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Angry lawmakers say it's an 'absolute joke' that there's competition in the airline industry

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One gripe repeatedly mentioned throughout the 5-hour hearing was consumers' lack of choice when selecting an airline. Quote :You are in a near monopoly position. And that's why so many of us are concerned (posted on web may 2nd) (www.businessinsider.com) 기타...

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WALLACE24
WALLACE24 10
And who sanctioned all the mergers that reduced competition?
rmchambers
rmchambers 3
EXACTLY - they created this mess.
n9341c
n9341c 0
Reduced competition? Seriously? Go to Orbitz. Select NYC to SAN for any Sunday with a return the following Friday. I counted 82 options on 8 airlines. Ummmm, that's not competition on your planet?
joelwiley
joel wiley 15
Lawmakers calling anything 'absolute joke' sounds like the old 'pot calling the kettle black' motif.
scott8733
Yepper, Joel. Many times over I've said whenever these blockheads talk, I have 20 trillion reasons to tune them out.
scott8733
Just the latest in a long line of politicians bringing in someone to beat on. No different than when the auto execs were brought in during the last recession and hollered at.

Who knows? Congress may try to recall Michael Corleone and ask what knowledge he has of this.
zcolescott
I watched the hearing. What's an absolute joke is the understanding that lawmakers have of the airline industry that they want to regulate. Of course there are airports only serviced by one airline. No one is prohibiting other airlines from entering those markets. They choose not to because there is no profit in it for them. Fools.
RRKen
Uneducated is the word. This quote raised my interest:"It’s an absolute joke that there’s competition in the airline industry," Duncan Hunter, R-Ca., said during the hearing.

Airlines do have monopolies over certain routes. As Hunter noted, it's impossible to fly directly from San Diego to New York without booking United.

Yet after looking, I see that you can get to JFK from SAN on American, Delta, as well as JetBlue. United flied to Newark, the same as Alaska.

I am an uneducated retired railroad worker, and it took me 3 minutes to see the statement was garbage.
MikeMohle
And SWA flys from EWR to SAN too ,and vice versa. I have done it many times. And, the SWA folks also see to like their jobs......
TorstenHoff
Even they know that their statements make no sense. But it makes for great rhetoric and blustery grandstanding that they can point back to the next time they are up for re-election.
devsfan
There is this thing about entitlement as well. For some, they will not travel a certain carrier or route if they cannot find a direct flight.
gerardogodoy
And people keep re-electing them...
joelwiley
The only need 50% + 1 of the people who bother to vote. To set the bar much lower, you need to dig a trench.
joelwiley
And another minute to find United flies into into KEWR which, being Newark NJ, is technically not New York.
Moviela
But Joel, you are minutes from Midtown through a tunnel from New Jersey. Any NY airport is more than an hour away.

The Statue of Liberty is technically in NJ too, but no one cares.
dbkoob
dbkoob 1
SOL is in New york City the land was deeded to the city of new york. If you meant Ellis Island then your correct half is in NY half in NJ then your correct.
akayemm
I wonder how New Yorkers tolerate it !
dbkoob
dbkoob 0
tolerate what
akayemm
Symbol of NY being in another state .... foreigners associate the SoL with USA as well as NYC .... got it ?
dbkoob
dbkoob 0
SOL is in New york City the land was deeded to the city of new york.
akayemm
Shouldn't U B picking it with dear friend Ric Wernicke who wrote above ... The Statue of Liberty is technically in NJ too, but no one cares. .....
I'm a foreigner, Indian, and need not know much about USA .
So why argue with me ?
dbkoob
dbkoob 0
I'm not arguing i am fact checking you SOL is completely in New York. If you meant Ellis Island then your correct half is in NY half in NJ then your correct. My second hobby is cartography so i know this stuff
akayemm
As a foreigner it matters little if it is in NYC or Moscow .
Set your priorities right.
Address your worries to dear friend Ric Wernicke . Go and educate him if necessary.
Why me at all ?
SoL .... I care a damn !
dbkoob
dbkoob 1
Okay i will as just the way you said it sounded like an insult to new yorkers which i am one
devsfan
Oy vey....Umm, look at any carrier website. Or one of the travel sites. Airports in the NY Metro are are referred to as "New York"...When one clicks on that destination, they are directed to the appropriate airport..Jeez.....Pick any other nits lately?
dbkoob
dbkoob 1
Yeah and PBI is referred to as Miami yet it is 2 hours away. So what's you point
royhunte92
Just shows how the "lawmakers" make fools of themselves regularly.
gerardogodoy
Lawless, lawmakers you mean.
devsfan
The assigning of gate space at airports DRIPS with political implications. Who are you kidding?
Do you actaully believe that for example, Southwest is going to be able to approach the Port Authority of NY/NJ and say "scuse me....We want gates. We're going to cut into United's business by undercutting their prices on similar routes?....HA! United's people will look at the Port Authority people, wink, nod and the gates are denied to SWA....
BTW, this House member's statements regarding flights from San Diego to one of the three NYC airports is a lot of hooey....One can find flights on other carriers.
scott8733
Valid point. SWA for years tried getting into ATL. DAL, through local politicians, made sure that didn't happen. Result was SWA bought AirTran to obtain their gates.
PlainSpeaking
Both Hunter and Shuster are Republicans, who one would expect understand the basic concept of supply and demand in the market. Do they actually believe philosophically an airline should provide a money-losing service that is not supported by passenger revenues? if they do, it is time for them to retire and start their own airline and see how that works.
btweston
btweston 10
News Flash: The Republican Party is no more savvy about economics than any large group of people. Look what happens when they get power: They spend a lot of money (on different things, but oh, boy do they spend it) while cutting revenue streams. Not exactly business genius.
MikeMohle
I would expect that kind of talk from Sanders and Maxine Waters, but these guys????????????
Moviela
Sanders is interesting. While he promotes taking everything and dividing it up with everyone, ask him how many houses he owns.

Now Rep. Waters has been in LA politics for so long with a single tune on her lips that if you look up self-righteous indignation in the dictionary, there is her picture!
WALLACE24
I seriously doubt Waters scores 5thgrade level. Sanders is sharply attuned to the money stream.
gerardogodoy
There are No republicans or democrats..its just "Sharks".
ArthurNetteler
They are ONLY going to discuss and comment on, what they have been assigned by Soros and Buffett.
ArthurNetteler
BOY... you got that RIGHT... I have booked 9 Flights since January... And the Prices EVEN FOR INTERNATIONAL FLIGHTS was within 5% of each other. And in the Case of 5 DIFFERENT AIRLINES from Chicago, IL to Manila, PH. The price on 4 of them were IDENTICAL $1,255.67, the 5th was 1,276.21!
ArthurNetteler
It is the FAULT of the Very Politicians that are NOW BITCHING about the Condition of the Airline Industry. The PROBLEMS with the Airline Industry lay on the SHOULDERS of Government Bureaucrats and their ENDLESS NEED to Regulate/Tax and Policy the CRAP out of every Industry in the USA! Welcome to the 21st Century of the Regulation WORLD Nations!
joelwiley
Don't forget to report this on your 2017 1040. There is a new Government Insult Tax to offset the revenue shortage from the tax cuts for the .01%
[sarcasm font still broken]
paulgilpin1953
the only time lawmakers are angry is when they don't get their cut.
akayemm
Lawmakers, all over the world, know nothing about their basic job , the law making, so how can one blame them for their " ignorance " about airlines N perils faced by them.
My half cent ...
n9341c
n9341c 2
Wouldn't it be fun to see the politicians call in the "big education" moguls at (name your Big 10 University) to have them explain their yearly 20% tuition increased? Nahhhhh. Never happen.
joelwiley
And here I thought their basic job, from their perspective, is reelection. That one they know ALL about.
akayemm
well said my friend.
So in that light they should renamed as Re-electioneers !
QCIA
Shocking! Domestic airline service has been in decline EVERY year since 'Deregulation' in 1977. Prior to deregulation, over 500 communities had reliable air service to each of the other communities. Currently only some 300 communities have air service and that number is decreasing by 20-30 each year. Eventually, only some 50 communities will have 'cattlecar' service to the other 50 some communities and 200 communities will have limited 'cattlecar' service to a few 'hubs'. The 'Southwest Effect' has managed the bring domestic air service down to the level of being an 'Absolute Joke'.
devsfan
Prior to the feds deregulating the airline industry, carriers were blessed with protected routes for which there was zero competition. With non competitive regulated fares, labor costs were a large percentage of the bottom line.
Most middle class people could not afford to use air travel.
Deregulation was and is not the problem. The problem is the mergers and acquisitions. Carriers gobbling up each other in an attempt to keep from being gobbled up themselves.
The entire airline business model needs to be set on fire and rebuilt from the ground up. All these mega carriers need to be broken up. For crying out loud, look at the way this is done now. The main line carrier flies relatively few flights as compared to their affiliates. Look at the list of flights on short haul routes. The header always says "Operated by". So why not just put that carrier's livery on the aircraft, let them book the flights and train their own people the way they see fit.
QCIA
Preventing the 'mega mergers' would have accelerated the demise of the domestic airline system. The mergers were only a bandaid to allow the airlines to lose money slower. In general, 'airline service' is a 'high-cost' means to transport 'high-value'/'time-sensitive' people and things. Once air service became a mass-transit system to get vacationers to Florida and Las Vegas, the die was cast. Was air service to 500 communities too many? Probably. Is air service to 50 communities too few? Most likely. A reliable, comfortable, and safe domestic network of air service is only possible through regulation of the airlines as a 'public utility'. My opinion is based my 42 years as an aviation professional.
WALLACE24
Airlines are making great money. When they were losing money they were selling tickets below cost to drive others out of business. It worked. They bought up the last of the rivals. Now a virtual monopoly-government sanctioned.
mikeosmers
I'm sorry but you are mistaken. 2-3% return on investment is not great money and that's only in the last few years. The absolute dollar figures are impressive but what Haney says is true. Airlplanes are very expensive to operate, wheather it's a Cessna 172 or Boeing 787. The only way to make even a go of it is to cram seats, fill them for what people are willing to spend and hope you can make it through the fourth and first quarters without losing too much. I may be mistaken but over the course of tpairline existance I don't believe the industry in the aggregate has been profitable. That's why the running joke is "How do you make a small fortune in the airline industry?.... Start with a large one!"
WALLACE24
I know first hand about airplanes being expensive. But it is they who choose to sell tickets too cheaply then. SWA seems to do ok even with reasonable fares. Perhaps the others need to control expenses better. Don't know. But they have nobody to blame for low or no profit but themselves. Demand is there. Look at how they got the public to fork over billions in baggage and change fees. Either cut expenses or raise prices if profit is low. You can only make the seats so small. Lol.
mikeosmers
Well I don't think so. Seems like when I hear airlines are raising their fares it's reported as price gouging. They are reducing the seat pitch to squeeze more seats onto the plane... they are charging for bags, for soda, for food, extra leg room... The list goes on. These charges don't happen because airline executives want to gouge their customers, they happen because the elasticity of demand is so tight that it makes sense to differentiate the product such that customers can decide what they want to pay for in addition to the basic fare to get from here to there, and for the company to be reasonably profitable as well.
Change fees are another interesting topic. When you don't show up for your hotel room does the hotel charge a nominal fee to stay the following day? Not in my experience. They'd be happy to sell you the room at full price the next day though after you've forfeited tonight's fee though. This rebooking privilege is one of the things that can drive the problem of overbooking.Yet another interesting topic! ;-)
These issues really all go back to the idea of deregulation from the '80's. Before that fares were based strictly on a mileage based formula. After, market conditions prevail. Every economist alive (obviously hyperbole but I hope you get my good natured meaning) was saying there'll be a massive fallout with only 4 or 5 national airlines remaining. It's economics and math, not an opinion but cold fact. And here we are, just as they said.
Airlines ( and passenger railroads, subways, etc. for that matter) are really in economic terms "public utilities", we are trying to operate them in a "free" marketplace with enormous regulatory burdens. As long as such is the case, we will have these devisive issues I'm afraid.
QCIA
Exactly!!!!!!! Actually, many years later, the primary architect of 'Airline Deregulation' admitted to not considering the 'Southwest Effect' and that deregulation turned out to not be in the best interest of domestic air service.
QCIA
That misconception is the rub. Yes, Southwesr has been very successful in what they do. However, Southwest is not a network airline. They are a scheduled point-to-point charter service, with a minimal hub system. They have a much lower cost structure because they do not have the infrastructure of a full service network airline.
WALLACE24
No matter what you call SWA they are an airline and successful.
And I understand deregulation as I am from the trucking industry. My only point is that if an airline doesn't turn a profit it is doing something wrong. Same as the truck world. People will pay. And yes, I think the government should limit it's role. You can't have deregulation if they continue to regulate every aspect of the industry. Duh.
QCIA
OK, how many times have you connected from SWA to another airline? How many times has SWA transferred you to another airline when their flight is cancelled? When SWA was forced to implement a seat reservation system, it was a major hit to their profit structure. Basically, SWA does not make a profit by what they do, but rather what they do not do.
WALLACE24
Matters not to me how they do it really. Actually I don't really care if any of them make a profit or just excuses. I don't own their stocks and I dodge (and dread) using their services equally.
QCIA
I hear you. However,access to reliable air service is essential to the economic well being of many more communities than the less than 200 that fit into the SWA profit model. With the current trend, any community with a population base of less than 300,000 is 'at Risk' for air service.
WALLACE24
If there is enough demand from people willing to pay I'm sure they will be served.
QCIA
I wonder how that philosophy would work for providing gas & Electric service to small communities. After WWII, Congress determined it was important to provide commercial air service to over 500 communities. The long haul profitable routes subsidized the short haul unprofitable routes. I think 500 was too many. we have many small commercial service airports within 50 miles of another airport. I would target a number more like 300 communities that should have commercial air service. under the current 'free market' system, domestic air service will continue to deteriorate until only a small number of high volume long haul city-pair routes will remain. Due a little research on 'Essential Air Service'. EAS was programmed to last for ten years after deregulation to provide time for small communities to plan for life without commercial air service. Now, 40 years after deregulation, the Federal government is spending over $260 Million per year to subsidize commercial air service to 160 communities. Hmmmmmm..... it appears Congress still thinks access to commercial air service is important to small communities. However, they do not have will to re-regulate and give us back the reliable and safe air transportation system we enjoyed prior to deregulation. I have been a student of this topic for 42 years. The topic of my college senior thesis in 1975 was on the value of regulation in providing a domestic airline system.
WALLACE24
I have a different view of the government running anything. 20 trill in debt for no reason is enough proof but we digress. Have a good weekend.
QCIA
I am with you on that! I would NEVER want to see a Federally run Airline. However, if one wants to have a reliable domestic airline network to 300 communities, regulation of the airlines as a public utility is the only option. And yes, the $20T is number one on my hit parade. You have a good weekend also.
mikeosmers
Now that's interesting! What was your conclusion about deregulation?
QCIA
My conclusion in 1975 was that regulation was necessary if this country wanted to maintain an air service network that afforded 200+ communities with reliable access to each community in the network and the world. In my opinion, airline service, on the whole, has degraded each year since deregulation and will continue to degrade for many years. It is a slow process.
WALLACE24
All for it.

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