On the heels of the announcement that the Fed is now expected to act as corporate America's playground monitor, I'm officially taking bets on when the entire airline industry goes back to pre-1979 regulation. As far-fetched as that sounds in the Reagan era, keep two things in mind. First, large corporations violently oppose regulation only until they begin producing an audible death rattle.
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Second, an objective look at the industry makes it entirely unclear how any airline is going to survive the next five to eight years.

Aloha Airlines just went down after filing for Chapter 11 for the second time since 2002. Delta** (bankruptcy: 2005-2007) is trying to buy out 30,000 workers after failing in its Fat Guy Looking For A Prom Date search for a buyout partner. United (2003-2006) launched a failed LCC (low cost carrier), partnered with Aloha (brilliant!), and is also looking for a buyer to no avail. US Air and America West went bankrupt and then merged, which is approximately as intelligent as two dirt-poor, debt-laden people getting married.

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ATA died. Nearly every airline abandoned its pension responsibilities and dumped them onto Uncle Sam via PBGC. While some major carriers crawled back to making small profits in 2007, the mad increase in fuel costs and unrelenting LCC competition will take care of that.

The air travel industry grew exponentially in the 1980s when airlines figured out that, by and large, people don't give a shit about amenities. If the average consumer has two choices – a no-frills service they can afford or a high-end service they can't – the former wins out 100% of the time. Now we have a perfect storm brewing. Fuel costs are making even "no-frills" service very expensive at the same time that middle- and working-class incomes are feeling a serious squeeze due to stagnant wages and rising prices. Make no mistake, you and I are what the airline industry needs to survive.

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The only people doing well in the past 8 years – the top 5% of income earners – can only fly so much. Certainly not enough to fill existing capacity.

I only see a few outcomes. The major airlines can continue limping along by filing bankruptcy every 4 years, which amounts to government intervention to keep them alive. The government could subsidize fuel. Southwest (tenuously assuming that they can continue making money, which they won't once their fuel hedges run out) could become a de facto monopoly on domestic traffic, necessitating regulation. Or the entire damn industry could teeter on collapse until Washington steps in to assign routes and set prices.

Or we could send everyone a check for $600 in an election year effort to cover the fact that there's a lot of shit you can't afford anymore.

**(Seriously, fuck Delta. If it isn't the world's worst airline this side of Tajik Air, then I don't know what is. One flight is enough to tell you that there's more to their bankruptcy than fuel costs.
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8 thoughts on “DE-DE-REGULATION”

  • Fuck Delta, indeed, but fuck the lot of them, too. Southwest may have the decency not to pretend that it doesn't view us like cattle, but at the end of the day, they still view/treat us like cattle. Having flown in the past month and a half more than I have in the five years prior, and on at least seven different carriers, it's been an interesting experience to see the state of the industry up close. Interesting and depressing. The folks who work for the airlines have the "don't give a rat's ass" attitude of the broken-spirited; gate agents in particular were surly at best and often downright hostile. You get the sense that they're being treated poorly by their bosses, and taking crap from customers, and generally are starting to think of mass suicide as a pleasant alternative to continued employment in this field. Unfortunately, this has the effect of leaving travellers with the (entirely correct) perception that we are more of an annoyance than a customer–or, God forbid, a 'guest'–remember back when *that* was the attitude to air passengers? I've noticed that more and more we're expected to do things for ourselves–get our boarding passes at kiosks, check in our own luggage, stow our own carry-ons and sort our own seating out–the industry is becoming invisible to its customers, which is always a bad sign–they've retreated into the keep. (The only airline that did not treat me poorly was British Airways, surprising inasmuch as it's not nationally subsidized anymore.) People ignore the 'safety demonstrations' at the start of the flight, and the attendants have the unhappy looks of teachers whose students refuse to stop misbehaving. Drinks service is rushed–and of course, we are now allowed to purchase meals at prices that resemble the deals offered by loan sharks. Flying has become a chore–tolerable at best, and often (and increasingly often) miserable at worst. When you make discretionary purchases unattractive to consumers, you're hosed as an industry–and that, I think, is what's going to happen. Of course, government regulation will just turn the incompetence over to another set of suits.

  • I've had two completely different experiences flying recently, but both were actually exactly what I expected. Once on AirTran from Milwaukee to Baltimore and back, and the other on Allegiant Air (who??) from Rockford to Vegas and back.

    Maybe I'm a victim of the expectations game, but I don't look at flying as much more than getting into my car at this point except I don't have two kids in the back seat and I can turn on my iPod or read a book. I have no romantic ideals of mass transportation when it comes to busses or busses with wings.

    My flight to Baltimore was a last minute trip and expensive as hell, but the amenities were okay and the staff was decent – they even came to the bar to let the passengers know we were going to be departing early. That's right, not only did we leave on time, but we left early to avoid a weather delay… dare I say it was a bit of forward thinking??

    My flight to Vegas on Allegiant was $300 round trip and we were five across on a MD 83. We were packed into an old plane, but it got us there and back on time.

    Would I take my family on vacation using either airline, probably not. But I would use them for what they are – the Greyhounds of the air…

  • I could not agree more, JD. The entire industry now wears an identical facial expression with an identical mindset: I Hate This Fucking Job. And it really, really shows. Honestly, I find Southwest to be the best. Mostly because it is one of the most heavily unionized and profitable companies. So the employees aren't going through each drink service thinking about how their 40 years of pension contributions just went up in smoke. Or how 40% of the workforce just got laid off and the other 60% isn't far behind.

    That said, Southwest is one of the worst offenders in the "What do I look like, your servant? Do it yourself, assholes" category. Search the available flights yourself, make your own reservation, print your own boarding pass, seat yourself, bring your own food, pay us to carry your luggage.

    As far as flying on a "legacy carrier?" Forget it. They are an archetype for business students the world over: This is how not to run a business. This is how not to treat customers.

    I used to fly everywhere for my epic vacations, but I've driven for the last three. Flying is too goddamned expensive for such a mind-numbing experience. I don't expect my ass to be kissed, but I'm not paying $400 to have these people act like I'm fuckin' bothering them by being on their plane.

  • Those unhappy people you mentioned are just the tip of the iceberg, the ones you see. What about the ones you don't see like the mechanics. They have been fucked over by management for years. Where there is a union they have a two tier system and do you think the mechanic with only a few years in likes the fact that the graybeards are making twice as much?? Every time they want to increase the bottom line the first thing they do is cut the pay of those who are providing the service. When is the last time the upper management took a pay cut?? Also a lot of the airlines now farm out the maintenance to places like Costa Rica or China. It is cheaper to fly the plane halfway around the world than do the work here.

  • Southwest is able to run cheap because they defer maintenance and ignore FAA air worthiness directives — or haven't you been paying attention to the news? And they don't have unions, at least not for the workers who actually keep the planes in the air, the mechanics.

  • Since moving to the DC area, I have the two incredibly convenient options of flying National Airport (basically down the street from me) or taking the train from Union Station (a 15-minute Metro ride away). I take Amtrak at every opportunity. If you haven't been on a train lately, try it. Booking couldn't be easier. If you call them you can talk to a human being who knows what they're doing. The various systems at the stations and on the trains all work. The staff are generally polite, competent, and seemingly happy to be there. The trains actually do run on time more often than not. NO RIDICULOUS SECURITY CHECKS. Enormous amounts of legroom and sprawl room. Snack cars, dining cars, observation decks, huge bathrooms. Power outlets for your laptop. No safety lecture. And while you travel, you actually get to see the countryside – the trip itself becomes an enjoyable, comfortable, refreshing part of the travel experience.
    My SO and I took Amtrak to Vermont last summer and rented a car once we got there. Sure, it was a 12-hour ride, but we passed through beautiful Atlantic coast and New England countryside the whole way. I read the paper (Saturday NYT, free with ticket), drank coffee, napped, read a book – and arrived in Vermont feeling completely refreshed and ready to start the vacation. It worked out to be cheaper than driving up, much cheaper than flying up, and infinitely more pleasurable than either.

  • @ Nan: If I remember correctly Southwest is able to run cheap also because they were smart enough to hedge their fuel costs about 5-7 years ago or so and might still be running on that contract at those prices. But maybe not for long.

    I gotta say, SAS service to Europe was a hoot. I had plenty of fun chats with the attendants and they even gave me free candy when I went to the back to wait for the bathroom. Contrast that with the bitchy NWA attendant who sniggered at my pregnant wife when she asked for a pillow – 'those are only for international flights' – Say Wha?

  • Yeah, I think there's a little more to SWA making money for 35 straight years than a recent story about shoddy maintenance. They're the only major airline that has never had a crash, which is pretty amazing when you consider the sheer number of takeoffs they have on a daily basis. They had a ground incident at chicago-midway which resulted in 1 fatality, but that's it. Compare that to any other US airline and I think they can stand by their safety record if nothing else.

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