Next 24 Hours Will Change The Face Of Aviation

[PITbull]

I thought you were maskerading as a UAL f/a.

Customer, managment or U employee...or is it a secret?

 

[Bear96]

I thought you were maskerading as a UAL f/a.

Customer, managment or U employee...or is it a secret?

[post="300532"][/post]​

Not masqureding as anything. I am a former UA F/A, as I have made clear in the past (and if it really matters to this discussion).

But keep on avoiding the tough issues...

 

[sfb]

Southwest serves about 62 cities in 31 states with over 850 airports on the list awaiting (hoping) for flights. Problem is half the aviation market segments in this country produce less than 2 pax per day. Half of those produce less than 2 per week.

The essential problem with this argument is that the "half of aviation market segments" to which you refer probably also represents at most 2-5% of air passenger traffic. Is it efficient to have the general public (or the industry) paying 25-50% higher costs to subsidize a small fraction of people traveling? I would argue it is not.

The legacy model isn't exactly perfect, either; Southwest's point-to-point routings are often far more convenient than travel through a network hub. It's a lot easier to go non-stop from MSY to BHM, SMF to SAN, AUS to ELP, or FLL to MSY than it is to go through the nearest hub.

You can't serve point to point: Buffalo to Boise. 95% of all US domestic makerts fail using an LCC business model.

True, but those 95% of markets are only a tiny fraction of the US domestic market by passenger volume or revenue. There just aren't that many people trying to fly from LEB to LRD, STS to SJT, or RDD to RDG. Now, the small markets do provide a niche for probably one to three network carriers, along with the people willing to pay a premium of some sort for additional services offered by a network carrier.

One could also envision efficient regional carriers (for example, SkyWest) in partnership with LCC's to allow people in smaller markets to access LCC point-to-point operations in places like Chicago, New York, Houston, Atlanta, Los Angeles, Seattle, etc. With a relatively reasonable CASM and rational pricing, this strategy could work.

 

[WorldTraveler]

The alternative business model will quickly fall apart and the federal government will see why the US airline system is broken. When US went into bankruptcy, it pulled mainline service out of a lot of markets. Not too big of a worry, though. Delta expanded capacity into most of those markets and customers just moved their connection from CLT to ATL and from PIT to CVG.

DL and NW are now on the verge of cutting signficant amounts of capacity and it won't come out of their local markets. You can bet that even if CVG gets dumped as a hub in a merger with NW, DL will keep enough capacity to maintain the local market - just as AA has done in STL. The capacity that gets cut is connecting capacity and DL, NW, and US provide the bulk of connecting capacity east of the Mississippi. ORD is too congested to accommodate service to any new destinations in a significant way as is EWR. With alot less capacity, airfares will soar in thousands of connect markets. But the markets are too small to justify bringing in an LCC.

So the federal government will have created an air transportation system of haves and have-nots (not unlike alot of the rest of America); cities will either be large enough to support point to point service at reasonable fares or they will have connecting service which will be priced at a large premium.

Perhaps that is why the Chinese and any other civilized government would not want to follow the US aviation model. Transportation systems are inherently expensive to operate; relying on the free market to determine the level of services is a very poor system at best and unsustainable at worst.

 

[EyeInTheSky]

Perhaps that is why the Chinese and any other civilized government would not want to follow the US aviation model. Transportation systems are inherently expensive to operate; relying on the free market to determine the level of services is a very poor system at best and unsustainable at worst.

[post="300562"][/post]​

Our government needs to put some quotas on the airlines. You can't go adding capacity when the industry is about to collapse. Of course, that will mean higher fares and most of the public wants cheapie cheapie. In the end, bankruptcy or not the American public will pay more in lost jobs and the money from those jobs that help stimulate the economy. One day soon the public will realize the true costs of low fares.

 

[usair_begins_with_u]

Chapter 11 is why you clowns still have jobs...

 

[EyeInTheSky]

Chapter 11 is why you clowns still have jobs...

[post="300612"][/post]​

Takes a clown to know a clown...

 

[javaboy]

That will make over 50% of U.S. airline capacity operating in BK at the same time - though I'm not sure if it will still be over 50% after we emerge.

Jim

[post="300114"][/post]​

and still Al Khan will stand up and say deregulation is a resounding sucess. yeah congrats it took just under 30 years but it completely left an unstable aviation system in the most economically powerful nation in the world. yeah it worked alright.

guess what the old arguement as presented to UAIR management no less than 3 times in 10 years....
after a quick check can now be said at NWAC and DAL both! and probably FLYI too

if every Pilot worked for free the airline (insert your carrier here) would STILL LOSE MONEY

if every Pilot AND Flight Attendant worked for free (insert your carrier here) would STILL LOSE MONEY

if every Pilot, Flight Attendant and Mechanic worked for free (insert your airline here) would STILL LOSE MONEY.

guess what, i'm thinking that maybe salaries ARENT THE PROBLEM HERE? in NWAC's article it names several top executives that have experience in dealing with Bankruptcies, and count this AS A PLUS??????

maybe it was their MANAGEMENT ABLITIES that PUT THEM IN THAT POSTION IN THE FIRST PLACE? included were executives that worked for U and UAIR, EAL, Pan AM and TWA. yeah nice track record and then claim its a plus?

we here know what lies ahead, i wish all those employees the best of luck during the hardest of times of which they are upon.

h34r:
:blink:

 

[diogenes]

One could also envision efficient regional carriers (for example, SkyWest) in partnership with LCC's to allow people in smaller markets to access LCC point-to-point operations in places like Chicago, New York, Houston, Atlanta, Los Angeles, Seattle, etc. With a relatively reasonable CASM and rational pricing, this strategy could work.

[post="300559"][/post]​

Wait SFB, WN doesn't interline!

That might change when they're the king daddy and can dictate terms.

 

[diogenes]

Bear, my point is business types justify BK in terms of saving jobs. I'm saying consideration goes beyond that.

First, the companies had a fiduciary obligation to the pension plans. You may believe it coincidental all of this high paid acumen in so many businesses failed in these obligations. I do not. I will certainly agree the PBGC brought quite a bit upon themselves: the oversight and funding requirements were inadequate when compared to such a broad collapse of pensions.

Second, it is no stretch to assume a PBGC bailout.

http://edworkforce.house.gov/issues/109th/...on/dc062705.htm

I see no point to stay silent until the horse has escaped the barn. Taxpayers have a right to know they are getting screwed before the fact.

Businesses frequently socialize risk.

SuperFund

http://www.cpeo.org/lists/brownfields/2004/msg00112.html

Here's a partial list laying off risks, while retaining profits, via the Ex-Im Bank

http://www.cato.org/testimony/ct-iv071797.html

To avoid taxes (profits go up while Joe Taxpayer has to shoulder a heavier load)

http://moneycentral.msn.com/content/Taxes/P39956.asp

And, exploiting illegal immigrants while letting the taxpayer educate and provide health care for them.

http://www.usdoj.gov/opa/pr/2001/December/01_crm_654.htm

Here's a fuller discussion of the forces at work.

http://www.thenewamerican.com/tna/2003/09-...9_exporting.htm

Enjoy!

 

[Bear96]

Dio

You're getting way off track and trying to obfuscate the issue. Posting links to articles that are only peripherally related, at best, to the question doesn't help us move forward. Focus!

The issue is:

If you think the concept of reorganizational bankruptcy is a bad idea, what are you proposing to replace it with, other than a system whereby as soon as a company can't pay its bills, it must shut down (liquidate) completely? Or do you indeed see that as the better public policy?

You and PITbull seem to be almost as adept at John Roberts at answering the tough questions.

 

[EyeInTheSky]

Bear96, I am all for corporate accountability. I say use the Japanese method. If a company tanks the CEO is directly responsible. This country needs some harakiri in the corporate ranks --- a cleansing if you will.

 

[diogenes]

OK, Bear, three things.

1. You asked me to clarify what I meant by socializing risks, and I was more than happy to oblige.

2. Obviously, you want to give a company reasonable chances to stay a going concern. Where those chances become unreasonable is in the eyes of the beholder. I'd argue part of that calculus is when the gain from the business going forward is significantly offset by risks incurred by vendors, taxpayers, etc., liquidation becomes a consideration.

In the context of steel, airline and soon, auto pensions being dumped on the PBGC, it seems obvious BK has become too easy an avenue for management to escape the consequences of their poor decisions. At the very least, management should share pain to the same degree they are are asking shareholders and employees to bear. Perhaps we'd see fewer BK's.

Hopefully, the new BK rules will make BK less of an option.

3. In regards to Roberts, I am practicing for the brave new economy.

Hey, it's working for him!

 

[Bear96]

Obviously, you want to give a company reasonable chances to stay a going concern. Where those chances become unreasonable is in the eyes of the beholder.

[post="300974"][/post]​

True enough.

But here we seem to have unanimous agreement that U has clearly overstepped all bounds of what Ch.11 should "reasonably" be. Therefore what I am trying to do is elicit from those who are saying that, like you and PITbull, either (A) an admission that you prefer U just simply liquidate since they have "abused" the system, or (B) a proposal of some realistic alternative which has the positive aspects outweigh the negative more than the current system.

Neither of which seem to be forthcoming.

 

[mrman]

And as usual ,the pols want WN pricing in Fargo. We both know that is impossible.

[post="300477"][/post]​

Why not, they do it in Harlengin, Corpus, Midland, Boise, Lubbock, Tulsa, Jackson just to name a few off the top of my head