Airlines losing money or bankrupt

MagicMan08 · #1 08-20-2005, 07:35 PM

I don't really understand how these companies can lose so much money in such a short period of time. If tickets were cheaper more people would fly.

How can these companies be going bankrupt or losing money?

tylerdurden · #2 08-20-2005, 07:44 PM

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How can these companies be going bankrupt or losing money?

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Because they're poorly managed? That's partially unfair. Notice the "old" airlines are the ones in trouble - the ones that were founded in the era of regulation. They haven't adapted. Part of that is because their unions haven't allowed them to adapt. The newer airlines without regulation-era baggage are doing OK.

cardcounter0 · #3 08-20-2005, 07:47 PM

I think unions are a very minor part of it. And their inability to deal with unions goes back to the bad management ... Many unionized industries have had to adapt and change, and they managed to do it by working with the unions or overcoming it, not by going broke and crying about the "evil union".

mackthefork · #4 08-20-2005, 07:55 PM

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I think unions are a very minor part of it. And their inability to deal with unions goes back to the bad management ... Many unionized industries have had to adapt and change, and they managed to do it by working with the unions or overcoming it, not by going broke and crying about the "evil union".

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I dunno, maybe we should pay pilots minimum wages, and have them collect the tips 5 mins before landing, 'ladies and gentlemen please come forward to the tipping area I am afraid we are currently experiencing some tubulance and 3 of our engines have stalled, thank you for flying aeroflot'.

Mack

Cyrus · #5 08-20-2005, 07:55 PM

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The "old" airlines are the ones in trouble - the ones that were founded in the era of regulation. They haven't adapted. Part of that is because their unions haven't allowed them to adapt. The newer airlines without regulation-era baggage are doing OK.

[/ QUOTE ]

The new comnpanies are competing somewhat unfairly with the old ones in terms of maintenance and safety costs.

Do I have to elaborate?

ptmusic · #6 08-20-2005, 08:11 PM

[ QUOTE ]
[ QUOTE ]
The "old" airlines are the ones in trouble - the ones that were founded in the era of regulation. They haven't adapted. Part of that is because their unions haven't allowed them to adapt. The newer airlines without regulation-era baggage are doing OK.

[/ QUOTE ]

The new comnpanies are competing somewhat unfairly with the old ones in terms of maintenance and safety costs.

Do I have to elaborate?

[/ QUOTE ]

Yes, because although I agree with you much of the time, I'm not sure you nailed this one.

-ptmusic

Cyrus · #7 08-20-2005, 08:34 PM

OK.

Always within regulations, the cut-price airlines (which is what I was referring to by the term "new airlines" because the other "new" ones are just mergers) are shaving costs by getting around proper maintenance and safety precautions. They are "assisted" in this endeavor by cutting down on various supporting jobs and hiring some mechanic and pilot jocks/hot shots, who are then encouraged to engage in cowboy acts.

The Helios Airline tragedy last week was, it appears, the outcome of such practices.

The upshot (for the company) is that the plane leaves on time -- and flies cheaply.

Meantime, stodgy old foggies such as British Airways or Qantas will delay a plane for an hour making sure.

ptmusic · #8 08-20-2005, 08:53 PM

[ QUOTE ]
OK.

Always within regulations, the cut-price airlines (which is what I was referring to by the term "new airlines" because the other "new" ones are just mergers) are shaving costs by getting around proper maintenance and safety precautions. They are "assisted" in this endeavor by cutting down on various supporting jobs and hiring some mechanic and pilot jocks/hot shots, who are then encouraged to engage in cowboy acts.

The Helios Airline tragedy last week was, it appears, the outcome of such practices.

The upshot (for the company) is that the plane leaves on time -- and flies cheaply.

Meantime, stodgy old foggies such as British Airways or Qantas will delay a plane for an hour making sure.

[/ QUOTE ]

Let's at the quintessential cut-price airline: Southwest. I think it's "safe" to say (pun intended) that Southwest's success is due to far more than safety and maintenance cost-cutting.

They came up with a new strategy, which involved cost-cutting across the board (not just maintenance), but which also included different routes and airports. In effect, they created a new segment in the airline industry, and they were therefore "first mover" into that segment, an advantage in and of itself. Other airlines have tried to copy their success, but most have failed: Southwest has been able to sustain its competitive edge.

Also, to speak to your point about on time vs. delayed flights, that is another of Southwest's edges. They streamlined everything, including assigned seating, different "classes", and different meals, all adding to a speedy turnaround at the terminal.

The non-union factor is also not negligable to Southwest's bottom line.

I'm not saying the maintenance factor is negligable, but even with my fear of flying, I know that statistically, flying Southwest is pretty damn safe.

-ptmusic

vulturesrow · #9 08-22-2005, 01:51 PM

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Always within regulations, the cut-price airlines (which is what I was referring to by the term "new airlines" because the other "new" ones are just mergers) are shaving costs by getting around proper maintenance and safety precautions.

[/ QUOTE ]

Care to back up this vague assertion with some actual evidence or should we just shut up and believe because Cyrus says so?

fluff · #10 08-22-2005, 05:48 PM

[ QUOTE ]
OK.

Always within regulations, the cut-price airlines (which is what I was referring to by the term "new airlines" because the other "new" ones are just mergers) are shaving costs by getting around proper maintenance and safety precautions. They are "assisted" in this endeavor by cutting down on various supporting jobs and hiring some mechanic and pilot jocks/hot shots, who are then encouraged to engage in cowboy acts.

The Helios Airline tragedy last week was, it appears, the outcome of such practices.

The upshot (for the company) is that the plane leaves on time -- and flies cheaply.

Meantime, stodgy old foggies such as British Airways or Qantas will delay a plane for an hour making sure.

[/ QUOTE ]

Eh? Southwest is the safest US carrier with 0 fatalities since it started operation in 1974 (9.5 million flights!). No other major US carrier (nor British Airways, with about 2/3rds the flights of Southwest) can say the same.

http://www.airsafe.com/airline.htm