johnso29

Apparently bag fees aren't fair, or maybe just making money.




Congressmen say they will try to bring back financial regulation of airlines if merger is OK'd



Joan Lowy, Associated Press Writer, On Wednesday June 16, 2010
WASHINGTON (AP) -- Restoring financial regulation of the airline industry will be put before Congress, if the Justice Department approves a proposed merger of United and Continental airlines, two key House members said Wednesday.

At a hearing on the merger, Reps. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, and Jerry Costello, D-Ill., chairman of the panel's aviation subcommittee, expressed concern about the impact the proposed deal could have on consumers and airline workers.

Deregulation has been credited with making airline travel affordable for the average American. But Oberstar pointed to the $2.7 billion the airlines earned in baggage fees in 2009 as evidence that consumers are no longer benefiting from the system. He said he believes there's support in the House for re-regulation.

"Hardly a day passes where I don't walk out on the (House) floor that someone asks me, 'When are we going to re-regulate the airlines?'" Oberstar told reporters after the hearing.

The legislation would impose federal regulation of airline pricing and re-establish a government gatekeeper role similar to that played by the old Civil Aeronautics Board prior to deregulation in 1978, Oberstar said. The board set standards for companies trying to enter the airline market and decided on a case-by-case basis which companies should be granted permission to fly passengers.

Deregulation worked for a while, bringing new, lower-cost carriers into the market and driving down fares, said Oberstar, who -- as a junior congressman -- voted in favor of deregulation. Most of those air carriers -- as well as several "legacy" carriers dating back prior to deregulation -- are gone.

The CEOs of United and Continental, who testified at the hearing, complained that competing against a steady influx of low-cost carriers who drive prices artificially low and then go bankrupt has weakened the airline industry.

Airlines have also suffered repeated shocks in recent years, including the Sept. 11 terror attacks, the SARS virus, volatile oil prices and the economic downturn. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $30 billion to $60 billion in recent years. At least 13 airlines have filed for bankruptcy in the past several years.

"The status quo for this industry is unacceptable," said United's Glenn Tilton.

United's proposed merger with Continental would create the nation's largest airline. Tilton and Continental's Jeffery Smisek said the new company would be able to compete more effectively against large, foreign carriers in the international market.

The new airline's financial success will be based on "synergies" produced by combining the two carriers, not higher fares, Tilton said.

However, industry experts and consumer advocates were skeptical that there would be any synergy savings other than reduced competition.

Costello said the committee will ask the Justice Department, which is reviewing the merger proposal, to determine if there is evidence to support the synergy claims.

"I'm looking for a way to preserve competition," Oberstar said. "That's what I voted for in 1978."

johnso29

That being said, I'm in favor of regulation. We can keep this industry free of new airlines coming in and driving down wages.

Denny Crane

Once he realizes what price "Congress" will have to charge passengers for a ticket so an airline can make money, he won't want to come with 100 miles of re-regulation.

Denny

johnso29

I was thinking the same thing. This guy won't be happy until flying is free.

KC10 FATboy

I just spoke with the FE on this flight. According to him, the crosswinds were strong but not at the limit (31 knots). The First Pilot (think co-pilot), was at the controls. The FE said the landing was very good despite the awkwardness of this picture. Textbook crosswind landing. He was on centerline. haha

The KC-10s were moving A-10s. Apparently, some of the A-10 pilots were MD-11 guys (I assume at FedEx). They witnessed the landing and were so impressed, bought the guy beers that night.

forgot to bid

very cool.

beer

Why so many numbers? I only gave them one!!!

forgot to bid

Why create the CAB when you can just "re-regulate" via the gray area called the DOT/DOJ and that oh so important phrase: "FAA approved."

The problem for the airlines is they're broke and don't have the money to bribe D.C., which is commonly referred to as lobbying.

My bet, this goes nowhere. Didn't Oberstar object to our merger, and where did that go?

tsquare

Now when is John Q gonna exercise that same purported intelligence and start taking drivers licenses and putting people in jail for talking on cell phones and TEXTING while driving, putting far more people at risk than either of these pilots? No sir, this is an egregious misuse of power by the obama whitehouse. Sorry, but it IS a political issue, that's a fact.

forgot to bid

Its just insurance. Besides, I never ever answer unless I'm on SC. Ever. If however more IA calls start coming in then I will delete one of those numbers.