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Mr. Dave - Airline industry consultant

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Mr. Dave - Airline industry consultant

Postby ArturoBandini » Tue Apr 24, 2012 7:03 pm

I admit that I enjoy reading the Citizen Dave columns (ok, "blogs"), but only because they are often deliciously awful. Today's bit of advice to the airline industry is no exception.
Quoting the article:
It starts with buying the ticket. I once spent $900 of an organization's money to fly me to Detroit to give a speech in Windsor, Ontario. I could have flown to Paris for less, and then I would have been in France. Nobody's been able to explain to me why that is.
This is really not a difficult concept. Supply and demand are driving the underlying pricing functions, while airlines' inability to accurately predict said demand, coupled with supply disruptions (weather, unscheduled maintenance) are driving the day-to-day price fluctuations. If Dave (or anyone) can predict air travel demand and weather better than the professionals who have billions of dollars invested in this industry, then there is certainly a hefty paycheck waiting for him somewhere.
So the suggested solution here is to go back to federal government regulation of prices. We do it at the local level for cab fares, so why not for flights? I'm not wedded to that solution, so if you’ve got another one I'd like to hear it.
We already had that system and it was abolished under Jimmy Carter. Under that system, prices were uniformly higher. Air travel was effectively priced out of reach for the lower end of the middle class. After deregulation (which is incomplete; the airline industry is hardly an example of market anarchy), market forces make air travel prices lower on average, but more volatile in response to volatility in supply and demand (i.e. a more accurate reflection of reality).
Next comes checking the bags. Ever since the airlines started charging bag fees, there has been chaos, confusion, and frustration. Understandably, nobody wants to pay the fees, so everybody tries to jam the largest possible bag into the cabin. It's a mess.
Overhead bin packing on today's jets is a classic example of a Tragedy of the Commons. The "resource" (bin space) is "free", and thus everyone has an incentive to use as much of the space as they can get away with (or as much as they can comfortably carry). The proper solution in this case is the same as how any Tragedy of the Commons issues are solved otherwise - property rights. People should buy and "own" space in the bins. Problem solved.

It really is quite simple, but Dave's assessment gets it exactly backwards:
Here's one solution. If the airlines need to charge more, just roll it into the cost of the ticket. That's going to be far less than $25 a ticket, because how many people pay that now to check a bag? If you spread out that revenue stream to every ticket buyer, I have to think we're talking a few dollars here.
This just creates an even wider Tragedy of the Commons situation. If everyone has to pay the same price whether they check/carry a bag or not, then there is no incentive to pack lightly. If no separate bag fees are charged, then airplane baggage compartments will be packed to capacity every time (because why not?), creating even more problems than there were before, and driving ticket costs up for everyone. Worse, the added costs of the irresponsible passengers - those packing more than they need - are borne by the socially-responsible ones who pack lightly.

Other non-anonymous commenters on Dave's actual article have pointed out a number of other weaknesses in Dave's proposal. Kudos to them.

Dave - have you seen Louis C.K.'s viral bit on airline whiners?
(Story about guy who whines about poor airline service)

Louis C.K.: And what happened next? Did you fly through the air, incredibly, like a bird? Did you take part in the miracle of human flight...?
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Re: Mr. Dave - Airline industry consultant

Postby Henry Vilas » Tue Apr 24, 2012 7:17 pm

Nice ideological rant. But I venture that you must not fly much.
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Re: Mr. Dave - Airline industry consultant

Postby fennel » Tue Apr 24, 2012 7:21 pm

The unregulated market needs a pacemaker.
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Re: Mr. Dave - Airline industry consultant

Postby ArturoBandini » Tue Apr 24, 2012 7:28 pm

Henry Vilas wrote:Nice ideological rant. But I venture that you must not fly much.
This is just basic economics.

I fly about 5 trips per year, mostly domestic.
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Re: Mr. Dave - Airline industry consultant

Postby snoqueen » Tue Apr 24, 2012 8:00 pm

We already had that system and it was abolished under Jimmy Carter. Under that system, prices were uniformly higher. Air travel was effectively priced out of reach for the lower end of the middle class.


Forgive me for being an old fart, but I remember back then, and I was most certainly lower end of middle class at best because I had just finished college. We still flew. We rationed our trips more, probably, than just-out-of-college people do now but we still took trips.

And it was a far more satisfactory experience. There was a lot more room to sit, there was decent food served during the flight, the staff wasn't as stressed, there was less restriction on what you carried, the place was cleaner. Now, I know part of the stress today is security measures, but that's only a small part of the difference.

Flights were not as overbooked as today and empty seats were filled on the standby basis, friendly old "student standby." You went to the airport, put your name on some list, and waited for an open seat on the next flight to wherever. Sometimes you got on right away, sometimes you had to wait as long as overnight (which was fine, you slept on the floor against your pack). No luxury, but a calm and not-unpleasant experience. And you knew ahead of time what the ticket cost: either full price or standby price. Period.

All this ended piecemeal after the airlines went into their present mode, which is of course "lowest cost rules."Airlines go out of business and get bought up incessantly, unions strike, experienced pilots get shuffled off to the side in favor of cheaper new guys. Obviously the market has played right into this system with people on line trying to get their best possible deal ($58 to San Diego if I book two months ahead, etc). Chaos reigns, from the viewpoint of the passenger, most likely the employees, and quite possibly the front office as well.

I liked it more before deregulation: a little more expensive, a little more predictable, and a whole lot more pleasant. Crappier and more chaotic is not always "better."
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Re: Mr. Dave - Airline industry consultant

Postby green union terrace chair » Tue Apr 24, 2012 9:58 pm

ArturoBandini wrote:If Dave (or anyone) can predict air travel demand and weather better than the professionals who have billions of dollars invested in this industry, then there is certainly a hefty paycheck waiting for him somewhere.

Seriously.

I know that hyperbole is an easy route to humor but really, Dave? United is "one of the most incompetent, least customer focused big organizations in the world?" Your anecdotal evidence of one bad trip only goes so far. Have you ever had a letter lost in the mail? Because of that, do you thing we should call for governmental regulation of the USPS? Er ...

I've heard horror stories about Charter. But I've had nothing but good experiences with them. Neither good nor bad anecdotes should rule the assessment of the company, but rather simply tell you that it depends on who you're talking to. No matter how much training a company gives, you're always gonna run into off examples of bad employees.

I still think it's downright amazing that you can turn on your computer, find an international flight and be on your way the next day. People get so uptight about flying and delays. Fucking deal with it ... a trip to the west coast no longer includes the threat of dysentery, starvation or your oxen drowning while crossing the river. And it takes considerably less than three months to accomplish.

Some comedian had a bit about one of the first flights he was on that had wi-fi. It wasn't working that day and his seatmate was having conniptions. His response: "I'm so sorry that the thing you didn't even know existed five minutes ago isn't working."
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Re: Mr. Dave - Airline industry consultant

Postby ilikebeans » Wed Apr 25, 2012 10:17 am

ArturoBandini wrote:After deregulation (which is incomplete; the airline industry is hardly an example of market anarchy)...

Are you suggesting the airlines should be completely deregulated? No government oversight whatsoever?
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Re: Mr. Dave - Airline industry consultant

Postby fisticuffs » Wed Apr 25, 2012 10:20 am

Are you suggesting the airlines should be completely deregulated? No government oversight whatsoever?


C'mon. You've read enough Arturo to know the answer to that.
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Re: Mr. Dave - Airline industry consultant

Postby ilikebeans » Wed Apr 25, 2012 10:27 am

fisticuffs wrote:
Are you suggesting the airlines should be completely deregulated? No government oversight whatsoever?

C'mon. You've read enough Arturo to know the answer to that.

True. Let me put a finer point on it.

Arturo: Would you suggest we roll back the so-called Airline Passenger Bill of Rights?
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Re: Mr. Dave - Airline industry consultant

Postby gargantua » Wed Apr 25, 2012 11:33 am

green union terrace chair wrote:
ArturoBandini wrote:If Dave (or anyone) can predict air travel demand and weather better than the professionals who have billions of dollars invested in this industry, then there is certainly a hefty paycheck waiting for him somewhere.

People get so uptight about flying and delays. Fucking deal with it ... a trip to the west coast no longer includes the threat of dysentery, starvation or your oxen drowning while crossing the river. And it takes considerably less than three months to accomplish."


Gramps...you should probably remember this since it sounds like you were there, but these particular travel issues were solved about 100 years ago with the invention of the automobile.

I do deal with the bad customer service and delays.....by avoiding air travel whenever I possibly can. That was not always the case. Air travel used to be an enjoyable experience compared to now. That's not all the airlines' fault, since the advent of TSA, but TSA doesn't cancel or delay my flights, lie about the reasons, overbook flights leading to involuntary bumping, lose luggage, and cram people into coach seating like cattle.

Clearly, if your standard of excellence is the avoidance of dysentery and drowned oxen, the airlines are doing fine. It would be interesting to see how many people think air travel has improved over the last several years.

By the way, the comedian's story was an anecdote, wasn't it? I thought we weren't supposed to pay attention to them.
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Re: Mr. Dave - Airline industry consultant

Postby ArturoBandini » Wed Apr 25, 2012 1:06 pm

ilikebeans wrote:True. Let me put a finer point on it.

Arturo: Would you suggest we roll back the so-called Airline Passenger Bill of Rights?
I'm not familiar enough with the background behind that legislation to say that it should be repealed without making other excisions at the same time. It may have been enacted to counterbalance some other regulatory measure gone awry, so it might only make sense to remove multiple legislative or regulatory tools simultaneously. But at the surface level, there is no need for the Airline Passenger Bill of Rights.

Looking at the page you've linked, I find it curious that the government exempts itself from liability if it is at fault for causing long tarmac delays or surprise surcharges on fares.
...with exceptions for safety, security and air traffic control related-reasons.
[the act bans] post-purchase fare increases unless they are due to government-imposed taxes or fees
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Re: Mr. Dave - Airline industry consultant

Postby Crockett » Wed Apr 25, 2012 1:20 pm

snoqueen wrote:I liked it more before deregulation: a little more expensive, a little more predictable, and a whole lot more pleasant. Crappier and more chaotic is not always "better."


It was quite a bit more than 'a little' more expensive. In nominal dollars terms flights are about the same as they were 25 years ago. Take into account inflation and in real terms they're incredibly cheap.

If so many people want 'service' and 'leg room' then why doesn't an airline offer those things? Why not? Because everyone (but you I gather) would give those things up to save money.

The industry is far from perfect, but it certainly is cheap.
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Re: Mr. Dave - Airline industry consultant

Postby Crockett » Wed Apr 25, 2012 1:22 pm

As for Banal Dave's columns, its like watching a car wreck, I want to look away but yet I can't.
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Re: Mr. Dave - Airline industry consultant

Postby green union terrace chair » Wed Apr 25, 2012 2:02 pm

gargantua wrote:
green union terrace chair wrote:
ArturoBandini wrote:If Dave (or anyone) can predict air travel demand and weather better than the professionals who have billions of dollars invested in this industry, then there is certainly a hefty paycheck waiting for him somewhere.

People get so uptight about flying and delays. Fucking deal with it ... a trip to the west coast no longer includes the threat of dysentery, starvation or your oxen drowning while crossing the river. And it takes considerably less than three months to accomplish."


Gramps...you should probably remember this since it sounds like you were there, but these particular travel issues were solved about 100 years ago with the invention of the automobile.

I do deal with the bad customer service and delays.....by avoiding air travel whenever I possibly can. That was not always the case. Air travel used to be an enjoyable experience compared to now. That's not all the airlines' fault, since the advent of TSA, but TSA doesn't cancel or delay my flights, lie about the reasons, overbook flights leading to involuntary bumping, lose luggage, and cram people into coach seating like cattle.

Clearly, if your standard of excellence is the avoidance of dysentery and drowned oxen, the airlines are doing fine. It would be interesting to see how many people think air travel has improved over the last several years.

I was using Oregon Trail references as hyperbole. I don't think you should just accept being uncomfortable and seemingly weird pricing mechanisms, but that doesn't mean we need to nationalize the airline industry. This stuff is not that big of a deal. People come to expect the superior example as the bar by which all other experiences must meet and that's just not the case.

One wonderful thing that was NOT available years ago is your ability to compare and buy airfares on your own without the use of a travel agent. And even beyond Orbitz, Travelocity, Kayak, etc. ... I recommend Bing's airfare comparison site (used to be an independent site called Farecast). It's fantastic if you have flexible travel dates. If you're traveling between common pairs of cities (usually have to use Milwaukee or Chicago), it shows you the cheapest airfares over a spread of days. Also gives a prediction if those fares will go up or down over the next few days based on historical behavior.

http://www.bing.com/travel/ Look at the bottom of the page at "Find the dates with the lowest fares:"

gargantua wrote:By the way, the comedian's story was an anecdote, wasn't it? I thought we weren't supposed to pay attention to them.

Ha ... anecdotal evidence is useful but doesn't prove a position in sparing amounts. If you go outside and get wet, it probably means it's raining but it doesn't mean that you will always get wet every time or even most of the time you go outside.

Anyways, I suspect the comedian's "anecdote" is more of an invented story than anything else.

ilikebeans wrote:
ArturoBandini wrote:After deregulation (which is incomplete; the airline industry is hardly an example of market anarchy)...

Are you suggesting the airlines should be completely deregulated? No government oversight whatsoever?

I know you aimed this at Arturo but I want to take a stab at it. We need the FAA, we need air traffic controllers, we need subsidization of airports and their construction and that equates to federal / state / local spending on our roadways. (Hyper-libertarians will argue that that all can be privatized, but I don't buy it.)

The TSA needs to be massively retooled or done away with. Have they prevented terrorism? Has some terrorist cell been discouraged to act because of how difficult it would be now? Maybe ... we'll probably never know. But it's a big expensive mess that is porous and inefficient.
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Re: Mr. Dave - Airline industry consultant

Postby Stebben84 » Wed Apr 25, 2012 2:12 pm

Crockett wrote:The industry is far from perfect, but it certainly is cheap.


About a year and a half ago I was flying in from Europe to Chicago. I was hoping to get a connecting flight to Madison. $600. You call that cheap. I call that bullshit.

Fares keep going up and the service keeps getting crappier.

When I was flying around in Europe, I was blown away by how good the service and food was on the flight. The flight from Belgium to Italy was pretty short, yet the food was something I would actually purchase in a restaurant. The airports were hit or miss, but overall on par if not better than here.

Why the hell can't we do this?

green union terrace chair wrote:One wonderful thing that was NOT available years ago is your ability to compare and buy airfares on your own without the use of a travel agent. And even beyond Orbitz, Travelocity, Kayak, etc. ... I recommend Bing's airfare comparison site (used to be an independent site called Farecast). It's fantastic if you have flexible travel dates.


When these first started I thought they were great. When I went this route my last two trips I found them a bust. Every site had virtually the same rates and even similar rates to the airline websites. I tried every trick in the book and spent weeks getting updates with no good deals popping up. I then tried something. I checked the cost for one-way flights each way and bingo, I saved about $150 by not booking round trip. How come these sites didn't do that for me? I'll keep using them, but they aren't what they used to be. I actually think Groupon and Living Social sites are gonna be the next way to get cheap airfare.
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