Re: Re: Re: Airplanes falling out of the sky

[Doug Henwood]

Jim Devine wrote:

>I read some stats in LBO awhile back that indicated that price-deregulation
>didn't really lead to lower airline ticket prices. Doug?

Yup, this is a long-standing LBO obsession. See other post. The dereg 
partisans like to quote real fares per seat-mile, which are down 
since dereg. Problem is people aren't seats. They have to fly longer 
now - one or two stops have become the norm. Flying from NYC to 
Virginia? Change planes in Chicago. If you wanted to fly from NY to 
Seattle tomorrow, it'd probably cost you around $1,800 round trip. 
You could save $1,200 on that by buying 3 or more weeks in advance, 
but long gone are the days of $200 cross-country flights. But that's 
because demand is strong. It'll be very interesting to see what 
happens in the next recession. In the early 1990s, the cumulative 
losses of the airline industry exceeded its cumulative profits 
starting from the days of the Wright Bros. first flight. When demand 
is weak, the temptation to sell otherwise empty seats below cost is 
enormous.

Doug