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US Probing Possible Airline Collusion That Kept Fares High
A letter received Tuesday by major U.S. carriers demands copies of all communications the airlines had with each other, Wall Street analysts and major shareholders about their plans for passenger-carrying capacity, or "the undesirability of your company or any other airline increasing capacity." (www.nytimes.com) Más...Sort type: [Top] [Newest]
Not sure this is going to go anywhere. Anyone here old enough to remember a phone conversation between Bob Crandall (AA) and Howard Putnam (Braniff) in the early 80s? "Raise your ****** fares 20 percent. I'll raise mine the next morning." Putnam was recording the call :-)
mr young..are you forgetting that the federal government must approve (and has) the mergers between varying carriers? the federal government also regulates the taxes added to tickets,and also must approve any routes used,curently flown, or any exchange of landing rights at a certain airport by carriers involved..if you look at the price of a ticket,on the average there is a federal tax,a local tax,and airport tax, and a fuel surcharge which greatly increases the price of the basic ticket..the airlines have to add these fees because of local and state requirements and to cover landing fees and gates and counter space at airports..the airlines "lease" from cities..they do not own..until such time as airlines can buy all new aircraft and retire the old ones that require more maintenance,there will be fewer seats..there are cities and small towns that airlines are cutting back service to,mainly because the demand is not there for service..and thia applies to the airlines "small carrier" partners such as envoy and united express..of course the name of the game in any business is making money,and many people expect cream for the price of low fat milk from the airlines!
That's LAX...Sorry typo...sausage fingers
I will preface my comments by stating this. I am a firm believer in capitalism and the profit motive.
As consumers we are all capitalists.....With that said, when two or more companies in the same industry with similar interests whether directly or indirectly match prices, and there exists no other alternative for the consumer, IMO that is collusion.
As consumers we are all capitalists.....With that said, when two or more companies in the same industry with similar interests whether directly or indirectly match prices, and there exists no other alternative for the consumer, IMO that is collusion.
I can tell you why the fare on the ORD to BDL fare is $800 compared to EWR/JFL/LGA to LAX.....LAX has many carriers while BDL has one dominant carrier. And BDL is a low traffic volume airport.
CLT is an expensive airport ( CLT to LAZ is $500+ RT) as US now AA has nearly 90% of the gates and 90% of daily operations. In effect AA OWNS CLT....
When DAL was the dominant carier at CVG, that was one of the most expensive airports in the US.
RDU used to be a cheaper alternative to CLT. Not anymore. RDU now has just two main carriers. AA And SWA. Those carriers match fares where the destinations compete.
CLT is an expensive airport ( CLT to LAZ is $500+ RT) as US now AA has nearly 90% of the gates and 90% of daily operations. In effect AA OWNS CLT....
When DAL was the dominant carier at CVG, that was one of the most expensive airports in the US.
RDU used to be a cheaper alternative to CLT. Not anymore. RDU now has just two main carriers. AA And SWA. Those carriers match fares where the destinations compete.
The story mentions fares implying this is the only criteria that matters.
This leads me to believe the writer is leaving out the additional cost in the form of fees air carriers charge for things such as, a family wishing to sit together. Additional fees for "choice" seats ( any seat not in the center of the row is considered "choice"). Fees for baggage. A Fee for a pillow and a blanket on a long haul flight. Fees for the slightest change in itinerary. Even if the carrier cancels a flight.
Carriers have cut the number of flights to the most popular destinations they serve. Reduced supply equals increased demand. Higher demand equals higher prices.
Ok, so it's business. Businesses exist to make a profit. I get it. I even support it. But when the scales are tilted so far away from the consumer, it's a call to have an investigation.
This leads me to believe the writer is leaving out the additional cost in the form of fees air carriers charge for things such as, a family wishing to sit together. Additional fees for "choice" seats ( any seat not in the center of the row is considered "choice"). Fees for baggage. A Fee for a pillow and a blanket on a long haul flight. Fees for the slightest change in itinerary. Even if the carrier cancels a flight.
Carriers have cut the number of flights to the most popular destinations they serve. Reduced supply equals increased demand. Higher demand equals higher prices.
Ok, so it's business. Businesses exist to make a profit. I get it. I even support it. But when the scales are tilted so far away from the consumer, it's a call to have an investigation.