Wsj Article

Cfm56

Member
Nov 3, 2002
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Excellent Wall Street Journal article
In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.

Long Flight

How Airlines Resisted Change
For 25 Years, and Finally Lost

After Deregulation, Carriers
Failed to Cut Labor Costs;

Internet Helps Upstarts

US Airways' Turbulent Ride

By SUSAN CAREY and SCOTT MCCARTNEY
Staff Reporters of THE WALL STREET JOURNAL

October 5, 2004; Page A1

When Congress deregulated the U.S. airline industry in 1978, many fares came down, flights increased and air travel took off.

But one side of the business changed much less: airline costs. To keep their grip on the market for more than two decades without rewriting expensive labor contracts or improving efficiency, big airlines used a bag of tricks: frequent-flier plans, the "hub" system of controlling key markets and international alliances to keep business customers. The airlines often gouged business travelers, their best customers, and bedeviled vacation travelers with restrictions and fees.

Now the airlines have run out of tricks. As upstart carriers spread across the nation with across-the-board cheap fares, the traditional higher-cost carriers are struggling to transform themselves into versions of the low-cost model. The most desperate to change is US Airways Group Inc., which entered bankruptcy last month for the second time. No other airline has tried as many gambits to avoid the day of reckoning as US Airways, and no other airline is in as much danger.

In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.

PORTION DELETED BY MODERATOR.....PROVIDE A LINK PLEASE...
 
If you want an example of the economy of airlines today, here's a reproduction of the graph from todays WSJ.

The graph is of the average price (fare) for a passener to fly one domestic mile - in 1978 fixed dollars... The value is cents.
 
ITRADE said:
If you want an example of the economy of airlines today, here's a reproduction of the graph from todays WSJ.

The graph is of the average price (fare) for a passener to fly one domestic mile - in 1978 fixed dollars... The value is cents.
[post="187885"][/post]​
Now that we all see this chart I am sure Labor will come to there senses and give management everything plus 1% to assure we survive....NOT.

Like the article hints, this airline is finished and I concur. Too much damage has been sustained and moral will never allow a true turn around. Like the divorced couple you hate each other and wish the other would die so goes the relationship which is alive at U and it's employees.

savoir faire was never managements strong point
 
Another dumb dishonest article by the WSJ. Note they say NOTHING about service to small and medium cities. They don't understand or intentionally mislead their readers into what they want to hear. Oh, yea, they'll be cheap fares point to point from small cities in very expensive ASM RJs . . . . btw, flown by cheap regional crews.
 
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>>>>Note they say NOTHING about service to small and medium cities.<<<

Often I hear employees from legacy airlines talk about this, as if airlines are a public utility. They are not -- they are a business. Same thing when people talk about Southwest "cherry picking" routes. The idea is to make money and be profitable, not be a money losing entity serving all cities at any cost. I always sort of chuckled when I see some airlines with "Worldwide Service" on the side of their airplanes....be better from a business standpoint if they said "we go there if profitable". If some cities aren't profitable to serve, they aren't. Big deal -- that's capitalism.
 

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