Next 24 Hours Will Change The Face Of Aviation

[NeedForSpeed]

NeedForSpeed, your free market theory is correct, but at what cost? Point blank, the airlines are underpricing their product. What other industry does this happen in? At some point we all pay for this cut-throat foolishness. The Chinese studied our aviation system for years and found it to be very flawed. You may not like hearing that but by putting their foot down and stopping the bleeding early they created a better system for the flying public and employees. I am not saying we go the "communist" route, but look at what they've done, it is working. Keep in mind in the coming decades Asia not the U.S will be home to the world's largest aviation market.

[post="300234"][/post]​

Eye, I hear what your saying.....First, your wrong about underpricing!!!! Many Industries/Companies underprice!! That is what our system is about(capitalist greed to some)....On this scale in the aviation industry, yes, it is cutthroat, and THAT is why they are ALL doing it (BK)....Do I think it right, for the employees, HELL no...but from a business prospective, they are doing what they can to try to survive. I had been involved in aviation for over 22 years, 18 in the airlines, your trying to say we didnt see the damns starting to break??? And this is just the beginning. Our airline system WILL consolidate......through market forces.....most of us in this industry knew it was coming, it is just hard for some to grapple with this reality. I guess what I was trying to say, is I thought you were calling for some type of government intervention(not turning to the "communist route",I never said that)

GOOD DAY!!!!

 

[FWAAA]

NeedForSpeed, your free market theory is correct, but at what cost? Point blank, the airlines are underpricing their product. What other industry does this happen in? At some point we all pay for this cut-throat foolishness. The Chinese studied our aviation system for years and found it to be very flawed. You may not like hearing that but by putting their foot down and stopping the bleeding early they created a better system for the flying public and employees. I am not saying we go the "communist" route, but look at what they've done, it is working. Keep in mind in the coming decades Asia not the U.S will be home to the world's largest aviation market.

[post="300234"][/post]​

Companies often unload perishable inventory at cut-rate prices. Their costs don't matter when the product is about to spoil, and as we all know, airline seats are as perishable as they come.

Reduce some of that capacity, and the seats that are left will go for more money. Simple supply and demand that I learned decades ago in my first economics course.

 

[NeedForSpeed]

Piney,

I hope that you did not mean to imply that i was saying these companies "planned" to "rape" the employees....was merly trying to point out that employees are the ones that suffer, and I pointed out in a previous post that anyone who has been involved in this industry for the last 15 or so years, should have seen it coming......AGAIN......Airline companies are using BK.....after the U model.....to re-define their "business-plan".....It's not pretty, but a reality, unfortunately. There WILL be more consolidation, everyone on these threads, or in this industry knows this to be a fact. Remember, This is just the beginning.....wait till Northwest and Delta file soon.......Developing.....

 

[PITbull]

Bob,

One problem that just shouts at you when reading this article...

Equilibrium in a customer-service-driven business can not be achieved without the human element that goes into providing that product.

There is huge cost spent that U specifically has paid for in "the plan".

That is very poor employee morale. How does a company compete?

As you said many times on this forum:

"There is no customer satisfaction without employee satisfaction."

NFS,

Couldn't have stated that better than you above.

 

[NeedForSpeed]

Bob,

One problem that just shouts at you when reading this article...

Equilibrium in a customer-service-driven business can not be achieved without the human element that goes into providing that product.

There is huge cost spent that U specifically has paid for in "the plan".

That is very poor employee morale. How does a company compete?

As you said many times on this forum:

"There is no customer satisfaction without employee satisfaction."

NFS,

Couldn't have stated that better than you above.

[post="300295"][/post]​

thanks Pitbull

 

[Bear96]

BK is a luxury for these companies, but sucks if you are a shareholder or unsecured creditor, or AN EMPLOYEE.

[post="300211"][/post]​

Would you prefer a system that as soon as a company is unable to pay a bill, there is instant liquidation and shutdown putting all the employees out of work, instead of a chance to reorganize permitting some employees to keep their jobs?

 

[Freighterguynow]

"alternative business format — low-cost carriers with a point-to-point production model, exemplified by Southwest, Ryanair, and JetBlue — "


Southwest serves about 62 cities in 31 states with over 850 airports on the list awaiting (hoping) for flights. Problem is half the aviation market segments in this country produce less than 2 pax per day. Half of those produce less than 2 per week.

You can't serve point to point: Buffalo to Boise. 95% of all US domestic makerts fail using an LCC business model.

 

[PITbull]

Would you prefer a system that as soon as a company is unable to pay a bill, there is instant liquidation and shutdown putting all the employees out of work, instead of a chance to reorganize permitting some employees to keep their jobs?

[post="300381"][/post]​

No Bear 96, I would rather have companies abuse the bK laws everytime they don't want to pay a bill (like pension payments for employees or lease agreements with lessors, vendors, creditors) fund the executive pensions BEFORE entering BK, and call it a nice day. Sure Bear, let me think like you for awhile...screw the sharholders, investors, creditors, lessors and vendors, employees because of bad business decisions at no condequence to managment... and it consider it "a good thing"? A remarkable thing? A great smart business decision?, Smart brilliant managment?

Hell, if your a corporation, you can go into BK every damn year and alter bad business decisions that went south with NO ACCOUNTABILITY. But a family, who makes bad decisions on purchases or tries to survive because of huge pay cuts, goes into BK, CAN't EVEN QUALIFY FOR A CREDIT CARD!!!! lOSES THEIR HOUSE AND ENTIRE FAMILY IS OUT ON THE STREET OR LIVING WITH NEIGHBORS, GRANDPARENTS, BROTHER, SISITER, SHELTERS, OR STREET. How is that for family stability!!!! Having job yields the same alternative for most people in BK. But for corporations...they start a new, like shedding a cocoon.


Yea, sure, I like the alternative. :angry:

 

[jack mama]

PITBULL, take a deep breath....you can only file CH11 twice...the third time is liquidation...

 

[a320av8r]

PITBULL, take a deep breath....you can only file CH11 twice...the third time is liquidation...

[post="300425"][/post]​

WRONG :down:

 

[PITbull]

Jack Mama, I wish that was the case, and and I wish they would change the laws or reform them.

When people don't pay their bills it is very inflationary.

Unfortunately, there are no consequences in BK as long as you can "snow" a group of invrestors and take their money as easily as they did Bronner and ATSB.

The folks that get really rich in this type of business paradigm is the BK lawyers, and they don't want any laws to change. Neither do the Corporations who use this as their "new business model", as an alternative to sound business decisions gone array.

 

[diogenes]

Bear,

One of my professors used that analogy, to which I countered, do you prefer a system that lets a company shift its fiduciary obligations (pensions) to taxpayers? As a consumer, I can choose to not subsidize U with my business. As a taxpayer, I have no choice but to subsidize them.

Subsidize risk; privatize profit - only in America!

Bob,

I agree with the format argument, but as I have argued in the past, allowing the new format to go forward eventually means small and mid sized cities will not have air service.

Yet a lot of taxpayer $$$ has gone into infrastructure.

And as usual ,the pols want WN pricing in Fargo. We both know that is impossible.

What to do? Right now, we can't even get an honest conversation, let alone meaningful action.

 

[Bear96]

Bear,

One of my professors used that analogy, to which I countered, do you prefer a system that lets a company shift its fiduciary obligations (pensions) to taxpayers? As a consumer, I can choose to not subsidize U with my business. As a taxpayer, I have no choice but to subsidize them.

Subsidize risk; privatize profit - only in America!

I'm not sure I understand your analogy.

First, pension obligations have never been, nor are currently, shifted to the taxpayers. The PBGC is funded by employers that provide defined benefit plans, if that is what you are referring to. So I don't quite get the comparison. At some point in the future some are speculating that the PBGC may have to be "bailed out," presumably by public funds. Whether or not that will happen is anyone's guess, but to date not a dime of your or anyone else's tax money has gone to subsidize private pensions.

Second, the "problem" of fiduciary obligations in the form of defined benefit pensions is taking care of itself. DB pension plans are rare and getting rarer. I think it would be safe to say they are nearly obsolete. Certainly no major employer that I am aware of has started a new DB plan recently. Therefore the risk that public funds will need to be used will decline even further over time.

Third, so what are you and PITbull suggesting as an alternative? When U initially could no longer pay its bills back on Day 1 of BK 1 (I forget when that was now), what should have happened? If you don't like the Ch.11 concept, what do you want to see in its place? A system where only the creditors get shafted and the workers come out unscathed? How easy will it be to convince people to lend money under such a system? And where would THAT put the airlines, if no one will lend them money?

Finally (and at the risk of going even further off topic), as to your comment about "subsidize risk." Isn't that good public policy to a degree, in some situations? For example, if we want to encourage employers to do things like offer DB pensions, shouldn't the public assume some degree of the risk involved, should worse comes to worst?

 

[PITbull]

Bear,

No, we just love the present system where execs reap all the benefits, no accoutability and they still keep their jobs...every last one of them.

When you take your head out of the clouds, how about you and your United deal?

Any chance they will emerge in this century?

 

[Bear96]

Bear,

No, we just love the present system where execs reap all the benefits, no accoutability and they still keep their jobs...every last one of them.

It is all well and good to complain about the imperfections in the current system (and I am not trying to say there aren't problems or that it is perfect).

But I have yet to hear an answer with what you would like to replace it with, since you seem to want to throw the baby out with the bathwater.

When you take you head out of the clouds, how about you and your United deal?

Any chance they will emerge in this century?

[post="300512"][/post]​

Sorry, you must have me confused with someone else. United is not "my" deal. UA could shut down tomorrow and it wouldn't affect me one bit.

But, it does appear UA's strategy of staying in Ch.11 as long as possible is wiser than U's hurried exit after Round 1, dontchathink?