Machinists Call for Airline Re-Regulation

Everyone knows that de-regulation fosters price competition, and that
means lower airline ticket prices for consumers, so it's a "good
thing," right? After all, the most noble goal is to provide reduced
prices over mundane things like passenger comfort, right? And very
body know that government regulation is a "bad thing," right?

If the competition starts charging passengers for pillows and
blankets, it will ripple through the other air carriers, and ticket
prices will fall commensurately across them all, right? And if one
airline in it's attempt to increase revenues reduces leg-room so that
it can carry more passengers in a given aircraft, the other's will
have to follow suit, or become priced out of the market, so ticket
prices fall, right? Competition frees airlines to self-regulate; how
can that be bad? So why is Congress being asked to re-regulate
airlines?




http://finance.denverpost.com/mng-de...ChannelID=3197
WASHINGTON, May 7 /PRNewswire-USNewswire/ -- The International
Association of Machinists and Aerospace Workers (IAM) today urged
lawmakers to resist appeals to approve additional airline
consolidation, calling instead for measured re-regulation of fares
and capacity as the only way to ensure safe and reliable air
transportation in the United States.

"Limited re-regulation is the only long-term solution for an
industry that is continually seeking government assistance," said
IAM General Vice President Robert Roach, Jr., at a Senate Commerce
Committee hearing on the state of the airline industry. "This
industry is simply unable to turn away from pricing its product
below the cost of providing it, further perpetuating the chaotic
spiral that brings us here today." The IAM's complete testimony is
available at http://www.goiam.org/issue.cfm?cID=12828 .

"Airlines today compete by cutting standards, eliminating services
and reducing ticket prices to the bone, which makes a profitable
industry impossible," said Roach. "The Government Accountability
Office estimates that median ticket prices have dropped nearly 40
percent since 1980, while the costs of aircraft, airport leases
and fuel have increased dramatically."

"When an industry essential to the national economy can no longer
function, it is the responsibility of elected representatives to
step in and provide the necessary guidance and stability," said
Roach.

The IAM is the largest airline and rail union in North America,
representing more than 170,000 Flight Attendants, Customer Service
Agents, Reservation Agents, Ramp Service Personnel, Mechanics,
Railroad Machinists and related transportation industry workers.
Additional information about the IAM is available at
www.goiam.org/transportation.

Source: International Association of Machinists and Aerospace
Workers


http://www.goiam.org/content.cfm?cID=12868
Merger Watch Video

http://www.goiam.org/content.cfm?cID=12882
Washington D.C., May 7, 2008 - The International Association of
Machinists and Aerospace Workers (IAM) today urged lawmakers to
resist appeals to approve additional airline consolidation,
calling instead for measured re-regulation of fares and capacity
as the only way to ensure safe and reliable air transportation in
the United States.

On May 9, 10:36*am, Larry Dighera wrote:

If the competition starts charging passengers for pillows and
blankets, it will ripple through the other air carriers, and ticket
prices will fall commensurately across them all, right? *And if one
airline in it's attempt to increase revenues reduces leg-room so that
it can carry more passengers in a given aircraft, the other's will
have to follow suit, or become priced out of the market, so ticket
prices fall, right? *Competition frees airlines to self-regulate; how
can that be bad? *So why is Congress being asked to re-regulate
airlines?

Because some people make a great deal of money off gov't regulation.
In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people. In this case the union dudes are afraid they aren't
getting enough right now.

-robert
.

On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"
wrote in
:

On May 9, 10:36*am, Larry Dighera wrote:

If the competition starts charging passengers for pillows and
blankets, it will ripple through the other air carriers, and ticket
prices will fall commensurately across them all, right? *And if one
airline in it's attempt to increase revenues reduces leg-room so that
it can carry more passengers in a given aircraft, the other's will
have to follow suit, or become priced out of the market, so ticket
prices fall, right? *Competition frees airlines to self-regulate; how
can that be bad? *So why is Congress being asked to re-regulate
airlines?

Because some people make a great deal of money off gov't regulation.

Which 'people' mad a great deal of money due to airline regulation in
the past?

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing.

I'm afraid I don't understand how government regulation "directs an
artificial amount of money towards certain people," unless your
referring to corrupt government regulators and politicians.

In this case the union dudes are afraid they aren't
getting enough right now.


I think it's more a matter of those currently employed by the airlines
fearing the inevitable firings usually associated with
consolidation/mergers.

Larry Dighera wrote:


I'm afraid I don't understand how government regulation "directs an
artificial amount of money towards certain people," unless your
referring to corrupt government regulators and politicians.

Well to start, think about the recent in-group discussions on E85 and
its biofuel ilks. I wouldn't call the politicians "corrupt" per se (not
breaking any laws -- or at least they don't have to !), but simply
effective (at getting elected).

Or for a more formal treatment, try Economics: Private & Public Choice,
by Gwartney, Stroup, Sobel, Macpherson... Ch 6 "The Economics of
Collective Decision Making", or most any other college freshman Econ
text....

On May 9, 4:39*pm, Larry Dighera wrote:
On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing. *

I understand, and I understand there are a lot of people like you. For
many of us the natrual forces of the market are very intuitive but for
others its a difficult concept. In a nut shell, as long as producers
have to compete for customers, customers will get the best value
(based on what is important to them). In the airline industry
passengers have said over and over again that they want cheap fares
and are not willing to pay extra for comfort. Several have tried to
create "premium" airlines but they always fail. If someday passengers
prefer comfort over price the market will change. There is a reason
BMV sells better cars then Kia and its not because they are nicer
people.

-Robert

"Robert M. Gary" wrote:

On May 9, 4:39*pm, Larry Dighera wrote:
On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing. *

I understand, and I understand there are a lot of people like you. For
many of us the natrual forces of the market are very intuitive but for
others its a difficult concept. In a nut shell, as long as producers
have to compete for customers, customers will get the best value
(based on what is important to them). In the airline industry
passengers have said over and over again that they want cheap fares
and are not willing to pay extra for comfort. Several have tried to
create "premium" airlines but they always fail. If someday passengers
prefer comfort over price the market will change. There is a reason
BMV sells better cars then Kia and its not because they are nicer
people.

I agree with all your points above, but am not against government
regulation. I think it has its place, where social objectives
over-ride what particular participants in a completely free market
transaction may prefer. For instance, in a completely free market, the
best win-win transaction between a chemical company and a farmer may
be pesticides that, when used, create environmental or health risks to
the rest of us. Regulating the market for those products is more
efficient than trying to police their use. Back on topic, there are
valid social reasons (such as safety) to regulate air travel. But
regulating which carriers can go into which markets, and fixing prices
to force carriers to compete on services that buyers would rather give
up for more attractive prices is not a legitimate government role,
IMHO.

Controlling consolidation is a legitimate role for regulation, but
that is not an airline regulation issue. That is an issue of proper
enforcement of anti-trust laws to preserve competition.
--
Alex -- Replace "nospam" with "mail" to reply by email. Checked infrequently.

On Mon, 12 May 2008 22:32:00 -0700 (PDT), "Robert M. Gary"
wrote in
:

On May 9, 4:39*pm, Larry Dighera wrote:
On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing. *

I understand, and I understand there are a lot of people like you. For
many of us the natrual forces of the market are very intuitive but for
others its a difficult concept.

I understand that a free market promotes competition, and that results
in providing what the buyers want. But I believe that sort of
thinking is a bit simplistic and shortsighted, and overlooks some
significant issues that the "little man behind the screen" doesn't
want people to see.

Certainly in a marketplace dominated by a monopoly, a free market is
inappropriate. The Europeans know that, and are teaching Microsoft
about it.

http://www.msnbc.msn.com/id/20818452/
EU court dismisses Microsoft appeal
Upholds $613 million fine, saying it was guilty of monopoly abuse

In the case of a marketplace like the air carrier market, while a free
market (deregulation) may have provided a positive result in lowering
fares, it has also produced additional negative effects. Competition
has forced less efficient, or less market driven airlines into
bankruptcy or unwelcome mergers and consequent unemployment of former
employees. After all, that is the key to survival: kill or eat the
competition, so that you can dominate the marketplace on the road to
monopolizing it. (While 'eat-or-be-eaten' may be the law of the
jungle, is it an appropriate doctrine for an enlightened society?) As
the subject of this discussion bears out, there is significant
collateral damage to free-market economics, and negative impact on the
lives of people involved in the unregulated industry.

The free-market concept is predicated on the buyers knowing what is
best (inevitably lower prices), but are buyers qualified to direct the
industry? Doubtful. Buyer's don't conduct research and make
intelligent decisions that benefit the industry above their own
personal wants. Take the tobacco marketplace for example; no one
would call tobacco smokers wise or sagacious, yet they built one of
the most poisonous industries ever in a free market place. Regulation
is appropriate at times.

The difficulty with market regulation lies in the bureaucratic ethos
of government regulators. They don't have a financial stake in the
industry they regulate, so they may not be sufficiently motivated to
act at times, and then there's always the question of ethics or the
lack thereof....

So I acknowledge your point, but it overlooks mine to the detriment of
all.

In a nut shell, as long as producers have to compete for customers,
customers will get the best value (based on what is important to them).
In the airline industry passengers have said over and over again that
they want cheap fares and are not willing to pay extra for comfort.

Have airline passengers said they want the consequent delays that
result when rampant competition forces air carriers to schedule an
unreasonable number of flights into hub airports or face losing market
share? No. Passengers aren't even aware that it is competition in
the deregulated marketplace that is producing those delays. And you
can bet the airlines aren't disclosing the fact that it is their being
forced to saturate hubs in order to survive the intense competition
that is the source of the absurd increase in flight delays**.
Consumers are not always qualified to decide what is best; their
analysis is often superficial and banal. Unbiased experts are far
more qualified to direct markets, but that approach has its drawbacks
too...

And we haven't even begun to consider if it in the best interest of
the world to have 5,000 aircraft in the air over the CONUS (and more
worldwide) the vast majority of which are transporting tourists
(537-million pax annually*) while spewing enough jet exhaust
(20,317,000,000 gallons of jet fuel annually by US air carriers*) to
change the temperature of the planet (born out during the flight ban
subsequent to 9/11***).

Several have tried to create "premium" airlines but they always fail.
If someday passengers prefer comfort over price the market will change.

The airline market is changing; there are more defectors to business
jets, and the airlines are attempting to change regulations to
increase the tax on GA to protect their current dominate position.
Business-jet operations are increasing significantly as a result of
the abysmal experience airline travel has become.





* http://www.aopa.org/whatsnew/factcard.pdf ~20-trillion gallons!



** http://gettingtomaybe.blogspot.com/2...lue-delay.html
Thursday, February 22, 2007
News broke last week that passengers on Jet Blue flights were
subjected to 10 hour delays inside the plane, while on the runway.
Passengers were forced to wait for many hours due to bad weather
and an unavailability of open gates. ...



*** http://www.csmonitor.com/2005/0210/p14s02-sten.html
Although cars generate more greenhouse gases, airliner exhaust has
an exaggerated effect, scientists say. Is it time to take action?

The result: growing scientific concern that jets may be turning
the skies into a hazier, heat-trapping place.

"Airliners are special because even though their total emissions
are relatively small, compared to other sources, they're putting
their emissions directly into the upper troposphere," says Joyce
Penner, a University of Michigan professor of atmospheric science
and lead author of a landmark report on aviation and the
atmosphere. "It's a special location."

--
So on this day, the 17th anniversary of the Exxon Valdez oil spill,
let us pause to consider how close we are to making ourselves fossils
from the fossil fuels we extract. In the next twenty years, almost a
billion Chinese people will be trading in their bicycles for the
automobile. Folks, we either get our **** together on this quickly,
or we're going to have to go to plan 'B': inventing a car that runs on
Chinese people. --Bill Maher, March, 31, 2006

"Larry Dighera" wrote in message
...

I understand that a free market promotes competition, and that results
in providing what the buyers want. But I believe that sort of
thinking is a bit simplistic and shortsighted, and overlooks some
significant issues that the "little man behind the screen" doesn't
want people to see.

Certainly in a marketplace dominated by a monopoly, a free market is
inappropriate.


In a marketplace dominated by a monopoly a free market is nonexistent.



The Europeans know that, and are teaching Microsoft
about it.


No, the Europeans are displaying their dislike of free markets.

On May 13, 7:52*am, Larry Dighera wrote:
On Mon, 12 May 2008 22:32:00 -0700 (PDT), "Robert M. Gary"
wrote in
:
I understand that a free market promotes competition, and that results
in providing what the buyers want. *But I believe that sort of
thinking is a bit simplistic and shortsighted, and overlooks some
significant issues that the "little man behind the screen" doesn't
want people to see.

The whole point is that there is no "man behind the screen" There is
no guy in a secret layer setting fuel prices. Its all the natural
forces of the market.

Certainly in a marketplace dominated by a monopoly, a free market is
inappropriate.

Monopoly = no competition. I support regulation that encourages
competition.

In the case of a marketplace like the air carrier market, while a free
market (deregulation) may have provided a positive result in lowering
fares, it has also produced additional negative effects. *Competition
has forced less efficient, or less market driven airlines into
bankruptcy or unwelcome mergers and consequent unemployment of former
employees. *

Less efficient airlines are expensive to customers so I see it as a
good thing that they went out of business. You really have to ask
yourself what the purpose of the airline is. Is it to employ airline
employees or is it to move customers around. If you want to create an
airline who's primary purpose is to employ people you are welcome to.

As
the subject of this discussion bears out, there is significant
collateral damage to free-market economics, and negative impact on the
lives of people involved in the unregulated industry.

Employees ultimately do better in a free economy because there are
more jobs. If you regulate the industry and unionize the employees you
just end up with a few people that have golden jobs and a bunch of
other people who can't find work (i.e. supply and demand are out of
wack)


The free-market concept is predicated on the buyers knowing what is
best (inevitably lower prices), but are buyers qualified to direct the
industry? *Doubtful. *Buyer's don't conduct research and make
intelligent decisions that benefit the industry above their own
personal wants. *

It’s a fundamental concept in liberalism that people are too stupid to
make their own choices. Please understand that there are others of us
that consider that ability to be sacred.

Take the tobacco marketplace for example; no one
would call tobacco smokers wise or sagacious, yet they built one of
the most poisonous industries ever in a free market place. *Regulation
is appropriate at times. *

No, you miss the point. Tabacco exists because people want to smoke.
What right does the gov't have to take that away from them? Its their
free choice.

The difficulty with market regulation lies in the bureaucratic ethos
of government regulators. *They don't have a financial stake in the
industry they regulate, so they may not be sufficiently motivated to
act at times, and then there's *always the question of ethics or the
lack thereof....

I agree, the best solution is to keep the gov't out with regard to
number of producers and pricing. They don't have a natural stake in
the game so they can't make pro/con decisions.


Have airline passengers said they want the consequent delays that
result when rampant competition forces air carriers to schedule an
unreasonable number of flights into hub airports or face losing market
share? *No. *

Yes, they've said they want low fares over low delays. The airlines
could have extra aircraft and crew (which they used to to some extent)
but pax are not willing to pay extra. They'll just go to the less
expensive airline. If you disagree, get rich and prove me wrong by
starting another airline(I won't mind).

-Robert

"Robert M. Gary" wrote in message
...
On May 9, 4:39 pm, Larry Dighera wrote:
On Fri, 9 May 2008 16:11:13 -0700 (PDT), "Robert M. Gary"

In fact, that is what gov't regulation does. It disrupts the natural
forces of the market and directs artificial amount of money towards
certain people.

There's little question that government regulation "disrupts the
natural forces of the market," but I don't see that as a bad thing.

I understand, and I understand there are a lot of people like you. For
many of us the natrual forces of the market are very intuitive but for
others its a difficult concept. In a nut shell, as long as producers
have to compete for customers, customers will get the best value
(based on what is important to them). In the airline industry
passengers have said over and over again that they want cheap fares
and are not willing to pay extra for comfort. Several have tried to
create "premium" airlines but they always fail. If someday passengers
prefer comfort over price the market will change.

- Just like self serve gas.


There is a reason
BMV sells better cars then Kia and its not because they are nicer
people.

- But interesting how many Beemer owners prefer to pump their own gas.