Current Events > "Airlines Can Treat You Like Garbage Because They Are an Oligopoly"

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http://fusion.net/airlines-can-treat-you-like-garbage-because-they-are-an-1794192270

Why is an armed agent of the state using violence to enforce a contract freely entered into by two private parties? Because that is more or less how you define “classical liberalism.” You may have thought that buying a ticket and boarding a plane and even sitting in your assigned seat meant you had some “right” to “fly on the plane.” Legally and contractually, you do not. (Welcome, Tweeps, to your first reckoning with the inherent contradictions in the philosophical underpinnings of laissez-faire capitalism and its conception of “coercion.”)

Of course, this isn’t how capitalism is supposed to work. This isn’t how it’s sold to us. Goons dragging bloodied passengers off of airplanes shouldn’t happen in a world where people “vote with their wallets” and corporations compete with one another to attract consumers. This is the disconnect that has puzzled so many. The first hint to the answer comes in noting that this was not an isolated incident, and that this sort of corporate mistreatment of paying customers is not limited to United.

Why do these airlines sound so unapologetic on social media? Why aren’t the CEOs apologizing? Why does no one sound contrite? This isn’t how the outrage cycle is supposed to work!

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The major American airlines, though, do not need to do anything to convince people to fly with them, because they all merged and consolidated until there were just four firms controlling the vast majority of domestic flights, and they have determined that it is in their collective best interest not to seriously compete with one another.

There used to be competition, which seemed—just like we were taught in high school economics—to bring lower fares and more routes to more destinations, but the airlines weren’t making enough money, so they consolidated into a few huge carriers, reduced service to medium-sized airports, and massively raised the cost of flying through both increased fares and skyrocketing fees.

In the three decades after the U.S. deregulated the airline industry in 1978, carriers chased market share at the expense of profits, losing tens of billions of dollars over the period. From 2008 to 2014, four mergers combined eight big airlines into four: American Airlines Group Inc., United Continental Holdings Inc., Delta Air Lines Inc. and Southwest Airlines Co.

This is called oligopoly, and, for airline shareholders, this is great! It truly is a new golden age of aviation, for people who fly in private jets but own stock in airlines. For the rest of us, this is most of why flying sucks now (the rest of it is the ever-expanding and largely incompetent security state), and also why United is not that worried about you sharing that video of a man being brutally dragged off their plane. They are not embarrassed, and you will not embarrass them. Airlines feel no need to perform the dance of corporate penitence. If you’ve chosen to fly somewhere, it’s probably because you don’t have a good alternative to flying, and you may not even have a good alternative to flying one particular airline:

At 40 of the 100 largest U.S. airports, a single airline controls a majority of the market, as measured by the number of seats for sale, up from 34 airports a decade earlier.
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This is the end result of decades of corporate consolidation—aided by economists and regulators and politicians from both parties—that has greatly enriched a few at the expense of workers, consumers, and citizens in general. People chose to create a world that allows what happened on that plane to happen. Direct your outrage at the policymakers, economists, and industry cartels that created this future.

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Obama's DOJ was horrendous at enforcing anti-trust laws, and we saw several competition-crippling airline mergers happen under his watch that contributed to this horrendous customer experience.

The airline industry sucks, period. Whoever managers to create a viable Uber-like substitute will quickly have an 11-figure bank account.
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The Admiral posted...

Obama's DOJ was horrendous at enforcing anti-trust laws, and we saw several competition-crippling airline mergers happen under his watch that contributed to this horrendous customer experience.

The airline industry sucks, period. Whoever managers to create a viable Uber-like substitute will quickly have an 11-figure bank account.

UberAir would be awesome.
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https://en.m.wikipedia.org/wiki/List_of_airlines_of_the_United_States
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Three decades of deregulation
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The Admiral posted...

Obama's DOJ was horrendous at enforcing anti-trust laws, and we saw several competition-crippling airline mergers happen under his watch that contributed to this horrendous customer experience.

Correct
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The Admiral posted...

The airline industry sucks, period. Whoever managers to create a viable Uber-like substitute will quickly have an 11-figure bank account.

given their razor-thin margins i question whether such a substitute could ever be profitable

idk what the right answer is here. airlines are not getting super rich off our suffering. they suck because air travel is fucking expensive as fuck for them.
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Darkman124 posted...

given their razor-thin margins i question whether such a substitute could ever be profitable

Uber isn't! But to the extent that they can squeeze out money out of an alternative model it would mean crushing labor and avoiding basic requirements whenever possible.
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Antifar posted...

Uber isn't! But to the extent that they can squeeze out money out of an alternative model it would mean crushing labor and avoiding basic requirements whenever possible.

yeah, which means a different part of the market is getting screwed

transport is kind of a no-win when you get down to it

the risk of being kicked off your flight (and the obscenely bad pricing system) is what you face when you insist upon ultra-low fares as a consumer
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airlines have extremely low barriers to entry - highly competitive and relies heavily on capital

There is a reason we can fly across the country in 5 hours for $600

dont talk shit about Obama, he saved us from the Republicans
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Romes187 posted...

airlines have extremely low barriers to entry - highly competitive and relies heavily on capital

There is a reason we can fly across the country in 5 hours for $600

do you mean extremely high barriers to entry
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Have you ever seen the tax you pay on your airfare?

You want to talk about criminal look at the government and how much they tax the shit out of everything.
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Darkman124 posted...

do you mean extremely high barriers to entry

No, though I will say it has been a little while (year and a half maybe?) since I did any analysis of the airline industry. Most MBA programs love to use Southwest as a case study for a variety of different business strategies...but the industry itself is often cited as an example of one that has low barriers to entry.

if things have changed since then, my post could be wrong.

But Trump told me deregulation was a good thing
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Darkman124 posted...

transport is kind of a no-win when you get down to it

so if its a no win is it something we should let the gov't handle?
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