on "capacity cartels" and government regulation
cause I just don't get it.
no clue what my stance is. no clue what i'm talking about, really.
this is like some freakish nightmare scenario from an Ayn Rand novel. (Ugh!)
"On these routes (the high density transcontinental and semitranscontinental routes), where price insensitive business customers wanted maximum convenience, excess capacity was rampant. This was aggravated by the introduction of widebodies, which added concentrated capacity on those very routes. In 1971-1972, LOAD FACTORS ON DOMESTIC 747 FLIGHTS REACHED A LOW OF 33%"
yes, these airlines are being subsidized by the govt.
"During the summer of 1970, American, United, and TWA held private meetings to discuss reductions in capacity for 15 major city pairs. An agreement involving four key city pairs was reached, and was approved by the Civil Aeronautics Board, without hearings, in midsummer 1971. The number of weekly round-trip flights was reduced by 38 percent for the NY-San Fran. market..."
more stats...blah blah blah...
"In all these markets, load factors improved considerably, to the point where travelers complained of difficulties getting tickets. When hearings finally were held, the proceedings lasted 18 months before and examiner concluded in 1974 that the capacity agreements were unlawful."
(from Contrived Competition)
ok. so by definition, this is a "capacity cartel."
nasty words. puts you in mind of monopolies, price fixing, and drug dealers.
but ultimately, who is being hurt the most by this?
the government - who won't need to shell out dough
so that the airlines can fly their planes into the air 67% empty?
the consumer? yes, this problem stemmed partially from the fact that people LIKE flying on really big half empty planes. but if anybody thought that they would ultimately be paying for all those empty seats, they'd reconsider and suck it up when forced to sit in a plane that is running at proper capacity.
I just don't get it.
no clue what my stance is. no clue what i'm talking about, really.
this is like some freakish nightmare scenario from an Ayn Rand novel. (Ugh!)
"On these routes (the high density transcontinental and semitranscontinental routes), where price insensitive business customers wanted maximum convenience, excess capacity was rampant. This was aggravated by the introduction of widebodies, which added concentrated capacity on those very routes. In 1971-1972, LOAD FACTORS ON DOMESTIC 747 FLIGHTS REACHED A LOW OF 33%"
yes, these airlines are being subsidized by the govt.
"During the summer of 1970, American, United, and TWA held private meetings to discuss reductions in capacity for 15 major city pairs. An agreement involving four key city pairs was reached, and was approved by the Civil Aeronautics Board, without hearings, in midsummer 1971. The number of weekly round-trip flights was reduced by 38 percent for the NY-San Fran. market..."
more stats...blah blah blah...
"In all these markets, load factors improved considerably, to the point where travelers complained of difficulties getting tickets. When hearings finally were held, the proceedings lasted 18 months before and examiner concluded in 1974 that the capacity agreements were unlawful."
(from Contrived Competition)
ok. so by definition, this is a "capacity cartel."
nasty words. puts you in mind of monopolies, price fixing, and drug dealers.
but ultimately, who is being hurt the most by this?
the government - who won't need to shell out dough
so that the airlines can fly their planes into the air 67% empty?
the consumer? yes, this problem stemmed partially from the fact that people LIKE flying on really big half empty planes. but if anybody thought that they would ultimately be paying for all those empty seats, they'd reconsider and suck it up when forced to sit in a plane that is running at proper capacity.
I just don't get it.