Ornery.org
  Front Page   |   About Ornery.org   |   World Watch   |   Guest Essays   |   Contact Us

The Ornery American Forum Post New Topic  Post A Reply
my profile login | register | search | faq | forum home

  next oldest topic   next newest topic
» The Ornery American Forum » General Comments » What the hell is wrong with the airline industry?

 - UBBFriend: Email this page to someone!    
Author Topic: What the hell is wrong with the airline industry?
scifibum
Member
Member # 945

 - posted      Profile for scifibum   Email scifibum   Send New Private Message       Edit/Delete Post   Reply With Quote 
All I read is about bankruptcies and multi-billion dollar losses. The former golden boy airline, JetBlue, is even struggling.

The reasons mentioned in the news articles: poor economy, high fuel cost.

There are weak measures like charging for in-fight meals, and for checked baggage.

Why don't they simply hike airfare until they are in the black? Flying is expensive. I can still get a round trip ticket from SLC to San Jose for about a day's pay...and it sure would cost me more than that to drive.

I'm an economic dunce, but this seems pretty simple: if airlines are universally hemorrhaging money, they need to charge more for their services. I can't fathom how they can continue to lose money for years on end.

Posts: 6847 | Registered: Mar 2003  |  IP: Logged | Report this post to a Moderator
kenmeer livermaile
Member
Member # 2243

 - posted      Profile for kenmeer livermaile   Email kenmeer livermaile       Edit/Delete Post   Reply With Quote 
Price wars can be as stupid and relentless as civil wars.
Posts: 23297 | Registered: Jan 2005  |  IP: Logged | Report this post to a Moderator
OceanRunner
Member
Member # 5605

 - posted      Profile for OceanRunner   Email OceanRunner   Send New Private Message       Edit/Delete Post   Reply With Quote 
I was reading about this the other day. The thing is, Americans do a fair amount of air travel that's not absolutely necessary because, well, we can. However, with discretionary spending already tanking, if airlines raise ticket prices much more, they're afraid they'll reach the tipping point where people just cease all non-essential flying competely.

And yes, then of course there are the price wars, which is where these stupid secondary costs come in. I don't mind giving up in-flight meals, but checked baggage? That just seems sad.

Posts: 740 | Registered: Nov 2007  |  IP: Logged | Report this post to a Moderator
TommySama
Member
Member # 2780

 - posted      Profile for TommySama   Email TommySama       Edit/Delete Post   Reply With Quote 
Jesus, Scifi, what do you do for a living? It takes about 2 weeks of pay (when I still worked) to buy a ticket, for me. Now it costs no weeks of pay since I'm living off of savings [Smile] , but still!
Posts: 6396 | Registered: Feb 2006  |  IP: Logged | Report this post to a Moderator
Peter
Member
Member # 6058

 - posted      Profile for Peter   Email Peter   Send New Private Message       Edit/Delete Post   Reply With Quote 
I’m completely baffled by the fact that our airlines can’t run in the black. I fly United Airlines weekly for business and my flights are nearly always full. Yet last quarter they post a half billion dollar loss.

This explained much: http://www.newsweek.com/id/120105/page/1

I’m an economic dunce (like Scifi), but I don’t understand why we don’t discontinue our bankruptcy protection of domestic carriers and allow foreign airlines to fly point to point within the US. Can someone explain?

Posts: 24 | Registered: Mar 2008  |  IP: Logged | Report this post to a Moderator
Delirium Tremens
Member
Member # 1997

 - posted      Profile for Delirium Tremens     Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by scifibum:

I'm an economic dunce, but this seems pretty simple: if airlines are universally hemorrhaging money, they need to charge more for their services. I can't fathom how they can continue to lose money for years on end.

The problem specifically with airline carriers is that it is a very cash intensive industry. In short: a plane is a very expensive thing that lasts a long time (say, 20 years or so). Just suppose that in a normal situation, it would take you 15 years to make a profit. If you buy a plane then (supposing you're an airline carrier), you need to be able to plan at least 15 years upfront the size of the plane, the number of passenger it will transport, the distance that it will fly etc. An economic disaster during those first 15 years (like 9/11) is a catastrophe that is very difficult to recover from. You can't just dump or old fleet and buy new planes which are more suited: it's just too expensive and who says what the needs will be in 10 years?

Another problem is that there are just too many airline carriers. Just make the following comparison:
- How many car manufacturers are there: say 10 - 20 big ones, all the rest is tiny crap.
- How many computer manufacturers are there: same answer 10 - 20 big ones, all the rest is tiny crap.
- How many airline carriers do you have? At least 50 big ones. This is just way too much.
Consolidation of the industry is in full progress in Europe (since a year or 5) but hasn't really started yet in the US.

[ May 22, 2008, 06:39 AM: Message edited by: Delirium Tremens ]

Posts: 432 | Registered: Aug 2004  |  IP: Logged | Report this post to a Moderator
scifibum
Member
Member # 945

 - posted      Profile for scifibum   Email scifibum   Send New Private Message       Edit/Delete Post   Reply With Quote 
quote:
Originally posted by TommySama:
Jesus, Scifi, what do you do for a living? It takes about 2 weeks of pay (when I still worked) to buy a ticket, for me. Now it costs no weeks of pay since I'm living off of savings [Smile] , but still!

I'm talking about a flight scheduled a month in advance on a tiny regional jet through my employer-negotiated discount, and it's between $200-$300 bucks round trip. That's about what I make (before ANY taxes) a day. It's mid-range salary for a professional in this region.

I think it's cheap at that price. If the airline needs to double that, it's not going to stop my employer from flying me out sometimes. (They pay a LOT more to put me up for a week in San Jose than they do for the flight.)

I understand the points about the long amortization of the infrastructure, and the discretionary flying. Still, it seems like losing money every year is going to push the airlines toward the painful end result of flying by necessity at a highly increased fare, eventually.

Posts: 6847 | Registered: Mar 2003  |  IP: Logged | Report this post to a Moderator
   

Quick Reply
Message:

HTML is not enabled.
UBB Code™ is enabled.
UBB Code™ Images not permitted.
Instant Graemlins
   


Post New Topic  Post A Reply Close Topic   Feature Topic   Move Topic   Delete Topic next oldest topic   next newest topic
 - Printer-friendly view of this topic
Hop To:


Contact Us | Ornery.org Front Page

Powered by Infopop Corporation
UBB.classic™ 6.7.1