Oil prices - future fares discussion
Oct 21, 2014, 11:02 pm
#16
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As someone who has been in the oil business for 3 decades and knows how oil prices are established, my only response to you is: "Hogwash".
If you'd like an education about how oil prices are established I'm happy to oblige. But, for the record, the big boys (oil companies and governments) neither set nor control prices.
If you'd like an education about how oil prices are established I'm happy to oblige. But, for the record, the big boys (oil companies and governments) neither set nor control prices.
Oct 22, 2014, 2:26 am
#17
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Possibly. But he used the word "cartel". There *is* an oil cartel. There is *not* an airline cartel. In fact, accusing the airlines of being part of a cartel is accusing them of commiting a serious felony (as least the US airlines).
So if he was in fact saying the airlines are part of a cartel, his statement gets a double "Hogwash".
So if he was in fact saying the airlines are part of a cartel, his statement gets a double "Hogwash".
Oct 22, 2014, 2:33 am
#18
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Call me a cynic......those who have a YQ will not adjust it down.......any revenue source one customers have accepted is an " opium pipe"... Very hard to dial down !
Look at BA, they renamed it and continues to let it beef up the bottom line.
Look at BA, they renamed it and continues to let it beef up the bottom line.
Oct 22, 2014, 3:48 am
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As someone who has been in the oil business for 3 decades and knows how oil prices are established, my only response to you is: "Hogwash".
If you'd like an education about how oil prices are established I'm happy to oblige. But, for the record, the big boys (oil companies and governments) neither set nor control prices.
If you'd like an education about how oil prices are established I'm happy to oblige. But, for the record, the big boys (oil companies and governments) neither set nor control prices.
I was talking about the airline business, not the oil business. "Reading is elementary", and yet the distinction was missed?
That oil producing countries have a cartel doesn't exclude the existence of other cartel practices existing in other industries.
By the way, not all cartels are illegal in the US. I'm not impressed that someone is or has been in the oil business for 3 decades. I've known current or previous oil ministers for some of the biggest OPEC producers for just as long, but that non-sequitur isn't meant to impress myself or anyone either.
This topic is focused on the airline industry, just not the oil industry.
Last edited by GUWonder; Oct 22, 2014 at 4:00 am
Oct 22, 2014, 5:00 am
#20
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Talk about another non-sequitur.
I was talking about the airline business, not the oil business. "Reading is elementary", and yet the distinction was missed?
That oil producing countries have a cartel doesn't exclude the existence of other cartel practices existing in other industries. By the way, not all cartels are illegal in the US.
I'm not impressed that someone is or has been in the oil business for 3 decades. I've known current or previous oil ministers for some of the biggest OPEC producers for just as long, but that non-sequitur isn't meant to impress myself or anyone either.
This topic is focused on the airline industry, just not the oil industry.
I was talking about the airline business, not the oil business. "Reading is elementary", and yet the distinction was missed?
That oil producing countries have a cartel doesn't exclude the existence of other cartel practices existing in other industries.
By the way, not all cartels are illegal in the US. I'm not impressed that someone is or has been in the oil business for 3 decades. I've known current or previous oil ministers for some of the biggest OPEC producers for just as long, but that non-sequitur isn't meant to impress myself or anyone either.
This topic is focused on the airline industry, just not the oil industry.
All *private* cartels are illegal in the US. Cartels involve price-fixing. They involve CEOs, etc. meeting together to carve up business territories, set prices, remove competition, force new players out.
If you have any evidence that the airline execs in the US are doing that, I'm sure that the DOJ would love to hear from you.
Or will you go for "triple hogwash"?
Oct 22, 2014, 5:09 am
#21
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It seems like the "double hogwash" didn't come from my post, but it is found in the above quoted post.
Oct 22, 2014, 5:15 am
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The first of the above two sentences is false. And the second of the above sentnces is not a necessary condition for a cartel to exist. If you doubt these, my suggestion is to actually take a few classes in law and economics, a rather well-studied area.
It seems like the "double hogwash" didn't come from my post, but it is found in the above quoted post.
It seems like the "double hogwash" didn't come from my post, but it is found in the above quoted post.
Let me help. Or let Google help you:
"A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members."
"(Economics) Also called: trust a collusive international association of independent enterprises formed to monopolize production and distribution of a product or service, control prices, etc"
"An organization created from a formal agreement between a group of producers of a good or service, to regulate supply in an effort to regulate or manipulate prices."
I could go on, but I kind of suspect you won't believe anything that causes you to reconsider your opinion.
Oct 22, 2014, 5:37 am
#23
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It's cute that some try to spin and constrict and the definition (and use) of a word already used here, yet -- whether or not that constriction/spin and focus on semantics is obfuscation -- it's but an to effort to deprive others of using the word appropriately under a definition that doesn't fit everyone's interests equally.
I'm allowed to appropriately use words as I deem fit for my interests and to do so without accepting your redefinition or spin on my words --it's called getting in the way of efforts to stuff words in my mouth.
I have no doubts that the author (of a post) ordinarily knows better than the reader (of the same post) which definition the author is relying upon (when communicating in the post). I find it cute when someone thinks they know my mind better than I do.
I get that you don't like my word choices, but playing semantics doesnt really change the following:
In an oligopolistic market with a government inclination more in favor of large corporate cartel players and against consumers, prices will tend to be stable or rise even if oil-related costs for the cartel players decline.
If anything, the oil price drops will lead to a more immediate increase in air travel costs as demand for air travel will increase as more consumers end up with more money for air travel as their costs for daily ground vehicle transport and heating needs drop.
Only de-cartelization and/or a material increase in de novo suppliers' capacity in the market would make the kind of substantive difference where a drop in suppliers' input costs would be followed by a higher chance of lower prices for consumers.
If anything, the oil price drops will lead to a more immediate increase in air travel costs as demand for air travel will increase as more consumers end up with more money for air travel as their costs for daily ground vehicle transport and heating needs drop.
Only de-cartelization and/or a material increase in de novo suppliers' capacity in the market would make the kind of substantive difference where a drop in suppliers' input costs would be followed by a higher chance of lower prices for consumers.
Last edited by GUWonder; Oct 22, 2014 at 5:44 am
Oct 22, 2014, 7:41 am
#24
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I'm sure the U.S. airlines' lawyers are smart enough to advise their executives on what constitutes illegal cartel activities.
Technically/legally, they (probably) aren't a cartel. But it seems pretty clear that the power of the oligopoly, plus the ability to signal to each other what their future strategy looks like, lets them behave like one. They've carved out turf, mostly aligned their business practices, made it clear that they are going to control supply, and largely set their prices in lockstep on many routes. The complicit DOJ has allowed competition to be reduced or eliminated in many places.
So I guess I'm not calling for a criminal investigation...I'm more disappointed that the DOJ allowed all of this consolidation to begin with.
Technically/legally, they (probably) aren't a cartel. But it seems pretty clear that the power of the oligopoly, plus the ability to signal to each other what their future strategy looks like, lets them behave like one. They've carved out turf, mostly aligned their business practices, made it clear that they are going to control supply, and largely set their prices in lockstep on many routes. The complicit DOJ has allowed competition to be reduced or eliminated in many places.
So I guess I'm not calling for a criminal investigation...I'm more disappointed that the DOJ allowed all of this consolidation to begin with.