Airlines flying empty planes to keep flight slots during coronavirus outbreak • Hacker News Board

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#131

Post by Nextgrid » Sat, Mar 07, 2020, 9:23 PM UTC

closeparen wrote: post #124

emiliobumachar wrote: post #108

Ironic. I had heard tales of the old Soviet Union about trains running empty to fill distance quotas. It was presented as the ultimate proof of how messed up their system was.

This is just another instance of the classic Soviet problem. A scarce resource is allocated by a government bureaucracy instead of a market, and the bureaucracy's design is imperfect, so nonsensical incentives fall out of it sometimes. There's no irony. It's just kind of quirky for the West to manage flight/landing slots this way, instead of an auction (as the FCC does with spectrum).

To be fair, the auction model doesn't seem to work well when it comes to spectrum. What you end up with is a few big players delivering awful service while having enough money to outbid anyone, essentially preventing any competitor from ever breaking into the market to provide better service.

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#132

Post by derefr » Sat, Mar 07, 2020, 9:28 PM UTC

Nextgrid wrote: post #131

closeparen wrote: post #124

Earlier quoted context omitted.

This is just another instance of the classic Soviet problem. A scarce resource is allocated by a government bureaucracy instead of a market, and the bureaucracy's design is imperfect, so nonsensical incentives fall out of it sometimes. There's no irony. It's just kind of quirky for the West to manage flight/landing slots this way, instead of an auction (as the FCC does with spectrum).

To be fair, the auction model doesn't seem to work well when it comes to spectrum. What you end up with is a few big players delivering awful service while having enough money to outbid anyone, essentially preventing any competitor from ever breaking into the market to provide better service.

I would consider that an anti-trust problem, not an scarce-resource-allocation-system problem. The concept of an auction is predicated on having a liquid market—both that there are replacement goods available from other sellers, and that there are many buyers "at the top" with enough bidding power to compete fairly between themselves, such that they'll "pick their battles" by buying only what matters most to them.

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#133

Post by arbuge » Sat, Mar 07, 2020, 9:28 PM UTC

The other thing to note is that an oil price crash is going on. It had started before the outbreak, was accelerated because of it, and accelerated further by the OPEC+ talks failing yesterday.

Cheaper aviation fuel will incentivize airlines to keep their planes in the sky.

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#134

Post by Symbiote » Sat, Mar 07, 2020, 9:33 PM UTC

closeparen wrote: post #124

emiliobumachar wrote: post #108

Ironic. I had heard tales of the old Soviet Union about trains running empty to fill distance quotas. It was presented as the ultimate proof of how messed up their system was.

This is just another instance of the classic Soviet problem. A scarce resource is allocated by a government bureaucracy instead of a market, and the bureaucracy's design is imperfect, so nonsensical incentives fall out of it sometimes. There's no irony. It's just kind of quirky for the West to manage flight/landing slots this way, instead of an auction (as the FCC does with spectrum).

At least in Britain, there's an open market for the landing slots.

Slots at Heathrow can be sold for tens of millions of pounds.

https://simpleflying.com/flybe-heathrow-slots/

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#135

Post by onlyrealcuzzo » Sat, Mar 07, 2020, 9:35 PM UTC

cinquemb wrote: post #130

0x8BADF00D wrote: post #104

Earlier quoted context omitted.

Except there won’t be money available when they ask for it. When the dollar collapses after the Fed cuts rates, the interest rate will rise very high. The government will be forced to cut spending, and there will be no bailouts this time.

>When the dollar collapses after the Fed cuts rates, the interest rate will rise very high. As long as the dollar denominated debt outstanding continues to dwarf the amount of dollars in circulation (claims on future dollars far exceeds the amount of dollars that exist), I don't see the dollar collapsing. Interest rates can also rise due to credit risk. Fake interest rates set by FRBNY cant fix credit risk, they cant…

What corporations are engaging in bank-like activities without access to the mentioned facilities??

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#136

Post by closeparen » Sat, Mar 07, 2020, 9:43 PM UTC

Nextgrid wrote: post #131

closeparen wrote: post #124

Earlier quoted context omitted.

This is just another instance of the classic Soviet problem. A scarce resource is allocated by a government bureaucracy instead of a market, and the bureaucracy's design is imperfect, so nonsensical incentives fall out of it sometimes. There's no irony. It's just kind of quirky for the West to manage flight/landing slots this way, instead of an auction (as the FCC does with spectrum).

To be fair, the auction model doesn't seem to work well when it comes to spectrum. What you end up with is a few big players delivering awful service while having enough money to outbid anyone, essentially preventing any competitor from ever breaking into the market to provide better service.

The government can only give away slices of a fixed resource for so long. Eventually it runs out.

You literally can't start an airline from scratch. You have to first buy one that already has landing slots, then figure out how to dispose of the planes/staff/operations/debts that come with the package. Is that really better for competition than just having a market for slots?

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#137

Post by pengaru » Sat, Mar 07, 2020, 9:47 PM UTC

pbhjpbhj wrote: post #21

pengaru wrote: post #5

"asking for the rules to be suspended during the outbreak to prevent further environmental and economic damage" It's not like having those planes full of people results in less environmental damage.

Doesn't it depend on whether the people are then on additional trips, or transferred from other trips. If they're taking ghost planes instead of other modes of transport, then they may be reducing environmental damage?

Does that seem likely to you when the impetus for not flying is the coronavirus?

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#138

Post by Reedx » Sat, Mar 07, 2020, 9:48 PM UTC

emiliobumachar wrote: post #108

Ironic. I had heard tales of the old Soviet Union about trains running empty to fill distance quotas. It was presented as the ultimate proof of how messed up their system was.

This appears to be happening in China with electricity quotas. Running AC and machines in empty factories to make quota.

"Local companies and officials are fraudulently boosting electricity consumption and other metrics in order to meet tough new back-to-work targets"

https://asia.nikkei.com/Spotlight/Caixin/Lights-go-on-but-no...

"Video evidence. In #Wenzhou, factory manager told they must consume 3000 kWh electricity by midnight, as the authorities use electricity usage as a criterion of re-open rate. Even this factory has not re-opened for lack of supply and manpower due to #COVID2019, manager had to.."

https://twitter.com/jenniferatntd/status/1233793672497573894

"Argh. A Wenzhou-based factory owner tells how district officials are telling him his closed factory (he has no workers) must turn on the machines and consume electricity or he’ll get “a visit”. Higher ups are watching the electricity numbers."

https://twitter.com/You_Shu_China/status/1233535925185122305

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#139

Post by quickthrowman » Sat, Mar 07, 2020, 9:51 PM UTC

arbuge wrote: post #133

The other thing to note is that an oil price crash is going on. It had started before the outbreak, was accelerated because of it, and accelerated further by the OPEC+ talks failing yesterday. Cheaper aviation fuel will incentivize airlines to keep their planes in the sky.

Short USO, long JETS: the next overcrowded trade

Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak

#140

Post by Skunkleton » Sat, Mar 07, 2020, 9:53 PM UTC

emiliobumachar wrote: post #108

Ironic. I had heard tales of the old Soviet Union about trains running empty to fill distance quotas. It was presented as the ultimate proof of how messed up their system was.

This is similar, but different. We have an system that works in the normal case, that is struggling with an exceptional case. Could it be improved? Sure. Is it a sign that western civilization is doomed? No.