The Stand Is Closed

[Hope777]

Lawmaker warns airlines on future aid (UAIR, DAL) By Maggie McNeil
WASHINGTON (CBS.MW) -- The chairman of the House Aviation subcommittee said the U.S. airline industry must be prepared to "fend for themselves." "Let me make it clear that Congress is not going to underwrite losing airline operations," said Rep. John Mica, R-Fla. "Congress cannot re-regulate the airlines to save them from market competition." The panel was holding a hearing Thursday to examine the financial condition of the U.S. airline industry. Major carriers are struggling to reduce costs to compete with the low fare carriers. U.S. Airways (UAIR) and Delta (DAL) have hinted that they may have to file for bankruptcy.

 

[Hope777]

And another article on THIS topic....


http://biz.yahoo.com/rb/040603/airlines_congress_3.html

 

[geo1004]

That's pretty easy big-boy talk from a Florida Congressman. Given that Florida destinations will be well served regardless and that no major airline is based out of Florida I suppose I understand...

 

[AtlanticBeach]

Mica is a no-nonsense guy who got all the post-9/11 aviation legislation through Congress. Members in both parties look to him for guidance on these issues. My take is that his comments are a warning to United/ATSB in particular and the entire industry in general.

An addendum to Geo's post. DAB is the only airport with scheduled service in Mica's district. JAX is about 25 miles from the northern border of his constituency.

 

[FWAAA]

The most ridiculous government reaction to September 11 was to impose the $2.50 per segment ($10/max RT) tax (September 11 Security Fee) on airline tickets.

Everyone who has ever studied economics knows that imposition of taxes decreases the consumption of the taxed item (exactly like a government subsidy increases the consumption of the subsidized item).

It's painfully obvious to those who have studied the situation that airlines are paying the September 11 Security Fee and not the pax (since airlines have been unable to make any price increases stick), which has directly harmed the airlines.

Last year, the Congress agreed to refund the stupid tax as part of Bailout II, but didn't repeal the stupid tax.

What would happen if the tax were repealed? Ticket prices would probably stay the same, giving the airlines some much needed revenue.

It wouldn't end all the industry's problems, but eliminating taxes on airline tickets is a step in the right direction. Better yet would be to eliminate all federal airline ticket taxes (not the airport user fees, I'm talking about the federal excise and segment taxes, together with the September 11 Security Fee tax increase).

 

[WorldTraveler]

FWAAA,
while I agree that the airlines are disproportionately shouldering post 9/11 security taxes, the government is surely encouraged by the fact that travel has rebounded to pre-9/11 levels. They don't care that it is the legacy carriers that can't make it because of fuel, security costs etc.

 

[RowUnderDCA]

Mica is a no-nonsense guy who got all the post-9/11 aviation legislation through Congress. Members in both parties look to him for guidance on these issues. My take is that his comments are a warning to United/ATSB in particular and the entire industry in general.

An addendum to Geo's post. DAB is the only airport with scheduled service in Mica's district. JAX is about 25 miles from the northern border of his constituency.

This is true.

 

[Winglet]

Like the public in general, Mr. Bush and the Republicans don't care about anything but cheap airline tickets. They just assume that minimum wage illegal immigrants take your job or just outsource it altogether to another country. The Democrats don't care either, actually. At least the Republicans might get thrown out of office this year.

 

[robbedagain]

FWAAA,
while I agree that the airlines are disproportionately shouldering post 9/11 security taxes, the government is surely encouraged by the fact that travel has rebounded to pre-9/11 levels. They don't care that it is the legacy carriers that can't make it because of fuel, security costs etc.

i wonder what would happen if the low fare carriers also started having problems like this???? would the washington dudes help them???

 

[funguy2]

I am glad to see that the airlines are finally taking the stand that airline/aviation security IS national security. Back in the '70's, airline security was something to be paid for by airline passengers, as there wasn't going to be much success hijacking a train to Cuba or Beruit. Therefore a "user-fee" security system might have made sense.

However, now that airplanes have been used specifically to target buildings (and potentially other ground targets), even if you never use the airline system, you are still at risk of a terrorist using an airplane as a weapon. Therefore, it seems unreasonable to me that airline passengers be required to pay for security, when technically, the security is for both airline passengers and people who never leave the ground.

While, from what I have read, the airlines did take a stand on this issue, it would have been nice to see it stated very plainly. I would have liked to hear this particularly from Gordon Bethune, who typically gets away with saying very plain, sometimes overly blunt, things, and typically gets his point across (whether or not you agree). In other words, Gordon does not tip-toe around the issue, he tells you how it is (in his view).

 

[Diesel8]

Doubtful, they would just let RB and VUSA, et al, perform cabotage.

Perhaps we could have the pax pay the Goverment directly, for all the taxes, fees, PFC and assesment, that are put on tickets, then we might hear a bit of outrage.

I was talking to a Air Canada mechanic. He said someone in Canada, either Westjet or JetsGo, was selling tickets for a dollar. After all taxes and fees were paid, the ticket was around 150.

The CFO for SWA talked about taxes and fees, IIRC, the goverment makes more on a ticket sold on SWA, than SWA does.

Now mind you, I think the airlines have to pay for the infrastructure, that is up to a point. I think as an industry, aviation is one of the most heavily taxed. Now that is all very good and dandy, if tickets are 1000 dollars and up, but at 99 dollars, it just does not add up. If anything, the goverment should deal in percentages, not in flat fees, but think that would be unfair vis a vis higher priced tickets, that is unless there was a cap set.

 

[mweiss]

If anything, the goverment should deal in percentages, not in flat fees...

Depends on how you look at it. Is the tax supposed to be a user fee, or a form of wealth redistribution? If it's a user fee, then the fee should, indeed, be flat (at least for all seats on the same airplane).

Does it cost the FAA less to route an airplane filled to the brim with $99 fares than to route one filled to the brim with $1,200 fares?

Now, one could make an argument for per-segment fees, given that the infrastructural cost is heavily weighted toward the stuff that happens below 10,000 feet. I'd go for that argument.

 

[leadmech8]

"may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" :blink: ff: :censored:

 

[ITRADE]

File this one into the "Misleading Title" category.

This is the opinion of one congressman. If every congressman's opinion was taken as the official U.S. government position, this country would come to a grinding frickin' halt.

 

[Reservation Agent]

The company needs some "airline people" running the company....

It is being run by bankers and investors right now...

Hmmmm... They'll probably come up with the idea to put ATM machines in the galley on our aircrafts, so they can collect $1.50 service fee for using the banking machine, while in flight....