 599 posts, RR: 0 Reply 2, posted (4 months 2 weeks 5 days 4 hours ago) and read 2301 times:
Quoting Gsoflyer (Reply 1): Like the automobile industry, Unions are killing airlines
I understand that unions exist to protect the employees and fight for their rights, but it seems like they sometimes get out of line.
Quoting Gsoflyer (Reply 1): nstead of looking to build a quality base, happy employees and serving customers. They are only looking to make shareholders happy quarter to quarter.
Agreed! The management of airlines are at the mercy of the shareholders and Wall Street. A lot of the airlines (but not all of them) have forgotten what it means to have happy employees, and have good quality service. Instead, they just wants to squeeze every single cost out of their companies, so they'll maximize profits for Wall Street.
I believe that an airline is public transportation, and it should serve the people, not management, and not Wall Street. An airline should be committed to providing the best service available (hot meals, PTVs with AVOD, etc) at affordable prices (and YES, it IS possible!). Airlines should also be committed to looking out for their employees and make sure they make decent wages in which to support their families. An airline is a service, and a service should be about the people.
Quoting Gsoflyer (Reply 1): When management expects employees to take paycuts, they should be taking them too.
Cloudboy From United States, joined Jan 2004, 466 posts, RR: 0 Reply 3, posted (4 months 2 weeks 5 days 4 hours ago) and read 2277 times:
I think the reason why the airlines are in trouble is pretty simple - poor business leadership.
The airline industry has always had a big problem with change. They have had an even bigger problem with innovation and competition. When confronted, the first thing airlines think of is how to out finance, out regulate, or simply crush any potential competition. Very, very few airlines have ever made any real attempt to innovate. They only see in terms of numbers on a spreadsheet. In this case, I think for too long they have seen the small numbers but missed the big picture, so they are not prepared when the economy goes south, they are faced with equipment problems, and suffer bad publicity. This is further driven by a stock market system where airline are rewarded for stock market performance, not marketplace performance. The stockmarket has no long term interest in businesses - it is too easy for the stock market to shift, thus encouraging short term gains that have huge costs long term.
As for why European airlines have all these cheap carriers, that is due to the fact that there IS competition. Competition in the form of the train. In Europe, rail travel is seen as the more attractive option, and instead air travel has been relegated to being price driven. In the US we have again and again bailed out the aviation industry, we pour vast amounts of our budget into air travel and ignore other modes other than cars, and we basically let, and even encourage, airlines to do the same old thing and instead of taking responsibility for their choices, bail them out every time.
Change in the US is going to come, if it does, through innovation. At some point things are going to fall apart so much that none of the current airlines are going to be able to stop new start-ups, who ARE going to bring changes to the market. We have already seen it with Southwest and JetBlue. The old legacies are going away, replaced by new legacies.
"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
Milesrich From United States, joined Jul 2003, 714 posts, RR: 4 Reply 4, posted (4 months 2 weeks 4 days 11 hours ago) and read 2073 times:
Yes, the unions are out of line. While a gallon of milk is now $5.00, and a gallon of gas approaches $3.50, how dare those pesky airline union members demand a living wage! What other employee group has works for less today than they did 15 or 20 years ago, and for a lot of airline employees, that is not in constant dollars, either but in actual inflated dollars. Don't blame the employees, or their unions. The airline business model is a lousy one. It allows an airline like Mesa to enter a market like Hawaii, with little investment, and then to undercut existing carriers like Aloha driving them out of business, only to later raise their below cost prices. Reregulation may be the only solution. The US is not Europe. The distances we travel are much greater. Additionally, in Europe, the passenger railroads are mostly government run, and those governments have had no trouble in the past raising tax dollars to subsidize the railroads. Let the GOP control every European Parliament, and we will see how well their railroads do. The fact is that the American mindset is much different than that in Europe. You don't hear any European movement or Canadian movement, for that matter, clamouring to adopt the US health care model, do you? Yet every GOP politician claims we have the best system in the world, that it is the envy of the world, and that the reforms proposed by their political opponents are nothing but socialized medicine, which is inherently bad. The same thing can be applied to air travel, except that their is less difference between the two continents. Yes, Europe has its low cost carriers, but they are copies of our Southwest, and AirTran, and JetBlue. But their legacy carriers are in trouble too. Look at Alitalia, and before that there was Swissair, and Sabena. Air France has many troubles. Should I continue? And when you compare the size of KLM to say Northwest or American, or even USAir, it's not even close.
Is airline management to blame, yes, sort of. But even industry darline Jet Blue has retrenched. Give them a national route structure, and you will see the same problems. Pricing is NOT inelastic. When prices hit a certain point, demand drops sharply. And the airlines have few choices when fuel goes up, to raise prices, or cancel service. They can't go to the employees anymore, they have already given back so much. Even they won't work for peanuts. There was a time when there were more people willing to work for the airlines than there were jobs, and that might still be true, but the quality of applicants at still lower wages is also lower.
Reregulation will solve the problems. The only question is, does Congress have the will to impose it?
Tdscanuck From Canada, joined Jan 2006, 3198 posts, RR: 25 Reply 5, posted (4 months 2 weeks 4 days 11 hours ago) and read 2063 times:
Quoting Gsoflyer (Reply 1): 1) Like the automobile industry, Unions are killing airlines.
*Some* unions are killing their airlines. Mismanagement is a much bigger factor. Don't forget that the US's most successful airline has been heavily unionized from day one.
Quoting Milesrich (Reply 4): Reregulation will solve the problems.
It will solve some problems...it will cause some other horrible problems. Like crushing demand due to greatly increased prices. Reregulation is a guaranteed way to drive many of the current carriers out of business.
Osiris30 From Barbados, joined Sep 2006, 2434 posts, RR: 12 Reply 6, posted (4 months 2 weeks 4 days 11 hours ago) and read 2044 times:
Quoting Milesrich (Reply 4):
Reregulation will solve the problems. The only question is, does Congress have the will to impose it?
Respectfully this is asinine. What will solve all the problems is for Congress to do NOTHING. If 80% of airlines in the US fold up shop tomorrow because they can't turn a profit, then sobeit. *That* is what a free market economy is all about (you know the thing you American's pride yourself on.. land of the free, home of the brave and whatnot). It isn't free if your government is regulating every aspect of your life and it sure as hell ain't brave to run crying to Uncle Sam every time it gets scary out there.
Some airlines will go broke; great. THAT is what is needed. Does the US really need 1,2,3,4,5 legacy carriers, (plus whatever US is), plus WN, Frontier, VX, ATA, etc., etc., etc. The really short answer to that question is no. So some of them are going to get bought out, others will fold, the market will adjust, prices for air travel will rise moderately (unlike the drastic increases you would see under regulation), and at the end of the day everyone will be better.
You all seem to forget that free enterprise is what got America to where it is, and that the meddling of the last 15 years through government bailouts has done nothing but keep the weak alive, which has drained the strong via a death of a thousand guts. (If you don't believe me, think about if Chrysler had just been allowed to fold, GM and Ford would be in MUCH stronger positions today).
It's the same as the bloody union pilots bickering about money... if you don't like your salary find a new job, like 98% of the rest of the population in the world does... good lord. What ever happened to growing a pair!!!
I don't care what you think of my opinion. It's my opinion, so have a nice day :)
Milesrich From United States, joined Jul 2003, 714 posts, RR: 4 Reply 7, posted (4 months 2 weeks 4 days 8 hours ago) and read 1867 times:
If Chrysler had been allowed to fold, what makes you think GM and Ford would be in strong positions today. At the time, of the Chrysler loan guarantee, (1979-1980) era, GM and Ford thought themselves invincible. Their theory was build big cars, that is where the profit is. They paid short shrift to the small car market, and in doing so lost an entire generation of customers. GM's theory used to be, (when all cars were large), start the customer in a Chevrolet, and then move them up to a Pontiac, Oldsmobile, Buick, and finally a Cadillac. They forgot the lesson. GM's success vs Ford and Chrysler was that the Chevrolet, pure and simple, was a superior vehicle to a Ford or Plymouth. Compare a 1954 Chevy (before the V-8) to a Flathead Ford or Plymouth. Or a few years later, compare the 57 Chevy to a 57 Ford or Plymouth. The Chrysler product had a forward look and a body that rusted out in three or four years. Sorry you Ford fans, but the expression, Fix or Repair Daily, was a reality. Body by Fisher meant something. But when VW and the other imports starts to grow, the Big three just didn't compete. By 1980, when Chrysler was bailed out, it wasn't even competition for Ford and GM. If GM had wanted to put Chrysler out of business, it could have, but they were afraid the DOJ would start anti trust proceedings. The product at GM and Ford improved remarkedly, even thought they lost a lot of market share. But what is killing them now has nothing to do with competition, it has to do with healthcare costs, and their component in retirement benefits. Somethng foreign manufacturers do not have to deal with it. Japan already has Hillarycare, so does Germany, and S. Korea.
The United States had numerous profitable successful long time carriers before 1978 and deregulation. Deregulation brought us lower air fares, no doubt about that, and made flying affordable for almost all. But was it successful? Only three startups still exist of any size, WN, FL, and B6,. still exist. How many billions of dollars of capital have been lost on startup carriers? What have there been, over 250 of them that have come and gone. And of the legacies, how many of them have allowed their stockholders to escape a total loss of their investment? ONE, American Airlines. Every single other carrier has gone broke, only to be recapitalized by their lenders.
Quoting Osiris30 (Reply 6): Respectfully this is asinine. What will solve all the problems is for Congress to do NOTHING. If 80% of airlines in the US fold up shop tomorrow because they can't turn a profit, then sobeit.
Your idea is to let almost all the remaining carriers go broke, and let a monopoly of sorts come to fruition by that process. Airlines are more than a bunch of airplanes painted in a common scheme. They are families of employees, the vast majority of whom have no say so or input into their future. Better to reregulate, than to allow all but WN and possible one or two of the legacies survive. With these fuel prices, we will see how profitable AirTran is. Midwest is almost a goner. Frontier is in Chapter 11 and the chances of them coming out are much less than many would have you believe. $100.00 a barrel oil isn't going away. The US economy is not going to bounce back quickly. John McCain will be the next President insuring the USA's continued engagement in Iraq and a weak dollar, pushing prices even higher and sinking the economy even lower. The whole thing is quite sad, and IMO, it will be difficult for any carrier to whether this storm. Public Utilities have successfully provided electricity and water. They are regulated. The passenger railroads in Europe are regulated. Congress is not going to do "nothing," because while the Republicans may hold the White House, they will not regain control of Congress for a very, very long time.
I don't think my opinionis so asinine as you have pointed out.
Panova98 From United States, joined Apr 2008, 66 posts, RR: 0 Reply 8, posted (4 months 2 weeks 4 days 8 hours ago) and read 1821 times:
I say no to re-regulation.
But, but, where are we? In today's marketplace, the airlines appear to be saying they can't price their product to make a profit or, at least, cover costs, and travellers are showing that they won't or can't pay what the airlines are charging them now, whatever level that is.
As a traveller, I welcome the airlines saying "hey, travelling public, this is what we need to survive." However, if no one is willing to pay that, I say: "Sayonara!"
Seriously, both of us, airlines and the travelling public, are in this together. As a traveller, I am more than willing to pay a fair price that's worth my while. But, I welcome lot more openness from the airlines about their costs and what it takes in today's marketplace. I see far too much going on that to me looks like nothing more than gouging their best customers or pricing simply to kill off competition. Enough!
Burkhard From Germany, joined Nov 2006, 876 posts, RR: 0 Reply 9, posted (4 months 2 weeks 4 days 7 hours ago) and read 1792 times:
One significant point: The US airline industry is under financed. They just can spend the money the got yesterday. Compare this to airlines who order new aircraft only when they have the money to pay them in cash. Even Swiss, just rescued, has no single Franc debth.
A sane airline industry needs investors who think in decades, not in a quarter. This means, nobody from Wall Street.
TN757Flyer From United States, joined Apr 2008, 454 posts, RR: 0 Reply 10, posted (4 months 2 weeks 4 days 7 hours ago) and read 1790 times:
Quoting Gsoflyer (Reply 1): 1) Like the automobile industry, Unions are killing airlines.
Unions effectively killed Eastern. They could have killed AA back in the 90's. Greed of a particular employee group is often more important than the overall welfare of the company and ALL employees.
Quoting Gsoflyer (Reply 1): 4) The American love of the road.
The U.S. should have invested in a viable intermodal transportation system like in Europe years ago, at least in the northeast and larger urban centers. Americans would use trains if they were reliable and relatively inexpensive, neither of which Amtrak is particularly known for.
Quoting Gsoflyer (Reply 1): 5) We want it all when we fly. We want that cheap ticket.
Exactly. Then people come on to a.net and bitch when an airline does not have IFE or serve meals anymore. You can't have it both ways. The days of air travel being "glamorous" are long gone. Now it's just a bus ride in the air (no Skybus puns intended), with a few exceptions.
PacificWest From United States, joined May 2007, 50 posts, RR: 0 Reply 11, posted (4 months 2 weeks 4 days 6 hours ago) and read 1723 times:
"We now face a danger which in the past has been most destructive to the human: success --plenty, comfort, and ever-increasing leisure. No dynamic people has ever survived these dangers." -John Steinbeck
It's a problem with society. We all want something for nothing. We want a meal and all the bells and whistles, but we don't want to pay for it. People feel entitled to a meal, LiveTV, leather seats, and no turbulence for $200 round trip. It's the same crap I hear people spew all day long. People "deserve" free health care, job security, and a life free of sadness and hardship just for living in Western hemisphere.
StarAC17 From Canada, joined Aug 2003, 1296 posts, RR: 0 Reply 12, posted (4 months 2 weeks 4 days 6 hours ago) and read 1652 times:
Here are 3 things I think
I don't think you need to re-regulate the airliners completely but I would do it for maintenance, as the incidents in the past few weeks have shown airlines are willing to undercut this to save money and I find this unacceptable. What would have been the reaction if there was a preventable crash killing 200 people. Weather the airliners or FAA is responsible for this happening another thread so I'm not discussing that.
Also leave the unions in and make an effort to improve them. The reason I say this is that there is no stopping management from cutting their pay and making them work longer hours. Without Unions the employee is unprotected, now I know there are some of you in management that think don't treat your employees like this and they are not unionized and kudos to you for doing that. However as said the workers have given back enough after 9/11, and paying airline employees less than what they can live off shouldn't be the case in the free market.
This extends to the all industries, yes we know in China people are payed $1/day to make shoes that we buy for $100 but do we want to pay our workers in the developed world that and have the standard of living fall below China, we need to find a way to compete in other ways that cutting labour costs.
Change the fare structure completely and make sure you are not selling tickets at as loss which if it means raising fares then so be it. Some airlines might go under and let them! The amount of people who will fly will drop but there will still be a huge group of people that need/want to.
Also if you have extra services like IFE and complementary meals them market them into your prices and if you don't then be honest about it so passengers know what service to expect.
PPVRA From Brazil, joined Nov 2004, 4727 posts, RR: 25 Reply 13, posted (4 months 2 weeks 4 days 5 hours ago) and read 1620 times:
Quoting Milesrich (Reply 4):
Reregulation will solve the problems. The only question is, does Congress have the will to impose it?
That won't solve anything.
Quoting Milesrich (Reply 7): Your idea is to let almost all the remaining carriers go broke, and let a monopoly of sorts come to fruition by that process. Airlines are more than a bunch of airplanes painted in a common scheme. They are families of employees, the vast majority of whom have no say so or input into their future. Better to reregulate, than to allow all but WN and possible one or two of the legacies survive
Quoting Milesrich (Reply 7): Public Utilities have successfully provided electricity and water. They are regulated. The passenger railroads in Europe are regulated. Congress is not going to do "nothing," because while the Republicans may hold the White House, they will not regain control of Congress for a very, very long time.
So is the U.S. market, and look at what is happening. If you want more stability for U.S. companies as a whole, not just for the poor families of airline employees, you'd reconsider all the anti-trust regulation. That is keeping the industry from consolidating and helping everyone out in the long term, especially in the form of job security. Of course, consolidation is frowned upon by all left-wing politicians (and some right too). So yeah, when it comes to politics, don't expect John McCain or Hillary or Obama to fix your worries. . . they won't because they can't, no matter how much they say they can or how wonderful their new "ingenious scheme" sounds.
Quoting StarAC17 (Reply 12): we need to find a way to compete in other ways that cutting labour costs.
There is another way, as I pointed out above, but it's illegal right now. Unfortunately.
Are fares in Canada so bad because AC has such a big market share? No, right? And even if they are not as low as you'd like it is still good for Canada because of the stability this brings for AC's employees and for the general flying public. There's a balance that needs to be reached for the industry to remain healthy.
[Edited 2008-04-12 16:33:15]
“When goods do not cross borders, soldiers will.” - Frederic Bastiat
StarAC17 From Canada, joined Aug 2003, 1296 posts, RR: 0 Reply 14, posted (4 months 2 weeks 4 days 5 hours ago) and read 1560 times:
Quoting PPVRA (Reply 13): There is another way, as I pointed out above, but it's illegal right now. Unfortunately.
Are fares in Canada so bad because AC has such a big market share? No, right? And even if they are not as low as you'd like it is still good for Canada because of the stability this brings for AC's employees and for the general flying public. There's a balance that needs to be reached for the industry to remain healthy.
Very true, and what AC has done is simplify its fare structure to include more benefits for higher fares, which helps it compete with WS on certain routes. I don't know all the much when it comes to anti-trust laws except for sports and the computer industry so I'll take your word for it but I have a question.
Is capacity dumping a violation of anti-trust laws?
MillwallSean From New Zealand, joined Apr 2008, 172 posts, RR: 0 Reply 15, posted (4 months 2 weeks 4 days 4 hours ago) and read 1471 times:
Its never easy to compare different markets or cultures. But sometimes I feel that people that have grown up in the US don´t understand unions. They seem to be viewed as a threat and something just being disruptive to the company.
My experience is that often with US management there are no understanding or effort to work together towards common goals between managers and unions. Everyone fight their own corner and instead of bringing the company forward they end up wasting energy on their troubled relations. I don't have much experience of US unions but the little that I have was not positive.
In many parts of Europe unions are part of running a business. In some countries you cant even employ someone without a contract with the unions, thus making relations with unions something natural.
In most of western Europe, there are union representatives at board level. For example Germany generally have four union reps on their board of directors, Sweden have a minimum of two etc etc.
These countries have prospered and achieved healthy economic growth with unions being part of their culture.
The point I want to make is that its the relationship between unions and management that doesn't work in the US.
Who to blame for that I don't know but generally there are two in an argument...
If Lufthansa, Air France and KLM can work with unions and achieve good results, american airlines can do it too.
I am no expert on the US, but this is my personal experience.
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