Comment by gizmo686
11 hours ago
Why does any of this imply they should become a regulated utility? This seems like a textbook case of the free market pushing prices down to cost. Having alternative revenue streams pushed that minimal price down; but even without that, there is no reason to think the market would have done anything other than push prices to the lowest level possible in that environment as well.
Company makes too much money: "they're extracting monopolist rents! They need to be a regulated utility!"
Company makes too little money: "there's no money in this industry! They need to be a regulated utility!"
A more fair assessment would be: company runs a utility => they need to be a regulated utility!
The core part of air travel doesn’t really feel any different to a bus or metro or train. Off the tarmac then yes it absolutely feels like a Verizon store, as does some of the in-flight service, but there’s always been this weird feeling as a traveler that every carrier is basically the same thing but with different decals on it. Airline alliances are surely the ultimate example of this.
Have you ever flown spirit or any of the other ultra low cost carriers?
It very much is a different experience than flying a legacy domestic mainline carrier. I’m not alone amongst people i know who will happily fly the cheap seats on United/Delta/AA but won’t even look at a ticket from Spirit or Frontier even at a significant discount.
Compare it to a flag carrier like Singapore air and it is a shockingly different product.
All that’s an aside: we know what regulated airlines look like since we already tried it, much more expensive, with airlines competing not on price but on amenities.
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Streets, tracks and maybe tarmacs are public utilities, not the vehicles themselves.
I think the ultimate example is the fact that most routes are run by other companies than the branded carrier; capacity providers like Endeavour and SkyWest just borrow the name and livery of the major carrier they're operating for that day.
Meanwhile, first class today is not very much more than coach cost in the regulated era.
Try flying Delta. It isn’t the cheapest option, but you really do get better service.
If you want to feel special, do Aeromexico first class. The checked bags are waiting for you before you can even walk there on a domestic flight.
Spirit was cheap. And if you’re poor, you need cheap. If you aren’t, buy better service and don’t complain that it’s just Greyhound on a plane.
Am I the only one who really doesn't care what kind of service I get on a plane? I don't drink alcohol, so I don't care about that. I bring my own water bottle, so I'm good on that. The little bags of pretzels are nice, but if they stood at the front and launched them out of a t-shirt cannon, I'd be good with that.
As long as the required crew of flight attendants doesn't assault me, I've never really got off a plane thinking anything at all about the service. Just "where do I need to go next" or "I'm glad to be home".
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I like the EU model. The regulators set a "bare minimum" set of requirements. They have much better minimums that North America, and the fares are (still) cheaper per kilometer travelled. Also, I love the penalty system when flights are late.
"They have much better minimums that North America"
Can you enumerate these? As far as I'm aware Ryan Air is basically more "Spirit" than Spirit Airlines.
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Company, always: "We need government subsidy". Then hell yes to regulating what they do.
Spirit wasn't asking for a government subsidy to get saved from bakruptcy. They were asking to be allowed to get merged with JetBlue (which could've saved them from bankruptcy) and got denied by the government. Those two things aren't the same.
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Two wrongs don't make a right.
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Even with your uncharitable framing I agree with both quotes.
Can you educate the rest of us by explaining your reasoning?
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Company offers a service that is considered essential to function in society, and the overwhelming majority of people _must_ pay for as if it were a tax: "this seems like something generally useful to the public! They need to be a regulated utility!"
Changing it to a utility? Like Bart in sf? We should have Bart authority run the airline!
Company is valuable to us as a society in a fundamental way but is fucking us up in all sorts of unique ways: They might need to be a regulated utility.
Hopefully we can regulate them like California electricity and let one airline be active per airport and let them charge more than triple national rates.
Okay, but the process of underwriting an airline now somehow involves operating a successful credit card company. Which, you know, are not typically successful based upon operating excellence but upon rapaciousness of interest rates and merchant fees.
I'm not sure it's great to have important infrastructure operated this way. Other than regulation do you see a way out?
No airline operates a credit card company. They just put their name on a card and sell miles at a discount in bulk to credit card companies like Chase or Citi.
Bottom line: there never really is any free market. Because it doesn't work.
Because the amount anyone would actually pay is substantially below cost for most routes, but it's still a service that many people depend on (either directly or by the indirect economic impact of travel). It's a genuine force multiplier that is unaffordable without being subsidized; making it a utility would just shift the subsidy from credit card points programs to the government.
> Because the amount anyone would actually pay is substantially below cost for most routes
This is absolutely not true. If all the airlines were prohibited from making money with anything else (miles, credit cards) then airfares would rise across the board and there would still be plenty of demand. Not as much, but still plenty.
If airlines didn’t exist, people and goods would continue to move around the globe as they have done for thousands of years. There’s nothing magical about air travel (or any other transport mode) that makes it worthy of subsidy .
Listen, I'm the type of fella who'd gladly take the Amtrak from the East Bay to Portland, 18 hours each way, and I'm telling you even I'd do so only as a novelty. If I actually had somewhere to be, spending basically an entire day on a train would be a non-starter. And that's just on the same coast! If I had to take the Amtrak back east to see my family for the holidays I would probably just not go. My travel to the other coast (not to mention back to the country where I was born, an additional ocean's worth of distance) would only be worth the trip for like a life change or a death in the family.
I'm clearly not the only one who thinks so, judging by both Amtrak ridership statistics and the cost ineffective nature of my attempts to travel on it.
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There absolutely is something magical about air travel! We can get places much faster and much safer than we could before. I live in California, and another part of my family lives in Maryland. Are you saying that when I want to visit my family, instead of spending 5-6 hours in a metal tube in the air, I should spend a week (or more) either driving or taking various trains and buses?
If air travel didn't exist, I likely wouldn't move around the globe at all. Hell, I wouldn't move around the country even.
In the US, roads are mostly publicly-owned (the ultimate subsidy). Local bus and rail transit is usually also publicly-owned, though when it isn't, it's done through public-private partnership and/or subsidy. Regional and long-distance rail is subsidized. Why shouldn't air travel follow the pattern?
> people and goods would continue to move around the globe as they have done for thousands of years.
Indeed! We don't need air travel when we have perfectly good teams of oxen and covered wagons. We could even hunt and forage for our food along the way to save some money!
When something is that drastically different, it becomes different in kind. For example, if you have high network latency, you cannot jam (play live music) with friends remotely. If you have low latency, you can. Just because the difference is in a single value (I.e. net speed) doesn’t mean it doesn’t change the fundamental nature of what’s possible. Air travel makes the kind of business, shipping, and attendance possible that wouldn’t have been possible otherwise, because our collective lifetimes and risk tolerances are limited.
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You can't think of a single situation where an airline route is infinitely better and probably the only viable option ?
Btw you don't need to completely disregard other modes of transport to appreciate bus :)
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> people and goods would continue to move around the globe as they have done for thousands of years.
Would love to compare the economic throughput in raw dollars of the Oregon trail vs a single flight route.
Don't forget that the whole point of transportation under capitalism is enabling and stimulating economic activity. So sure, get rid of the airlines if you want to collapse a bunch of economic activity. Personally I'd hope for it to get replaced by high speed rail, but kinda hard to do that when economic activity is highly depressed.
Do you oppose the federal highway system (or rail systems) as well?
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Not advocating for subsidies, but there are things like patient transports to hospitals, where speed is a factor.
> There’s nothing magical about air travel (or any other transport mode)
There kind of is. I can make it from here in Bucharest to Paris in about 3 hours by plane, while by car I'll need about 3 days (i.e. two sleepovers till I get there). This is magical to me. To say nothing of places like the Arabian peninsula or, I don't know, the Indian subcontinent, I wouldn't even think of getting there by car as it is close to impossible (at least when it comes to a land-route to India), but taking a plane is a 6-hour flight from nearby Istanbul to Delhi.
> the amount anyone would actually pay is [...]
That's.... like a pretty shocking erasure of the idea of a demand curve given the forum here.
To be glib: no, that's not how it works. Increase the price and fewer people will fly, but the demand won't drop to zero. Decrease it and you make less money per ticket but the size of the market is bigger. At some point there is a local maximum, to which the market seeks.
But conditions change occasionally and the equivalent supply curve is moving rapidly because of the oil shock (i.e. it's more expensive to put planes in the air to service tickets you already sold). And things like the mess with Spirit are what happens when the market readjusts: the rest of the industry will (probably) backfill some of the lost capacity, but not all of it, and prices will (probably) rise a bit to a new equilibrium.
When a necessary service is pushed towards being unprofitable / breakeven due to "free market pressures", it probably should have some kind of backstop to ensure the service doesn't completely fold - because it is necessary. I think the suggestion to treat it like a utility was trying to emphasize this.
I'd also feel similar I'd my primary water, electricity, or internet provider was on the brink of failing due to "free market pressures".
Consumer air travel is not a necessary service, though.
How do you feel able high speed internet vs dial up?
If we let the free market do its work, there'd be no airlines. Jet fuel is heavily subsidized, the State injects massive amounts of money into airports and plane manufacturers, etc.
Honestly, with the looming climate crisis, we should probably just let them fail one by one and let alternatives (who can actually be profitable) take off.
In a free market, every working citizen could easily afford more expensive airline tickets, since they could keep their entire income with no taxes deducted.
> every working citizen could easily afford more expensive airline tickets
You mean every laboring slave.
No free market means corporations are allowed to engage in slavery, chattel or otherwise. Let's be honest about what a free market actually is. Factory towns, lifetime debt bondage.
That's a really cute idealized world, but it wouldn't work in practice. The structure of free-market capitalism all but precludes it.
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Airlines basically were a regulated utility until they were unregulated to the point where normal people can barely fit in a seat and there’s basically no amenities anymore. It used to be kind of nice to fly. That’s laughable now.
Now you have to option to pay as much as you used to (inflation adjusted) for a ticket, and get first class service with all the leg room you want.
On the other side of that coin, when airlines were heavily regulated, most people couldn't afford to fly at all.
The "regulation vs. no regulation" stance is the wrong way to look at it. Airlines are still regulated, of course. Maybe some of the regulations we do have are unnecessary, some of the regulations we got rid of we should really bring back, and perhaps there are others that we never had that we need.
We can't be sure whether cost came down because of removing regulation or improvements in technology. We can only guess.
What other things changed besides regulation?
My guess is MANY more people fly and are able to afford to fly vs before. There are probably many others things that changed.
It's also very nice to fly.... in first class.