[Bob Owens]

From Turbulent Skies, pg 72
ISBN 0-471-10961-4

Quote

"Between 1929 and 1939, the cost per passenger mile fell from 12 cents to 5.1."

Here we are 81 years later and AA just said the cost is 11.8 cents!!!

Quote

pg 71,

1936

"The round-trip fare to Manila was $1438.20, a years wage for a working man."

From Orbitz:

Asiana Airlines LAX to Manila, Feb 17 24 2011

1 stop $649
total $946

From Wikipedia;The real median earnings of men who worked full time, year-round climbed between 2006 and 2007, from $43,460 to $45,113

So airfare went from a years pay to a little over a weeks pay.

Our efforts make anyplace on the Globe accessable, its time we get paid fairly for what we do.

[Crapdog]

You’re trying to compare apples to oranges. How long did it take to get to Manila in the 20's and 30's at 90 to 140 knots per hour in a float plane? Those prices you are quoting include airline owned hotel rooms on the multiple island hops to get there. I don't remember AA ever flying to Manila or overseas before deregulation.

[Bob Owens]

No I'm comparing CASMS to CASMS and the price of a ticket to the price of a ticket. The fact is that air travel has become very cheap, I only used Manila because thats what was in the book.

What other services can you think of are available today that are that much cheaper than they were then?

[737823]

Bob Owens, on 04 September 2010 - 06:12 AM, said:

No I'm comparing CASMS to CASMS and the price of a ticket to the price of a ticket. The fact is that air travel has become very cheap, I only used Manila because thats what was in the book.

What other services can you think of are available today that are that much cheaper than they were then?

Long distance telephone calls, internet access, electronic goods such as televisions, computers, stereo equipment even taking into account hedonic adjustments (ie a laptop purchased today for $500 provides more value than one purchased in 2000 for $1500). Perhaps the same could be said of automobiles (again factoring in the added feature and value) and in some markets real estate. So no, the airlines aren't the only ones.

Face it, besides Emirates, Singapore, Cathay Pacific airlines are essentially commodity goods. I care most about reliability and flying non-stop. Many customers could careless if they fly an AA 737 or a United Express CRJ if UAX ended up saving them $25, they'd be on UAX. I think the mentality among airline employees that "we are subsidizing cheap tickets for the public" isn't true. It's more that the public demands cheap tickets and is unwilling to pay a premium for service (yet still complains about no free meals, checked baggage fees, service cuts, etc). If airline employee compensation was truly keyed to ticket prices (in real dollars) employees would be in for a big paycut.

Josh

[Bob Owens]

737823, on 04 September 2010 - 07:53 AM, said:

Long distance telephone calls, internet access, electronic goods such as televisions, computers, stereo equipment even taking into account hedonic adjustments (ie a laptop purchased today for $500 provides more value than one purchased in 2000 for $1500). Perhaps the same could be said of automobiles (again factoring in the added feature and value) and in some markets real estate. So no, the airlines aren't the only ones.

Face it, besides Emirates, Singapore, Cathay Pacific airlines are essentially commodity goods. I care most about reliability and flying non-stop. Many customers could careless if they fly an AA 737 or a United Express CRJ if UAX ended up saving them $25, they'd be on UAX. I think the mentality among airline employees that "we are subsidizing cheap tickets for the public" isn't true. It's more that the public demands cheap tickets and is unwilling to pay a premium for service (yet still complains about no free meals, checked baggage fees, service cuts, etc). If airline employee compensation was truly keyed to ticket prices (in real dollars) employees would be in for a big paycut.

Josh

Some of what you are talking about are goods, not services and some of them didnt exist then such as televisions, computers, stereo equipment. My guess is the average price for a car in 1936 was under $1000, try finding a new car today for $1000, Real Estate would be same, I doubt you could find anything anywere that would go for around or less than it would in 1936.

We are subsidizing cheap tickets because all the other parties in this industry keep grabbing up all the extra revenue created by increased effeciency. As they grab more and more the airlines tell their workers there isnt anything left for them. They claim they cant raise ticket prices even though they do through fees.

AMR is bringing in around $4 billion a year more than they were back when they took away 25% of our compensation, they also shrank our ranks by 35%, saving them even more money, they pay half what they used to pay and they have $4 billion more coming in yet they cry poverty at the negotiations table and all the talking heads in the media agree and parrot their arguements. The Flying public gets cheap airfare, the banks, lessors, airports, oil companies and everyone else except the workers get more and more while we get less and less.

[TIME FOR CHANGE]

EXACTLY !

[WorldTraveler]

Bob,
the standard of living among the middle class as a whole has decreased... airline jobs were largely considered middle class in the post WWII era when the jet engine began to make air travel commonplace. The reality is that in a deregulated world 1. there is competition and companies that can produce a product cheaper win and 2. not al airline jobs are at the pay levels that were established in the past... as hard as that may be to accept, there is a market for work and if an employer can get the job done just as well for less, then they have a responsibility to their owners to find the best way to get the job done.

The US domestic industry was deregulated more than 30 years ago and with Open Skies, int'l deregulation exists in most of the largest int'l markets.
There are an aweful lot of people who haven't adapated to the reality of a competitive, free market economy in the airline industry.

Specific to AA, the simple fact is that other airlines produce 30% more ASMs than AMR does with the same number of employees, AA's top int'l and domestic markets are under attack, and competitors are marking money in markets like Asia where AA is relatively small.

Employees in any business are only paid as well as the company they work for.... AA has not produced the kind of revenues relative to the industry to justify high pay increases - and yes, that should include AA mgmt as well.

But even if AA started making lots of money, AA's labor costs are above average and until that is brought in line with the industry, no management is going to support a pay raise... and passengers will not pay for it or have any sympathy with employees that expect it.

Telecommunications is indeed a service and there have been major failures in that industry on the way to free markets.

[Hopeful]

WorldTraveler, on 04 September 2010 - 11:10 AM, said:

But even if AA started making lots of money, AA's labor costs are above average and until that is brought in line with the industry, no management is going to support a pay raise... and passengers will not pay for it or have any sympathy with employees that expect it.

Pretty good economics lesson and you do bring up some very good points. But we are talking about American Airlines here. When AA was making money hand over fist we won a 6 1/2% raise over 6 six years from 1995-2001.
AA was making money inspite of itself. Those were some very good quarters and years for AA.
People like to invoke memories of Crandall, but I give credit to Carty accepting a very good contract in 2001. And right after 9/11 we weren't asked to give anythng back except a ban on overtime which was gladly received thanks to the raise.
Then in 2003...well you know the rest.

Traveler, I ask you this....
Do you think it is so unreasonable for us to ask for something we had over 5 years ago? After all work groups gave back billions?
Think about it....asking for the 2001 contract that was revoked in 2003?

I don't think that is unrealistic at all,