Is it time we all took a stand against airline mergers?
#1
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Is it time we all took a stand against airline mergers?
If I have my facts correct, United proposes to merge with U.S. Air, and other carriers are contemplating mergers. My opinion is that the airline industry suffers from a startling lack of real competition. The fare you get doesn't depend, say, on how far you are going. Instead, it depends on whether there is another carrier serving that route. If so, the price is low. If not, the price is high. So the last thing we need is to combine two big airlines into one gigantic one so there will be even less competition and worse service and higher fares. I might have to write a letter to someone about this.
#2
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If people wrote or called their representatives on this issue maybe something would be done. I read in the paper this morning that part of the problem with the gas prices rising is all the mergers that have taken place. There is no real competition anymore.
#3
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If we are someday left with only three airlines, each of which services every airport in America, then we have something to worry about. In the meantime, try to understand that, in comparison to the pre-deregulation era, airfares are a bargain.
Airline deregulation occurred over two decades ago. It took years of effort for that to happen, and when it fianlly did occur, the airline industry exploded. Now, an approprate correction is occurring.
If the government were to again get involved, fares inevitably would rise. Leave it alone--as long as free enterprise exists, there will always be a bargain out there.
Airline deregulation occurred over two decades ago. It took years of effort for that to happen, and when it fianlly did occur, the airline industry exploded. Now, an approprate correction is occurring.
If the government were to again get involved, fares inevitably would rise. Leave it alone--as long as free enterprise exists, there will always be a bargain out there.
#4
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Yeah, I agree with Pollyanna. The government should stay out of the airlines business. The anti-competitiveness on the routes makes it better for the consumers, just like Microsoft's policies made it better for the consumers. Even I, who have never taken a flight, would like to see more competition and fewer mergers. See me live at www.noach.com
#5
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I think you missed the point Pollyanna.
No one said anything about deregulation. The question was about mergers. We do not need a couple of airlines controlling everything. Look what is happening to gas prices since the oil companies merged. You better bone up on Business 101.
No one said anything about deregulation. The question was about mergers. We do not need a couple of airlines controlling everything. Look what is happening to gas prices since the oil companies merged. You better bone up on Business 101.
#6
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Please tell the folks who live in hub airport cities or mid-sized cities like Wichita, Baton Rouge, and Sioux Falls that "as long as free enterprise exists, there will always be a bargain out there." Very untrue...the only bargains today are cities lucky enough to be served by Southwest or another discount carrier OR the very large cities served nonstop by multiple carriers. The poor folks in Memphis pay twice as much for similar routings than their friends in Nashville because Northwest controls the MEM airport. You want that for every airport???? No thanks! Stop the US-UA merger now before AA-NW and CO-DL follow. I don't advocate reregulation, but I do think we have anti-monopoly laws on the books for a reason.
#7
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It would be a good idea if you spent some time learning about business economics and our government agencies and processes, in addition to posting things on public BBs, then you might come up with some better ideas and thoughts on this and understand the process better. I don't know who you planned to write to, but I don't think writing your representative, for example, is going to do much good. Do you understand the function of the Federal Trade Commission, the Antitrust section of the Dept. of Justice, and Senate Committees? If not, it would be helpful for you to read up on them. Also, while I agree with the general potential problems of less competition through mergers, the cost of transportation should not be a function of distance--if you believe that, I don't think you understand the concept of fixed costs. If you have the same size airplane flying between two cities exactly the same distance apart, don't you understand why fares will be higher for the flight of one of these city pairs if it consistently only fills half the seats, and the other is almost always full? Think about it. As a matter of fact, this is a very timely post because the Senate Committee on Commerce, Science and Transportation is holding hearings on this exact merger yesterday and they are continuing today. They are hearing testimony from the CEOs of the involved airlines, economists, etc. You should learn more about this process. Senator John McCain (R, AZ) is the Chairman of this committee and it would make more sense for you to address concerns to that committee instead of some random political person or other party. The hearings are actually rather interesting, and they also were scheduled to have hearings on something to do with the airlines and the internet today, but that was cancelled. If you are interested in the airline industry, you might want to watch and read more about this Committee. Their main Web site (for that Senate committe) with information on their hearings is at www.senate.gov/~commerce/hearings/hearings.htm and the testimony from yesterday is on there already (www.senate.gov/~commerce/hearings/0621mcc.pdf)
If you wish to contact them, there is information on that web site as to how to go about doing that (email, FAX, etc) at www.senate.gov/~commerce/contact.htm
However, you might give a little more thought to what your objections are, at least regarding the mileage proposition.
If you wish to contact them, there is information on that web site as to how to go about doing that (email, FAX, etc) at www.senate.gov/~commerce/contact.htm
However, you might give a little more thought to what your objections are, at least regarding the mileage proposition.
#8
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Hey you know what? I still have some airline coupons that I received as part of a class action lawsuit against the airline industry about eight years ago. The airlines were found guilty of collusion and price fixing, and that was eight years ago. It's the same old, same old, whether they merge or not.
#11
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Hey Christina thanks for the info. I just called them and gave them my 2 cents, maybe if everyone gets on the bandwagon something can be done.
The site again is:
www.senate.gov/~commerce/contact.htm.
You can either call, fax or mail your 2 cents!
The site again is:
www.senate.gov/~commerce/contact.htm.
You can either call, fax or mail your 2 cents!
#12
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What's this? There are people who think the free market is working just fine in the airline industry? Tell that to my sister in Denver, who routinely gets shafted on United. I can fly to Phoenix from the D.C. metro area for less than she can. That is because Southwest serves Baltimore, so there is cut-throat competition. I don't think anyone is saying distance is the only factor that determines the price of a ticket. But the single most important factor, in my experience, is whether there is meaningful competition on the route. If not, better go Greyhound.
And Christina, I know you meant well, but the tone of your post is a little condescending. Many of us are plenty educated about business and lots of other pertinent things, so advising us to get more book learning isn't really all that helpful.
And Christina, I know you meant well, but the tone of your post is a little condescending. Many of us are plenty educated about business and lots of other pertinent things, so advising us to get more book learning isn't really all that helpful.
#13
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United (Express) is the only airline that regularly flies out of Gunnison Colorado. Without competition, flying out of Gunnison is considerably more expensive than flying out of nearby Montrose, Colorado. Montrose is regularly served by both United (Express) and America West Airlines. Prices that are set in the free marketplace by true competitors will, in theory, always be lower than a price set by a company that enjoys a monopoly. The less competition, the higher the price.
#14
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Anyone who thinks we are better off now than before deregulation must have been born just about then! I can't begin to cover all that's gone wrong with the airlines, and I believe they have been asking for government intervention with their abusive practices -- but IF AND ONLY IF the government agencies weren't largely managed by the industry itself. Voters and passengers are nowhere in sight.
Unless you live near a major hub airport, you can't get anywhere non-stop anymore except to one of those hubs, and your tickets are priced like gold. The bargains are only on the heavy-business travel routes.
And there are very, very few airports that aren't dominated by one or another airline. I saw the one major airline, American, pull out of RDU (a _minor_ hub) not because they were losing money here -- they were making money -- but because they wanted to go on the attack to push another airline out of another airport. This isn't free-market competition, it's thuggery that does not serve the public at large, only the financial game-players.
I'd love to see what airfares would be if only coach travel of 500 mi. or more were tax-deductible and all premium and frequent-flyer programs were eliminated, not to mention those plush clubs in all the airports for the VIPs.
Unless you live near a major hub airport, you can't get anywhere non-stop anymore except to one of those hubs, and your tickets are priced like gold. The bargains are only on the heavy-business travel routes.
And there are very, very few airports that aren't dominated by one or another airline. I saw the one major airline, American, pull out of RDU (a _minor_ hub) not because they were losing money here -- they were making money -- but because they wanted to go on the attack to push another airline out of another airport. This isn't free-market competition, it's thuggery that does not serve the public at large, only the financial game-players.
I'd love to see what airfares would be if only coach travel of 500 mi. or more were tax-deductible and all premium and frequent-flyer programs were eliminated, not to mention those plush clubs in all the airports for the VIPs.
#15
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2cents:
The reason the VIP lounges and frequent flyer programs exist is to attract business travelers; the corporations for which they work pay full fare for coach, business, and first class seats. That's the only way they can make enough money to get your sorry butt into a seat for one-third of what the business travelers pay.
Sorry, fella, but you caught me at a bad time.
The reason the VIP lounges and frequent flyer programs exist is to attract business travelers; the corporations for which they work pay full fare for coach, business, and first class seats. That's the only way they can make enough money to get your sorry butt into a seat for one-third of what the business travelers pay.
Sorry, fella, but you caught me at a bad time.
#16
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2 cents,
I think you are recalling things a bit incorrectly. During deregulation, there was pretty much one kind of service -- gold service. Tickets were expensive, and only the wealthy could afford it. I took only one plane flight in my life growing up in the 60s and 70s. Now, you can hop a plane for not much. Yes, service is awful, but at least you have far more choices.
So I guess I am saying that deregulation wasn't great for those of us completely priced out of the market.
And remember, mergers and decreased competition are totally different from deregulation. Apples and oranges.
I think you are recalling things a bit incorrectly. During deregulation, there was pretty much one kind of service -- gold service. Tickets were expensive, and only the wealthy could afford it. I took only one plane flight in my life growing up in the 60s and 70s. Now, you can hop a plane for not much. Yes, service is awful, but at least you have far more choices.
So I guess I am saying that deregulation wasn't great for those of us completely priced out of the market.
And remember, mergers and decreased competition are totally different from deregulation. Apples and oranges.
#18
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Two Bricks: Those gold-plated butts in first and business class are paid for by taxpayers, who have to make up the difference when corporations deduct all those "perqs" as cost-of-doing-business.
Notthe: I'm still older than you are, and one thing I remember is train service, prompt and ubiquitous, as a decent alternative to flying, esp. trips less than 500 miles. Actually, I also remember the telephone, which I'm convinced would suffice for a great many of the last-minute meetings called in distant cities.
But since we're talking about planes -- deregulation had to do with which routes were covered, among other things, and that is a large part of what is involved in these mergers.
Notthe: I'm still older than you are, and one thing I remember is train service, prompt and ubiquitous, as a decent alternative to flying, esp. trips less than 500 miles. Actually, I also remember the telephone, which I'm convinced would suffice for a great many of the last-minute meetings called in distant cities.
But since we're talking about planes -- deregulation had to do with which routes were covered, among other things, and that is a large part of what is involved in these mergers.
#20
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Dear 2 cents,
Please don't deny my point that deregulation was a bummer for people like my family that was totally priced out of the airline market. The availability of train travel is fine for short distances as you say, but we always needed to go from coast to coast, and a train was not a decent alternative. But I suppose when a relative dies across the country, one can always attend the funeral by conference call.
Lastly, please explain your last point about these mergers being just about routes. That is like saying Microsoft's abuse of its monopoly power was all about software. It doesn't advance the debate much, unless you have a theory I'm not yet getting.
Please don't deny my point that deregulation was a bummer for people like my family that was totally priced out of the airline market. The availability of train travel is fine for short distances as you say, but we always needed to go from coast to coast, and a train was not a decent alternative. But I suppose when a relative dies across the country, one can always attend the funeral by conference call.
Lastly, please explain your last point about these mergers being just about routes. That is like saying Microsoft's abuse of its monopoly power was all about software. It doesn't advance the debate much, unless you have a theory I'm not yet getting.