Experts: Too Many Carriers in Air Industry

[UpInArms]

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/20/AR2005052001042.html

McLEAN, Va. -- Bankrupt US Airways may have saved itself by agreeing to merge with America West Airlines, but it does little to address what many in the industry believe is a fundamental problem: too many carriers offering too many flights.

When US Airways Group Inc. made its second trip into bankruptcy in September, some competitors hoped and many experts believed the airline would never emerge, allowing competitors to pick the bones from the carcass of the nation's seventh largest airline.

Southwest Airlines Inc., for instance, made no secret of its desire for some of US Airways' gates at its Philadelphia hub, where the two airlines compete directly. Other airlines eyed US Airways' slots at airports in New York, Washington and Boston and some of its profitable Caribbean routes, but nobody wanted to acquire the dysfunctional airline as a whole.

Now, even though many in the industry believe the collapse of a carrier like US Airways would be the best remedy for excess capacity, the planned merger with America West calls for just a slight trim of the US Airways fleet.

<snip>

"If I'm the CEO of Delta ... I would have loved to see the elimination of a carrier like US Airways," said Sabino, an industry expert.

...more...

:wow: Look at what the free market competition does! Too many carriers! Isn't that counter to the spin? More competition is good for the economy? Better for the consumer? Win-Win? No Regulation means more Competition?

I'm confused :crazy:

[AllegroRondo]

1. We havent had free market competition

we've had endless bailouts by taxpayers to keep badly performing companies alive.

[UpInArms]

3. thanks AllegroRondo

what with the taxpayers pouring all those billions into the pockets of those CEOs, I completely forgot that we "bailed" them out from their refusal to have proper security methods in place prior to 9/11 as it would have bankrupted them to spend any money on reinforced cockpit doors and better screening personnel.

[Daphne08]

5. At least Lee Iacocca and Chrysler paid the government back!

Have any of the others?

[Lydia Leftcoast]

2. Too many carriers?

There were more carriers when the airlines were regulated: Pan Am, Braniff, Eastern, TWA, Southern, Western, Piedmont, Allegheny, and North Central.

They didn't start disappearing and merging until DEregulation kicked in. Even one of the supposed successes of deregulation, People Express, lasted only a few years.

[UpInArms]

4. didn't Continental go the way of the dodo too? ..... eom

[Ilsa]

6. Continental is still alive...flew them last month...I don't know how many

times they've been bailed out.

[The Velveteen Ocelot]

7. They've been in and out of bankruptcy twice.

[The Velveteen Ocelot]

8. The Airline Deregulation Act didn't work as advertised.

Congress intended to allow for the creation of new airlines, but as it happened those didn't survive. In fact, predators like Lorenzo took down airlines like Eastern, and then PanAm folded. And now the other "legacy" carriers are struggling, too. There are a lot of reasons for this, not the least of which is fuel costs, but airlines should be treated more like a public utility because that's really what transportation is. IMO they should bring back the CAB and regulate rates and tariffs. That way cities that needed it could get essential air service, and maybe there would be fewer airlines in the long run, but also, maybe under re-regulation they could at least make enough money to preserve their workers' wages and pensions.

[leesa]

9. Yeah....I can't wait til the elite wannabes who get washed out in these

purges figure it out...dumb f**ks!