fly18725

Of course you can think what you want, but it's not always a best practice to say whatever you think. I usually find it is a good idea to avoid criticizing those that control my paycheck, particularly when I don't have a factual basis to do so.

The challenge with the premise of illegality is that fewer participants does not mean less competition, there's not less capacity, fares are not higher, and airlines are finally generating sustained profits, albeit relatively minimal compared to their industrial peers.

EWR764

I saw an interesting snippet this morning:

http://m.huffpost.com/us/entry/55ae4...0a9b9485275bb?

I know UAL has been working with Priestmangoode as of late on its new shorthaul economy seat fabrics and design. Priestmangoode is the real deal, and does not come cheap. I am confident the new product with be good and am heartened by an indication that the company is finally willing to get away from the generic, off-the-shelf style of pre-merger Continental.

Silver Fox

The good Smisek giveth, and the good Smisek taketh away, amen.

ExtonUS

I would agree that there is no evidence of illegality public at this time so statements to that effect are a bit overboard. Reduced capacity and/or increased fares after consolidation are not in and of themselves evidence of collusion or illegal behavior. What can't be argued is that capacity has gone down and fares have gone up since the consolidations.

What I don't see is what remedy there would be to illegal behavior. Seriously if the airlines have been colluding and this is the best profit margin they can achieve then really there is no sustainable business model for an airline!

I have to imagine that the end result of the investigation will be an 'ooops it was obviously stupid from a pro-consumer standpoint to let all these airlines consolidate, but they haven't acted illegaly'

luckypierre

That's probably an accurate speculation about the ultimate fallout from the inquiry. Seems to me that much of United's anti customer behavior is rooted in a fundamental assumption of oligopolistic/monopolistic markets-the consumer doesn't have a choice.

Since the past year has seen the first major oil price collapse since the full consolidation of the American airline industry, it would be interesting to see if fares are "stickier" at higher levels than previous oil declines.

bocastephen

When the airlines meet and discuss capacity containment and tip each other off to fare increases, that is price collusion and is illegal. There are discussions in the news that show where certain airline execs met at one or more conferences to discuss reducing capacity and in some cases modifying capacity to reallocate market share efficiently - that is illegal.

The airline business model is not sustainable and never has been. The industry is an ongoing sine wave. Today's "record profits" will be vanquished by tomorrow's economic slowdown and further cuts in business travel, then when a new recovery occurs, the cycle reverses again. Airlines never make money in the long run...they make money to squirrel away for the lean times. If they don't earn enough, then it's off to bankruptcy to clear the deck and start over.

If proof of collusion is found (which I don't doubt it will be), at the very least there will be stiff fines, but I fear that won't change anything. We need criminal charges and either the threat of breaking up the mergers, or allowing more foreign competition and/or ownership. The Big3's worst nightmare would be US carrier funded and run by one of the gulf airlines.

BearX220

This. I think the whole post-merger strategy was predicated on exploiting reduced competition / consumer choice, coupled with a business assumption that no other major domestic airline would be any better.

The first has proven of limited benefit to UA. It's how they're making any money at all. The second assumption has not held up. Its failure why they're earning so much less money than they should be, and it's why UA's self-inflicted wounds re: reliability, labor, etc. still hurt badly despite the reduced number of players left.

I have long said I think the Smisek approach is actually more suited to running a city transit system than an airline. If you wanted to argue the case against collusion, you could say that if it were on, DL wouldn't be so much better.

bseller

PRECISELY.

In fact, it's the opinion of many here that FLIBS actually thinks he's doing just that.

Dave

CO_Nonrev_elite

At the moment, United cannot even get employees to be nice to First Class passengers, so no matter how many perks or products are added or removed, nothing is going to improve until that improves.

The polls and complaints both external and internal show otherwise.

That said, the F seat going away is just a sign of the times. Delta and American also removed them and they run a better operation and product than United.

Lastly don't be so sure that just because some of the international carriers still have F that they are all happy with it.

Look for a mileage ticket in ANA F on more or less any route they fly it to/from the USA and it is more or less ALWAYS available for saver award pricing.

Their product is fantastic, and if it is always avail for saver, then that's because it is not an easy product to sell.

kevanyalowitz

Really? My travel patterns align with just about every one of the GS that I know. Make United work internationally because of GF upgrades and the benefits GS provides for domestic travel.

I think what your saying is that UA is only interested in corporate contract premium travelers that have no choices and live in cities with no competition.

fly18725

There is a single year when domestic capacity was higher - 2007. I would argue that fluctuations in capacity are more influenced by economic conditions and passenger demand, rather than some type of coordinated behavior. In the past, airlines added capacity to gain market share in the hope of driving a competitor out of business. Today, airlines add capacity when demand is sufficient to support profitable fare levels. While I may suffer in the short term as a consumer, it's difficult to argue - with a straight face - for a return to the irrational, anti-competitive behavior of the past.

There are no reports of certain airline executives meeting and I think you're confusing speaking at a conference with collusion.

You're advocating that airlines should run unsustainable businesses for the benefit of consumers?

tuolumne

I think it'll be difficult to get it that wrong. AMR's NGBC was the result of bad timing.

Putting F on 20 777-300ER widebodys is not what I would call "giving up". That's almost the size of UAL's entire 744 fleet.

EmailKid

ASAIK DL (or NW) never had a true FC int'l cabin, only Biz 1st equivalent like pmCO.

AA has made it plenty obvious that they will have plenty of birds without Int'l 1st, while it appears they will have it on routes that have demand.

fly18725

DL and NW both had F before the introduction of BE and WBC, respectively.

transportbiz

DL and NW and CO all had international First class. Three cabin service. CO was the first to dump it, and introduced the BF product in the early 90's. NW came soon after with World Business Class which was aligned with KLM, DL came a couple years later with BusinessElite, which just changed branding this year to DeltaONE, I think to establish that it had replaced all WBC and BE cabins with the new service with all-aisle access.