DrBeeper

I admit that there are alot of flights out of CVG that are Delta. I admit that the prices are higher. I admit that I avoid CVG since they are so expensive.

Now, who is being hurt? People who don't want to drive to Dayton or Columbus to get connecting flights. So, there is a premium for convenience for flying out of CVG. Why is this actionable, Mr. Former Trial Lawyer? Vote with your feet.

There is an excellent book entitled "Economic Analysis of Law" by Richard A. Posner, a former University of Chicago law school professor and federal judge. He attempts to explain that economic impacts of certain laws and rulings. I suggest that everyone try to understand the concepts in this book rather than jumping on the "I don't like it so I am going to sue you" bandwagon.

JS

Aha! Now you are on to something. However, unlike AA at DFW, I don't recall another carrier attempting to compete with DL's non-stop flights out of CVG.

How can a lawsuit over lack of competition go anywhere if no one is even trying to compete?

There is nothing stopping another carrier from adding service from CVG at lower prices. This lawsuit is completely baseless and belongs in the trash heap with all the other BAL lawsuits.

andymo99

Seems like you are forgetting the demand half of the supply/demand equation. Or is your "perfect market" not a capitalist one?

DrBeeper

Monopoly? You are implying that all flyers out of CVG are required to fly Delta. Hmmm. A simple check on www.orbitz.com reveals that between CVG and LAX, you can take American, USAir, Delta, Northwest, and Continental. The fares range from $341 to $493 for one-stop flights. A nonstop Delta flight is $539.

Now, you can fly from Dayton Ohio to LAX on the same airlines (plus ATA and AirTran). The range of prices (July 1 departure and July 8 return) is $235 to $395. Obviously, there is a discount relative to CVG (just as there is a discount for flying out of Midway in Chicago, Love Field in Dallas, etc). But is this a monopoly problem?

All I see is competition galore. If you don't like Delta, fly USAir. If you don't like CVG, fly out of Dayton or CMH. The range of prices for CMH to LAX is $275 to $443 (the highest price being Delta). So, if Delta is too high, pick Continental for $275.

But our trial lawyers will press on and present the case to a jury of people who don't understand basic economics. They will conclude that Delta is evil and award huge sums of $$$ to the plaintiffs. The trial lawyers will get rich(er). And some people will still pretend that Delta has a monopoly in CVG and should be punished hard! Even though it is clear that there are other choices and plenty of competition.

But this is a Constituitional Republic (Hillary keeps saying it is a Democracy) and our legal system is the best (or one of the best) in the world. So, we have to put up with bogus litigation as part of culture.

CVG's DL Hostage

Here's an example. Vanguard has come and gone at CVG twice. Each time they entered, DL matched and undercut its prices until they exited, then ramped them back up. That is a classic exercise of a monopolist's power.

CVG's DL Hostage

Judge Posner was my professor at Chicago. I am more than familiar with his work. Posner, too, would argue that DL at CVG is a monopoly (he would actually liken the positions of other carriers in their fortress hubs as shared monopolies).

I give DL all my business, unless they don't go where I need to, which is rare. Hey, I love the convenience of flying from my home airport. Do it all the time. I even pay the monopoly prices sometimes to avoid the hassle factor of driving 60-100 miles. I can leave my house at 8:15 for my 9:20 flight to PHX instead of leaving at 5:00 am to drive to LEX, SDF, DAY, or wherever.

The antitrust laws are designed to protect competition, not competitors. That's a critical distinction, because consumers are the beneficiaries.

I think the instant lawsuit is largely without merit. It is not premised on the specific issue of monopoly pricing, but rather on hidden-city ticketing (NW was the original target defendant).

CVG's DL Hostage

A perfect market is by definition a capitalist one.

CVG's DL Hostage

No one has to pretend DL has a monopoly at CVG. It does. The rest of them are niche carriers. This is neither a good nor bad thing, just a fact.

Is there competition? It depends how you measure it. If it's just "a way to fly from CVG to wherever without regard to schedule or equipment", then, yes, there's competition. I can fly from CVG to PHX on NW, AA, or UA and kill an extra hour or two in Detroit, Minneapolis, or Chicago. I might even get more than one outbound choice. I may well be on aircraft that makes the CRJs feel spacious.

Or, I can pick four DL nonstops that get me to my place in Arizona in four hours.

It's not really the same thing.

Now CMH, which you presumably use, is a good example of a competitive market. Lots of carriers, nobody has a huge market share. It's mostly local passengers. Good pricing -- because no one carrier has the ability to sustain high prices. That's a good thing. But the downside is you don't get the benefits that a true monopolist can bring, like more flight choices and destinations. So a monopoly, even DL's at CVG, can have both disadvantages and advantages.

CelticFlyer

I recall that Air Canada tried CVG-YYZ and Delta drove them out in much the same way.

CelticFlyer

That is pretty much the way I see it. The advantage is the extensive route network that the local market could never sustain on its own. The fact that CVG is DL's second largest hub means that it is well connected. The disadvantage is that since nobody else can get a decent foothold there, DL dictates the pricing. One day a low cost will enter the market and survive on their share of the O&D traffic and at that time the table will start to turn.

I don't see much wrong with the lawsuit. If people want to use the law to abuse Delta then it is a direct result of Delta using their dominant position in such markets to abuse the customers in the first place. The customers aren't broken but the airline pricing system has been for many years.

JS

What do you want the airlines to do? Fly hourly non-stops from everywhere to everywhere for $29 one way?

JS

Two wrongs make a right?

If the airline pricing system is broken, the market will fix it. No need to get Big Brother involved. That will screw up everything.

CelticFlyer

Nobody is even remotely suggesting that. Most people in the CVG market would prefer Delta to stop abusing their position at CVG. By that I mean that people would prefer to be able to get the same ballpark fares at CVG that they can get at SDF, DAY and CMH.

CelticFlyer

Government intervention may have its problems but the airline pricing model has been allowed to develop down a very unhealthy path. When an airline wants $1600 between B & C but only $300 between A & C via B and A & B are 60 miles apart you know something is just plain wrong. Yes the market is sorting this out - that is why low cost airlines are doing so well. If you still happen to be stuck near a fortress hub that process seems painfully slow and gives one time to wonder whether some consumer protection from government might not have provided a better solution some years back - and it may have encouraged more efficient airline operations too.

JS

How about this:

DL offers you a lower fare if you fly CVG-SDF-CVG-LAX rather than CVG-LAX non-stop. I predict people will still whine and complain and sue that they have to pay more to fly non-stop.

Regarding your second post, that consumer protection from government ==> efficient airline operations. Hmmm... I don't know about that.