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US airlines are not subsidized like some foreign airlines. It's pretty easy to give wine away when it's "only taxpayer money".
United turned into a dumpster fire under Jeff Smisek. Hopefully they stop with their budget airline ways at full service airline prices. If they didn't hub at EWR, I would never fly them again and it won't be much longer before that is the case as it's almost time to leave this God forsaken state.
Previous comment got it correct; Americans have demonstrated time and time again that they prefer "cheap" airfares and or lousy service over higher prices.
Large parts of the flying demographic in USA view air travel for what it has become, a flying bus that gets them from point "A" to "B". They arrive in their jammies bringing everything but the kitchen sink, cram themselves and or family into seats and settle into the routine.
Land sakes for most domestic routes there really isn't any real competition as between mergers and bankruptcy there are only a handful of carriers remain. As noted rail service *could* provide some alternative but we've discussed that as well.
That would work fine on an hour flight. Good luck with that on a 10+ hour flight
No 1 hour flights for me, I will drive before I would take a hour flight. 10 hour flights still don't any fuss because I will be asleep most of the flight.
Land sakes for most domestic routes there really isn't any real competition as between mergers and bankruptcy there are only a handful of carriers remain. As noted rail service *could* provide some alternative but we've discussed that as well.
Remember startup airlines? We had a ton of them in the 80's. A smaller but still sizeable second generation crop of them in the 90's. Anyone remember names like PSA, AirCal, Reno Air, Western Pacific, etc?
Today there are none. Given the regulatory hurdles in place today, those days are OVER. It's highly, highly unlikely we'll ever see any more new airlines like that again. What we have now is what we will have ten, twenty, a thousand years from now. That's it. The last attempted upstart I'm aware of-California Pacific-was strangled to death through endless bureaucracy at the FAA. They had all their ducks in a row, a sound business plan, and were well funded. And yet they were refused to allow to fly. SOMEONE in the FAA owed someone a favor and intentionally denied, denied, and denied that airline the rights to fly. I'm convinced of it.
Of course even most of todays airlines will not exist in their current form forever. In spite of the last round of mergers we had, I see more coming. When the US air market finally plateaus in maturity, I expect it to be controlled almost 100% by just four airlines. Here's the next and final process of elimination round I see, the bolded name being the surviving brand.
Spirit/Frontier
JetBlue/Alaska (I think the Eskimo bit off more than he could chew with Virgin America)
Allegiant/Sun Country
United/Delta
Spirit/Allegiant
American/JetBlue
That would leave just four airlines standing:
American United Southwest Spirit
Two full service 'legacy' airlines, a discount a-la-carte one, and everyones favorite, Southwest-which is somewhere in between (which would automatically get thrown a few gates and slots with each of the above mergers as per unofficial DOJ protocol). Eastern might continue to eke out its meager existence flying between Miami and Cuba but I don't see them rising to any level of relevance beyond that. I have no idea what will happen to Hawaiian.
Remember startup airlines? We had a ton of them in the 80's. A smaller but still sizeable second generation crop of them in the 90's. Anyone remember names like PSA, AirCal, Reno Air, Western Pacific, etc?
Today there are none. Given the regulatory hurdles in place today, those days are OVER. It's highly, highly unlikely we'll ever see any more new airlines like that again. What we have now is what we will have ten, twenty, a thousand years from now. That's it. The last attempted upstart I'm aware of-California Pacific-was strangled to death through endless bureaucracy at the FAA. They had all their ducks in a row, a sound business plan, and were well funded. And yet they were refused to allow to fly. SOMEONE in the FAA owed someone a favor and intentionally denied, denied, and denied that airline the rights to fly. I'm convinced of it.
Of course even most of todays airlines will not exist in their current form forever. In spite of the last round of mergers we had, I see more coming. When the US air market finally plateaus in maturity, I expect it to be controlled almost 100% by just four airlines. Here's the next and final process of elimination round I see, the bolded name being the surviving brand.
Spirit/Frontier
JetBlue/Alaska (I think the Eskimo bit off more than he could chew with Virgin America)
Allegiant/Sun Country
United/Delta
Spirit/Allegiant
American/JetBlue
That would leave just four airlines standing:
American United Southwest Spirit
Two full service 'legacy' airlines, a discount a-la-carte one, and everyones favorite, Southwest-which is somewhere in between (which would automatically get thrown a few gates and slots with each of the above mergers as per unofficial DOJ protocol). Eastern might continue to eke out its meager existence flying between Miami and Cuba but I don't see them rising to any level of relevance beyond that. I have no idea what will happen to Hawaiian.
What more do we really need?
That depends on how much we are willing and able to be gouged on prices and squashed on top of each other in transit.
It may be that go-to-meeting and similar conference software will be the death knell of airlines, if airlines go the way you suggest and become so massive that there's absolutely no semblance of a chance of competition on routes. If business travel craters, I wonder whether they'd survive. I mean, how many people, historically, have taken vacations requiring 1,000 miles of travel from point A to point B? Not many, definitely not many outside the 1%ers.
Each absolutely dominate in their sectors. Whatever third 'competitors' exist (such as Craigslist), they are in such a distant third place as to be basically irrelevant.
Each absolutely dominate in their sectors. Whatever third 'competitors' exist (such as Craigslist), they are in such a distant third place as to be basically irrelevant.
Why not the airlines too?
Hmm. I don't think that's quite right.
Lowes/Home Depot -- Yes, those are the big box stores. But there's lots of little places you can go instead in almost every community. So, they don't have a monopoly. And if they charge too much or have bad service, people can (and do) go elsewhere.
Coke/Pepsi -- Nobody needs these products.
FedEx/UPS -- The post office still works, for now, and there's DHL and others. Again, people have viable options.
WalMart/Target -- That's the best example you've got. Walmart and Target are closing stores even as we speak. Perhaps things aren't so rosy for them after all? I'm not sure, maybe they're just trying to increase already large profits.
Ebay/Amazon -- Every store in the country is competing with them. And Amazon first turned a profit in 2015. It is still an open question whether their model is viable in the long term, which explains their investments in additional technologies to speed delivery (e.g., drones). (By the way, if that happens, it'll further hurt the airlines).
You've identified the big players in a few sectors, but mostly there's lots more competition in those sectors than in any given airline route. But the major difference between those examples and airlines is the barrier to entry to compete with an airline is massive in comparison. That's why I said new technology, in the form of virtual meetings, is the real threat to the airline industry. The barrier to entry for that is minuscule in comparison. By the time the airlines realize this, it will probably be too late.
[That's my comment, but I believe my last three sentences might need explaining. Business people are the target for virtual meeting software, and some of those people fly business class or first class often. But, many business people do not fly every business trip in first or business class. When the beancounters look at the cost of travel vs. virtual meeting, and the economy seats are so bad the employees don't want to travel because they could get stuck in skinconomy (seats so small they take your skin off), then the tide will turn. Once businesses routinize the conduct of meetings over the internet, what it'll take to justify a flight will increase (say, a crisis at a site, instead of a regular quarterly meeting). When that happens, airlines will see their revenues from business enter a death spiral. Airlines to survive will have to raise prices on the travelers that are least likely to pay it--vacationers. And, at the same time, they'll have crammed so many seats into those planes, even fewer people will feel it is worth it. This will make the business unsustainable. They should be anticipating this day and offering amenities to make it worth our while. But they are doing quite the opposite. The end game will not be pretty . . . for them.]
And, at the same time, they'll have crammed so many seats into those planes, even fewer people will feel it is worth it. This will make the business unsustainable. They should be anticipating this day and offering amenities to make it worth our while. But they are doing quite the opposite. The end game will not be pretty . . . for them.]
As Yogi Berra put it, "Nobody goes there anymore; it's too crowded."
I'm not arguing that things won't happen as you've said. But at the moment, I see no sign of half-empty planes shunned by business travelers and unaffordable by leisure travelers. Quite the opposite, actually. My understanding is that airline load factors are among the highest they've ever been. So, at least for now, they are certainly finding customers somewhere.
However, I do think you are right to point to a potential future loss of customers. If this happens as you say, the nation's airline system will contract; but I highly doubt it will just go away entirely. Some people will still choose to fly, for various reasons. But the airlines will have to adjust to a smaller customer base.
A situation with a local movie theater in my area may provide some insight to what might happen. About 20 years ago, a 14-screen megaplex opened in my community, and it was so vastly superior to every other theater in the area that all the others were driven out of business in short order. For a time, this theater was packed, pretty much every day. But since then, other megaplexes have opened; three new ones have opened within about a 10 mile radius. And as the offerings of these other megaplexes improved, the original one steadily lost business.
How did the original one respond? They completely redid all 14 of their auditoriums. They replaced their old seats with new ones that are wider, and also fully recline. Naturally, this meant that several rows had to be taken out of each theater. But the result is that this megaplex can now compete on patron comfort, and be successful even though its overall capacity has shrunk.
So, who knows? Maybe we'll see the day when standard economy class on a 737 consists of 5-abreast seating, with each seat being 20 inches wide; and seat pitches of 34-35 inches.
As long as the plane lands safely, I don't need any additional service on a flight.
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