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Old 04-25-2010, 06:50 AM
 
Location: Houston, Tx
3,644 posts, read 5,562,831 times
Reputation: 1616

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Quote:
Originally Posted by Jaggy001 View Post
But there is cartel-like price fixing. One does it and they all do it. Southwest is the exception but all the others are the rule.
Cartel-like pricing is not when one company (or many companies) match another in pricing. It is when they all get together and decide on a price and no one goes below that price. Think OPEC. Price matching (usually to the lowest price) benefits consumers. You can see that example on any street intersection that has two or more gas stations. If one is even a feww cents higher they will have less business unless traffic flow is bad enough to make it a pain to get to the cheaper one.
As Wheelsup said, the airlines usually don't make a profit. That means prices are too low (or costs are too high, which might be thre more likely scenario since there are unions involved).
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Old 04-25-2010, 08:47 AM
 
11,951 posts, read 21,545,710 times
Reputation: 11726
Quote:
Originally Posted by rogerbacon View Post
Cartel-like pricing is not when one company (or many companies) match another in pricing. It is when they all get together and decide on a price and no one goes below that price. Think OPEC. Price matching (usually to the lowest price) benefits consumers. You can see that example on any street intersection that has two or more gas stations. If one is even a feww cents higher they will have less business unless traffic flow is bad enough to make it a pain to get to the cheaper one.
As Wheelsup said, the airlines usually don't make a profit. That means prices are too low (or costs are too high, which might be thre more likely scenario since there are unions involved).
LOL on labor costs. Airline employees have seen paycuts in the 50% range not accounting for inflation over the past decade and a complete loss of pensions. There is a mainline flight attendant that lives in my crashpad who makes under $20,000/year and has worked for her carrier for over a decade.

Labor costs have continually gone down and really can't go much lower. In fact, on a 2 hour flight each passenger pays around $5 for the entire flight and cabin crew. Fuel, mx, facilities etc. are the high cost items. In fact one little known fact is SouthWest now has some of the highest paid crew members but still maintain a low cost product.
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Old 04-28-2010, 04:41 AM
 
8,341 posts, read 9,805,136 times
Reputation: 10651
Quote:
Originally Posted by Tek_Freek View Post
There is no incentive to stop. If the airlines are planning on charging $45 and the feds decide to tax it the airlines will simply charge $55 instead. We pay the tax for them.
Yep. A tax levied upon a corporation is always paid by the consumer. Airlines are in the business of making money. Don't like it? Don't fly that airline. If they all follow suit, then that's the price you pay to use their service. Big Bro needs to butt out and worry about their own colossal problems first.
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Old 04-28-2010, 12:07 PM
 
14,261 posts, read 24,004,620 times
Reputation: 20084
Quote:
Originally Posted by wheelsup View Post
LOL on labor costs. Airline employees have seen paycuts in the 50% range not accounting for inflation over the past decade and a complete loss of pensions. There is a mainline flight attendant that lives in my crashpad who makes under $20,000/year and has worked for her carrier for over a decade.

Labor costs have continually gone down and really can't go much lower. In fact, on a 2 hour flight each passenger pays around $5 for the entire flight and cabin crew. Fuel, mx, facilities etc. are the high cost items. In fact one little known fact is SouthWest now has some of the highest paid crew members but still maintain a low cost product.
And unlike the other carriers, Southwest Airline has lived up to their commitments to the work force. And maybe that is why the Southwest staff has the "right kind of attitude."
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Old 04-28-2010, 02:48 PM
 
11,951 posts, read 21,545,710 times
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Quote:
Originally Posted by jlawrence01 View Post
And unlike the other carriers, Southwest Airline has lived up to their commitments to the work force. And maybe that is why the Southwest staff has the "right kind of attitude."
Well to be fair SWA never had pensions to dump, and until the legacies took 50% paycuts SWA had some of the lowest paying wages in the industry.
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Old 04-28-2010, 03:31 PM
 
14,261 posts, read 24,004,620 times
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Quote:
Originally Posted by wheelsup View Post
Well to be fair SWA never had pensions to dump, and until the legacies took 50% paycuts SWA had some of the lowest paying wages in the industry.
Any company founded in the past thirty years has avoided offering pensions in lieu of defined contribution plans.

Seems to me that SWA now has some of the highest pay scales in the industry AND STILL manages to make money, the best of both worlds.

(Of course, they are NOT tied to the failed hub and spoke system either.)
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Old 04-28-2010, 03:33 PM
 
8,341 posts, read 9,805,136 times
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Quote:
Originally Posted by wheelsup View Post
Well to be fair SWA never had pensions to dump, and until the legacies took 50% paycuts SWA had some of the lowest paying wages in the industry.
True. They used to be one of the bottom feeders to work for. They didn't become a better place to work, it's that the others became worse. Gotta love the walmart of the sky.
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Old 04-28-2010, 09:29 PM
 
11,951 posts, read 21,545,710 times
Reputation: 11726
Quote:
Originally Posted by 11thHour View Post
True. They used to be one of the bottom feeders to work for. They didn't become a better place to work, it's that the others became worse. Gotta love the walmart of the sky.
Thank goodness someone gets it .
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Old 04-28-2010, 09:32 PM
 
11,951 posts, read 21,545,710 times
Reputation: 11726
Quote:
Originally Posted by jlawrence01 View Post
Any company founded in the past thirty years has avoided offering pensions in lieu of defined contribution plans.

Seems to me that SWA now has some of the highest pay scales in the industry AND STILL manages to make money, the best of both worlds.

(Of course, they are NOT tied to the failed hub and spoke system either.)
Get rid of hub and spoke and you take away air service to 80% of the current airports. SWA's model only works in specific city pairs. And even at that you'd have to switch planes 5 times to get from Boston to San Diego.

Hub and spoke was pioneered by FexEx's founder. It is actually the most efficient way to move cargo.
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Old 04-29-2010, 07:07 PM
 
Location: Houston, Tx
3,644 posts, read 5,562,831 times
Reputation: 1616
Quote:
Originally Posted by wheelsup View Post
Get rid of hub and spoke and you take away air service to 80% of the current airports. SWA's model only works in specific city pairs. And even at that you'd have to switch planes 5 times to get from Boston to San Diego.

Hub and spoke was pioneered by FexEx's founder. It is actually the most efficient way to move cargo.
SWA doesn't fly to Miami, which I think isa major hub for most airlines that operate in the US. What alternatives are there to the hub and spoke system? I remember about 10 years ago Boeing said they were concentrating on a future that involved smalelr planes and less of the hub and spoke system, in contrast to Airbus's superbig plane they were building. I don't remember details about how a non hub and spoke system would work though.
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