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US Probing Possible Airline Collusion That Kept Fares High

eklendi
 
A letter received Tuesday by major U.S. carriers demands copies of all communications the airlines had with each other, Wall Street analysts and major shareholders about their plans for passenger-carrying capacity, or "the undesirability of your company or any other airline increasing capacity." (www.nytimes.com) Daha Fazlası...

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Bernie20910
Bernie20910 6
And this comes as a revelation to anyone?
genethemarine
Gene spanos 3
AA, UAL and Delta favor limited access to foreign and US airports in that each has partners ( code-share alliances ) with foreign airlines.
www.capp-citizensagainstplanepollution.com
mayhemtrip
Maher Chebib 3
And they were attacking the Gulf States airlines? The big 3 seems to be like :"I love competition, as long as I don't have to follow the same rules "
flypilot12
flypilot12 5
Well this is what happens when you let a group regulate itself. After government deregulation of the airlines the service that they had to use to make themselves stand out when the way of the dodo. They stopped "serving" passengers and started to treat them like money making cattle trying to cram as many as they could onto a single aircraft so they could carry more with fewer aircraft, and now with all the tussles you see on aircraft is a direct result of the corporate greed that is running most airlines. If cable companies are now considered a vital infrastructure, so too should aviation, for with out it the global economy would grind to an instant halt, and no, ships would not be able to take up that slack.
preacher1
preacher1 4
I really don't see where the deal is. It doesn't take a rocket scientist to see that empty seats don't produce revenue. One of the first things Dick Anderson said after coming on board was that capacity would be reduced to the market in order to gain efficiency. He realized that would not be popular but said he wasn't hired to run a popularity contest. The others probably just followed suit.
margeauxk
Margeaux K 2
(Duplicate Squawk Submitted)

Feds Suspect Airlines Are Ripping Us Off

Because extra fees and delayed flights weren't enough reason to sour on airlines, the Justice Department has added one more: Federal investigators suspect that the airlines are colluding to rip off passengers.

http://www.newser.com/story/209181/feds-suspect-airlines-are-ripping-us-off.html
watkinssusan
mr young..are you forgetting that the federal government must approve (and has) the mergers between varying carriers? the federal government also regulates the taxes added to tickets,and also must approve any routes used,curently flown, or any exchange of landing rights at a certain airport by carriers involved..if you look at the price of a ticket,on the average there is a federal tax,a local tax,and airport tax, and a fuel surcharge which greatly increases the price of the basic ticket..the airlines have to add these fees because of local and state requirements and to cover landing fees and gates and counter space at airports..the airlines "lease" from cities..they do not own..until such time as airlines can buy all new aircraft and retire the old ones that require more maintenance,there will be fewer seats..there are cities and small towns that airlines are cutting back service to,mainly because the demand is not there for service..and thia applies to the airlines "small carrier" partners such as envoy and united express..of course the name of the game in any business is making money,and many people expect cream for the price of low fat milk from the airlines!
dee9bee
dee9bee 1
Not sure this is going to go anywhere. Anyone here old enough to remember a phone conversation between Bob Crandall (AA) and Howard Putnam (Braniff) in the early 80s? "Raise your ****** fares 20 percent. I'll raise mine the next morning." Putnam was recording the call :-)
SBActuaries
Ian Duncan 1
What nonsense. Fares are ridiculously low. I have been flying regularly between LA and JFK (2500 miles) for less than $200 one-way. Back in the late 80's/early 90s I regularly flew Chicago-Hartford for $800 round trip. I believe that the airlines have cumulatively run at a loss since they began in the 30s. So rational capacity and pricing is what we should all support, if we want to keep traveling.
watkinssusan
you are correct gene about the alliances..when you purchase a ticket to travel internationally to a destination not served by say, dl,aa, or ua, they do what is called "codesharing" with a foreign carrier,and you are advised of that upon purchasing the ticket..the problem with airlines such as emirtes,etcetera has to do not so much with competition in a foreign market,but with taxes,slots,landing fees, and the fact that these are not airlines owned by a private corporation,but with government ties..as far as "collusion' among the carriers,for years the airlines have had a policy of changing and charging according to what other carriers do,whether its a higher/lower fare,or a baggage fee,all within faa regulations and oversight,but not ownership..this is not a new concept..although consumers may whine and not like it,the fares and fees will not automatically drop with a government investigation..southwest has actually added seats by enlarging their route structure to international routes,although if those aircraft are needed to fly them,some domestic seats are taken away..i was in the airline business for around 30 yers,and I also kept up with it before that time..i do remember the "good old days" before deregulation,and the airlines and passengers did just fine,abd even then,fares were raised and lowered to keep up with one another,and people still flew on the route they needed to fly,no matter whether it was delts,united,the old continental,pan am,northwest,national,eastern braniff or texas international..
devsfan
ken young 1
The story mentions fares implying this is the only criteria that matters.
This leads me to believe the writer is leaving out the additional cost in the form of fees air carriers charge for things such as, a family wishing to sit together. Additional fees for "choice" seats ( any seat not in the center of the row is considered "choice"). Fees for baggage. A Fee for a pillow and a blanket on a long haul flight. Fees for the slightest change in itinerary. Even if the carrier cancels a flight.
Carriers have cut the number of flights to the most popular destinations they serve. Reduced supply equals increased demand. Higher demand equals higher prices.
Ok, so it's business. Businesses exist to make a profit. I get it. I even support it. But when the scales are tilted so far away from the consumer, it's a call to have an investigation.
devsfan
ken young 1
I can tell you why the fare on the ORD to BDL fare is $800 compared to EWR/JFL/LGA to LAX.....LAX has many carriers while BDL has one dominant carrier. And BDL is a low traffic volume airport.
CLT is an expensive airport ( CLT to LAZ is $500+ RT) as US now AA has nearly 90% of the gates and 90% of daily operations. In effect AA OWNS CLT....
When DAL was the dominant carier at CVG, that was one of the most expensive airports in the US.
RDU used to be a cheaper alternative to CLT. Not anymore. RDU now has just two main carriers. AA And SWA. Those carriers match fares where the destinations compete.
devsfan
ken young 1
I will preface my comments by stating this. I am a firm believer in capitalism and the profit motive.
As consumers we are all capitalists.....With that said, when two or more companies in the same industry with similar interests whether directly or indirectly match prices, and there exists no other alternative for the consumer, IMO that is collusion.
devsfan
ken young 0
That's LAX...Sorry typo...sausage fingers

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