EU-US Open skies agreement

[mrmitchell]

Perhaps I was unclear; I meant American Airlines -- they're the one of the 6 legacies that has never undergone bankruptcy proceedings.

I was unclearer. I didn't mean "American airlines" as in "American Airlines Corporation (ticker symbol AA)", but rather as "airlines that operate in America". It's easy to see where you could get confused...

Most people hate flying and rightly so.

Not really. Being on the plane is okay. Being at the airport sucks. Lines, crappy stores, security, that kind of thing.

[JohnT]

Originally posted by Ted Striker


Wow, rates fell and I can book flights over the Internet. That's nice, but not good enough.

Yet the experience of being on a plane has not changed ONE BIT from 1982. Not at all.

Those innovations are baby steps. I'm talking radical change. Most people hate flying and rightly so. It's a crappy experience that has gone on too long the same way and is in need of change.

Of course flying is a "crappy experience", Ted, that's partly my point.

Back before there was "no competition", airlines were able to charge thousand$ for flights and be able to treat you like Kings. Of course, that meant that 60%+ of the population couldn't fly without a substantial, months-long effort to save money for the tickets, but at least the "elites" got to fly in comfort which I guess is what you are looking for.

But that world sucks:

For most adults in the developed world, aviation has been a constant in our lives. A unique experience some decades ago has become commonplace, and far from being anticipated, it is often now something to be endured as part of another, broader, endeavor. This ubiquitousness has also been a direct result of deregulation. As an example, in February 1978, there were 12 nonstop flights each day between San Francisco and New York. They were operated by the “permitted carriers”, United, American and TWA and all flew from SFO to JFK. In February 2004, The Bay Area market was served by non stop flights from all three airports, SFO, Oakland, and San Jose with (roughly) 40 non-stop services each day to JFK and Newark. These flights were operated by United, American, Continental, jetBlue, America West and ATA. Furthermore, there were seats available on many of those aircraft priced as low as $99 one way, an amount that would have stunned our 1978 passenger. Even more astounding is the growth in service between London and New York which are compared in Figure 1, on the right.

http://www.unisys.com/transportation/insights/insights__compendium/what__next__for__us__airlines.htm

It's far better to have the rich pay $2,000 to fly in comfort on rarely scheduled flights than the middle class to pay $99 to fly in a "Greyhound in the Skies", apparently.

Consumers have enjoyed big savings:

Between 1976 and 1990 average yields per passenger mile—the average of the fares that passengers actually paid—declined 30 percent in real, inflation-adjusted terms. Average yields were declining in the decades before deregulation as well, thanks largely to the introduction of jets and jumbo jets. The best estimates, however, are that deregulated fares have been 10 to 18 percent lower, on average, than they would have been under the previous regulatory formulas. The savings to travelers have been in the range of $5 billion to $10 billion per year.

The overwhelming majority of the traveling public has enjoyed these lower fares. In 1990, according to the Air Transport Association, 91 percent of all passenger miles traveled were on discount tickets, at an average discount of 65 percent from the posted coach fare. The benefits of the price competition unleashed by deregulation, however, have been unevenly distributed among travelers. That is because the intensity of competition varies from one market to another. Prices per mile are usually much higher on thinly traveled than on densely traveled routes. They also are higher for the minority of travelers who have to pay full coach fares because they are unwilling or unable to meet the typical conditions for discounts (advance purchase, nonrefundability, and staying over a weekend).

Greater choice...

For example, between 1979 and 1988 American Airlines increased the number of domestic airports it served from 50 to 173, and United Airlines from 80 to 169, both without major benefit of mergers. As of February 1992 a traveler between Boston and Phoenix could choose among six airlines; in 1977 there were only two. Again, back in 1979 only 27 percent of all passengers traveled on routes served by three or more competitors; by 1988 more than 55 percent enjoyed that kind of choice.

Safer airplanes...

Air travel is unequivocally safer now than it was before deregulation. Accident rates during the twelve-year period from 1979 to 1990 were 20 to 45 percent (depending on the specific measures used) below their average levels in the six or twelve years before deregulation. Moreover, by taking intercity travelers out of cars, the low airfares made possible by deregulation have saved many more lives than the total number lost annually in air crashes.

And have responded by flying more...

The other major accomplishment of deregulation has been the improvement in airline productivity. Deregulation fostered this improvement by removing the previous detailed restrictions on airline prices and on where they can fly. Decontrol of prices allowed airlines to fill their planes by offering large numbers of heavily discounted fares for seats that would otherwise go unused. Decontrol of routes permitted them to plan their operations as they see fit. And deregulation has compelled improvements in efficiency through the intense pressures of the price competition it unleashed. Carriers have put more seats on their planes—the average went up from 136.9 in 1977 to 153.1 in 1988—and succeeded in filling a greater percentage of those seats—from an average of 52.6 percent in the ten years before 1978 to 61.0 percent in the twelve years after.

And your complaint about how flying sucks is pretty irrelevant because people know that their demand for cheap fares make airline seats a commodity and therefore expect what they pay for:

Second, travelers have endured an undeniable increase in congestion, delays, and discomfort. But these are not, in themselves, a sign of failure. After deregulation, low-cost, aggressively competing airlines, such as People Express, offered the public low fares, with correspondingly lower-cost service—narrower seating, longer lines, and fewer amenities. The incumbents responded with very deep discounts, accompanied by similarly poorer service. The enormous response of travelers to the availability of these new options is a vindication of deregulation, not a condemnation, even though the quality of the air travel experience has deteriorated as a result.

http://www.econlib.org/library/Enc/AirlineDeregulation.html

In 1980, all US aircraft revenues per passenger miles, foreign and domestic, were 250 billion. http://www.bts.gov/publications/nati...r_profile.html

Last year it was 750 billion miles.

So... More people are flying in safer aircraft to a greater variety of destinations at far cheaper fares than what their fathers paid and you want to argue that merely because "flying is a crappy experience" (and as someone who has gone on dozens of round trip flights (do you fly often, Ted?), I do agree with the sentiment) there have been no improvements and there is no competition in the airline industry?

How are rate wars, in which airlines sell seats at a loss (the only thing more expensive, of course, is not selling the seats at all), in which two US carriers are bankrupt because they can't charge profitable rates to supplement their pre-1978 business models (well, it seems that way), a sign of "lack of competition"? Hell, Ted, did you know that for 50 years Pan-Am had a monopoly on flights leaving the US, a monopoly that ended in my lifetime? If you wanted to go to Heathrow, you had to take Pan Am. If you wanted to go to New Zealand, you had to take Pan Am. If you wanted to go to Africa, and Pan Am didn't offer a flight there, you would have to book a connecting flight, locally (as in, when you got there, not prior to departure) to your destination.

Ahhhhh... the good old days.

[Ted Striker]

That's all well and nice (and by the way you do realize you're not the only person that understands this information) but the level of innovation is still way too low.

Those changes you are talking about were way overdue in the 1980s, so I guess I could say the airline industry is still 20 years behind.

Maybe I should applaud that they replaced the peanuts with pretzels as mad innovation.

[Imran Siddiqui]

Those changes you are talking about were way overdue in the 1980s

That's your response to being completely and utterly pwned? You can do better!

[Ted Striker]

Considering how many times I've pwned you, being someone else's fanboy is not a good tactic for getting revenge. If you want to follow me around I suggest starting a fan club.

JohnT's information, while well sourced and extensive, didn't provide anything new that we didn't know before.

[JohnT]

Originally posted by Ted Striker
That's all well and nice (and by the way you do realize you're not the only person that understands this information) but the level of innovation is still way too low.

Those changes you are talking about were way overdue in the 1980s, so I guess I could say the airline industry is still 20 years behind.

Maybe I should applaud that they replaced the peanuts with pretzels as mad innovation.

OK... so, in your experience and knowledge, just where should the airline industry be? If reducing fares by 95% and making service so efficient that the number of PRM's triple in a mere 20 year span is not an example of efficiency, innovation, and competition... what more do you want?

Also... what services and offerings are being done around the world that are not being done here? Don't mention anything "network" or "computer" related (i.e., anything that allows passengers to book, schedule, review, or compare flights, flight data, industry statistics, SEC filings, NTASB flight safety data, or any bit of airline information anywhere on the global 'net) because, according to your own words, "internet" stuff is not an example of innovation that satisfies you. You also can't bring up aircraft - the new Boeing 777's use 1/3rd less fuel and has 40% lower maintainance costs at the same stage of use than the 747's that were the rage in 1985.

We're not flying people into space, true, but there it's the government that dropped the ball, not private industry.

And while it is true that Airbus has been making fantastic planes, their existence truly has nothing to do with your original assertion that the American industry is less competitive and innovative than it was 20 years ago.

So... given that you can't bring up computers and planes, exactly where should the airline industry be? Where have they lacked in terms of innovation? Tell us, Ted... I've made my case as to a number of innovations and improvements, but all I get are three line answers in return that do nothing but restate the original claim.

[JohnT]

Originally posted by Ted Striker

JohnT's information, while well sourced and extensive, didn't provide anything new that we didn't know before.

Ted.

You made an assertion. No data to back it up, just an opinion.

I rebutted it, using statistics and citations.

You replied, saying that my examples of innovations weren't "innovative" or "competitive" enough for ya, and instead of providing more (or any) data, you restate the original opinion.

I then rebut it again, using different citations, different data, going at it from a different angle.

You then, again, state baldly that "I know all this", but ... and again restate your opinion, doing nothing to back it up. You can't even answer the simple question about your flying experience.

I then, for the third and last time, bring in even more data, more citations... and then I read this post.



Are you telling me that you knew that PRMs in 1980 were 267 million and that they were 750 million in 2004?

You actually knew the date that frequent flyer miles were introduced?

You've researched the Boeing 777 (if just to participate in an internet argument), knew that it was 30-odd percent more efficient on a couple of very important and costly availables, but didn't bother to bring it up, hoping that I wouldn't? Or is it you just don't think a 30% increase in fuel efficiency is innovative?

I mean, you "knew" all this? I'm just repeating data that was already in your brain, data that you've already dismissed as irrelevant because you are on top on the airline industry and "know" far more than just some other schmoe on the internet? That's why you haven't bothered to counter me with anything but your opinion - because your sum of knowledge is so vast and all-encompassing that you can't be bothered to explain it all to the likes of poor little ol' me?

[Dinner]

Cool if it happens though that's a big if. Then there is the problem with most airports already being full.

[Ted Striker]

Again, all you're doing is just reciting common knowledge that everybody already knows. You're citing trends that any industry will show, but somehow praising the airline industry for doing something special. You're basically aiming low. It's the same industry it was 20 years ago, based on the same outdated model, just that costs have gone down and more people have access to the service. We already know that.

It's the equivalent of praising the auto industry for pushing out cleaner cars, even though they almost always still require the same old gasoline or diesel. That's not innovation.


But the experience of the common passenger hasn't gotten any better the entire time. So we got some planes on some select flights with DirecTV in them, big deal.


The REAL innovation comes when the actual passenger's flight experience becomes better, both faster AND more comfortable. Not just the rich passenger who "deserves" it, according to you, (because they can actually pay for it).

Since you mentioned Airbus, they have taken a baby step with their A380, and many airports have had to be redesigned to accomodate it. That's the type of radical change that is needed.

Boeing has the Blended Wing project, which will fit on existing runways, but it's still in the conceptual stage.

Interesting that Airbus is now taking Boeing down, because they have basically been pushing out the same planes for the past 30 years. It's the equivalent of GM except their planes don't break all the time the GM's cars do.


Until the airline industry can offer a better travel experience for EVERYONE, THEN we'll talk about innovation.

I appreciate your effort but you're aiming too low.

[Ted Striker]

Originally posted by JohnT


Ted.

You made an assertion. No data to back it up, just an opinion.

I rebutted it, using statistics and citations.

You replied, saying that my examples of innovations weren't "innovative" or "competitive" enough for ya, and instead of providing more (or any) data, you restate the original opinion.

I then rebut it again, using different citations, different data, going at it from a different angle.

You then, again, state baldly that "I know all this", but ... and again restate your opinion, doing nothing to back it up. You can't even answer the simple question about your flying experience.

I then, for the third and last time, bring in even more data, more citations... and then I read this post.



Are you telling me that you knew that PRMs in 1980 were 267 million and that they were 750 million in 2004?

You actually knew the date that frequent flyer miles were introduced?

You've researched the Boeing 777 (if just to participate in an internet argument), knew that it was 30-odd percent more efficient on a couple of very important and costly availables, but didn't bother to bring it up, hoping that I wouldn't? Or is it you just don't think a 30% increase in fuel efficiency is innovative?

I mean, you "knew" all this? I'm just repeating data that was already in your brain, data that you've already dismissed as irrelevant because you are on top on the airline industry and "know" far more than just some other schmoe on the internet? That's why you haven't bothered to counter me with anything but your opinion - because your sum of knowledge is so vast and all-encompassing that you can't be bothered to explain it all to the likes of poor little ol' me?

What can I say, that's all still common knowledge.