Will U.S. Private Airline Industry Survive?

Discussion in 'Politics, Religion, Social Issues' started by xsedrinam, Aug 30, 2005.

  1. xsedrinam macrumors 601

    xsedrinam

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    #1
    Will there even be an American Airlines, Delta, Continental, etc., solvent and thriving by 2007? Speculation among economists (can't find quote, but will) has spawned questions as to whether or not, under their present model, any U.S. private carrier company can remain solvent. And that a government owned and operated airline industry is not only inevitable but may happen as early as 2007. Now that oil prices will once again skyrocket, it's another ominous cloud in the friendly skies.
    Airline Industry
    Facing Record Fuel Prices
     
  2. zimv20 macrumors 601

    zimv20

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  3. roadapple macrumors regular

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    #3
    in the US? Not going to happen. Ever.
     
  4. zimv20 macrumors 601

    zimv20

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    #4
    meaning you think there'll be a bailout or bailouts instead?
     
  5. ~loserman~ macrumors 6502a

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    #5
    Since Airlines depend on Oil to fly, I believe all airlines world wide will fail within the next 50 years. Lets face it we ARE going to run out of OIL.

    There may be some surviving service but it will be prohibitively expensive.
    But eventually even it will go away too.
     
  6. roadapple macrumors regular

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    #6
    I think that the market is continuing to transform the travel industry, but a government operated airline is not a political option.

    Bailouts could be a short-term option to keep people flying, but Washington is not going to take over an industry.
     
  7. zimv20 macrumors 601

    zimv20

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    but what happens if all the airlines declare bankruptcy and stop operations? whether the fed wants to run an airline or not doesn't affect my theoretical situation.
     
  8. Ugg macrumors 68000

    Ugg

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    #8
    The governement seems pretty committed to keeping the airlines afloat. All the post 9-11 loan guarantees and all of the union busting, retirement destroying judges out there are seeing to that.

    The airlines will survive, but they won't be safer. The biggest trend in corporate travel is "air taxis". The proliferation of small jets in the past few years is unprecedented and costs have already come down a bit. For corporate America, Homeland Security means loss of valuable time and they simply can't afford to wait around for hours at the gate. I predict a major shift on the part of the wealthy in the US towards these services, leaving the rest of the population to fly cattle class in extremely uncomfortable and unsafe planes.
     
  9. IJ Reilly macrumors P6

    IJ Reilly

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    #9
    Fractional partnerships in corporate jets and turboprop aircraft are all the rage. In effect, a private airline system is being created for the people who can afford it. The rich will always find a way to get around. The rest of us will be relegated to an increasingly expensive and inconvenient air transport system with fewer long-haul airline routes and reduced service to smaller cities.
     
  10. mactastic macrumors 68040

    mactastic

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    #10
    Hasn't JetBlue managed to remain solvent? IOW, aren't there ways to do it that don't involve federal bailouts and union-busting?
     
  11. StarbucksSam macrumors 65816

    StarbucksSam

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    #11
    Yes! They are on time, don't suck, comfortable, from what I understand, and STILL SERVE FOOD.
     
  12. xsedrinam thread starter macrumors 601

    xsedrinam

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    #12
    Looks like Northwest plans to take the same line that Eastern took, to its demise. Northwest to replace strikers The original post and reference to government owned and operated U.S. airline's statement came out of a Milken Institute Global Conference. I believe the guy's name was Silverman. Anyway, it's a pretty good link for current stuff, requires a sign in and password, but at no charge - FWIW
     
  13. tristan macrumors 6502a

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    #13
    Smaller discount airlines like JetBlue and Southwest are doing fine. It's the major carriers that are struggling. Unionization and lack of efficiency are big factors, according to my understanding of the situation.

    I think that the industry will survive - there is plenty of demand. Some of the majors will go bankrupt but will emerge from bankruptcy with less debt. There will be some consolidation too. The way I think it will shake out is that we'll use primarily discount carriers for US travel and then foreign carriers for overseas travel. Unions will disappear, as will big hubs.
     
  14. IJ Reilly macrumors P6

    IJ Reilly

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    #14
    Everybody wants to be like Southwest now, and to copy their success, but they don't fly the kind of long-haul routes we depend upon to get us across the country quickly and comfortably. Nobody wants to fly these routes anymore. I recently flew on Alaska Airlines, which has remade itself in the image of Southwest -- which means you can fly from Los Angeles to Fairbanks but you have to change planes in Seattle and you'll get no food service on either flight.
     
  15. tristan macrumors 6502a

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    #15
    I thought this too until I took Independence Air from DC to San Francisco. I think the Airbus 320s are getting longer ranges.
     
  16. IJ Reilly macrumors P6

    IJ Reilly

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    I don't think it's a matter of the equipment so much as it is the inherent difficulties associated with flying long hauls profitably. It's apparently more cost-effective for the airlines to break these flights into two or three shorter legs. In addition to flying a fleet of all one type of aircraft, this is Southwest's secret to success.
     
  17. Ugg macrumors 68000

    Ugg

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    #17
    Spoke and hub has been around since airline deregulation began and is the only way that small airlines and small airports can survive.

    Although the unions have played a part in the demise of the legacy carriers, the largest problem they have is their continual layoffs. I believe there's something like 1 worker for every 3 or 4 retirees. The United bankruptcy is only the beginning.

    Retirees are getting royally screwed because of the airlines' focus on short-term appeal to wall street as opposed to long-term viability.

    I have a cousin who has spent 18 years with Northwest. It is very likely that he will never see a penny of his retirement.
     
  18. xsedrinam thread starter macrumors 601

    xsedrinam

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    #18
    Doug Steenland is supposed to meet this Friday with N. Dakota officials about NW's planned cut back of carriers. Meeting On the market side of the coin, their appeal has been to the "business class" flyer like most, since it is they who pay the way for the "backpackers'" special offers. Since 9/11 they have been pretty open about keeping this clientele in tact believing that so long as business flyers are willing to pay top dollar prices for seats, they can float the others. Not sure, but I think most operate on that model. The bag of pretzel crowd will always be around for the Roaming Adventure, but whether or not business travelers will continue to acquiesce to paying high prices for a meal and a reclined snooze, remains to be seen.
     
  19. Xtremehkr macrumors 68000

    Xtremehkr

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    #19
    There should not really be a problem. There is a lot of activity aimed at breaking unions going on lately. If the cost of oil rises, the price of tickets rises. Over the long run, if oil continues to become more expensive, the cost of flying will continue to increase and so services may be cutback.

    Flying started out expensive became more available with cheap oil (and technology), it may just take a reverse course now as fuel becomes more and more expensive over time. Higher costs, fewer planes, fewer pilots and passengers.

    Who knows, maybe traveling by rail will make a return. It's too bad all we have is Amtrak, I think I would rather hitchhike. Maybe it will be the catalyst for a high speed rail network in the US, like Europe already has.

    Or, people could start demanding action on developing alternative sources of fuel, instead of accepting the oil industries propaganda about how it can't be done. Some people just aren't willing to reconsider until you punch them in the wallet it seems. Given all that has been accomplished over the years, I am astounded that people seem to think that nothing better than Oil can be developed.
     

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