Aces High Bulletin Board
General Forums => The O' Club => Topic started by: rpm on January 21, 2005, 03:16:04 AM
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NEW YORK (Reuters) - Delta Air Lines Inc. on Thursday posted a sharply wider fourth-quarter loss as it struggled with high fuel prices and low fares, and analysts warned of an even bigger loss in the first quarter of 2005, sending its shares down over 10 percent.
The No. 3 U.S. airline, which has narrowly avoided bankruptcy in the past few months, posted a net loss of $2.2 billion, or $16.58 a share, compared with a loss of $327 million, or $2.69 a share, a year earlier.
"Their numbers were worse than what we were expecting, and we weren't expecting much," Calyon Securities analyst Ray Neidl said in an interview. "We expect high fuel costs and low fares to continue into the first quarter, which will exaggerate Delta's losses further."
Delta, teetering on bankruptcy until it negotiated a concession package with its pilots in December -- which would save it $1 billion annually for five years -- in January slashed its fares by as much as 50 percent on domestic routes.
"Down the road, it may turn out to be a positive thing because of increased traffic stimulation in business travel, but you can safely look forward to very bleak first and second quarters," Neidl said.
The airline said it ended the fourth quarter with $2.1 billion in cash, of which $1.8 billion was unrestricted.
"Bankruptcy is not imminent anymore, with that amount of cash in hand," Neidl said. "But if fuel prices continue to rise, and fares stay as low as they are, bankruptcy remains a possibility for Delta."
How the #%!@ do you lose $2B in a quarter and stay in business? That's freakin' insane! I feel sorry for the poor schmucks that work there. :(
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I haven't looked into it so please help me out here. Is it just US arilines that can't make any money, or is it a global issue for the industry? If it's only US airlines what did they do to **** things up so badly and so broadly?
Charon
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Good question Charon. My understanding is, at least as far as US airlines go, that it's the bigger traditional ones that suffer while smaller companies like JetBlue and Southwest do a lot better.
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It is a global problem for the whole industry. Many of the smaller countries with a single major airline are only surviving because as the countries flagship carrier, their government pours money into them, often more as a matter of pride and providing employment, rather than an attempt to bridge them to profitablity. Even airlines in larger countries are suffering, many in a big way.
dago
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its all airbus' fault!!
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JetBlue and Southwest are not doing good because they are small, they make money because of their business plan, and they are getting bigger.
the big old airlines were formed when the airlines were regulated and they were assured a profit, after deregluation they were stuck with high operating cost, wages, ect and low competive air fares. if they do not change they will fail and be replaced by more "jetblues".
also the big carriers thought the "hub and spoke" would be the answer but wile it works for cargo(UPS-fedex) it does not work for passengers, too many take off and landings and ground crew to handle bages and service planes. JB and SW use point to point routes.
BTW jetblue's CEO said he modeled jetblue.s biz plan after southwest's plan.
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You can find fault with the hub and spoke if you like, but you better also acknowledge there are tremendous advantages to it. If you lived somewhere like Madison WI, you could jump on a major carrier, connect in Chicago or Minneapolis to anywhere in the world. If Southwest picked you up in Madison, where do you think they would take you with their point to point system? Maybe one or two places only. Point to point only works on a limited basis between major cities. P to P drastically reduces a persons ability to travel to many places. With P to P, when you do have to connect, without the hub/bank systems, you will experience long long layovers with frequent overnight stays during those layovers.
dago
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This news about Delta comes as no surprise, having read posts by Mr. Toad on this subject. The one he wrote that stuck out in my mind was about the building of a large and expensive terminal building at one of the major airports (can't recall which one it was) served by Delta.
Dago - are we going to try to be nice to each other in 2005? OK then, I have a question about your post. Originally posted by Dago
It is a global problem for the whole industry. Many of the smaller countries with a single major airline are only surviving because as the countries flagship carrier, their government pours money into them, often more as a matter of pride and providing employment, rather than an attempt to bridge them to profitablity.
Can I just ask you which countries you were referring to, and in what time frame? Iberia of Spain and TAP of Portugal are state run. As far as I know, NO British airline is state run or receives any government subsidy.
Furball! I was just about to say...
... in view of the financial difficulties being experienced by American long haul operators, help is at hand in the form of the new Airbus 380, which is about 15% cheaper to operate per seat-mile, and might prove to be the spade with which they can dig themselves out of the hole that they're in.
I see that UPS and FedEx already have orders for the A380. No doubt other American carriers will follow suit shortly. :aok
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Beetle, I will be happy to stay civil, as long as your refrain from posting negative threads about the USA, it's citizens or policies, even those thinly veiled with your supposed humor.
As far as the list of airlines, it's too long, but if you were curious, it wouldnt take you long to do the research. During my career, I have traveled to and met with the leaders of many airlines in differant countries. As part of "due diligence", I had to build a background report on the airline I was "auditing". This gave me a pretty fair picture of their financial situation. (used many sources, including D&B). Too often employees asked with an almost sad hope that we were there to consider buying them, as they often feared for their long term future due to continuing annual loses, even at times prior to 9/11 when profitability was not uncommon among airlines.
Most of those in the worst shape were if not the sole airline of a country, they were the only "major" or "international" airline. They existed only due to their nations subsidies reflecting the nations pride and determination to have a quality international airline to be proud of. None I mention were UK based, I never got around to working on any of those.
dago
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Originally posted by Dago
Beetle, I will be happy to stay civil, as long as your refrain from posting negative threads about the USA, it's citizens or policies, even those thinly veiled with your supposed humor.
OK, but it's a two way street, so no jokes about our nation's dental health etc.
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Originally posted by Dago
It is a global problem for the whole industry. Many of the smaller countries with a single major airline are only surviving because as the countries flagship carrier, their government pours money into them, often more as a matter of pride and providing employment, rather than an attempt to bridge them to profitablity. Even airlines in larger countries are suffering, many in a big way.
dago
well we are small country, with the only CSA, rest of airliners are from all around world. CSA belongs to goverment, thats true, but their profit is going up year by year.
So its not quite nessesry to pump money into it as you mentioned.
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Originally posted by lada
well we are small country, with the only CSA, rest of airliners are from all around world. CSA belongs to goverment, thats true, but their profit is going up year by year.
So its not quite nessesry to pump money into it as you mentioned.
You dont have a country. None showing below your name, I guess you are embarrassed or ashamed, and I am not bothering to guess. Your airline probably is losing money faster than a drunk sailor in a brothel, but they are just lieing to the public about it.
dago
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Originally posted by beet1e
Can I just ask you which countries you were referring to, and in what time frame? Iberia of Spain and TAP of Portugal are state run.
Air Canada was subsidised by our federal government years for all the same socialist excuses. Westjet (Who has the same business model as Southwest Airlines, started taking market share.
Because Air Canada was bulky, and ineffient and has gone tits up. The want the government to bail them out again, the government finally said "No" (whoohoo!).
Now Air Canada is trying to find an angel investor. I'm just glad my hard earned dollars aren't going to prop up a bull**** socialist experiment still stuck in the 70's.
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you have friends in air canada...
and you want them to go tits up? :(
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British Airways used to be state run. And what a pig's ear the then Labour Govt made of that.
It was losing money hand over fist - so then when the Conservatives came to power in 1979, Thatcher had a great idea: Why not let the airline be run by people who understand commercial aviation?
It worked. BA was privatised. It went from losing millions to being the most profitable airline in the world. They had to slash the workforce, and some non-profitable routes had to be axed, but what the hell? No point in trying to run an airline as a charity organisation.
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Originally posted by Furball
you have friends in air canada...
and you want them to go tits up? :(
No, I want a time machine so I can send back the Westjet board of directors to take over Air Canada a couple of decades ago, so my friends jobs will be more secure and so the Canadian taxpayer isn't asked to pick up the bill.
I never said I want Air Canada to go tits up. I said I don't want tax payer dollars to fund it.
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ahh sorry.. i misunderstood your "whoohoo!" comment.
thought it was because you were happy Air Canada was failing.
Originally posted by Thrawn
Because Air Canada was bulky, and ineffient and has gone tits up. The want the government to bail them out again, the government finally said "No" (whoohoo!).
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Once upon time, most countries had an airline that was the 'flag carrier'. They were subsidisied. Even in America airlines were subsidised in some form or other or at the very least 'protected'. Ticket prices were mandated in the US by the Civil Aeronautics Board. It was a matter of prestige for the countries concerned. The result was a cost protected worldwide cartel. High airfares and a bloated overpaid bone idle workforce. Only well off people could fly on Pan Am, Delta, United, TWA, Continental, Braniff, British Airways, Air France, Aer Lingus, Swissair, Sabena, CSA, Air Canada etc etc. It was a great time to work for the airlines, high pay, travel, glamour. It had it all. Remember the movie? 'Catch me if you can?'. Halcyon days.
But one day a new man appeared on the scene. His name was Herb Kelleher and he was from Texas. He invented an airline called Southwest. They had low fares, minimum employees and low overheads. The big boys were horrified and tried to kill his little airline. But they failed and now most of them are either gone to the great hangar in the sky or desperately trying to compete with all the other low cost airlines that have sprung up. All copying in one form or other the Southwest mode. The old style airlines must change or die. That includes CSA, Lada, Ryanair or Easyjet will gobble them up unless they go low fare.
Ryanair is a good example of the new low fare model. In theory an Irish airline it is in fact a multinational airline with bases everywhere and a huge fleet of Boeing 738's with more being delivered every day. It has the power and muscle to undercut any airline that trys to compete with it. Soon there will be only one or two airlines left in Europe and one of them will be called Ryanair. A commercial for another low fare airline pointed out that it was cheaper to fly to Germany than the cab fair to the airport.
Delta won't survive unless it competes with the Southwest's and the Jetblue's. People no longer want to pay big money to fly. It's as simple as that.
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I wouldnt go so far as to credit Southwest and Herb for deregulation, but I do admire that fact that at least Southwest treats it's employees like human beings. What a novel concept in the airline business.
Be careful and consider the consequences of driving all the airline competition out of business. What will control fairs then?
dago
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Originally posted by Dago
It is a global problem for the whole industry. Many of the smaller countries with a single major airline are only surviving because as the countries flagship carrier, their government pours money into them, often more as a matter of pride and providing employment, rather than an attempt to bridge them to profitablity. Even airlines in larger countries are suffering, many in a big way.
dago
Not entirely true, SIA, Emirates, Qantas all made money last year and all have a promising profitability outlook for this year. QF,and Emirates don't recieve govt. money (no idea about SIA) and are all considered flagship airlines.
Tronsky
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I said "Many of the smaller countries", I didnt say all.
I can only hope you guys understand I work in aviation, and have traveled to and and worked with many people at many small airlines in many countries, big and small. I dont pretend to be an industry expert, but I do have a bit of an inside view.
dago
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Originally posted by Dago
Be careful and consider the consequences of driving all the airline competition out of business. What will control fairs then?
The market, just like it should in capitalism.
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Originally posted by beet1e
... in view of the financial difficulties being experienced by American long haul operators, help is at hand in the form of the new Airbus 380, which is about 15% cheaper to operate per seat-mile, and might prove to be the spade with which they can dig themselves out of the hole that they're in.
I see that UPS and FedEx already have orders for the A380. No doubt other American carriers will follow suit shortly. :aok
These are orders for cargo carriers and will be used for international delivery by the companies. I would highly doubt you will see them used by American Passenger flights as the main company behind the 380 is France. Not to mention Germany and Spain. Yes UK played a part in development. Americans tend to have pretty good memories when it comes to returning favors.
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Raider179
Of course the part of my post that you quoted was tongue in cheek. ;) Yes, the only US carriers to have placed A380 orders so far are freight carriers. I mentioned earlier that American Airlines runs SIX flights per day from London to New York using B767. It's likely they could save money by consolidating these into three flights by operating A380s on that route. AA does not operate any B747 (an employee of theirs tells me this is due to fuel cost considerations), but does have A300-600 in its fleet. And both United Airlines and US Airways operate Airbus aircraft. Originally posted by cpxxx
A commercial for another low fare airline pointed out that it was cheaper to fly to Germany than the cab fair to the airport.
Delta won't survive unless it competes with the Southwest's and the Jetblue's. People no longer want to pay big money to fly. It's as simple as that.
A very interesting post, CP - the whole thing, not just what I quoted here. I'm amazed by RyanAir. They offer flights to foreign destinations at ridiculous prices, eg. £1 for a flight to Salzburg. And yet in one recent year they made a £20m profit: How do they do it?! As to the cab ride to the airport being more expensive than the flight...
... In 2001, I went with a friend to Dublin on RyanAir. The seats were £1 each way. The biggest expense was the tax which put the round trip total for two people to £52. If we'd gone by boat, the petrol to and from Liverpool would have cost more than that! In the event, the airfare with tax came to less than what we spent on the Guinness in Temple Bar.
The whole experience of flying with RyanAir and easyJet leaves me in no doubt that what you say is correct. Their business model of filling all seats, cutting out frills, cutting out first and business - is what people want. Palatial airport terminals, expensive lounges, toilets with marble basins and gold taps belong in the past.
Just one thing though - I wish the airports that RyanAir flew to weren't so inconvenient! Venice Traviso? Frankfurt Hahn? - bah! :mad:
;)
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Dont forget Freddie Laker and Skytrain, his I think was the first and only airline to do budget transatlantic flights.
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Originally posted by Thrawn
The market, just like it should in capitalism.
So, your saying there really is no need for anti-monopoly laws?
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Originally posted by Dago
So, your saying there really is no need for anti-monopoly laws?
Of course, only a commie would say otherwise. I kind of like the idea of freedom.
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Originally posted by Thrawn
Of course, only a commie would say otherwise. I kind of like the idea of freedom.
You are either kidding, or very short sighted.
dago
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Originally posted by Furball
you have friends in air canada...
and you want them to go tits up? :(
No he wants Air Canada to stop sucking up his hard earned money and become a business that becomes profitable on it's own merits rather than depending on the taxpayers to keep it afloat.
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A very interesting post, CP - the whole thing, not just what I quoted here. I'm amazed by RyanAir. They offer flights to foreign destinations at ridiculous prices, eg. £1 for a flight to Salzburg. And yet in one recent year they made a £20m profit: How do they do it?!
It's partly down to subsidies.
Ryanair flies to a lot of small regional airports, and gets support from regional governments for doing so.
As an example, they've recently been ordered to repay some of the £10 million they've recieved since 2001 for flying to Charleroi airport in Belgium.
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Originally posted by Nashwan
It's partly down to subsidies.
Ryanair flies to a lot of small regional airports, and gets support from regional governments for doing so.
As an example, they've recently been ordered to repay some of the £10 million they've recieved since 2001 for flying to Charleroi airport in Belgium.
Bingo
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Originally posted by Dago
You are either kidding, or very short sighted.
dago
What's short sighted about it?
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Without anti-monopoly laws, in any industry you would risk one company controlling everything, something Microsoft has already come close to doing.
In aviation, it would be very easy for one airline to get big enough to bury competitors, and after doing so raise rates to astronomical rates. That has happened too often on a minor scale already, but given time and the laws the situation has normally self-corrected. If not for anti-monopoly laws, it would not correct and the public, wishing to fly would be paying through the nose. An airline can make just as much or more money flying less passengers at higher fares.
dago
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Originally posted by Dago
Without anti-monopoly laws, in any industry you would risk one company controlling everything, something Microsoft has already come close to doing.
I think they already 'do' and are not 'close' -- but that's another topic. ;)
Anti-monopoly laws spawned out of different time for specific reasons against specific conditions. Think about this for a minute:
The reason we have anti-monopoly laws today is because deregulation hasn't worked.
A provocative statement and I can see eyebrows being raised already, but hear me out and don't anyone go blowing a gasket just yet.
The lofty goal of deregulation is to foster competition to benefit the consumer and an industry by allowing marketforce efficiencies to bring about natural selection and a natural balance in an industry.
But are we deregulating growth-potential industries? Or are we trying to deregulate industries that might better be classified as 'infrastructure imperatives?' Look at the track record of the 3 major deregulation efforts in the U.S. and consider the result
The telecom deregulation and 'breakup' was actually a sham and the U.S. consumer has not benefitted from it. Telephone costs are unreasonably high and unscrupulously calculated for such a low-tech, mature technology. We're talking about telephones here, not rocket ships. Who exactly is the competition to your local Bell provider?
It extends to broadband service also. Americans are not receiving reasonably priced, reliably delivered, reasonable state-of-the-art Adsl service.
Trucking deregulation has not reduced the costs of moving goods across the country. It only transferred wealth from all the owner/operators to a few company executives while forcing drivers to a lower standard of living on top of driving longer hours.
Look at airline deregulation. The industry is the fastest way for a multi-millionaire investor to become a millionaire. It's an industry littered with debt across the landscape. It's subject to too many wild swings that benefit no one.
Advanced societies and economies need communication and reliable transportation to move goods that sell and people that work to produce and sell products and services. These are infrastructure needed to advance high-growth (read potential for jobs) industries. Market forces work most efficiently and benefit an economy more in the long run by being applied to growth industries and not to infrastructure. You don't consider your sewer and water to be growth industries. They are just 'there.' Thay are just basic infrastructure that employs some people and supports the system.
If you had the chance to start from scratch, you would probably eliminate all the special interest lobbying and regulatory trickery being done to the detriment of the consumer and the economy for the benefit of a few.
If you started from scratch, you'd want a transportation system that is safe, reliable, moves goods and people efficiently between points at greater than 80% capacity.
If you started from scratch, you would not want the convoluted web of quasi-deregulation existing now that is inefficiently distributing investment.
I'm not talking about socialism, there already is the worst of socialism now - the 3 industries are for the most part, providing lousy service, or on the brink of insolvency, or sucking investment, or being manipulated nationally or locally by lobbyists and thieves and the consumer is no better off in any 3 of these industries since 'deregulation.' The average employee in these industries is certainly no better off (except for the Bells).
Just maybe deregulation (in the way it was executed) didn't work.
I'm not sure myself... just a thought.
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Delta is generally credited with "inventing" the hub and spoke concept in the late '70's early '80's. Initially, the industry know-it-alls scoffed and said it couldn't possibly work.
I got hired during the boom DAL experienced from hub and spoke. It was a huge money making success. It was a "new" idea and it solved some problems. Eventually, the other majors implemented hub and spoke. They had to in order to compete.
However, the market is not static. Times change and so do people's desires in travel as well as the "economics" of the industry.
Right now, the pendulum has swung away from hub and spoke and those carriers heavily invested in it are paying a huge price. They'll either transition back to point-to-point or a hybrid hub-point sytems or else they won't survive.
As for DAL's bankruptcy prospects, I'm enough of a tin-foil guy to think that they still WANT bankruptcy. It's sooooo much easier to totally remove ALL the workers bennies and work rules if you first get the workers to agree to cut their contract and THEN go to the judge for bankruptcy where you can get all the rest by judicial fiat. Doubt that? See the history of US Air.
So, now that they got the easy major concessions from the work group, you drive the company into bankruptcy and get the rest of the contract annulled.
I mentioned earlier that American Airlines runs SIX flights per day from London to New York using B767. It's likely they could save money by consolidating these into three flights by operating A380s on that route.
I'd say it's unlikely. Six flights gives the passenger a choice of six departure/arrival times. Those can be absolutely key in fililng an aircraft's seats.
Further, no one has yet to determine the effect of the 380 on the infrastructure. It's quite conceiveable that JFK will have a hard time handling an aircraft that big. Lots to consider... passenger waiting lounges, baggage facilities, ramp space, taxiway clearances.
It's a bit early to predict the success/failure of the 380 in the passenger market. I would predict it a huge success as a freighter though.
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Originally posted by Toad
Delta is generally credited with "inventing" the hub and spoke concept in the late '70's early '80's. Initially, the industry know-it-alls scoffed and said it couldn't possibly work.
Actually, most industry experts credit Bob Crandall of American as having invented the hub and spoke concept, with UAL and Delta quickly adopting it.
dago
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Originally posted by Toad
I'd say it's unlikely. Six flights gives the passenger a choice of six departure/arrival times. Those can be absolutely key in fililng an aircraft's seats.
Further, no one has yet to determine the effect of the 380 on the infrastructure. It's quite conceiveable that JFK will have a hard time handling an aircraft that big. Lots to consider... passenger waiting lounges, baggage facilities, ramp space, taxiway clearances.
Good points. I'd thought of some of those. The AA example is not the best. If we consider British Airways for a moment, operating SEVEN flights a day just from LHR to JFK alone (with a further two flights to Newark/EWR). As you can see from the sample itinerary below, the largest interval between any two flights is between the last two - an interval of 1h45m. In some cases, as with the first two flights of the day, the interval is only 20 minutes. (The first flight is a 747, the second is a 777) Passengers need to check in at LHR at least 2 hours before flight departure (sometimes 3 hours if there's been a terrorist alert), so some of the problems you mentioned, such as airport lounge capacity, already exist. At LHR, that problem is already in hand with a fifth terminal under construction. (We won't talk about the increased road traffic near LHR - the M25 in that area is already the busiest motorway in Europe) But the really crucial thing at LHR these days is the number of runway slots - we're running out of them. But is it really going to be important to a business traveller heading to New York whether he/she gets the 8:20 or the 8:40?
I agree - the internal flight structure of the US is not where A380 is destined to succeed - with so many different destinations, and so many route permutations.
But consider Singapore Airlines (SIA), which will become the first passenger carrying operator of A380. Singapore is one of only about two popular stopping off points between Europe and Australia/NZ. (The other route is via LAX) But SIA doesn't then operate short hops to dozens of other cities in the surrounding area. They operate services to 59 cities in 32 countries, but only about 8 of those cities are within 1000 miles of Singapore. One of SIA's destinations is Brisbane, Australia - a distance of more than 3800 miles from Singapore. Their capacity to that one destination has tripled in four years.
For all of the above reasons, it's not surprising that the smallest aircraft in the SIA fleet is the A340! (The only others are B747-400 and B777 - especially the extended range variants) The key factors for SIA's choice of fleet are size, and range. They have 18 B777-300ER on order with an option for 13 more, and firm orders for 10 A380, with an option for 15 more.
I agree that if the A380 were to be deployed for point to point operations in the US, it would be financial suicide. But the business model for airlines like SIA is completely different owing to the geography and demography of SE Asia, and the destintions which they serve.
PS - bolshevik!
Thrawn - eek, I find myself agreeing with Dago! I think the anti-monopoly legislation IS needed, and should even be more strict. Here's an example. In the 1990s, a Greek gentleman called Stelios started an airline called easyJet. It's a damned good airline too, and serves useful destinations with low cost fares by cutting out frills, and by operating out of low cost airports such as London Luton (LTN). Well guess what? British Airways got pissed off with competition from easyJet, so they started their own subsidiary airline with the same business model as easyJet, but with even lower fares which were made possible by illegal subsidies from the BA parent airline. The new airline was called "Go". I resolutely refused to fly on Go because I thought BA were being so unfair to easyJet. Stelios was able to prove that Go was operating at below cost (apprently, that's the part that's illegal) and ran a competition for passengers to estimate the size of the loss in Go's first year: They lost £22m. So you can see what's going on here - big airline launches little squib to drive a company like easyJet out of business. Once achieved, it is then free to crank up its fares. I don't know how this debacle ended up, but easyJet is going from strength to strength.
BA also had a campaign of "dirty tricks" against Virgin Atlantic, who rented time on a British Airways IBM mainframe computer. Virgin's business would have been in a separate LPAR (logical partition) of the IBM mainframe computer, but the IT wizards at BA were apparently spying on Virgin's business. BA were then calling prospective Virgin customers, offering them cheaper seats on BA.
BA schedule from London to New York
Hmmm, with those fares, it might be time for another trip!
(http://www.zen33071.zen.co.uk/baschedule.jpg)
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Dago,
You can find "credits" for the hub and spoke going to both Crandall and DAL. The Atlanta Journal credits DAL.. what a suprise.
There isn't any doubt, however, that DAL did EXTREMELY well with it.
Times change though; hub/spoke has to evolve. When every airline is required to report the number of passengers it carries between each city pair, it gets real easy for a point2point airline to "sharpshoot" the best markets.
Beet, we'll see. I think the 380 implementation is going to severely tax the infrastructures. The aircraft is ahead of its support facilities IMO.
If passenger delays due to it's size and impact on the infrastructure become common, businessmen will book away from it. We'll see though.
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Originally posted by Dago
You dont have a country. None showing below your name, I guess you are embarrassed or ashamed, and I am not bothering to guess. Your airline probably is losing money faster than a drunk sailor in a brothel, but they are just lieing to the public about it.
dago
Jeez dago, if you were nearly as good in airline industry as you make out yourself to be you'd know that CSA is a Czech airline :D
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I know I could have easily looked up CSA, I didn't want to bother. I do not understand why posters won't bother putting at least their country in the location box. I try to challenge them, if even through embarrassment or anger to have the nads to admit where they are from.
dago
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Originally posted by Toad
Beet, we'll see. I think the 380 implementation is going to severely tax the infrastructures. The aircraft is ahead of its support facilities IMO.
Indeed. But it's not as if A380 is going to need to operate from vast numbers of different airports. As I understand it, SIA plans to deploy the A380 initially to London, and Australia, with Sydney as the first Australian destination. Second will probably be Melbourne, which expects to be A380-ready by May, with Sydney becoming A380-ready seven months later - way ahead of SIA A380 operations which are expected to begin in June 2006. Read this (http://www.theage.com.au/news/Business/Melbourne-Sydney-gear-up-for-A380ss/2005/01/19/1106110803164.html?oneclick=true).
A380 preparation at LHR is to include wider taxiways and double decker loading ramps.
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It's partly down to subsidies.
Ryanair flies to a lot of small regional airports, and gets support from regional governments for doing so.
As an example, they've recently been ordered to repay some of the £10 million they've recieved since 2001 for flying to Charleroi airport in Belgium.
It simply isn't true Ryanair's profits are down to subsidies. Their profits are down to ruthless business strategies which includes special deals with Boeing for new aircraft. No fat whatsoever. Even the pilots have to pay for their own uniforms and medicals. They don't even get free water not to mention coffee on board. It even costs 50 pounds sterling to apply for a pilot job. Then they only pay half flight pay for six months. No salary. It goes right through the company.
They negotiate the lowest possible landing fees and are ruthless about it. If airports want business they need to attract and keep Ryanair and other low fares airlines. It's as simple as that. Airports are another example of cosy little operations. They now need to attract airlines.
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Originally posted by fd ski
Jeez dago, if you were nearly as good in airline industry as you make out yourself to be you'd know that CSA is a Czech airline
Originally posted by Dago
I dont pretend to be an industry expert, but I do have a bit of an inside view.
dago
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If airports want business they need to attract and keep Ryanair and other low fares airlines. It's as simple as that. Airports are another example of cosy little operations. They now need to attract airlines.
It's not the airports that want the business, it's the local regions.
It wasn't Charleroi airport that was subsidising Ryanair, it was the regional government that owned Charleroi, that believed bringing more tourists and businessmen to the area would be beneficial.
It's not just Charleroi either, I believe a similar deal with Pau in France is currently being investigated, and half a dozen more are under suspicion.
It wasn't just discounts Ryanair was getting from Charleroi. They were paid large cash sums for each new route they opened, cash for every passenger they landed, subsidised crew training, etc.
Whilst it's obviously not responsible for all of Ryanair's profits, the subsidies do help lower the cost of the ticket substantially on the really cheap routes.
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Originally posted by Dago
Without anti-monopoly laws, in any industry you would risk one company controlling everything, something Microsoft has already come close to doing.
I think that threat become less and less with the globalisation of industry. But people always have a choice to buy the product or not. Take Microsoft, people can chose to use Linex, heck it's free.
If not for anti-monopoly laws, it would not correct and the public, wishing to fly would be paying through the nose. An airline can make just as much or more money flying less passengers at higher fares.
Why wouldn't it correct? After all, if there is a domestic monopoly in airlines, people can choose to use another mode of transporation. If anything I think the airline industry is showing how competition works.
Originally posted by Rolex
But are we deregulating growth-potential industries?
Does it matter if they are growth-potential or not? By regulating an industry the government tries to meddle with market forces and anytime a government does that it naturally introduces misallocations of resources. By trying to out guess supply and demand the government may in the short term help the special interest, but it hurts the overall economy.
Or are we trying to deregulate industries that might better be classified as 'infrastructure imperatives?'
Socialists will always come up with reasons, and terms for, why thier special interest is the one that just has to be paid for out of the publics pocket, whether it be airlines, space exploration or yes, even health care.
But in the end what they are saying is, "I believe in this, therefore a law should be passed forcing you to pay for it". In my books, that's immoral, and it sure as hell isn't freedom.
Look at the track record of the 3 major deregulation efforts in the U.S. and consider the result
Right, but was the problem caused by deregualtion or regulating it in the first place?!
Who exactly is the competition to your local Bell provider?
Why is Bell such a monolithe, could it be because it was granted a socialist monopoly by the government? As far as a "fair" price who is to decide that if not the market? If you fix the price to low then you will less investment and thus less growth in the infrastructure. That is unless you want to steal more money from the taxpayer, misalocate more resources and hurt the economy even further.
As far as who is competion for Bell, cell phones.
Trucking deregulation has not reduced the costs of moving goods across the country. It only transferred wealth from all the owner/operators to a few company executives while forcing drivers to a lower standard of living on top of driving longer hours.
It doesn't force the drivers to do anything. They choose to continue working in that field, you know that freedom thing again. If they feel like they aren't getting proper wages considering thier time and resources they invested into the trade then they can leave it. Younger people that once considered trucking don't get into it. I imagine because of regulation there was an over supply of labour in the field, as it was more profitable for the trucker. So truckers leave or don't enter the field, supply drops, demand goes up, wages go up.
And if the owners/operators are making greater profits then great! That means that these people that have proven thier success in making investments have more wealth to invest and increase the growth of the economy.
Look at airline deregulation. The industry is the fastest way for a multi-millionaire investor to become a millionaire. It's an industry littered with debt across the landscape. It's subject to too many wild swings that benefit no one.
One wonders how the newer airlines are being successful then. But once again, is the problems that the majors going through due to deregulation or the misalocation of thier resources and stagnation do to regulation in the first place?
Advanced societies and economies need communication and reliable transportation to move goods that sell and people that work to produce and sell products and services.
Since degrulation of the sectors mentioned are goods still flowing? Are people still being transported. Are people still communicating?
Market forces work most efficiently and benefit an economy more in the long run by being applied to growth industries and not to infrastructure. You don't consider your sewer and water to be growth industries. They are just 'there.' Thay are just basic infrastructure that employs some people and supports the system.
Why? The amount of housing in Ottawa is skyrocketing. But I can see your point, I would even deem somethings "essential services". But I have my special interests to. ;)
But I what I'm seeing is more and more sectors deemed "essential services" by special interest lobbies who all want a piece of my tax dollar.
Just maybe deregulation (in the way it was executed) didn't work.
I'm not sure myself... just a thought.
Maybe there could have been a less painless way to institute it. But anyway you cut there was going to be a degree of turmoil as resource got properly allocated where the demand actual was. And no society shouldn't ignore the individual that is actually going to suffer because of it.
beet1e, I think you have just shown why a socialist monoploy created by a government is a bad thing. How many market created monopolies can you think of? How many socialist government ones can you think of?
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Originally posted by Thrawn
beet1e, I think you have just shown why a socialist monoploy created by a government is a bad thing. How many market created monopolies can you think of? How many socialist government ones can you think of?
If you're talking about British Airways and their unfair competition against easyJet, it has nothing to do with socialist government or market created monopolies. EasyJet did not exist until 1995, but British Airways has been a private company since 1987. And it isn't a monopoly. It just wishes it was.
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Originally posted by beet1e
If you're talking about British Airways and their unfair competition against easyJet, it has nothing to do with socialist government or market created monopolies. EasyJet did not exist until 1995, but British Airways has been a private company since 1987. And it isn't a monopoly. It just wishes it was.
But British Airways did have a socialist monoploy which is the reason it's in a position where it can use it's power to try and break EasyJet.
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Originally posted by Thrawn
But British Airways did have a socialist monoploy which is the reason it's in a position where it can use it's power to try and break EasyJet.
No, and no. British Airways never was a "socialist" monopoly. We've always had other carriers as well, such as Britannia Airways and British Midland, both of which existed back in the 1960s. And the attempts by British Airways to break easyJet were unfair and illegal trading practices - as were their attempts to procure Virgin Atlantic business. It has nothing to do with "socialism" or "monopolies". As a matter of fact, both cases occurred in the 1990s - long after BA was privatised - during the Thatcher government. Whatever anyone thinks of that government, it most certainly was not socialist!
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Originally posted by cpxxx
Even the pilots have to pay for their own uniforms and medicals.
The company never paid for any of my uniforms and it wasn't until the last contract that you could even submit your medical as meeting part of your deductible; they didn't really pay for them.
So, this certainly isn't unique to Ryanair.
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Originally posted by Toad
The company never paid for any of my uniforms and it wasn't until the last contract that you could even submit your medical as meeting part of your deductible; they didn't really pay for them.
So, this certainly isn't unique to Ryanair.
That is what I was thinking.
dago
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Originally posted by beet1e
No, and no. British Airways never was a "socialist" monopoly. We've always had other carriers as well, such as Britannia Airways and British Midland, both of which existed back in the 1960s.
So, were those other carriers allowed to fly routes where BA was given a monoploy by the government?
And the attempts by British Airways to break easyJet were unfair and illegal trading practices - as were their attempts to procure Virgin Atlantic business.
That's what we are discussing, wither or not those actions should be illegal.
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Originally posted by Thrawn
So, were those other carriers allowed to fly routes where BA was given a monoploy by the government?
I am not aware of any routes being "given a monopoly" by the British government, whilst excluding other British carriers. Are you?
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Originally posted by beet1e
I am not aware of any routes being "given a monopoly" by the British government, whilst excluding other British carriers. Are you?
Of course. But once again you are confusing "being" with "been".
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Originally posted by Thrawn
Of course. But once again you are confusing "being" with "been".
No, this is the first time, and no - "being given a monopoly" does not necessarily relate to the present or even the recent past. Eg. "I am aware of germany being defeated in WW2" is a valid statement, even though it happened long ago.
But please do enlighten me. Give details of the routes, and name the other carriers that were barred from flying those routes so that they could be preserved for British Airways, and I'll find out what I can.
I'll be away today and tonight, so I'll get back to you tomorrow if I've heard from you by then.
TP
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I typed a long explanation, but erased it for a simpler presentation.
One of the leading contributors to US airliners loss of profitability is the legal blackmail of the airlines by the unions. Wages that don't match the market.
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It doesn't force the drivers to do anything. They choose to continue working in that field, you know that freedom thing again. If they feel like they aren't getting proper wages considering thier time and resources they invested into the trade then they can leave it. Younger people that once considered trucking don't get into it. I imagine because of regulation there was an over supply of labour in the field, as it was more profitable for the trucker. So truckers leave or don't enter the field, supply drops, demand goes up, wages go up.
That is exactly what is happening in trucking today. There is poised to be a HUGE driver shortage due to far fewer new drivers (pay/hours/image), new anti-terrorist regulations/background checks (cutting some existing drivers) and an aging base of existing drivers. The trucking industry seems to have realized that, but they are a bit on the backside of the wave. Not a bad field to get into in the near future.
Charon
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Here's an even simpler presentation.
When I joined DAL in 1980 we had about 8 Vice Presidents.
When I left DAL in 2003 we had about 40+ Vice Presidents.
We were not 5X larger in '03 than '80; we were about 2X larger.
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Originally posted by Toad
The company never paid for any of my uniforms and it wasn't until the last contract that you could even submit your medical as meeting part of your deductible; they didn't really pay for them.
So, this certainly isn't unique to Ryanair.
Well maybe Toad, but check out this site. Ryanair is non union but that may change because of this kind of thing being perpetrated by the management.
Watch out this is one possible future for airline pilots in low cost carriers. I can back up most of it as I have several friends flying for Ryanair.
http://www.ryan-be-fair.org/news/halfmilhits.htm
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From your source:
From flight crew:
"pilots working in the company be it 1 month or 15 years now have to pay all expenses whilst being converted from the 200 on to the 800. They have to pay their own transport (including airfares - as they are off duty), food and accommodation for the duration of their conversion training 4-6 weeks and during line training. And also sign a 2 year bond.
I never had to pay for any of my training once I was hired. I bought some training (Citation ATP) prior to getting hired.
Paying for training is pretty bad, I agree. However, everytime you see some dolt wearing a "Will Fly For Food" T-shirt you can understand how they get away from it.
Also bear in mind that they will not be paid sector pay whilst training either - this will bring the cost directly to the pilot of over 4000.
I have no idea what "sector pay" is but it sounds like they're getting a double hit on pay in this deal.
What other company would send an employee away for training and expect them to pay for their own transport, food and accommodation on top of all the other annual expenses now incurred.
Just about every flying operation that thinks they can get away with it. Lots of the commuter lines do it here.
They have reached a new low in employee relations"
It's been some time since employees were viewed as assets. They are now viewed as liabilities. This leads directly to "new lows" in employee relations.
"Contracts within Ryanair arnt worth the paper they are printed on. The company changes the terms as they see fit and if you dont like it you can leave. Its a disgrace. The ONLY thing that drives Ryanair is its persuit of the almighty dollar. A business should care about its employies Ryanair doesnt at all. All they care about is that they are cheap. We (Flight Deck) have have veiled threats as to what will hapen if we
In this, Ryanair is EXACTLY like every other airline right now. It's why the Unions exist. The only thing worse than a Union is ..... no Union.
Any contract is only as good as the Union's "Contract Administration" committee. The company will always try to cheat; you have to be willing to take them to Grievance and Arbitration on every single violation or before you know it... you have no contract.
So, again, I see little difference in Ryanair and all the rest at present.
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Hey beet1e, BA was given a monopoly over routes by your government.
DO...YOU...UNDERSTAND...THIS?
DO...YOU...WANT...TO...ARGUE. ..THE...POINT...?
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Originally posted by Thrawn
Hey beet1e, BA was given a monopoly over routes by your government.
DO...YOU...UNDERSTAND...THIS?
DO...YOU...WANT...TO...ARGUE. ..THE...POINT...?
Let's go over this once more. :rolleyes:
You seized upon the example of British Airways operating the Go airline at below cost as a means of driving away competition from easyJet as the result of a "socialist monopoly". As I have already pointed out, this is bollocks - on three counts: [list=1]- British Airways was privatised in 1987, and had therefore been a private company for about 8 years before easyJet started up in 1995;
- The unfair practices adopted by BA were not driven by a "socialist monopoly". They started an airline in direct competition with easyJet, which they operated at below cost, and lost £22m in the first year.
- The government in power when British Airways was privatised in 1987 was the Thatcher administration, which was anything but socialist.
Now, I am saying that I don't know of any routes being denied to any other British airline. In the case of British Midland, their home base was then and is now East Midlands, and they operated flights to destinations like Jersey and the Isle of Man. These routes were probably of no interest to BA anyway. BA was formed out of BOAC and BEA in 1976. One of the most popular routes for holidaymakers heading out to the Costa Brava in Spain in those days was Gatwick-Barcelona. And I can tell you now that British Airways did not have a monopoly on this route. As a matter of fact I flew from Gatwick to Barcelona myself in 1976 on another airline called DanAir London. So my question to you is this: Given that this key route was NOT restricted to British Airways and NOT barred to other British carriers, then please do tell me which routes were.
One thing you might want to consider is that a holiday tour company might also own the airline. For example, Thomson Holidays owns Britannia Airways, so if you see a Britannia aircraft (757/767) over the skies of Europe, its passengers are either off on a Thomson's holiday or returning home from one. No restrictions, because as far as I am aware, no British government has ever tried to get into the holiday business. :lol
RyainAir? I'll fly RyanAir and have done to places like Genoa, Dublin and La Rochelle. But I'm not that keen on RyanAir. The only consideration for flying them is price. A lot of their aircraft look old, worn and tatty, and they try to make up mileage by charging exorbitant amounts for refreshments. I think the cost of a basic sandwich was around £4.
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Beetle, you ever fly Aerlingus?
(http://airlines.afriqonline.com/images/px5112.jpg)
Back when they flew Lockheed Constellations, how do you think they referred to them? maybe connie-li... never mind.
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Originally posted by Holden McGroin
Beetle, you ever fly Aerlingus?
Back when they flew Lockheed Constellations, how do you think they referred to them? maybe connie-li... never mind.
:lol
No, I've only been to Ireland once ever - on RyanAir to Dublin.
The other joke I heard (one of a series of Smirnoff vodka jokes) was "I used to think Aer Lingus was an Irish airline, until I discovered Smirnoff!".