The US/DL LGA slot swap [Master Thread]

 
Old Feb 9, 10, 10:31 pm
  #31  
 
Join Date: Apr 2005
Location: Washington, DC (DCA)
Programs: UA, AA, AS, SPG.
Posts: 3,463
Originally Posted by ClueByFour View Post
The dirty little secret is that if Southwest gets their hands on a dozen more slots at LGA and aitran (or whomever) gets them at DCA, it'll cause fares to go down. That is better for the consumer than overinflated fares from a few additional small destinations to LGA or DCA.
Better, no! Cheaper, yes.

I beg to differ! We don't need multiple airlines adding flights on the same route. That is wasteful and does not improve overall service. All it does is lower prices while CASM climbs and RASM falls. I would much rather see US get the slots from DL and begin to offer more nonstops from DCA. That is truly better for the consumer to have access to/from cities previously unserviced from DCA....not more nonstops to the NE and Florida
uva185 is offline  
Old Feb 9, 10, 10:36 pm
  #32  
 
Join Date: Nov 1999
Location: Phoenix, AZ USA
Programs: DL-Platinum / AS-MVPG75K / Hyatt - Glob / Hilton-Diamond
Posts: 1,540
Yea, when I 1st heard of this "slot swap" my thought was .. "Excuse me ??? "

I don't exactly agree with the concept of slot controlled airports in a "free market" country ... when said country can't upgrade the 1950's technology to support today's free market ... but that's another topic. Given the fact that some airports are slot controlled....

The slots were originally awarded by DOT to help "spread the wealth". Yes the spread is biased. Alaska Air only gets a few cuz ... well ... they're way out in Washington & Oregon. The eastern seaboard airlines had more slots; they were willing to serve more cities from the "slotted" airport. But still, the DOT prevented any one airline from having too many of the coveted slots.

And now DL & US think they can just trade slots, each gaining the very concentration that DOT wanted to avoid !! Excuse Me ???
And some folks think this is valid thinking ?

If DL or US (or any airline) wants to increase competition in the northeast by providing additional hubs vs the traditional EWR/PHL/BWI/whatever, then they are certainly able to do so without controlling the limited number slots at controlled airports.
In fact, US had such a thing and threw it away. It's called PIT.
In fact, DL has such a thing, but they are starting to throw it away. It's called CVG.


I can't believe I'm siding with the Government on something
Steve
steve64 is offline  
Old Feb 9, 10, 11:45 pm
  #33  
 
Join Date: Aug 2008
Location: Maine
Programs: US Airways Chairman, PetSmart PetPerks Elite
Posts: 366
Originally Posted by ClueByFour View Post
When did the government become a jobs program? By supporting failing businesses, the feds prolonged the pain and suffering for the hundreds of thousands of employees of healthier airlines. How many people at every other legacy were furloughed after 9/11? Absent the current capacity that HP/US represents, that probably does not happen and the airlines that remain are healthier.
So, you weren't a history major?
vincentvan is offline  
Old Feb 9, 10, 11:48 pm
  #34  
 
Join Date: Apr 2006
Location: High Point, NC
Programs: None
Posts: 9,171
Originally Posted by uva185 View Post
I would much rather see US get the slots from DL and begin to offer more nonstops from DCA. That is truly better for the consumer to have access to/from cities previously unserviced from DCA....not more nonstops to the NE and Florida
And US is absolutely free to do that now with it's about 50% of DCA slots. If US is so concerned about lack of non-stop service between DCA and:

BHM
ISP
ITH
BHM
LIT
MYR
PNS
SAV
TLH

they could serve those markets non-stop with only a fraction of the slots they already have. Heck, if US was so concerned about service from LGA to the smaller markets in the NE, they could have used some of the 100+ slots they want to trade away and done exactly that instead of doing things like running 18-20 Dash flights between LGA and PHL every day.

The whole purpose of this exercise is market concentration. Higher market concentration leads to higher fares - so what if those wanting lower fares have to go to IAD/BWI to get them.

Jim
BoeingBoy is offline  
Old Feb 10, 10, 12:25 am
  #35  
FlyerTalk Evangelist
 
Join Date: Nov 2005
Location: Phoenix, AZ
Programs: AA Gold AAdvantage Elite, Rapids Reward
Posts: 35,773
Originally Posted by vincentvan View Post
So, you weren't a history major?
No.
N830MH is offline  
Old Feb 10, 10, 1:35 am
  #36  
atp
 
Join Date: Jul 2009
Posts: 20
Originally Posted by iahphx View Post
As usual, Scott Kirby has this exactly right.

Too bad so many participants on this forum have such animus toward US that they can't understand the stupidity behind today's gov't ruling. You might think frequent flyers would understand the benefits of stronger legacy carriers.
Actually,

Management and shareholders want the highest RASM at the lowest CASM.

The frequent flyers on here aren't saying what they are saying because of their animus towards the airline rather their desire for the lowest ticket price possible with the highest level of service.

Finding the middle ground where all the parties are content is what is so difficult.
atp is offline  
Old Feb 10, 10, 6:22 am
  #37  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 16,559
Originally Posted by atp View Post
Actually,

Management and shareholders want the highest RASM at the lowest CASM.

The frequent flyers on here aren't saying what they are saying because of their animus towards the airline rather their desire for the lowest ticket price possible with the highest level of service.

Finding the middle ground where all the parties are content is what is so difficult.
Yeah, reasonable people with different interests can have different opinions. That's reasonable (what's unreasonable is when someone, ahem, comes here to say he wishes the terrorists had finished off US because they suck).

But what the gov't doesn't realize is that the net result of their ruling is that EVERYBODY loses. There will be no new entrants. There will be no new competition. There will be no new flights. The legacy carriers won't get stronger.

Maybe the gov't will revisit this and work out a deal where a handful of slots can be sold. But I think the most probable result is that nothing happens, until the next administration. That might also apply to other merger/sale activity in the industry.
iahphx is offline  
Old Feb 10, 10, 7:20 am
  #38  
 
Join Date: Dec 2002
Location: PHX
Programs: AA EXP
Posts: 1,271
I think some on this board must be living in a bubble - times are not that good for many American business, especially the airline biz. Clearly it's time for the gov. to back off and let the struggling airline folks make a few bucks...or would a GM-like bailout be a better alternative? This one is a no brainer.
GaryZ is offline  
Old Feb 10, 10, 7:37 am
  #39  
FlyerTalk Evangelist
Original Poster
 
Join Date: Mar 2000
Posts: 16,559
Originally Posted by GaryZ View Post
I think some on this board must be living in a bubble - times are not that good for many American business, especially the airline biz. Clearly it's time for the gov. to back off and let the struggling airline folks make a few bucks...or would a GM-like bailout be a better alternative? This one is a no brainer.
It all depends on your mindset. Jeez, look at the mindset of the majority of posters on this board. They don't like the airline, and they DON'T want it to succeed. They'd rather have "more competition" -- as if there's not enough of that in the industry!

It's just really hard for me to see how anybody is hurt by US and DL swapping slots (except perhaps for the US commuter employees who get laid off), and how a lot of people might get some benefit. Instead, like many of the folks on this board, the gov't is looking for utopia, instead of a better reality.
iahphx is offline  
Old Feb 10, 10, 7:52 am
  #40  
 
Join Date: Nov 2008
Location: Southern California
Programs: AA, WN
Posts: 931
Originally Posted by iahphx View Post
Yeah, reasonable people with different interests can have different opinions. That's reasonable (what's unreasonable is when someone, ahem, comes here to say he wishes the terrorists had finished off US because they suck).
First of all, no one said that. They said they didn't think the government had any business propping up failing industry, no matter what the reason. I completely agree. That doesn't mean I wish terrorists had finished off US. It means I wish economics would be allowed to take its course. Flying into DCA is not free-market competition because the slots are government controlled. Therefore, the government has a responsibility to the PEOPLE, not to business, to artificially create as close to a free-market situation as is possible.

But what the gov't doesn't realize is that the net result of their ruling is that EVERYBODY loses. There will be no new entrants. There will be no new competition. There will be no new flights. The legacy carriers won't get stronger.
New competition? To use BHM as a random example, if right now your choices are BHM-ATL-DCA, BHM-CLT-DCA, BHM-EWR/IAH-DCA and the slot swap takes place, one carrier is gone (DL) replaced by US with BHM-DCA. How has competition increased? How has a new carrier entered the game? US was already flying between BHM and DCA with a connection. Did I miss something where US and DL pledged to use all of their new slots in perpetuity to create service between DCA/LGA and cities they do not currently serve in any capacity?

And what if, after 4 months, DCA-BHM is a bust? Does it become yet another DCA-PHL flight?

Originally Posted by GaryZ View Post
Clearly it's time for the gov. to back off and let the struggling airline folks make a few bucks...or would a GM-like bailout be a better alternative? This one is a no brainer.
The government doesn't need to back off anything. US and DL can still fly to these "smaller markets" they'd just have to cut some existing service to do so. If there is so much money to be made on these routes, one would think they'd be flying them already. The fact is, any business with profit as their end goal, is not going to make consumer friendly decisions out of the kindness of their corporate hearts. While the consumer may win in terms of increased service to different cities, the consumer will lose with increased fares to get there.

Ask most people if they'd prefer to spend $300 to fly BHM-CLT-DCA or $500 to fly BHM-DCA, and I suspect most people and small businesses would "suffer" the connection to save money.
flg8rmatt is offline  
Old Feb 10, 10, 8:02 am
  #41  
 
Join Date: Nov 2008
Location: Southern California
Programs: AA, WN
Posts: 931
Originally Posted by iahphx View Post
They'd rather have "more competition" -- as if there's not enough of that in the industry!
There's your answer right there. You are right. There is too much competition. And in an industry as far-reaching as the US airline industry, what that means is some airlines need to fail in order to bring the industry more in line with market demand.

Were you in an uproar when Skybus went under? Aloha? Or do only well-established, full service airlines deserve protections from the free market?
flg8rmatt is offline  
Old Feb 10, 10, 8:02 am
  #42  
 
Join Date: Jun 2004
Location: PIT
Posts: 8,394
Originally Posted by GaryZ View Post
I think some on this board must be living in a bubble - times are not that good for many American business, especially the airline biz. Clearly it's time for the gov. to back off and let the struggling airline folks make a few bucks...or would a GM-like bailout be a better alternative? This one is a no brainer.
WN seems to be doing OK. Airtran is more or less profitable. Isn't Allegiant profitable as well.?

The problem isn't the airline business. It is the broken model that the legacy airlines persist in trying to use that is their downfall. The government should not be perpetuating that model.

.
chicagorich is offline  
Old Feb 10, 10, 8:04 am
  #43  
 
Join Date: Nov 2008
Location: Southern California
Programs: AA, WN
Posts: 931
Originally Posted by chicagorich View Post
WN seems to be doing OK. Airtran is more or less profitable. Isn't Allegiant profitable as well.?

The problem isn't the airline business. It is the broken model that the legacy airlines persist in trying to use that is their downfall. The government should not be perpetuating that model.

.
Well said. And far more eloquently than my rambling posts.
flg8rmatt is offline  
Old Feb 10, 10, 8:12 am
  #44  
 
Join Date: Aug 2008
Location: Maine
Programs: US Airways Chairman, PetSmart PetPerks Elite
Posts: 366
Originally Posted by chicagorich View Post
WN seems to be doing OK. Airtran is more or less profitable. Isn't Allegiant profitable as well.?

The problem isn't the airline business. It is the broken model that the legacy airlines persist in trying to use that is their downfall. The government should not be perpetuating that model.

.
Pound for pound, I think Allegiant might be the most profitable of the bunch in recent times.
vincentvan is offline  
Old Feb 10, 10, 8:12 am
  #45  
 
Join Date: Nov 2009
Posts: 60
Originally Posted by chicagorich View Post
WN seems to be doing OK. Airtran is more or less profitable. Isn't Allegiant profitable as well.?

The problem isn't the airline business. It is the broken model that the legacy airlines persist in trying to use that is their downfall. The government should not be perpetuating that model.

.
Yes, this is more or less what I was getting at as well. Why does US and DL need monopolies at their hubs to have a successful business model when other airlines have proven that this is unneccesary. To me, they are simply putting a bandaid on a gunshot wound.

The model is a failure. Why do the commuter flights need to be hyperinflated to make up for the innefficiencies in the legacy business model?
jbird82 is offline  

Thread Tools
Search this Thread
Search Engine: