Post Deregulation Today
- Thread starter Buck
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WorldTraveler
Corn Field
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statistically, aviation is safer than ever.
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From a labor relations and job security standpoint, deregulation (the movement of airlines from being utilities to complete economic competition) was won of the worst moves to have affected the former well being of airline employees.
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When any new airline can start up and undo decades of legacy costs and benefits and compete with airlines that have existed for decades, there is no chance of the legacy airline employees maintaining what they once had.
Multiple rounds of bankruptcy in the industry, mergers, and cuts in service and pay and benefits have marked the US industry for more than 3 decades.
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The larger question is whether the US is really better off by having cut throat competition in every sector of the economy - at the HUGE expense of American workers. And yet Americans have some of the highest personal debt levels in the world.
The whole mindset of cutting prices to create a "higher standard of living" is flawed - and most of us believe that America has been and will continue to be harmed by that kind of thinking.
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Since the US was one of the first countries to economically deregulate air transportation, it is insightful that most countries have chosen not to follow the US lead in deregulation.
.
From a labor relations and job security standpoint, deregulation (the movement of airlines from being utilities to complete economic competition) was won of the worst moves to have affected the former well being of airline employees.
.
When any new airline can start up and undo decades of legacy costs and benefits and compete with airlines that have existed for decades, there is no chance of the legacy airline employees maintaining what they once had.
Multiple rounds of bankruptcy in the industry, mergers, and cuts in service and pay and benefits have marked the US industry for more than 3 decades.
.
The larger question is whether the US is really better off by having cut throat competition in every sector of the economy - at the HUGE expense of American workers. And yet Americans have some of the highest personal debt levels in the world.
The whole mindset of cutting prices to create a "higher standard of living" is flawed - and most of us believe that America has been and will continue to be harmed by that kind of thinking.
.
Since the US was one of the first countries to economically deregulate air transportation, it is insightful that most countries have chosen not to follow the US lead in deregulation.
Not so fast,
Aviation is only safer because the rising price of oil forces carriers to buy more fuel efficient aircraft, meaning less maintenance.
US laws protect bankrupt carriers to reorganize with lower costs, eliminating most debt and obligations, but keeping most assets.
WorldTraveler
Corn Field
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actually, aviation is safer because thankfully we do learn from our mistakes. The vast majority of accidents are caused by human error and processes and procedures have improved across the industry. Let's also remember what the US FAA establishes as law is viewed as the standard by which other countries set their laws.
eolesen
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Really??
Which countries still regulate fares, and the domestic routes an airline can serve?
Countries which still have a state owned or backed airline obviously protect that interest, but the EU is deregulated. Pretty certain Brasil, Australia, & Japan are.
I don't have my world airline report handy, but of the 20 or so countries which comprise 90% or so of all passenger boardings, I'm also fairly certain all of them are deregulated.
Deregulation hasn't been good for workers if you only look at wages, but consider the fact that tens of thousands of jobs were created directly at airlines, and tens of thousands more in the supply chain.
I suspect AA has more airplanes today than UA, DL, and AA combined in 1978. My guess is 95% of the people on these boards got their start in the airlines because of deregulation, and probably wouldn't have been in this line of work absent deregulation.
chris perry
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Deregulation has put alot of cut throat CEO's.... to work,now the race is on to export aviation job's overseas....Just take a look at GM,when their restructuring is done,somewhere in the neiborhood of 21% of their Parts/products will be American made.The rest third world no wonder this country has gone to ####.....The average worker cannot afford to even buy one without fancy financing. Deregulation sure hasn't worked with Texas Electric companies its been nothing but a ripp off!!!!!! Its made a bunch of traders very weathy...At our expense.....
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If you look at Deregulation from a raw political point, creating so many jobs is a good thing, only if Big Labor can put "everyone" to work at the same compensation. However, Big Corp puts only those that are truly needed and at the lowest labor compensation available. In my opinion Deregulation has devalued the earning power of the worker, union and non-union alike, expert those at the very top. I believe that even you E could have sold your skill at a higher return on your investment if the airline industry was still regulated.
eolesen
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Dunno, Buck. Absent de-regulation, there's a school of thought that says there would have been little incentive for airlines to grow. They'd make a guaranteed profit regardless how efficient they were, and there would be huge barriers for newcomers to enter the market.
If that had been the case, I doubt that I would have even entered the industry, and the same is probably true for most of us hired after 1980.
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Yet during the early to mid eighties Bob Crandall opened the window of opportunity and many were hired under the B-scale. It just goes to show that a strong leader can get things done. Some might not like Bob Crandall, but one thing, if he said he would do something it was done.
787nightmare
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$4.00😀 ......and who'd a thunk we'd be looking back at Crandall at this juncture??
Jeezzzz...
Kiplinger's Personal Finance Jun 1996
Flying low
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Maybe those articles should be mailed to all upper management and the BOD.
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WorldTraveler
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A pre-deregulation era airline job was a very good job - employees were compensated similar to utility workers- because the airlines were viewed as utilities prior to deregulation.
Deregulation has been a disaster for airline employees, customer service, and airline finances - although it is fair to note the airline industry wasn't terribly profitable even as a protected utility.
.
Just like so many things, the US philosophy of the airline industry has become quantity over quality - w/ a corresponding degradation of service which is closely tied to the number and compensation of airline employees.
.
Every time I travel outside of the US, I see how efficient US airlines are - and that efficiency has come at the expense of airline employees - and the inability of machines to fix the problem when the operation falls apart.
.
The Bloomberg article notes that
“It’s very clear the economy is not recovering,” Southwest Chief Executive Officer Gary Kelly said in an interview. “Business travel, for one, won’t grow until the economy really does grow at a healthy rate.”
... which means that capacity will have to continue to come out of the system in order to support higher fuel prices - and the need for higher ticket prices... if fares can't be raised - and WN acknowledges they are probably tapped out in their ability to raise fares which pretty well applies to the rest of the domestic industry - then capacity has to come out. Airlines like DL and UA and now WN to a lesser extent are able to remove excess capacity because of the duplication in their networks and more hubs than needed.
.
Replacing aircraft with more fuel efficient models such as AA is doing will help cope with higher fuel prices but the reality is that when AA talks about a one for one replacement of current w/ new aircraft, there is a certain amount of growth built into the plan - because the market will continue to shrink as fuel prices continue to rise - and OPEC will ensure they do, esp. once the economy begins to recover again.
.
The only real method to grow the network other than by increased efficiencies is going to be through mergers - because growth in a rising fuel environment is very hard to pull off. Historically, mergers have not been kind to airline employees.
.
If a young person talks about wanting to work for an airline now other than for a short term gig - perhaps as much to be able to see the world - hit them over the head and direct them to another industry. Although decent paying jobs are becoming harder and harder to find, it is certain that the airline industry will be at the forefront of the race to the bottom.
Deregulation has been a disaster for airline employees, customer service, and airline finances - although it is fair to note the airline industry wasn't terribly profitable even as a protected utility.
.
Just like so many things, the US philosophy of the airline industry has become quantity over quality - w/ a corresponding degradation of service which is closely tied to the number and compensation of airline employees.
.
Every time I travel outside of the US, I see how efficient US airlines are - and that efficiency has come at the expense of airline employees - and the inability of machines to fix the problem when the operation falls apart.
.
The Bloomberg article notes that
“It’s very clear the economy is not recovering,” Southwest Chief Executive Officer Gary Kelly said in an interview. “Business travel, for one, won’t grow until the economy really does grow at a healthy rate.”
... which means that capacity will have to continue to come out of the system in order to support higher fuel prices - and the need for higher ticket prices... if fares can't be raised - and WN acknowledges they are probably tapped out in their ability to raise fares which pretty well applies to the rest of the domestic industry - then capacity has to come out. Airlines like DL and UA and now WN to a lesser extent are able to remove excess capacity because of the duplication in their networks and more hubs than needed.
.
Replacing aircraft with more fuel efficient models such as AA is doing will help cope with higher fuel prices but the reality is that when AA talks about a one for one replacement of current w/ new aircraft, there is a certain amount of growth built into the plan - because the market will continue to shrink as fuel prices continue to rise - and OPEC will ensure they do, esp. once the economy begins to recover again.
.
The only real method to grow the network other than by increased efficiencies is going to be through mergers - because growth in a rising fuel environment is very hard to pull off. Historically, mergers have not been kind to airline employees.
.
If a young person talks about wanting to work for an airline now other than for a short term gig - perhaps as much to be able to see the world - hit them over the head and direct them to another industry. Although decent paying jobs are becoming harder and harder to find, it is certain that the airline industry will be at the forefront of the race to the bottom.
