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A Visual History Of Flying The Monopolistic Skies
The recent merger between United and Continental confirms merely the inevitable: ever since the deregulation of airlines some 30 years ago, the path in corporate development in the carrier business has been one toward constant consolidation, interspersed with the occasional bankruptcy, as companies are massively and pro-cyclically leveraged to the same economic growth model that caused Moody's computers to #REF out whenever a decline in home prices was assumed. Oddly enough the evolution in the airline carrier space will soon be mimicked by what is happening in market structure, as more and more exchange, ATS, dark pools and what not realize that the only way to survive is by growing horizontally instead of relying on organic growth in a market which is seeing less and less participation. And while a detailed chart showing the development in market structure is still missing at the corporate level, the New York Times has put together the following very informative infographic which shows how little by little America will soon be served by just one airline, in which first class is reserved only for those working south of 58th street in Manhattan, while everyone else will be shoved in the cattle car back in coach. Because only a fool thinks that a two-tiered market exists solely in stock trading...
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Looks like everyone better start following the Southwest business model if they wish to survive. Or continue to merge until there's just Southwest and one other airline.
You mean bags will fly free again? :-)
The charts look like the schematics of Star ship enterprise
SCOTTY, DAMAGE REPORT!
http://www.youtube.com/watch?v=BDnwDEsCX9U
I liked Braniff's gaudy colors.
Good graphic, thanks.
GL
I loathe TSA checkpoints and such, so I wouldn't mind if the entire industry fell into an abyss.
+ a gazillion
Thousands Standing Around
It's not a free-market - just get me there alive!
FOLLOW ME! I KNOW THE WAY!
http://www.google.nl/search?q=follow+me,+I+know+the+way+indiana+jones+youtube&hl=nl&prmd=v&source=univ&tbs=vid:1&tbo=u&ei=hzOqTIH_GMaYOqfhnI8M&sa=X&oi=video_result_group&ct=title&resnum=2&ved=0CCUQqwQwAQ
"ever since the deregulation of airlines some 30 years ago"
That is the quid of the question.
Change "airlines" for "financial markets" or anything else and the result is just the same. That yearn for "free markets" only killed the "referee" which made the game orderly and then "innovation" kicked in creating ever more and bigger monopolies. Because while many people loath the centripetal force of "gubermint!", many are very much unaware of the equally (if not stronger) centripetal force of big business.
Soon there'll be 1 airline, 1 bank and one master over you all. And that because you all thought da gubermint is soo commmunistx and eee4vil. Serves you right I'll say.
Pan Am, Eastern Shuttle, Peoples, Trump Shuttle.. just say'in.
I'm going to have to shack up with a flight attendant to get the her buddy pass. Hard times.
These beer nuts are stale god damm it.
I don't know about this.
The commerical, passenger airline industry is a bitch of a business - unions, fuel and other variable cost inputs, expensive, high maintenance equipment, all kinds of regulations and an American consumer that will, to paraphrase Herb Kelleher (I think): "fly on a plane with one wing if the price is low enough." Most countries have national or heavily subsidized airlines, not because they are commies but because the economics of running an airline make it a crappy private business model and economies of scale have a lot of advantages. Maybe specialty or regional carriers (like Alaska Air?) can compete successfully with the big boys in this country but that's about it. I'm hardly an airline expert but this much seems obvious.
Plus, post-911 we've apparently decided as a country (or the government has decided for us or both) that we will subject ourselves to being treated like animals rather than openly engage in the slightest bit of official political incorrectness.
Current equity market structure has serious problems. But those problems could all be mostly fixed in about five minutes if anyone in the SEC had half a brain. The airline industry? Not so much. Apples and oranges. Bad analogy.
"The commerical, passenger airline industry is a bitch of a business - unions, fuel and other variable cost inputs, expensive, high maintenance equipment, all kinds of regulations and an American consumer that will, to paraphrase Herb Kelleher (I think): "fly on a plane with one wing if the price is low enough."
Apparently, so will Europeans. Ever hear of Ryan Air? The seats don't recline, they charge for literally everything separately, engage in non-stop pitches during the (thankfully, usually relatively brief incarceration) and have recently floated the following revenue makers: charging for the loo, and putting people on saddle stands upright, to save space...You should see the crowds at their bloody kiosks. And they are WAY profitable...
Well that pretty much proves my general point about the airline biz - they have this narrow slice of the business that they have any real control over and in the case of Ryan Air, they're flogging it mercilessly and sucking out every last penny they can - rather successfully too (for now) it would seem.
For the trans-continenal version they could lock a bunch of term-abroad college kids in a can and then fire the thing into the air ballistically. It would arc briefly through space, then parachute down somewhere in the general vicinity of the target destination. Probably take all of twenty minutes too.
I just came across this, which depicts a shockingly similar pattern:
Nice chart.
Ahh, just banks. Brokerages, too, would be a monster chart.
Banks - a much closer analogy than equity market structure and like airlines we seem to be turning into Europe here too.
But recently mega-banks seem to get and stay mega via their close relationship with government (certainly the U.S. consumer has never been much impressed with the Citigroup type "financial supermarket"). I think the airlines' evolution toward bigger-is-better is more closely related to the inescapable economics of the industry and not the government angle although these days everything has a big government angle.
All right! The final four -- only it's year-long madness, not just March! :>D
and while you are flying the monopolistic skies be sure to waive to the flying pigs and skittle shitting unicorns taking off from the white house, bls, and nber....
I'll be at the front of the plane, will wave @ you guys
Would that be before or after you do the emergency exits & seat belt demonstration?
:-)
Reggie M coming up live on Bloomberg
mms://a627.l2479952251.c24799.g.lm.akamaistream.net/D/627/24799/v0001/reflector:52251
The airline industry is the most broken business model of all and has historically proven itself incapable of making money on a year-to-year basis. This is as much due to a strategy of monopolizing departures out of critical hub airports. (Monopolies gladly granted by our beloved, captured regulators). In order to obtain the monopoly positions, not only must the airline obtain the majority of landing and departure slots, but it must also obtain the planes to fill all those slots, thus overbulking its fleet at the expense of its competitors.
This, of course, results in the wonderful delays we are all so familiar with as by definition, 10 planes cannot all push back from the gate and all take off and head for Chicago at exactly 8 a.m. So the strategy is to overwhelm a competitor with the help of the regulators and then to swallow the competitor in a regulator-approved merger. Route rationalization has nothing to do with it, but personnel rationalization (as in lost jobs) and fleet rationalization (as in more planes parked out in the desert) mean a lot here.
I would not count on any service improvements.
I'm surprised by this post. The de-regulation of the airline business was typical government at its best.
Even cursory analysis of the industry shows that the stranglehold of governments on terminal regulations and fees and taxes precludes excellence, logistical efficiency, and low cost, high quality service. Only airlines springing up after de-regulation have a half-baked chance at economical air travel, squelched only by out-moded technology and regulation.
One only has to wander into today's airport to see the lunacy at work. Vonnegut couldn't have dreamed up a more spectacular nightmare. But until governments remove their heel from the necks of industry participants, the only game in town is sideways.
The bad news is that power grids, energy and banking are right there with them. We are well and truly fucked. And we are staying fucked.
The good news is that the recession could be ended in a month just by instituting a half-sane energy policy and rolling back the inanity which is the EPA.
Classic Monopoly game in progress. The winner takes it all.
Anyone flying three or four years from now in first class had better have 4 coach seats filled with very large well armed gents or you are in a world of shit. Your photos on deplaning will be on the streets in an hour or two.
Flying means wealthy people; especially if you deplane first. If you have traveled internationally recently--start looking around and I guarantee you you are noticed.
Lots of things are going to change for the elite; travel is going to be one of them. Milestones
Why would de-regulation cause more monopolies when the airline industry did not start off as a regulated industry?
I question the claim that deregulation caused the airline industry's problems. I would bet that there has been quite the opposite.
I was once in USA and had to fly United early on the Thanksgiving holiday morning, I remember it was a 6 a.m. flight. I was the ONLY person on the plane. Honestly, I was the only passenger for a two hour flight in a long haul jet. The reason I remember this flight was that the nine flight attendants stood around talking about whether they were going to vote to go on strike or not and did not serve me any meal of even say anything to me the entire flight. i thought to myself, how bad can an airline be if they cannot serve one person instead of 150?
I have not flown on an American carrier for over 15 years and wont unless I am forced to. My childhood school hallway guardian spoke with more kindness to us than the staff of the Americans' various airlines do to their customers.
Copmpare the service and standards of LAN Chile or Singaore Airlines or Qatar airlines VS Continental or United. I feel very sorry for the Ameicans who have to fly with their monopoly airlines that treat them like jews on the way to the concentration camps in WWII.
I do have one favorite video to share; yes its about united...
http://www.youtube.com/watch?v=5YGc4zOqozo
US airlines are the most piss poor in the world. They are rapidly being joined in their piss poorness by the UK ones as Willie Walsh can't decide whether he wants BA to be a flag carrier or a cattle truck. The consequence of which is that they try and charge you £6,000 to sit up front and still get treated by the staff like you just wandered in stinking of drink with shit smeared down your front.
I fly Emirates or Air France wherever possible.
Emirates has a lot of fans. Just make sure you don't have any poppy seeds on your clothes when you go through any airport in the UAE:
"Meanwhile, a Swiss national is serving a four-year jail term after three poppy seeds from a bread roll he ate at Heathrow airport were found on his clothes."
http://news.bbc.co.uk/2/hi/uk_news/7234786.stm