FlyerTalk Forums - View Single Post - The US/DL LGA slot swap [Master Thread]
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Old Feb 12, 2010, 5:00 am
  #93  
us2
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Join Date: May 2001
Location: Southern California/In the air
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Originally Posted by DoubleHaul
...The problem has been carriers' collective inability to consistently turn a profit using this model. There are several reasons for this. A major one goes back to the notion that each individual carrier acting in its own best interest can be damaging to the industry as a whole...
What you've argued is market failure akin to the tragedy of the commons, which raises the question of whether reregulation in some form is necessary to preserve a vital part of the nation's infrastructure. I don't have a firm view on reregulation, but, in getting back to the original topic of the slot swap, it does go to one of Kahn's fundamental rationales for deregulating the industry which was ease of entry and exit. LGA and DCA are slot-controlled, which turns the assumption of ease of entry on its head. As a practical matter, given ATC and terminal congestion, ease of entry at many airports without slots is in fact impossible in practical terms. At airports like PHL, the constraint on WN expansion is gates. At others, traffic volume is such that the practicality of establishing a new hub at a given airport is not realistic, even if the gates were available. In the sense of economic theory, concern over these barriers to entry -- and the consolidation of slots at major airports in the hands of one carrier -- is a credible argument for wanting some sort of divestiture in this deal. In the broader scheme of things, I question whether the assumptions that went into deregulation 32 years ago are even valid anymore. While I don't have a firm view pro or con, I'm at the point where I'm open to the argument, based on the perilous condition of the major network carriers. None of them are in good shape, and another 9/11-type event could send any or all of them over the edge. For such a vital part of the economy, I'm not sure that's a good place for us to be.
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