Airline Industry Is Doomed

[OldpropGuy]

The decision makers at Us Airways and the nations other airlines are doomed to fail, without a doubt. When one sales a product, any product, at less than cost, then it is obvious that there is no profit to be made. If some uncontrollable cost of the product or service (fuel) increases, it must be passed along to the consumer. If the consumer is not willing to pay the increased price for service, then the business is no longer worthwhile or viable.

Is it better to continue offering the product at a loss? This does not seem like a very smart way to make a profit. One would be better off to cut his losses, tuck his tail, and run.

I understand that Southwest has the advantage of having a very large amount of fuel hedged at a very low price. That is their only major advantage, and it too will end eventually! There is no way they can replace all the air service in the country. It is unimaginable that they have hedged enough to fuel the expansion needed to take over the whole airline industry! Their business plan is to operate only in the large markets, at a lower price than anyone else. That is where their money is made. That leaves most of the country for everyone else. If the customer is willing to drive several hundred miles to get these low fares to limited destinations, then let him!

Motel 6 probably has some of the cheapest rooms in the hotel business. Have they managed to eliminate Hilton, Radisson, Hyatt, etc.? I don't think so.

Is every other transportation industry operating at a loss because of high fuel prices? What about those fuel surcharges at UPS and FedEx?

There is still money to be made in the airline business. Quit giving it all away by trying to compete with the budget carriers. They will only drag you down to their level and beat you with their limited services and hedged fuel! Wake up people.

Maybe it is just me...........................


end of rant

 

[phl/yyz]

The decision makers at Us Airways and the nations other airlines are doomed to fail, without a doubt. When one sales a product, any product, at less than cost, then it is obvious that there is no profit to be made. If some uncontrollable cost of the product or service (fuel) increases, it must be passed along to the consumer. If the consumer is not willing to pay the increased price for service, then the business is no longer worthwhile or viable.

Is it better to continue offering the product at a loss? This does not seem like a very smart way to make a profit. One would be better off to cut his losses, tuck his tail, and run.

I understand that Southwest has the advantage of having a very large amount of fuel hedged at a very low price. That is their only major advantage, and it too will end eventually! There is no way they can replace all the air service in the country. It is unimaginable that they have hedged enough to fuel the expansion needed to take over the whole airline industry!  Their business plan is to operate only in the large markets, at a lower price than anyone else. That is where their money is made. That leaves most of the country for everyone else. If the customer is willing to drive several hundred miles to get these low fares to limited destinations, then let him!

Motel 6 probably has some of the cheapest rooms in the hotel business. Have they managed to eliminate Hilton, Radisson, Hyatt, etc.? I don't think so.

Is every other transportation industry operating at a loss because of high fuel prices? What about those fuel surcharges at UPS and FedEx?

There is still money to be made in the airline business. Quit giving it all away by trying to compete with the budget carriers. They will only drag you down to their level and beat you with their limited services and hedged fuel! Wake up people.

Maybe it is just me...........................
end of rant

[post="287671"][/post]​

must be you ...some will pay more for a first class product...ie:HILTON I hate and will not support wallmart...there maby a small market for top teir products...can the airlines carve that niche market? stay tunned...

 

[usair_begins_with_u]

They will make money when pilots salaries are cut by about 60%.... theres no flocking way a pilot deserves to make more than 70K a year.

 

[ggu23311]

They will make money when pilots salaries are cut by about 60%.... theres no flocking way a pilot deserves to make more than 70K a year.

[post="287692"][/post]​

Surly you jest! Why not ven,t your frustrations on your local 80K babysitters that get the summer off!

 

[calibrator]

Surly you jest! Why not ven,t your frustrations on your local 80K babysitters that get the summer off!

[post="287710"][/post]​

 

[EyeInTheSky]

They will make money when pilots salaries are cut by about 60%.... theres no flocking way a pilot deserves to make more than 70K a year.

[post="287692"][/post]​

usair_begins_with_u, why shouldn't a pilot make more than 70K a year? Just frickin' curious... If that's the attitude of most travelers out there than I can assure you that today's British Airways wildcat baggage handlers' strike won't be just a fad across the pond.

 

[usair_begins_with_u]

My first clue is that the airline industry as a whole has lost many billions since deregulation. Pilot salaries are the only big ticket cost left that management has control over... trust me, its going to happen in time. I envision day piolts are taken out of the loop.. If they can shoot a 20 ton missle 8000 miles away and hit a target within 9 meters.. surely they can program planes to take off and land.. just look at a cruise missle.. same concept. These high salaries will only speed up the technology conversion. We may not see this next year, but some of us wil surely see it in our life times.

 

[ZMAN777]

Pilot salaries are the only big ticket cost left that management has control over... trust me, its going to happen in time. I envision day piolts are taken out of the loop.. .. These high salaries will only speed up the technology conversion. We may not see this next year, but some of us wil surely see it in our life times.

[post="287755"][/post]​

Dude, what's with all the negative vibes? You must be some pissed off critter! Let me ask you this, just how willing are people going to be to jump on a jet without ANYONE at the controls? Not saying it can't be done, but think about it. A missile is one thing, on one's on board. You've surely heard about Murphy's Law right?

In the meantime, get over yourself and your hangups with pilots and just chill. With that mentality you'd have sports star's capped at $100K-$250K and the same thing for doctors and other professionals. Go find yourself some third world socialist country to try out your experiment on. North Korea comes to mind as a great place to practice your lunatic experiments with "evil capitalism". Good grief!

Cheers,
Z B)

 

[Cloud Watcher]

Old Prop Guy:

You are correct, the the carriers in Europe and Asia are making money because they charge what there product is worht and the planes are packed.

And Usair begins.......would love to see you hang in the cockpit with me for a month on international flights plus Deadheads and then ask you what I should be making. Then I can smile at you and say, "go home little boy", while you are crying because you haven't slept for 2 days.

 

[Cloud Watcher]

sorry for the bad spelling...just woke up!

 

[usair_begins_with_u]

In the meantime, get over yourself and your hangups with pilots and just chill. With that mentality you'd have sports star's capped at $100K-$250K and the same thing for doctors and other professionals.

Sports teams generate income.

 

[legacy-to-LCC]

The decision makers at Us Airways and the nations other airlines are doomed to fail, without a doubt. When one sales a product, any product, at less than cost, then it is obvious that there is no profit to be made. If some uncontrollable cost of the product or service (fuel) increases, it must be passed along to the consumer. If the consumer is not willing to pay the increased price for service, then the business is no longer worthwhile or viable.

Is it better to continue offering the product at a loss? This does not seem like a very smart way to make a profit. One would be better off to cut his losses, tuck his tail, and run.

I understand that Southwest has the advantage of having a very large amount of fuel hedged at a very low price. That is their only major advantage, and it too will end eventually! There is no way they can replace all the air service in the country. It is unimaginable that they have hedged enough to fuel the expansion needed to take over the whole airline industry! Their business plan is to operate only in the large markets, at a lower price than anyone else. That is where their money is made. That leaves most of the country for everyone else. If the customer is willing to drive several hundred miles to get these low fares to limited destinations, then let him!

Motel 6 probably has some of the cheapest rooms in the hotel business. Have they managed to eliminate Hilton, Radisson, Hyatt, etc.? I don't think so.

Is every other transportation industry operating at a loss because of high fuel prices? What about those fuel surcharges at UPS and FedEx?

There is still money to be made in the airline business. Quit giving it all away by trying to compete with the budget carriers. They will only drag you down to their level and beat you with their limited services and hedged fuel! Wake up people.

Maybe it is just me...........................
end of rant

[post="287671"][/post]​

propguy--
your industry prediction, if treatise is a rhetorical quagmire! at its core, economics is logic. thus, the high cost of fuel will be passed along to passengers--it is inevitable! there are two certainties right now: 1) cost of fuel is extraordinarily high; 2) air travel demand is above pre-9.11 levels. when you put these two realities in a mixer, the only logical result is a categorical inflation of fares--that may be a tough cocktail to drink! this, however, may be a positive catalyst...depressed yields are the consequence of unprofitable fares.
and, with respect to southwest. yes. they do have a competitive edge; but, as you indicated in your response to your own question, they could never absorb the (absurd) hypothetical possibility of 100% air travel marketshare. the reality of the fuel situationn is that it may be enough to eliminate some capacity?!?

 

[diogenes]

You'd have a point, if labor costs were the determining factor, but it isn't.

WN pays all of their folks more than U does.

WN turns a profit. U does not.

QED.

 

[luv2fly]

I envision day piolts are taken out of the loop.. If they can shoot a 20 ton missle 8000 miles away and hit a target within 9 meters.. surely they can program planes to take off and land.. just look at a cruise missle.. same concept. These high salaries will only speed up the technology conversion. We may not see this next year, but some of us wil surely see it in our life times.

[post="287755"][/post]​

I think you should be the first one to volunteer to strap yourself to that 20 ton missile.
I can see this now. Sorry folks, the system that automatically lands the aircraft has failed in flight, but look at it this way. At least we don't have to pay pilots anymore right???? :huh:
Note to everyone: You will not see an unmanned airline cockpits in your lifetime. Now if you believe in reincarnation,... might be another story. Until then, quit sniffing glue.

 

[The End]

The airlines want to have losses so they can go to bankruptcy court and have the judges do the dirty work for them i.e. bust the unions, cut your pay and benefits, and steal your pension!! One by one they will all do it. DAL & NW are next and AMR won't be far behind. The courts are just a tool to be used by corporate America. It is a cancer effecting all industry. Funny how it doesn't effect ceo pay and benies. The End