I’ve been waiting for airlines to give up on scheduling altogether and move to JIT routing. Maintaining schedules seems fragile, and I think demand would increase dramatically if customers didn’t have to plan ahead. This will definitely happen when the industry gets disrupted by cheap autonomous and electric mini-planes, but it seems that schedules are so broken already that the biggest thing keeping up the facade are FAA rules (e.g. massively unnecessary runway intervals).
Airlines flying empty planes to keep flight slots during coronavirus outbreak
81–90 of 364 posts
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#82Earlier quoted context omitted.
Airlines (and other businesses with very high fixed costs) can be profitable if there’s enough consolidation in the industry. Otherwise they get into price war death spirals with no way out.
Railways are also often unprofitable, even when a monopoly (because of inflexible ticket pricing and high amortisation, depreciation, and maintenance costs).
Transportation is critical yet often unprofitable, which is why it's usually heavily regulated and subsidized.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#83Earlier quoted context omitted.
The op addressed this issue with their comment about selling 1-5 year leases.
That didn't address the issue at all. They would just buy the leases and keep the competition out that way; no difference.
That means one of two things; the slots aren’t worth that much or they were sold for less than they were worth. If they’re almost worthless, as not using them suggests their not being used is no great loss. If they are worthwhile then either they’ll be used, someone else will buy them or the owner is setting money on fire by not using a valuable asset, in much the same way as someone who uses a vacant lot in Manhattan as a planning lot instead of building a skyscraper on it.
If you want a slot to go to its most valuable use sell it to the entity that values it most, whether permanently or by auctioning it yearly.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#84Earlier quoted context omitted.
> Because on the flip side, airlines could keep canceling flights on less popular routes when they're not at full capacity (i.e. not/less profitable). This would lead to them getting fewer customers as they got a name for awful reliability, like Alaska Airlines have a reputation for being assholes from top to bottom, or United have a reputation for destroying musical instruments. If you want to more directly disincen…
Alaska Airlines have a reputation for being assholes from top to bottom, or United have a reputation for destroying musical instruments As a frequent flyer on both airlines, I'm not sure that either of those reputations exist, at least I've never heard them. I vaguely remember some incident with a broken guitar (?) But I couldn't tell you which airline.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#85Airlines almost never make profits, because their revenue and main cost are strongly pro-cyclical: In the booms, they fly full, but with high fuel prices. In the recessions, they fly empty, but fuel is cheap. Covid-19 has devastated travel, but also dropped the oil price - still no profits.
Airlines (and other businesses with very high fixed costs) can be profitable if there’s enough consolidation in the industry. Otherwise they get into price war death spirals with no way out.
I find it interesting your word choice suggests that the price war is undesirable compared to a destabilizing monopoly.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#86Earlier quoted context omitted.
Because on the flip side, airlines could keep canceling flights on less popular routes when they're not at full capacity (i.e. not/less profitable). That would inconvenience passengers. Under this regulation they could lose that route to a competitor that is more willing to service customers (or can operate at a lower cost). EDIT: I found the EU page outlining the regulation here: https://ec.europa.eu/transport/modes…
Mandating flights seems like a bad solution to carriers canceling flights unilaterally. Why not just force them to provide comparable alternate arrangements and/or pay the passengers financial compensation?
It's not about the passengers, it's about parking space for the planes.
You not taking off means someone else can't land.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#87Earlier quoted context omitted.
Airlines (and other businesses with very high fixed costs) can be profitable if there’s enough consolidation in the industry. Otherwise they get into price war death spirals with no way out.
I find it interesting your word choice suggests that the price war is undesirable compared to a destabilizing monopoly.
I mean, what do you expect happens after airlines die from a price war? It’s not lower prices.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#88Earlier quoted context omitted.
Railways are also often unprofitable, even when a monopoly (because of inflexible ticket pricing and high amortisation, depreciation, and maintenance costs).
Transportation is critical yet often unprofitable, which is why it's usually heavily regulated and subsidized.
Further, it acts as a multiplier. Which is why I believe rail travel should be nationalised—very few people take a train for the sake of being on a train, people take trains to work or to spend money somewhere else. It makes no economic sense to insert competition into a natural monopoly whose main purpose is to multiply people’s productivity. Everyone loses out.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#89Earlier quoted context omitted.
Why not create a competitive market for slots, rather than incentivising people to literally burn fuel?
Because (as is argued elsewhere in this thread), large airlines could buy up all slots and then not operate flights on them, starving their would-be competitors of opportunity to create a basis for themselves.
But they could just do the same with the current ruling - the only difference would be whether they spend their money on more expensive slots or on wasting fuel.
Re: Airlines flying empty planes to keep flight slots during coronavirus outbreak
#90Earlier quoted context omitted.
Fuel is being burned, creating more CO2, without any benefit to society.
So if I have a corporation I have to benefit society with it? Else what, the government must expropriate my corporation from me?
Yes, actually.
Used to be you couldn't even incorporate unless you could make the case that granting the writ of incorporation would have a tangible benefit to the community granting it at large.
It was not a right, but rather a privilege. While it is rarer to see a refusal nowadays, it is still a possibility, and the corporate death sentence is a thing; even if we haven't exercised it in a long while.