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ro1960
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New burgeoning business market in the US?

Sun Feb 18, 2018 6:09 am

Interesting article about starter airlines filling the void left by regional carriers at secondary airports:

http://money.cnn.com/2018/02/14/news/onejet-new-airlines/index.html

Is this viable? And if yes will the US3 go back to this market via their regional arms?
 
ltbewr
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 6:30 am

Its an interesting concept. As the article notes as an example connecting by air non-stop on a small jet from BUF to ALB, that is not served by the US3 or their regional partners/subs. During the winter, what is a 5 hour drive between BUF and ALB could be several times more so a fight may be a far better option. I bet State politicos would love it instead of a drive by car or having to fly via a hub like LGA/JFK. Ditto for PIT and other small cites. Maybe these flights could haul USPS mail or small packages to offset costs and improve service, mail/packages not have to go through a FedEx/UPS hub or by long haul truck.
 
Blerg
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 7:18 am

So in the end it shows that all that consolidation was not so great for the customers, especially for those living outside the big cities. I really wish OneJet the best, they seem to be a really fine airline, just like Silver is.
 
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LAX772LR
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 9:04 am

Blerg wrote:
So in the end it shows that all that consolidation was not so great for the customers

Not sure how you arrive at that conclusion based on this... but that's basically the opposite of what this is showing.
 
Blerg
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 10:16 am

LAX772LR wrote:
Blerg wrote:
So in the end it shows that all that consolidation was not so great for the customers

Not sure how you arrive at that conclusion based on this... but that's basically the opposite of what this is showing.


The article clearly states that many smaller, secondary markets lost air-links once consolidation took place. Larger airlines simply didn't feel the need to fly to there as they couldn't earn as much money or they simply believed that those from unserved markets should drive a few hours to the nearest airport in order to fly.
The void left by these mergers is being exploited by these newcomers. Personally, I hope they make it as tickets are quite pricey outside the super competitive city-pair routes.
 
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LAX772LR
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 11:10 am

Blerg wrote:
LAX772LR wrote:
Blerg wrote:
So in the end it shows that all that consolidation was not so great for the customers

Not sure how you arrive at that conclusion based on this... but that's basically the opposite of what this is showing.

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place.

It also clearly states that new competition is forming to address those markets... which is why the mergers were allowed: they made the main carriers healthier, and still didn't impede competition.
 
Blerg
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 11:13 am

LAX772LR wrote:
Blerg wrote:
LAX772LR wrote:
Not sure how you arrive at that conclusion based on this... but that's basically the opposite of what this is showing.

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place.

It also clearly states that new competition is forming to address those markets... which is why the mergers were allowed: they made the main carriers healthier, and still didn't impede competition.


From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'
 
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TWA772LR
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 3:02 pm

This is where CFRP regional airliners (or Emb/CRJ NGs) come in. Hopefully soon we see the revival of the true regional airline. Silver is here and doing ok, Cape Air is in the same boat as Silver, so we have them. Expressjet tried but just had terrible timing. Oh how cool it would be to have an airline again that offered beer for a dollar!
 
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TWA772LR
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 3:35 pm

This is where CFRP regional airliners (or Emb/CRJ NGs) come in. Hopefully soon we see the revival of the true regional airline. Silver is here and doing ok, Cape Air is in the same boat as Silver, so we have them. Expressjet tried but just had terrible timing. Oh how cool it would be to have an airline again that offered beer for a dollar!
 
Planeflyer
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 3:48 pm

The economy has truly been terrible for almost a decade. US GDP has not had one year of 3% growth since 2005 and growth has been even slower in places like the northeast(inland) and the northern Midwest. So while consolidation, no doubt played a role, the big airlines would not have left places like Pittsburg, Albany and Buffalo had there been sufficient traffic.

A strong economy is the single most important factor in this discussion as the most innovative service only works if people are willing to spend.
 
DfwRevolution
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 4:05 pm

Blerg wrote:
LAX772LR wrote:
Blerg wrote:
The article clearly states that many smaller, secondary markets lost air-links once consolidation took place.

It also clearly states that new competition is forming to address those markets... which is why the mergers were allowed: they made the main carriers healthier, and still didn't impede competition.


From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'


Correction: said every business founder in history.
 
wedgetail737
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 5:50 pm

I guess business folks quickly learned from the 1980's huge onset of start-up carriers. But I am a little surprised that we didn't see a new round of startups in the past few years as the economy was growing substantially again.
 
freakyrat
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 6:05 pm

Now it has also shown to be feasable for the big three carriers to go back into markets that they abandoned. An example is American returning back to South Bend, Indiana with the larger regional jet flights to DFW and CLT. Moat likely this year is also United resuming service to DEN.
 
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LAX772LR
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 8:20 pm

DfwRevolution wrote:
Blerg wrote:
LAX772LR wrote:
It also clearly states that new competition is forming to address those markets... which is why the mergers were allowed: they made the main carriers healthier, and still didn't impede competition.


From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'


Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????
 
Blerg
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 9:12 pm

LAX772LR wrote:
DfwRevolution wrote:
Blerg wrote:

From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'


Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


In stead of using all those question marks how about you read the paragraph above the CEO's quote. Since JetBlue there hasn't been an all new player that made it into the big league. This is because the large US legacies have made sure they all end up failing so that they can charge $500 for a two hour flight on a Crj.
Do you think they won't try to destroy Silver if they start expanding beyond being a tiny regional player? There is a reason why no one made it big in the past two decades.
 
nutsaboutplanes
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Re: New burgeoning business market in the US?

Sun Feb 18, 2018 9:40 pm

Blerg wrote:
LAX772LR wrote:
DfwRevolution wrote:

Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


In stead of using all those question marks how about you read the paragraph above the CEO's quote. Since JetBlue there hasn't been an all new player that made it into the big league. This is because the large US legacies have made sure they all end up failing so that they can charge $500 for a two hour flight on a Crj.
Do you think they won't try to destroy Silver if they start expanding beyond being a tiny regional player? There is a reason why no one made it big in the past two decades.


I don’t see anything wrong with that. If anything, the growth of WN was a lesson for the large legacies that they had to be aggressive with new entrants. This is the responsible thing to do even if it means taking losses to battle a new competitor that has a lower cost base and the advantages that come with running a less complex and smaller operation. Seeing the response to Spirit and Frontier with the launch of Basic Econmy products suggests that the days of waiting for competition to become a problem are over....the legacies are going to make aggressive efforts to contain and eliminate competition in critical markets.....and that’s what they should do.
 
crownvic
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 5:04 am

Blerg wrote:
LAX772LR wrote:
DfwRevolution wrote:

Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


In stead of using all those question marks how about you read the paragraph above the CEO's quote. Since JetBlue there hasn't been an all new player that made it into the big league. This is because the large US legacies have made sure they all end up failing so that they can charge $500 for a two hour flight on a Crj.
Do you think they won't try to destroy Silver if they start expanding beyond being a tiny regional player? There is a reason why no one made it big in the past two decades.


I agree...The US legacies seem to do things much harsher than other industries, and that is to go out of their way to drive any potential competitor out of business. They will compete on a market with extenuating losses, until they achieve annihilation of the threat. I am sure there are other industries that practice this, but not to the extent of the airline business and yes, the consumer loses. Look at what US/AA did to WN in PHL. There was a time that WN felt that PHL could become a top tier city for them, but it failed due to pricing pressure. Now their PHL operation is a shadow of what it once was. The consumer loses not only through pricing, but in loss of air service as well. While I don't have figures handy, the amount of cities that had air service 25 years years ago vs. today, I am sure is quite astounding.
 
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LAX772LR
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 6:13 am

Blerg wrote:
LAX772LR wrote:
DfwRevolution wrote:

Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


In stead of using all those question marks how about you read the paragraph above the CEO's quote. Since JetBlue there hasn't been an all new player that made it into the big league.

And why do you, or even he for that matter, assume that there should be?

Every market has a span between equilibrium and saturation, and who is he to say that whatever undefined number of "big league" (whatever that even means) carrier maturity is a better indicator of the strength of market competition than what we currently have? Especially since regulators have demonstrated no such concurrence.
 
Buffalomatt1027
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 6:30 am

Planeflyer wrote:
The economy has truly been terrible for almost a decade. US GDP has not had one year of 3% growth since 2005 and growth has been even slower in places like the northeast(inland) and the northern Midwest. So while consolidation, no doubt played a role, the big airlines would not have left places like Pittsburg, Albany and Buffalo had there been sufficient traffic.

A strong economy is the single most important factor in this discussion as the most innovative service only works if people are willing to spend.


Their is sufficient traffic in Buffalo / BNIA. Pre mergers, Buffalo was on its way to 6 million+ passengers a year.

Recently, Jet Blue, Southwest, Frontier all have taken advantage of this. Direct flights to Miami, Denver, Cancun, Punta Cana, Los Angeles, and a few other new cities / routes.

The legacy carriers, have not. Which is kind of sad. The carriers havent left, but they havent moved. They have kept the same basic routes and services.
 
AirFiero
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 7:33 am

Something not mentioned in this article is the convenience of many of these flight operating from FBOs rather than the airlines terminals, with no TSA hassles. Easy in and out.
 
Blerg
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 2:42 pm

LAX772LR wrote:
Blerg wrote:
LAX772LR wrote:
Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


In stead of using all those question marks how about you read the paragraph above the CEO's quote. Since JetBlue there hasn't been an all new player that made it into the big league.

And why do you, or even he for that matter, assume that there should be?

Every market has a span between equilibrium and saturation, and who is he to say that whatever undefined number of "big league" (whatever that even means) carrier maturity is a better indicator of the strength of market competition than what we currently have? Especially since regulators have demonstrated no such concurrence.


Regulators? So you assume that whatever they do or decide is fair and that their decisions are in no way influenced by all those lobbyists? In the past 20 years the US got just one airline while I can think of at least six European ones that were founded in the same period that are still operating today. They are: Wizz Air, Aegean, Atlasjet, Volotea, Blueair, WOW Air...

How come European airlines can make it despite shorter flights and much more competition from buses and trains. Not to mention that Europe is famous for its high taxation and generally anti-aviation laws.
 
incitatus
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 3:29 pm

-----------------------------------------------------------------------
 
incitatus
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 3:35 pm

Blerg wrote:

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place. Larger airlines simply didn't feel the need to fly to there as they couldn't earn as much money or they simply believed that those from unserved markets should drive a few hours to the nearest airport in order to fly.
The void left by these mergers is being exploited by these newcomers. Personally, I hope they make it as tickets are quite pricey outside the super competitive city-pair routes.


The article is wrong. I did a quick scan of domestic air service in the US, Winter 2018 vs. Winter 2013. We went from 616 to 617 airports served with commercial flights. Of course, the list is not the same: Some airports got service and some lost. The number of commercial flights is virtually unchanged at about 21500 per day. What changed was the average aircraft size. The growth in the market was accommodated by flying larger aircraft: The average aircraft size was 98 seats, now it is 114. They also fly slightly longer missions on average.

I have not looked at a Summer vs. Summer but I expect a similar picture, if not more favorable because airlines are better equipped to estimate demand and take advantage of Summer peaks. Looking back 10 years also does not support the article: we had less than 600 airports with commercial flights in Winter 2008.

Planeflyer wrote:
The economy has truly been terrible for almost a decade. US GDP has not had one year of 3% growth since 2005 and growth has been even slower in places like the northeast(inland) and the northern Midwest. (...).


I don't think that is a fair statement either. "Truly terrible"???? Not at all. Not even in the NE. What we are seeing for 30+ years is a decrease in manufacturing jobs, due to both off-shoring and automation. At a city level there were some truly terrible outcomes, I can agree - but they are compensated be much more wealth in other places. For a poster child, Youngstown, Ohio. But bear in mind: Youngstown's population has been draining since the 1950s. Rochester a similar but less severe case, now with the economy being boosted by technology. Other medium size cities seem to be doing awesome lately, like Pittsburgh. On top of thriving, Pittsburgh's past just makes it beautiful.
 
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klm617
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 3:50 pm

Blerg wrote:
So in the end it shows that all that consolidation was not so great for the customers, especially for those living outside the big cities. I really wish OneJet the best, they seem to be a really fine airline, just like Silver is.



This is the absolute truth. The only markets that have benefited from consolidation are the biggest metropolitan areas as they continue to get new service bringing down over all fares while the rest of the country pays higher fares and subsidizes all the cheap fares in the larger markets. This last round of consolidation has been disastrous for the customer as far as fares and convince of service go.
 
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klm617
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 3:54 pm

incitatus wrote:
Blerg wrote:

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place. Larger airlines simply didn't feel the need to fly to there as they couldn't earn as much money or they simply believed that those from unserved markets should drive a few hours to the nearest airport in order to fly.
The void left by these mergers is being exploited by these newcomers. Personally, I hope they make it as tickets are quite pricey outside the super competitive city-pair routes.


The article is wrong. I did a quick scan of domestic air service in the US, Winter 2018 vs. Winter 2013. We went from 616 to 617 airports served with commercial flights. Of course, the list is not the same: Some airports got service and some lost. The number of commercial flights is virtually unchanged at about 21500 per day. What changed was the average aircraft size. The growth in the market was accommodated by flying larger aircraft: The average aircraft size was 98 seats, now it is 114. They also fly slightly longer missions on average.

I have not looked at a Summer vs. Summer but I expect a similar picture, if not more favorable because airlines are better equipped to estimate demand and take advantage of Summer peaks. Looking back 10 years also does not support the article: we had less than 600 airports with commercial flights in Winter 2008.

Planeflyer wrote:
The economy has truly been terrible for almost a decade. US GDP has not had one year of 3% growth since 2005 and growth has been even slower in places like the northeast(inland) and the northern Midwest. (...).


I don't think that is a fair statement either. "Truly terrible"???? Not at all. Not even in the NE. What we are seeing for 30+ years is a decrease in manufacturing jobs, due to both off-shoring and automation. At a city level there were some truly terrible outcomes, I can agree - but they are compensated be much more wealth in other places. For a poster child, Youngstown, Ohio. But bear in mind: Youngstown's population has been draining since the 1950s. Rochester a similar but less severe case, now with the economy being boosted by technology. Other medium size cities seem to be doing awesome lately, like Pittsburgh. On top of thriving, Pittsburgh's past just makes it beautiful.



Keep in mind though that not more cities got service than lost them because it's not fair to add all the secondary airport that Allegiant flies into that serve cities that already have service. Many cities have lost the level of service they once had before consolidation. Most regional airports are down to one carriers that had 2 and three before so there is a sever lack of choice.
 
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klm617
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 4:06 pm

LAX772LR wrote:
DfwRevolution wrote:
Blerg wrote:

From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'


Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????



Obviously you're not old enough to remember when it was nothing to see 5 start ups in one year but that is no longer possible because the US3 are so much bigger and more powerful than airlines were back in the late 70's and early 80's Most start ups in those years were pretty successful for at least a decade. Midway, People Express, America West, New York Air, Midwest Express, Braniff II, Jet America, World, Muse Air, Air Florida, Tower Air Not to mention all the start ups that had a good run but didn't last very long Capitol, Pacific Exprees, Empire, Morris Air, Florida Express, Altair, American International, Carnival Air, Arrow Air, Northeastern International, Air 1, Air Atlanta. I ask you to name 10 that got as far in the last 10 years as the airlines did before consolidation made airlines so powerful and to be far at least half of these airline didn't go out of business but were bought up to decrease competition..
 
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knope2001
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Re: New burgeoning business market in the US?

Mon Feb 19, 2018 6:15 pm

incitatus wrote:
Blerg wrote:

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place. Larger airlines simply didn't feel the need to fly to there as they couldn't earn as much money or they simply believed that those from unserved markets should drive a few hours to the nearest airport in order to fly.
The void left by these mergers is being exploited by these newcomers. Personally, I hope they make it as tickets are quite pricey outside the super competitive city-pair routes.


The article is wrong. I did a quick scan of domestic air service in the US, Winter 2018 vs. Winter 2013. We went from 616 to 617 airports served with commercial flights. Of course, the list is not the same: Some airports got service and some lost. The number of commercial flights is virtually unchanged at about 21500 per day. What changed was the average aircraft size. The growth in the market was accommodated by flying larger aircraft: The average aircraft size was 98 seats, now it is 114. They also fly slightly longer missions on average.


I think they are referencing far fewer nontop city pairs versus far fewer actual airports served. If one goes back more like 10-15-20 years there are countless cities pairs which have lost nonstop service for various reasons, and airlines like OneJer see potential serving the business segment will to pay for nonstop service in some of these city pairs.
 
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LAX772LR
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Re: New burgeoning business market in the US?

Tue Feb 20, 2018 8:35 am

Blerg wrote:
Regulators? So you assume that whatever they do or decide is fair and that their decisions are in no way influenced by all those lobbyists?

EASY ANSWER: Because they publish their decision, methods, and data; so you can see for yourself. There's not much of any secret involved.


Blerg wrote:
How come European airlines can make it despite shorter flights and much more competition from buses and trains. Not to mention that Europe is famous for its high taxation and generally anti-aviation laws.

EVEN EASIER ANSWER: Because Europe is a market with completely different dynamics than the USA. As is East Asia. As is South Asia. As is Australia. As is...........
 
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klm617
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Re: New burgeoning business market in the US?

Tue Feb 20, 2018 10:34 pm

LAX772LR wrote:
Blerg wrote:
Regulators? So you assume that whatever they do or decide is fair and that their decisions are in no way influenced by all those lobbyists?

EASY ANSWER: Because they publish their decision, methods, and data; so you can see for yourself. There's not much of any secret involved.


Blerg wrote:
How come European airlines can make it despite shorter flights and much more competition from buses and trains. Not to mention that Europe is famous for its high taxation and generally anti-aviation laws.

EVEN EASIER ANSWER: Because Europe is a market with completely different dynamics than the USA. As is East Asia. As is South Asia. As is Australia. As is...........


So what you're saying is Americans don't want cheaper air travel and more competition as the Europeans do. I think it's more like the US3 have been allowed to become to powerful so that they can manipulate the US airline market as they chose to.
 
jetblueguy22
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Re: New burgeoning business market in the US?

Wed Feb 21, 2018 12:04 am

klm617 wrote:
incitatus wrote:
Blerg wrote:

The article clearly states that many smaller, secondary markets lost air-links once consolidation took place. Larger airlines simply didn't feel the need to fly to there as they couldn't earn as much money or they simply believed that those from unserved markets should drive a few hours to the nearest airport in order to fly.
The void left by these mergers is being exploited by these newcomers. Personally, I hope they make it as tickets are quite pricey outside the super competitive city-pair routes.


The article is wrong. I did a quick scan of domestic air service in the US, Winter 2018 vs. Winter 2013. We went from 616 to 617 airports served with commercial flights. Of course, the list is not the same: Some airports got service and some lost. The number of commercial flights is virtually unchanged at about 21500 per day. What changed was the average aircraft size. The growth in the market was accommodated by flying larger aircraft: The average aircraft size was 98 seats, now it is 114. They also fly slightly longer missions on average.

I have not looked at a Summer vs. Summer but I expect a similar picture, if not more favorable because airlines are better equipped to estimate demand and take advantage of Summer peaks. Looking back 10 years also does not support the article: we had less than 600 airports with commercial flights in Winter 2008.

Planeflyer wrote:
The economy has truly been terrible for almost a decade. US GDP has not had one year of 3% growth since 2005 and growth has been even slower in places like the northeast(inland) and the northern Midwest. (...).


I don't think that is a fair statement either. "Truly terrible"???? Not at all. Not even in the NE. What we are seeing for 30+ years is a decrease in manufacturing jobs, due to both off-shoring and automation. At a city level there were some truly terrible outcomes, I can agree - but they are compensated be much more wealth in other places. For a poster child, Youngstown, Ohio. But bear in mind: Youngstown's population has been draining since the 1950s. Rochester a similar but less severe case, now with the economy being boosted by technology. Other medium size cities seem to be doing awesome lately, like Pittsburgh. On top of thriving, Pittsburgh's past just makes it beautiful.



Keep in mind though that not more cities got service than lost them because it's not fair to add all the secondary airport that Allegiant flies into that serve cities that already have service. Many cities have lost the level of service they once had before consolidation. Most regional airports are down to one carriers that had 2 and three before so there is a sever lack of choice.

So having sustainable service is a bad thing?
 
jayunited
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Re: New burgeoning business market in the US?

Wed Feb 21, 2018 1:25 am

klm617 wrote:
Obviously you're not old enough to remember when it was nothing to see 5 start ups in one year but that is no longer possible because the US3 are so much bigger and more powerful than airlines were back in the late 70's and early 80's Most start ups in those years were pretty successful for at least a decade. Midway, People Express, America West, New York Air, Midwest Express, Braniff II, Jet America, World, Muse Air, Air Florida, Tower Air Not to mention all the start ups that had a good run but didn't last very long Capitol, Pacific Exprees, Empire, Morris Air, Florida Express, Altair, American International, Carnival Air, Arrow Air, Northeastern International, Air 1, Air Atlanta. I ask you to name 10 that got as far in the last 10 years as the airlines did before consolidation made airlines so powerful and to be far at least half of these airline didn't go out of business but were bought up to decrease competition..


I completely understand the point you are making that consolidation has hurt many smaller cities that use to and probably would still have service if there were more competition. But while I was reading the article and reading many of the responses on this thread I wonder how many of the airlines you mention could have survived during difficult economic times? How many would have survived the shutdown of US airspace after 9/11 a closure that cost airlines millions? I think we are getting spoiled by the fact that US airlines are now profitable but how many would be profitable and of the airlines you listed how many were profitable during their time and how many were barely surviving?

I wonder are the start up airlines mentioned in this article being structured in such a way that they can and will survive the next economic downturn or are they simply a fad that will fade away at the first sign of economic turbulence? Remember Skybus Airlines they used the same business model used in the article but the economic downturn of 2008 swept them out of business. Airlines make money when times are good but when times are tough many consumers and businesses alike reduce their expenditures and one of the first things cut or reduced on everyone's list is travel expenses which directly impacts an airlines ability to survive.
 
airzona11
Posts: 1935
Joined: Wed Dec 17, 2014 5:44 am

Re: New burgeoning business market in the US?

Wed Feb 21, 2018 2:01 am

LAX772LR wrote:
DfwRevolution wrote:
Blerg wrote:

From the article:

'The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said Maguire, OneJet's CEO.'


Correction: said every business founder in history.

Exactly. Remind me where in the history of the planet (or in the regulation of a merger) that anyone promised that starting a new competing business would be easy?????


Airlines are very capital intensive and the economies of scale are crucial, both things startups do not have. Going to be interesting to see what fills the space. The large established carriers via consolidation have essentially been granted natural monopolies, not much different than the cable companies.

Repurposing cheap used regional jets is a way. There is going to need to be innovation in the space, notably from the aircraft.

Let's see what the market and the industry can deliver!
 
incitatus
Posts: 3501
Joined: Wed Feb 09, 2005 1:49 am

Re: New burgeoning business market in the US?

Wed Feb 21, 2018 3:25 am

knope2001 wrote:
I think they are referencing far fewer nontop city pairs versus far fewer actual airports served. If one goes back more like 10-15-20 years there are countless cities pairs which have lost nonstop service for various reasons, and airlines like OneJer see potential serving the business segment will to pay for nonstop service in some of these city pairs.


Even that one is not supported by data. We have now 3051 domestic city pairs with airline service. Five years ago we had 2826. Fifteen years ago we had 2890. Notice 15 years ago MEM, STL, CVG, PIT and CLE were still hubs. A lot of city pairs were naturally cut as these hubs were scrapped. I don't think that going further back changes the conclusion. It is not that service is less plentiful as a whole. As a whole there are more seats and more seat miles available. The number of city pairs and flights has not changed very much. But service moved. Places like Lansing, Kansas City, Norfolk have less service. Places like Ft Myers, Austin, Portland (OR) have more. The big cities have done well. That is a consequence of an evolving economy.

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