Discussion:
American Airlines - Last one standing
(too old to reply)
zak
2005-09-14 22:30:07 UTC
Permalink
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.

The major U.S. domestic carriers in 1978:

American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11

These are gone:

National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001

Will American eventually have to file for Chapter 11 just to get their
labor costs down and their debt restructured so they can compete with
the others on a level playing field? They don't just have to compete
with the other U.S. majors that have gone or are going through Ch. 11
reorganization, but also with the much leaner and meaner Southwest,
JetBlue, AirTran, Frontier, etc. If AA doesn't file for Ch. 11, they
will be at a huge disadvantage.

Don't know why AA, CO, DL, NW, UA, and US don't just stop flying
domestically and concentrate on international routes, which is where
they can still make a profit. DL could turn all their domestic flying
over to Song, United to Ted, and the other four could set up their own
low-cost domestic carriers. Or in the case of US, just become the
low-cost domestic feeder for AA, CO, or NW.

Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).

All in all, what a sad day for U.S. aviation, and what a sad state of
affairs for a once-prestigious industry.
Blake S
2005-09-14 22:45:52 UTC
Permalink
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Depends if you consider Alaska Airlines and Southwest to be major carriers
or not.
Post by zak
American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11
National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001
Will American eventually have to file for Chapter 11 just to get their
labor costs down and their debt restructured so they can compete with
the others on a level playing field? They don't just have to compete
with the other U.S. majors that have gone or are going through Ch. 11
reorganization, but also with the much leaner and meaner Southwest,
JetBlue, AirTran, Frontier, etc. If AA doesn't file for Ch. 11, they
will be at a huge disadvantage.
Don't know why AA, CO, DL, NW, UA, and US don't just stop flying
domestically and concentrate on international routes, which is where
they can still make a profit. DL could turn all their domestic flying
over to Song, United to Ted, and the other four could set up their own
low-cost domestic carriers. Or in the case of US, just become the
low-cost domestic feeder for AA, CO, or NW.
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
All in all, what a sad day for U.S. aviation, and what a sad state of
affairs for a once-prestigious industry.
zak
2005-09-15 17:20:31 UTC
Permalink
Post by Blake S
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Depends if you consider Alaska Airlines and Southwest to be major carriers
or not.
Neither Alaska nor Southwest were major U.S. carriers
pre-deregulation.
John Doe
2005-09-14 23:21:37 UTC
Permalink
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11
National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001
Will American eventually have to file for Chapter 11 just to get their
labor costs down and their debt restructured so they can compete with
the others on a level playing field? They don't just have to compete
with the other U.S. majors that have gone or are going through Ch. 11
reorganization, but also with the much leaner and meaner Southwest,
JetBlue, AirTran, Frontier, etc. If AA doesn't file for Ch. 11, they
will be at a huge disadvantage.
Don't know why AA, CO, DL, NW, UA, and US don't just stop flying
domestically and concentrate on international routes, which is where
they can still make a profit. DL could turn all their domestic flying
over to Song, United to Ted, and the other four could set up their own
low-cost domestic carriers. Or in the case of US, just become the
low-cost domestic feeder for AA, CO, or NW.
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
All in all, what a sad day for U.S. aviation, and what a sad state of
affairs for a once-prestigious industry.
I don't see the CEOs of either companies putting up forsale signs on their
nice big houses. The way these companies operated it's a wonder they
survived this long.

I don't think it's a sad day if you work for Southwest or AirTran or any
other airline that has continued to grow post 9/11.
Robert J Carpenter
2005-09-15 02:45:37 UTC
Permalink
I recall that at the time of the previous rash of airline failures,
1991???, Mr. Kahn ? - the chief architect of airline deregulation -
said that foreign airlines / owners ought to be let in to show how to
run an aitline. Back then that was particularly silly since most
European airlins still had protected turf and some subsidies (real or
hidden).

Last I heard, Barnson's Virgin organisation still insisted that they
are going to run an American airline through a "US Owned" shell.
Curious.
John Mazor
2005-09-15 04:03:47 UTC
Permalink
Post by Robert J Carpenter
I recall that at the time of the previous rash of airline failures,
1991???, Mr. Kahn ? - the chief architect of airline deregulation -
said that foreign airlines / owners ought to be let in to show how to
run an aitline. Back then that was particularly silly since most
European airlins still had protected turf and some subsidies (real or
hidden).

To compound the idiocy, we still hear proposals to allow foreign airlines to
compete in U.S. domestic markets (cabotage). As if the solution to
overcapacity and the inability of many U.S. carriers to charge the
profitable rates that would allow better service is... bring on subsidized
competition from foreign carriers! Duh.
Post by Robert J Carpenter
Last I heard, Barnson's Virgin organisation still insisted that they
are going to run an American airline through a "US Owned" shell. Curious.
They're going to have to pass some stringent tests on corporate control.
Which prompts the question "Why would a foreign carrier start an airline (or
invest in one) in the crazy U.S. market right now unless they could dictate
its structure, marketing, policies and practices?" Or, to quote an old
airline joke: How do you make a small fortune in the airline business?
Start out with a large fortune.

-- John Mazor
"The search for wisdom is asymptotic."

"Except for Internet newsgroups, where it is divergent..."
-- R J Carpenter

(It's been a while since I used that sig, but it's still my favorite.)
Bertie the Bunyip
2005-09-15 04:09:25 UTC
Permalink
Post by Robert J Carpenter
Post by Robert J Carpenter
I recall that at the time of the previous rash of airline failures,
1991???, Mr. Kahn ? - the chief architect of airline deregulation -
said that foreign airlines / owners ought to be let in to show how to
run an aitline. Back then that was particularly silly since most
European airlins still had protected turf and some subsidies (real or
hidden).
To compound the idiocy, we still hear proposals to allow foreign
airlines to compete in U.S. domestic markets (cabotage).
Hey, US airlines do it in Europe....


Bertie
Capt.Doug
2005-09-16 03:07:43 UTC
Permalink
"Robert J Carpenter" wrote in message
1991???, Mr. Kahn ? - the chief architect of airline deregulation -
Mr. Kahan now owns a large share of the US's largest privately held airline.
Last I heard, Barnson's Virgin organisation still insisted that they
are going to run an American airline through a "US Owned" shell.
Curious.
The corporation is the US 'citizen', not Mr Branson himself.

D.
Richard Steiner
2005-09-17 22:22:57 UTC
Permalink
Post by John Doe
I don't think it's a sad day if you work for Southwest or AirTran or any
other airline that has continued to grow post 9/11.
If WN wasn't so successful at fuel hedging a couple of years ago, I
suspect they'd be hurting these days as well. I'd like to see their
numbers if they had to pay existing rates for fuel...
--
-Rich Steiner >>>---> http://www.visi.com/~rsteiner >>>---> Mableton, GA USA
OS/2 + eCS + Linux + Win95 + DOS + PC/GEOS + Executor = PC Hobbyist Heaven!
WARNING: I've seen FIELDATA FORTRAN V and I know how to use it!
The Theorem Theorem: If If, Then Then.
Frank F. Matthews
2005-09-18 02:02:46 UTC
Permalink
Post by Richard Steiner
Post by John Doe
I don't think it's a sad day if you work for Southwest or AirTran or any
other airline that has continued to grow post 9/11.
If WN wasn't so successful at fuel hedging a couple of years ago, I
suspect they'd be hurting these days as well. I'd like to see their
numbers if they had to pay existing rates for fuel...
It is well known that they are operating at a loss without their hedges.
Jeff Hacker
2005-09-14 23:22:05 UTC
Permalink
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11
National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001
Will American eventually have to file for Chapter 11 just to get their
labor costs down and their debt restructured so they can compete with
the others on a level playing field? They don't just have to compete
with the other U.S. majors that have gone or are going through Ch. 11
reorganization, but also with the much leaner and meaner Southwest,
JetBlue, AirTran, Frontier, etc. If AA doesn't file for Ch. 11, they
will be at a huge disadvantage.
Don't know why AA, CO, DL, NW, UA, and US don't just stop flying
domestically and concentrate on international routes, which is where
they can still make a profit. DL could turn all their domestic flying
over to Song, United to Ted, and the other four could set up their own
low-cost domestic carriers. Or in the case of US, just become the
low-cost domestic feeder for AA, CO, or NW.
Welcome to the world of "AirTrak" - no competition means lousy service.
period.
Post by zak
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
All in all, what a sad day for U.S. aviation, and what a sad state of
affairs for a once-prestigious industry.
beavis
2005-09-15 02:01:58 UTC
Permalink
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes, and $7 Billion in annual revenue. I
think they qualify as a major carrier. They've never gone bankrupt,
and have turned a profit every year for 32 years.
Steven P. McNicoll
2005-09-15 02:53:05 UTC
Permalink
Post by beavis
Southwest has over 420 airplanes, and $7 Billion in annual revenue. I
think they qualify as a major carrier.
He said pre-deregulation U.S. major carrier. Do you think Southwest
qualified as a major carrier before deregulation?
Pooh Bear
2005-09-15 02:56:23 UTC
Permalink
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes, and $7 Billion in annual revenue. I
think they qualify as a major carrier. They've never gone bankrupt,
and have turned a profit every year for 32 years.
Do they have 'fat cat' management ?

Graham
Michael
2005-09-15 20:45:05 UTC
Permalink
Post by Pooh Bear
Do they have 'fat cat' management ?
Southwest has less than 10 various VP's and directors. Northwest has
over 40. Easy enough to determine which one had to file Chapter 11,
and which one never failed to turn a profit.

Michael
sfb
2005-09-15 20:52:05 UTC
Permalink
It is just a title. I know one Fortune 1000 that decided it had too many
VPs. The next AM, they were all directors or general managers. The
business card printers made out like bandits.
Post by Michael
Post by Pooh Bear
Do they have 'fat cat' management ?
Southwest has less than 10 various VP's and directors. Northwest has
over 40. Easy enough to determine which one had to file Chapter 11,
and which one never failed to turn a profit.
Michael
George Patterson
2005-09-15 21:31:50 UTC
Permalink
Post by sfb
It is just a title. I know one Fortune 1000 that decided it had too many
VPs. The next AM, they were all directors or general managers. The
business card printers made out like bandits.
It may be just a title in some companies, but at my former employer, a demotion
from VP to director incurred a substantial cut in pay - typically over $100,000.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
Gig 601XL Builder
2005-09-15 21:47:40 UTC
Permalink
Post by George Patterson
Post by sfb
It is just a title. I know one Fortune 1000 that decided it had too many
VPs. The next AM, they were all directors or general managers. The
business card printers made out like bandits.
It may be just a title in some companies, but at my former employer, a
demotion from VP to director incurred a substantial cut in pay - typically
over $100,000.
George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
Have you been to your bank lately? If you're anything other than a teller or
a secretary you're a VP. They give the title instead of pay.
sfb
2005-09-15 23:31:56 UTC
Permalink
Banks are a world of their own as some documents by law(?) or custom
require an officers signature.

"Gig 601XL Builder" <***@coxDOTnet> wrote in message
news:0_lWe.54332
Post by Gig 601XL Builder
Have you been to your bank lately? If you're anything other than a
teller or a secretary you're a VP. They give the title instead of pay.
Joe Delphi
2005-09-15 03:33:36 UTC
Permalink
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes, and $7 Billion in annual revenue. I
think they qualify as a major carrier. They've never gone bankrupt,
and have turned a profit every year for 32 years.
Plus they have never had a fatal accident in those 32 years.

JD
John Mazor
2005-09-15 04:03:52 UTC
Permalink
Post by Joe Delphi
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes, and $7 Billion in annual revenue. I
think they qualify as a major carrier. They've never gone bankrupt,
and have turned a profit every year for 32 years.
Plus they have never had a fatal accident in those 32 years.
They came damn close in San Diego. If that gas station had been on the
other side of the road...

I think that Kelleher's enlightened approach to corporate culture spilled
over into the safety arena, which is a good thing.
Joe Feise
2005-09-15 06:46:21 UTC
Permalink
Post by John Mazor
Post by Joe Delphi
Plus they have never had a fatal accident in those 32 years.
They came damn close in San Diego. If that gas station had been on the
other side of the road...
That was in Burbank, in the LA area.

-Joe
John Mazor
2005-09-16 00:09:09 UTC
Permalink
Post by Joe Feise
Post by John Mazor
Post by Joe Delphi
Plus they have never had a fatal accident in those 32 years.
They came damn close in San Diego. If that gas station had been on the
other side of the road...
That was in Burbank, in the LA area.
My bad. It was late.
zak
2005-09-15 17:23:14 UTC
Permalink
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes,
Not the subject of this thread.
Post by beavis
and $7 Billion in annual revenue
Not the subject of this thread.
Post by beavis
I think they qualify as a major carrier.
What you think is irrelevant to the subject of this thread.
Post by beavis
They've never gone bankrupt, and have turned a profit every year for 32 years.
None of which matters much to the subject of this thread, which is
about the present state of MAJOR U.S. CARRIERS BEFORE DEREGULATION.
Hatunen
2005-09-15 19:35:17 UTC
Permalink
Post by zak
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes,
Not the subject of this thread.
Post by beavis
and $7 Billion in annual revenue
Not the subject of this thread.
Post by beavis
I think they qualify as a major carrier.
What you think is irrelevant to the subject of this thread.
Post by beavis
They've never gone bankrupt, and have turned a profit every year for 32 years.
None of which matters much to the subject of this thread, which is
about the present state of MAJOR U.S. CARRIERS BEFORE DEREGULATION.
Your attempts to keep a Usenet thread strictly to the subject you
want is rather touching.

************* DAVE HATUNEN (***@cox.net) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
Casey
2005-09-15 18:35:47 UTC
Permalink
Post by Hatunen
Post by zak
None of which matters much to the subject of this thread, which is
about the present state of MAJOR U.S. CARRIERS BEFORE
DEREGULATION.
Your attempts to keep a Usenet thread strictly to the subject you
want is rather touching.
It is not the subject he wants, but the subject of the post Beavis/JF/
whatever was responding to. Those comments were completely
irrelevant to the previous post. But you are right that Usenet
posters often are completely devoid of logic and/or intelligence.

Casey
zak
2005-09-15 19:33:48 UTC
Permalink
Post by Hatunen
Post by zak
Post by beavis
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
Southwest has over 420 airplanes,
Not the subject of this thread.
Post by beavis
and $7 Billion in annual revenue
Not the subject of this thread.
Post by beavis
I think they qualify as a major carrier.
What you think is irrelevant to the subject of this thread.
Post by beavis
They've never gone bankrupt, and have turned a profit every year for 32 years.
None of which matters much to the subject of this thread, which is
about the present state of MAJOR U.S. CARRIERS BEFORE DEREGULATION.
Your attempts to keep a Usenet thread strictly to the subject you
want is rather touching.
Not half as touching as your ignorance.
Jay Honeck
2005-09-15 02:25:27 UTC
Permalink
Post by zak
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
Absolutely. The reason the airlines are in this mess is because Congress
refuses to let any major airline FAIL.

Unfortunately, that's what capitalism requires for success. In a truly free
market, the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels -- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.

Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
Reef Fish
2005-09-15 03:05:23 UTC
Permalink
Post by Jay Honeck
The reason the airlines are in this mess is because Congress
refuses to let any major airline FAIL.
In a truly free
market, the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
That's true. That's what the Free Market is all about. But the
airline industry is anything BUT a free market -- in fact, the
opposite.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels -- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.
You are mistaken here. The MAJOR airlines are REQUIRED to continue
operating in unprofitable routes, whereas Regional Carriers can cut
the unprofitable routes.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.
It has already hit bottom. AA is the next to go. :-)

-- Bob.
Jay Honeck
2005-09-15 11:31:19 UTC
Permalink
Post by Reef Fish
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels -- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.
You are mistaken here. The MAJOR airlines are REQUIRED to continue
operating in unprofitable routes, whereas Regional Carriers can cut
the unprofitable routes.
Both are true. Same result.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
John Mazor
2005-09-15 04:00:23 UTC
Permalink
I'm not disagreeing with your premises here, just amplifying on them.
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
Absolutely. The reason the airlines are in this mess is because Congress
refuses to let any major airline FAIL.
Well, there is the minor matter that until the US Airways/America West
merger, the administration also refused to allow mergers. Mergers provide a
rational, orderly reduction of capacity. Bankruptcy is a weapon of mass
destruction if reducing excess capacity is your goal.
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a truly
free market,

...the government would have been open to proposals for mergers.
Post by Jay Honeck
the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
That already happens. You don't need bankruptcy for that.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels
That goes all the way back to the Airline Deregulation Act of 1978, where
Congress hedged its bets by providing "Essential Air Service" subsidies.
The problem has been that Congress and consumers want it both ways -
competition resulting in cheaper fares, while maintaining the expectation of
service levels that were possible under regulated pricing.
Post by Jay Honeck
-- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.
True as far as it goes, but there are other factors that have undercut
airlines' ability to set pricing or clear a profit, such as Internet fare
shopping (which the airlines foolishly embraced at first), the rising cost
of oil (even the carriers in bankruptcy would have had operating profits
except for rising fuel prices), the way that the government has treated
airlines as a cash cow (the taxes on a typical airline ticket are higher
than the "sin taxes" on alcohol and tobacco).

The irony here is that allowing airlines to go into bankruptcy allows them a
competitive edge over solvent carriers. The solution is to reduce the
period for management to have exclusionary control over the enterprise, and
not allow a bankrupt carrier to expand operations.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.

That's one solution, but not the only one. There are more rational
approaches to the capacity problem.
Bertie the Bunyip
2005-09-15 04:07:48 UTC
Permalink
Post by John Mazor
I'm not disagreeing with your premises here, just amplifying on them.
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will
be needed in the future. There isn't really a need for more than
three major airlines, probably AA, DL (merged with CO and NW), and
UA (merged with US).
Absolutely. The reason the airlines are in this mess is because
Congress refuses to let any major airline FAIL.
Well, there is the minor matter that until the US Airways/America West
merger, the administration also refused to allow mergers. Mergers
provide a rational, orderly reduction of capacity. Bankruptcy is a
weapon of mass destruction if reducing excess capacity is your goal.
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a truly
free market,
...the government would have been open to proposals for mergers.
Post by Jay Honeck
the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
That already happens. You don't need bankruptcy for that.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress
keeps bailing out failing airlines, allowing them to continue
operating at below-profitable levels
That goes all the way back to the Airline Deregulation Act of 1978,
where Congress hedged its bets by providing "Essential Air Service"
subsidies. The problem has been that Congress and consumers want it
both ways - competition resulting in cheaper fares, while maintaining
the expectation of service levels that were possible under regulated
pricing.
Post by Jay Honeck
-- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that
NONE of the airlines can charge what it actually costs to fly.
True as far as it goes, but there are other factors that have undercut
airlines' ability to set pricing or clear a profit, such as Internet
fare shopping (which the airlines foolishly embraced at first), the
rising cost of oil (even the carriers in bankruptcy would have had
operating profits except for rising fuel prices), the way that the
government has treated airlines as a cash cow (the taxes on a typical
airline ticket are higher than the "sin taxes" on alcohol and
tobacco).
The irony here is that allowing airlines to go into bankruptcy allows
them a competitive edge over solvent carriers. The solution is to
reduce the period for management to have exclusionary control over the
enterprise, and not allow a bankrupt carrier to expand operations.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.
That's one solution, but not the only one. There are more rational
approaches to the capacity problem.
Best solution is to limit it to the types of people that used to fly.
People that needed to. People that could afford to. People with class.
Bring back the DC-7, I say.


Oh wait, wrong problem.



Bertie
sfb
2005-09-15 04:14:01 UTC
Permalink
Airlines and all businesses do not play taxes. They collect them from
passengers and customers who are the government's cash cow. The airlines
problems are revenues vs. costs and taxes are a wash just passing
through the airline bank accounts.
Post by John Mazor
I'm not disagreeing with your premises here, just amplifying on them.
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
Absolutely. The reason the airlines are in this mess is because Congress
refuses to let any major airline FAIL.
Well, there is the minor matter that until the US Airways/America West
merger, the administration also refused to allow mergers. Mergers provide a
rational, orderly reduction of capacity. Bankruptcy is a weapon of mass
destruction if reducing excess capacity is your goal.
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a truly
free market,
...the government would have been open to proposals for mergers.
Post by Jay Honeck
the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
That already happens. You don't need bankruptcy for that.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels
That goes all the way back to the Airline Deregulation Act of 1978, where
Congress hedged its bets by providing "Essential Air Service"
subsidies.
The problem has been that Congress and consumers want it both ways -
competition resulting in cheaper fares, while maintaining the
expectation of
service levels that were possible under regulated pricing.
Post by Jay Honeck
-- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.
True as far as it goes, but there are other factors that have undercut
airlines' ability to set pricing or clear a profit, such as Internet fare
shopping (which the airlines foolishly embraced at first), the rising cost
of oil (even the carriers in bankruptcy would have had operating profits
except for rising fuel prices), the way that the government has treated
airlines as a cash cow (the taxes on a typical airline ticket are higher
than the "sin taxes" on alcohol and tobacco).
The irony here is that allowing airlines to go into bankruptcy allows them a
competitive edge over solvent carriers. The solution is to reduce the
period for management to have exclusionary control over the
enterprise, and
not allow a bankrupt carrier to expand operations.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.
That's one solution, but not the only one. There are more rational
approaches to the capacity problem.
John Mazor
2005-09-15 04:37:47 UTC
Permalink
Post by sfb
Airlines and all businesses do not play taxes. They collect them from
passengers and customers who are the government's cash cow. The airlines
problems are revenues vs. costs and taxes are a wash just passing
through the airline bank accounts.
No. Taxes increase ticket prices. Airlines have to compete with other modes
of transportation and with other options such as corporate teleconferencing,
or for the typical consumer, the option of not making non-essential trips at
all if the price is too high. Do you think that traffic levels would remain
at current levels if the government imposed a $1,000 excise tax on every
ticket and the airlines passed along the cost to passengers?

Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it took them
to dare to impose modest price increases to partially offset rising fuel
costs.
nobody
2005-09-15 08:17:55 UTC
Permalink
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it took them
to dare to impose modest price increases to partially offset rising fuel
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.

I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.

Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
khobar
2005-09-15 16:14:28 UTC
Permalink
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it took them
to dare to impose modest price increases to partially offset rising fuel
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of their
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.

Paul Nixon
Earl Grieda
2005-09-15 19:04:21 UTC
Permalink
Post by khobar
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it
took
Post by khobar
them
Post by nobody
Post by John Mazor
to dare to impose modest price increases to partially offset rising fuel
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of their
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
TOliver
2005-09-15 20:18:59 UTC
Permalink
"Earl Grieda" <wrotet...
Post by Earl Grieda
Post by khobar
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it
took
Post by khobar
them
Post by nobody
Post by John Mazor
to dare to impose modest price increases to partially offset rising
fuel
Post by khobar
Post by nobody
Post by John Mazor
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of
their
Post by khobar
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
With little or no "cash" (which WN possessed and the Pantheon of Immortal
Legacies....May their names be cried in reverence and awe!....did not) the
legacies were unable to participate in the "futures" market for oil and jet
fuel. Cash is an even more valuable asset when it may be used to purchase
today that which is likely to be more expensive tommorrow.

All here should realize that for a couple of years and even more so today,
the "Cap Value" of WN, the total market value of its stock, has been and is
greater than the value of the stock of the legacies combined.

Zak, as for the legacies, like to monuments in the vast wastes of Nubia seen
by Iskander, they may be no more than deteriorating remnants of once proud
companies that saw them selves (and were seen by their employees) as
Immortals. After all, most every "legacy" started with one or two routes
across the dusty plains of America - or the Florida Straights, and WN had
three, HOU/SAT/DAL, a golden triangle for $19.95 a leg after 5PM on
Friday... Throw in Austin and El Paso, and all of a sudden, you have a
major airline, the highest pax number carrier in Califormnia these days, is
it not?

TMO
zak
2005-09-15 20:44:17 UTC
Permalink
Post by TOliver
Zak, as for the legacies, like to monuments in the vast wastes of Nubia seen
by Iskander, they may be no more than deteriorating remnants of once proud
companies that saw them selves (and were seen by their employees) as
Immortals. After all, most every "legacy" started with one or two routes
across the dusty plains of America - or the Florida Straights, and WN had
three, HOU/SAT/DAL, a golden triangle for $19.95 a leg after 5PM on
Friday... Throw in Austin and El Paso, and all of a sudden, you have a
major airline, the highest pax number carrier in Califormnia these days, is
it not?
TMO
You are missing the point. Nobody is disputing the fact that
Southwest and the other LCCs have a valid business model. They
obviously do. The point is that it is foolish and irrelevant to even
attempt to compare the Legacies with the LCCs. They are different
models of different eras.

Yes, we all know that Legacies are pre-historic dinosaurs that are
dying an agonizingly slow, painful death. The U.S. government dealt
the death blow with the 1978 De-regulation Act. The surprise isn't
that the Legacies are dying, if anything what is surprising is that
it's taken so long.

You simply cannot compare the object of your religious fervor,
Southwest, with the Legacies. Southwest doesn't have to compete with
European airlines who offer a superior product across the Atlantic.
Southwest doesn't have to compete with Asian carriers who offer a
vastly superior product across the Pacific. Southwest doesn't have to
fly a mix of different aircraft for different markets. Southwest
doesn't offer interline baggage transfers. Southwest doesn't even
offer advance seat assignments, an extremely basic thing which even
the cheapest of the other cheap carriers out there manages to do.

The bottom line: there is no comparison.

Does Southwest represent the future of U.S. domestic aviation? Yes,
unfortunately. It's lowest common denominator transportation. Peanut
fares for trailer trash folks.
Casey
2005-09-15 21:23:20 UTC
Permalink
Post by zak
Does Southwest represent the future of U.S. domestic aviation?
Yes, unfortunately. It's lowest common denominator transportation.
Peanut fares for trailer trash folks.
Southwest is definitely the Walmart of the airline business, but it is
not necessarily the only future. Look at JetBlue and Frontier. Both
offer lower prices, and both offer a superior product to Southwest.
In different words, the USA has Walmart and Target. Both provide
lower prices, but Target has better service and ambience. Both are
going to be around for a while.

Casey
zak
2005-09-15 21:44:45 UTC
Permalink
Post by Casey
Post by zak
Does Southwest represent the future of U.S. domestic aviation?
Yes, unfortunately. It's lowest common denominator transportation.
Peanut fares for trailer trash folks.
Southwest is definitely the Walmart of the airline business, but it is
not necessarily the only future. Look at JetBlue and Frontier. Both
offer lower prices, and both offer a superior product to Southwest.
In different words, the USA has Walmart and Target. Both provide
lower prices, but Target has better service and ambience. Both are
going to be around for a while.
Casey
Yeah, I thought about that the second I hit send. JetBlue is a much
better model for what the future of domestic aviation in the U.S.
should be than Southwest. They took Southwest's model and improved
upon it. It's New York's version of Southwest, done with style. And
they have the most overwhelmingly positive response of any domestic
airline.

The WalMart v. Target comparison is a great one.
Gig 601XL Builder
2005-09-15 21:42:36 UTC
Permalink
Post by zak
You are missing the point. Nobody is disputing the fact that
Southwest and the other LCCs have a valid business model. They
obviously do. The point is that it is foolish and irrelevant to even
attempt to compare the Legacies with the LCCs. They are different
models of different eras.
Yes, we all know that Legacies are pre-historic dinosaurs that are
dying an agonizingly slow, painful death. The U.S. government dealt
the death blow with the 1978 De-regulation Act. The surprise isn't
that the Legacies are dying, if anything what is surprising is that
it's taken so long.
And this is a good thing because it is much cheaper to fly now than it was
before 1978.
Post by zak
You simply cannot compare the object of your religious fervor,
Southwest, with the Legacies.
Yes you can...
Post by zak
Southwest doesn't have to compete with
European airlines who offer a superior product across the Atlantic.
They also don't have to use the same business model for domestics that they
do for international. It, of coursr doesn't help that many of the foreign
carriers are subsidized to offer that ?superior product.
Post by zak
Southwest doesn't have to compete with Asian carriers who offer a
vastly superior product across the Pacific.
ditto
Post by zak
Southwest doesn't have to
fly a mix of different aircraft for different markets.
They don't have to either. The fleet has been upgraded since 1978. They
could have used a one type model like SW.
Post by zak
Southwest
doesn't offer interline baggage transfers. Southwest doesn't even
offer advance seat assignments, an extremely basic thing which even
the cheapest of the other cheap carriers out there manages to do.
Not offering these things doesn't seem to be hurting SW in anyway.
Post by zak
The bottom line: there is no comparison.
Sure there is. SW didn't have the legacy problems but the legacy carriers
could have and it is quite easy to say should have changed the model at
least 10 years ago. They didn't and soon all of them will be a memory.
Post by zak
Does Southwest represent the future of U.S. domestic aviation? Yes,
unfortunately. It's lowest common denominator transportation. Peanut
fares for trailer trash folks.
That is the most elitist crap I have ever heard and it is just silly to
boot. AA or UA (the only legacy carriers I've flown on recently) gave poorer
service than SW and all of the employees acted as if someone had just stuck
a stick up their ass. Of course, I wouldn't be in a very good mood if my job
was hanging by a thread either.

The legacy carriers should have all gone into bankruptcy long ago. The
discounted planes would have been a could deal for all the new LCC that
replaced them.
TOliver
2005-09-15 22:27:31 UTC
Permalink
Post by zak
Does Southwest represent the future of U.S. domestic aviation? Yes,
unfortunately. It's lowest common denominator transportation. Peanut
fares for trailer trash folks.
....and Easyjet and Ryanair and a dozen others represent the "fate" of
European and eventually Asian airliners...

The "legacies" degraded transoceanic level of service has in part emerged
from their money-losing delivery of service to "feed" the cabins of their
international flights, presumed to be potentially unprofitable unless able
to attract passengers from the hinterlands. The US is a vastly different
"place" than Western Europe or Asia, and in all honesty, the Greyhound with
wings" class of service makes far better sense from a "business model"
standpoint, than what the legacies have attempted to maintain.

As for the European International carriers, one would be hard pressed to
find much justification for purchasing equity ownership these days as they
go through a shakeout of substantial dimensions. After all, a merger is no
more than an acquisition in which the "acquired" keeps her maiden name.
There are no "equal partners".

I sense that you don't comprehend that in most of the US, airlines compete
with each other on most domestic routes, while European "legacies" or their
equivalent possess substantial internal advantages. As for the "all the
same type" aircraft claim, that's simply smart business and not undertaking
routeds beyond the range of the chosen models. After all, WN has a handful
of routes which are as nearly as long as some North Atllantic legs and flys
an a/c with models in transocean service to Hawaii and in the
Central/Western Pacific.

I'm no flying fan of WN, rarely more than one trip a year (since they don't
fly out of my home airport), but find their coach service to be no more
painful than some of AA's dingy MD80s or DL's "never touched by a vacuum
cleaner" fleet. As for Europe, between Alitalia and BA, Marshall Balbo
needs to take charge and LT Christian would not have signed on. I don't
board anything short of 6 hours aloft in search of a meal, having long ago
lost the thrill from fining above the clouds. Up front, the best of it can
be attractive (but modestly satisfying), while in back, after Finnair's old
open sandwiches, it all been a vast and fast downhill slide

As for comparing premium class service, when there are 24 seats in front and
200 in back, it's pretty obvious that "premium service" is little more than
a prestige game. I saw an estimate by an airline analyst several months ago
in which he claimed that less than 20% of premium class seats actually were
filled by folks paying the full class fare. That breaks down to 4 in front
and 200 in back, with 20 frequent flyers or non-revenues filling up the
cabin in front. In the next few decades, few European carriers and not many
in Asia will be able to escape Wal-Martization, while social change and the
potential for revolution will cut many of the amenities gilding the lily on
service to the Gulf and and by Gulf-based airlines. After the sheikh's
heads begin to show up on pikes and fence spikes, there airlines will cut
back on hot towels and lounging gear.

Your son's (unless he's wealthy enough to pay the price) airlines will look
more like beans and bread in Steerage than caviar and champers in the First
Class salon.

TMO
nobody
2005-09-16 02:48:50 UTC
Permalink
Post by TOliver
cabin in front. In the next few decades, few European carriers and not many
in Asia will be able to escape Wal-Martization,
If you're talking low cost, Ryannair, Easyjet are way ahead of
Southwest, Jetsgo, Westjet. WAY ahead. (ro way worse depending on point
of view).

And in fact, this past august, for the first time, Ryannair carried more
people in its "regional" network than British Airways carried in its
worldwide network for August. (caveat: BA had the gate gourmet strike
which reduced its pax numbers).


The LCCs in north america are not so "no frills" anymore, and many now
provide entertainment and comfortable seats. In fact, it can be argued
that for some LCCs in north america, their on-board service is equal to
or better than many of the legacy carriers.
Robert J Carpenter
2005-09-16 10:30:15 UTC
Permalink
Post by nobody
And in fact, this past august, for the first time, Ryannair carried more
people in its "regional" network than British Airways carried in its
worldwide network for August. (caveat: BA had the gate gourmet
strike
Post by nobody
which reduced its pax numbers).
Is it perhaps just a coincidence that Texas Pacific owns Gate Gourmet
and is a financial backer of Ryanair? David Bonderman of Texas
Pacific is Chairman of Ryanair.

Texas Pacific owns parts of America West (& thus US Airways) and
Continental as well.

http://www.newbridgecapital.com/shareholders.html
Jeff Hacker
2005-09-16 14:02:32 UTC
Permalink
[snip]
"> Zak, as for the legacies, like to monuments in the vast wastes of Nubia
seen
Post by TOliver
by Iskander, they may be no more than deteriorating remnants of once proud
companies that saw them selves (and were seen by their employees) as
Immortals. After all, most every "legacy" started with one or two routes
across the dusty plains of America - or the Florida Straights, and WN had
three, HOU/SAT/DAL, a golden triangle for $19.95 a leg after 5PM on
Friday... Throw in Austin and El Paso, and all of a sudden, you have a
major airline, the highest pax number carrier in Califormnia these days,
is it not?
TMO
I agree with you on this, BUT, there is a bigger problem. That is stability
in the industry. In the "old days," you could count on pretty regular
schedules and what the cost was. Today, you can't. Fares vary by the
minute and on an airplane with 150 seats, there are 150 (or more) fare
possibilities, as the airlines try to maximize revenue.

In the old regulated environment, the idea was that airline service was a
public service and the airlines had to be able to provide it. Yes, part of
that required service to various cities that the legacies probably wouldn't
have otherwise wanted to serve, and the majors cross subsidized that service
with their longer haul revenues.

there has got to be a happy medium where the airlines are permitted to
compete, but the competition isn't so deadly that more than half of the U.S.
majors are operating in bankrutpcy. And the same is beginning to show
elsewhere as well (in Europe, with the failures of Swissair and Sabena, the
perilous situations of Alitalia and Olympic, etc.; in Australia /New Zealand
with the failure of Ansett and the troubles at Air New Zealand). When so
many carriers are in such dire straits, something is wrong with the
industry.

Today, people will desert one carrier to save $5 a ticket, even if that
extra $5 buys better service (i.e., larger baggage allowance, service to
primary airports, better inflight service, etc.) And yet even this is
largely bait-and-switch (Ryanair, for example, probably generates more
revenue selling inflight service items (drinks, food, etc.) than they make
on the tickets, and you essentially end up on a flying bus (no reclining
seats, no window shades, etc.)

Southwest has been successful because they stick to a simple formula. Their
fares are not always the cheapest; their web site is not the best if you're
looking at a connection scenario, but people know they can count on two
things, consistent schedules and consistent fares. And not least, tolerable
legroom.
Frank F. Matthews
2005-09-15 20:49:33 UTC
Permalink
Post by Earl Grieda
Post by khobar
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it
took
Post by khobar
them
Post by nobody
Post by John Mazor
to dare to impose modest price increases to partially offset rising
fuel
Post by khobar
Post by nobody
Post by John Mazor
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of
their
Post by khobar
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
There is always an interesting competitive stress between keeping the
competition in the dark and wanting to reassure your investors.

Despite the eternal desire of most managers to keep everything secret I
suspect that, in this case, the judgment was that there was nothing that
they could do with the actual information (except cry) and that the
investors (bosses in some sense) would be impressed.
nobody
2005-09-16 02:21:46 UTC
Permalink
Post by Earl Grieda
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
Airlines with bad credit cannot buy hedges. The better your credit, the
longer ahead you can buy hedges. Your ability to pay for the fuel you
contracted for 2 years down the road is very important.
Dave Stadt
2005-09-16 04:17:44 UTC
Permalink
Post by nobody
Post by Earl Grieda
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
Airlines with bad credit cannot buy hedges. The better your credit, the
longer ahead you can buy hedges. Your ability to pay for the fuel you
contracted for 2 years down the road is very important.
And when you haven't paid for the fuel you bought two years ago you have no
bargaining power toward future purchases.
DevilsPGD
2005-09-16 15:10:02 UTC
Permalink
Post by nobody
Post by Earl Grieda
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
Airlines with bad credit cannot buy hedges. The better your credit, the
longer ahead you can buy hedges. Your ability to pay for the fuel you
contracted for 2 years down the road is very important.
While I don't disagree, I also suspect the oil companies wouldn't have
any trouble selling that same fuel on the open market at that price
either.
--
Sign in a Laundromat AUTOMATIC WASHING MACHINES:
"PLEASE REMOVE ALL YOUR CLOTHES WHEN THE LIGHT GOES OUT"
Matt Barrow
2005-09-16 16:09:15 UTC
Permalink
Post by DevilsPGD
Post by nobody
Post by Earl Grieda
That's interesting. I would expect business expenses to be a competitive
secret. I wonder what sort of prices the other airlines negotiated.
Airlines with bad credit cannot buy hedges. The better your credit, the
longer ahead you can buy hedges. Your ability to pay for the fuel you
contracted for 2 years down the road is very important.
While I don't disagree, I also suspect the oil companies wouldn't have
any trouble selling that same fuel on the open market at that price
either.
http://gusvanhorn.blogspot.com/2005/09/too-bad-for-us.html
Too Bad for U.S.

The good news: Richard Branson, the mogul behind Virgin Airlines, who
recently started a private venture into space tourism, wants to build an oil
refinery.

Like the rest of the airline industry, Mr Branson's Virgin Atlantic
Airways has been stung by higher jet fuel prices and was forced to raise
fuel surcharges for the second time in four months.

Hurricane Katrina sent oil prices soaring to $US70 a barrel because it
shut several US Gulf Coast refineries, which turn crude oil into products
like diesel, gasoline and jet fuel.

"If we don't start now to get more refineries built then fuel prices could
literally rocket to $US100-$US200 (per barrel of oil) and the world economy
would come to a grinding halt," Branson said in an interview on financial
news network CNBC overnight.
The bad news: It likely won't be in the good ol' U.S. of A. Remember the
words of James K. Glassman on why our gasoline prices are so high?


The oil is there. The obstacles to putting it to use are strictly
political: restrictions on drilling, on building refineries [bold added]
(the number has dropped by more than half since 1980), and on making the
distribution system more efficient. Remove the barriers, and prices will
fall.

For anyone who might doubt that, Branson wants to build a refinery and could
easily afford to, but oil analysts think he will avoid trying to build in
the States.


"My immediate reaction to that is: Not in the US," said Paul Flemming, oil
analyst at Energy Security Analysis Inc. "That's definitely more pie in the
sky than anything."


In the US, getting a permit could involve years of navigating local,
state, and federal regulations and protests from environmental and community
groups, analysts say.

With all this talk about "cutting red tape" to get aid to victims of
Katrina, why has it not occurred to anyone that one need not cut red tape if
one gets rid of it altogether? And why speak of getting the government out
of the way only during emergencies?


Had the United States more oil refineries (and required the manufacture of
fewer special blends), gasoline prices would have been lower before Katrina
to begin with and would have increased by less after the storm hit
refinery-rich Louisiana -- assuming that refineries were more evenly spread
out geographically than they are. The government admitted part of its role
when it waived certain clean air standards after Katrina to "stabilize gas
prices".


Too bad this is just a short-term, range-of-the-moment fix. These
regulations should be abolished altogether, as should those that have
prevented new refineries from being built for decades. But having regulated
itself into crisis management mode, the government will reinstate the
restrictive regulations as soon as it feels people will tolerate the
additional pressure on gas prices again. Note that this waiver is, in
essence, additional government regulation! This is a classic example of the
economic principle that controls breed controls.


The premise that everything is up to the government is why, when gasoline
prices stay up, our government will be more likely to flirt with price
controls rather than getting out of the way -- permanently -- of new
refinery construction.


Only when our electorate gives up its paranoia about companies
"price-gouging" at the pump (due to a shortage created in the first place by
its elected representatives) in favor of a willingness to permit men like
Branson to make real money, we will get better government and lower gasoline
prices.


Our nation's response to rising gasoline prices so far gives "penny wise,
pound foolish" new meaning.


Here's hoping Branson is successful in finding a way to save on jet fuel,
and make additional money. Too bad for us it won't be here.
Miss L. Toe
2005-09-16 16:16:33 UTC
Permalink
Post by Matt Barrow
Hurricane Katrina sent oil prices soaring to $US70 a barrel because it
shut several US Gulf Coast refineries, which turn crude oil into products
like diesel, gasoline and jet fuel.
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.

Those who dictate the oil price didn't think logically.
Post by Matt Barrow
"If we don't start now to get more refineries built then fuel prices could
literally rocket to $US100-$US200 (per barrel of oil) and the world economy
would come to a grinding halt," Branson said in an interview on financial
news network CNBC overnight.
NO - If 'we' DO build more refineries we will allow demand to increase and
prices will rocket, if 'we' DONT build more refineries demand (for crude)
will not be able to increase and prices will change only with supply.

(Obviously if refineries are not built demand for refined fuel will outstrip
supply and alternatives will become more cost effective).
sfb
2005-09-16 16:35:57 UTC
Permalink
All the crude platforms in the Gulf also shut down and are slowly coming
back on line. If Katrina did what Ivan did, then there is extensive
damage to underwater pipelines that move crude onshore.
Post by Miss L. Toe
Post by Matt Barrow
Hurricane Katrina sent oil prices soaring to $US70 a barrel because it
shut several US Gulf Coast refineries, which turn crude oil into products
like diesel, gasoline and jet fuel.
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically.
Post by Matt Barrow
"If we don't start now to get more refineries built then fuel
prices
could
Post by Matt Barrow
literally rocket to $US100-$US200 (per barrel of oil) and the world
economy
Post by Matt Barrow
would come to a grinding halt," Branson said in an interview on financial
news network CNBC overnight.
NO - If 'we' DO build more refineries we will allow demand to increase and
prices will rocket, if 'we' DONT build more refineries demand (for crude)
will not be able to increase and prices will change only with supply.
(Obviously if refineries are not built demand for refined fuel will outstrip
supply and alternatives will become more cost effective).
Gig 601XL Builder
2005-09-16 18:37:04 UTC
Permalink
Post by sfb
All the crude platforms in the Gulf also shut down and are slowly coming
back on line. If Katrina did what Ivan did, then there is extensive damage
to underwater pipelines that move crude onshore.
Not to mention damage that may or may not have happened to the port that
offloads ~12% of the foreign crude that comes into the US. Crude on a boat
is useless while it is on the boat.
sfb
2005-09-16 19:09:35 UTC
Permalink
Louisiana Offshore Oil Port (LOOP) already came back on online.
Post by Gig 601XL Builder
Post by sfb
All the crude platforms in the Gulf also shut down and are slowly
coming back on line. If Katrina did what Ivan did, then there is
extensive damage to underwater pipelines that move crude onshore.
Not to mention damage that may or may not have happened to the port
that offloads ~12% of the foreign crude that comes into the US. Crude
on a boat is useless while it is on the boat.
Gig 601XL Builder
2005-09-16 20:06:01 UTC
Permalink
Post by sfb
Louisiana Offshore Oil Port (LOOP) already came back on online.
Post by Gig 601XL Builder
Post by sfb
All the crude platforms in the Gulf also shut down and are slowly coming
back on line. If Katrina did what Ivan did, then there is extensive
damage to underwater pipelines that move crude onshore.
Not to mention damage that may or may not have happened to the port that
offloads ~12% of the foreign crude that comes into the US. Crude on a
boat is useless while it is on the boat.
Yes it did and that is one of the reasons the price of crude dropped back
down.
sfb
2005-09-16 20:40:23 UTC
Permalink
You lost the thread. Somebody was arguing that there would be a surplus
of crude since the refineries were shut down driving down the price of
crude.
Post by Gig 601XL Builder
Post by sfb
Louisiana Offshore Oil Port (LOOP) already came back on online.
Post by Gig 601XL Builder
Post by sfb
All the crude platforms in the Gulf also shut down and are slowly
coming back on line. If Katrina did what Ivan did, then there is
extensive damage to underwater pipelines that move crude onshore.
Not to mention damage that may or may not have happened to the port
that offloads ~12% of the foreign crude that comes into the US.
Crude on a boat is useless while it is on the boat.
Yes it did and that is one of the reasons the price of crude dropped
back down.
Gig 601XL Builder
2005-09-16 21:17:27 UTC
Permalink
You lost the thread. Somebody was arguing that there would be a surplus of
crude since the refineries were shut down driving down the price of crude.
So I did.

But one part of my comment does still apply to that incorrect argument. The
crude on the boat is useless so concern that it would be harder to get crude
off the boat would negate some of the downward effect of reduced demand.
But... In the real world the price went up on both because it scared the
$h!t out of the market and fear is the only variable that is always in play
in economics.

To quote Eddie Murphy, "He ain't gonna be able to get his son the GI Joe
with the KungFu grip."
Pooh Bear
2005-09-16 23:22:32 UTC
Permalink
Post by Gig 601XL Builder
You lost the thread. Somebody was arguing that there would be a surplus of
crude since the refineries were shut down driving down the price of crude.
So I did.
But one part of my comment does still apply to that incorrect argument. The
crude on the boat is useless so concern that it would be harder to get crude
off the boat would negate some of the downward effect of reduced demand.
But... In the real world the price went up on both because it scared the
$h!t out of the market and fear is the only variable that is always in play
in economics.
And because there are plenty of other purchasers for crude.

Graham
khobar
2005-09-17 16:15:32 UTC
Permalink
Post by Pooh Bear
Post by Gig 601XL Builder
You lost the thread. Somebody was arguing that there would be a surplus of
crude since the refineries were shut down driving down the price of crude.
So I did.
But one part of my comment does still apply to that incorrect argument. The
crude on the boat is useless so concern that it would be harder to get crude
off the boat would negate some of the downward effect of reduced demand.
But... In the real world the price went up on both because it scared the
$h!t out of the market and fear is the only variable that is always in play
in economics.
And because there are plenty of other purchasers for crude.
Really?

http://www.washingtonpost.com/wp-dyn/content/article/2005/09/17/AR2005091700631.html

Paul Nixon
Pooh Bear
2005-09-18 00:40:33 UTC
Permalink
Post by Pooh Bear
Post by Gig 601XL Builder
Post by sfb
You lost the thread. Somebody was arguing that there would be a
surplus of
Post by Pooh Bear
Post by Gig 601XL Builder
Post by sfb
crude since the refineries were shut down driving down the price of
crude.
Post by Pooh Bear
Post by Gig 601XL Builder
So I did.
But one part of my comment does still apply to that incorrect argument.
The
Post by Pooh Bear
Post by Gig 601XL Builder
crude on the boat is useless so concern that it would be harder to get
crude
Post by Pooh Bear
Post by Gig 601XL Builder
off the boat would negate some of the downward effect of reduced demand.
But... In the real world the price went up on both because it scared the
$h!t out of the market and fear is the only variable that is always in
play
Post by Pooh Bear
Post by Gig 601XL Builder
in economics.
And because there are plenty of other purchasers for crude.
Really?
http://www.washingtonpost.com/wp-dyn/content/article/2005/09/17/AR2005091700631.html
Paul Nixon
Saudi's offering a less popular grade of crude.

" Riyadh has already scouted refiners to sell more of its crude in October, but its
incremental high-density, high-sulfur crude, difficult to process into transport fuel,
has found no takers. "

from your link.

The petroleum refiners prefer low sulphur light sweet crude.

Graham
Pooh Bear
2005-09-16 23:21:30 UTC
Permalink
Post by sfb
You lost the thread. Somebody was arguing that there would be a surplus
of crude since the refineries were shut down driving down the price of
crude.
That's because the poster in question forgot that there are refineries in
other countries than the USA. The crude will simply end up going to whoever
needs ( and can refine ) it.

Incidentally UK diesel prices at the pump are about 4-5% higher that petrol
/ gas. I'm told this is because there's insufficient diesel refining
capacity here and the extra has to be imported. Before diesel became so
popular for personal vehicles diesel was 2-3% less than petrol.

Graham
Bob Ward
2005-09-17 04:06:11 UTC
Permalink
On Fri, 16 Sep 2005 17:16:33 +0100, "Miss L. Toe"
Post by Miss L. Toe
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?

You probably think that "daylight saving time" actually saves
daylight, as well.
George Patterson
2005-09-17 04:11:29 UTC
Permalink
Post by Bob Ward
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?
The price of gasoline doesn't fall. The price of crude falls. And crude oil
prices are what's being reported as "barrel of oil" costs.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
mrtravel
2005-09-17 04:15:38 UTC
Permalink
Post by Bob Ward
On Fri, 16 Sep 2005 17:16:33 +0100, "Miss L. Toe"
Post by Miss L. Toe
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?
You probably think that "daylight saving time" actually saves
daylight, as well.
It does save energy, and it should be implemented all year.
Bob Ward
2005-09-17 04:53:34 UTC
Permalink
Post by mrtravel
Post by Bob Ward
On Fri, 16 Sep 2005 17:16:33 +0100, "Miss L. Toe"
Post by Miss L. Toe
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?
You probably think that "daylight saving time" actually saves
daylight, as well.
It does save energy, and it should be implemented all year.
Cite?
mrtravel
2005-09-17 05:00:14 UTC
Permalink
Post by mrtravel
Post by Bob Ward
On Fri, 16 Sep 2005 17:16:33 +0100, "Miss L. Toe"
Post by Miss L. Toe
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?
You probably think that "daylight saving time" actually saves
daylight, as well.
It does save energy, and it should be implemented all year.
Cite?
http://www.energy.ca.gov/daylightsaving.html

According to this, Russia has gone to +2 hours in the summer and one
hour the rest of the year.

In 2001, California asked the Feds for year long implementation of DST.
See the article link above and the links at
http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sjrx2_1&sess=0102&house=B&author=karnette
Jay Honeck
2005-09-17 12:25:12 UTC
Permalink
Post by mrtravel
Post by mrtravel
It does save energy, and it should be implemented all year.
Cite?
http://www.energy.ca.gov/daylightsaving.html
According to this, Russia has gone to +2 hours in the summer and one hour
the rest of the year.
Equally -- or more -- important: This would be a lifestyle enhancement for
us all.

Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?

In the old days, farmers represented a large percentage of the population,
and had the clout to "shift" (or, in this case, "hold") time into the
morning, so that they could work in the daylight. Now, with farmers
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
sechumlib
2005-09-17 14:47:06 UTC
Permalink
Jay Honeck wrote:

Now, with farmers
Post by Jay Honeck
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
James Robinson
2005-09-17 14:52:50 UTC
Permalink
Post by Jay Honeck
Now, with farmers
Post by Jay Honeck
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Instead they walk home in the dark, on busy roads not equipped with
sidewalks.
George Patterson
2005-09-18 02:15:56 UTC
Permalink
Post by James Robinson
Instead they walk home in the dark, on busy roads not equipped with
sidewalks.
Where's that? Here, it's still daylight when schools let out. At the Winter
solstice, it gets dark about 4:30 in NJ.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
john smith
2005-09-17 15:17:22 UTC
Permalink
Now, with farmers representing far less than 1% of the population,
to have darkness every afternoon is just silly, unsafe, and expensive.
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
In the upper midwest, daylight savings doesn't make sense when you go
from 16 hours of daylight (5 AM to 9 PM) in the summer to 8 hours of
daylight (8:30 AM to 4:30 PM) in the winter.
Clark W. Griswold, Jr.
2005-09-17 16:03:56 UTC
Permalink
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory requirement to
have a car before you are allowed to attend high school.
sfb
2005-09-17 16:11:32 UTC
Permalink
One of our schools had to build a drive in the back for busses because
they couldn't get in and out past mom picking up the kids. Even the ones
on the bus get picked up at the bus stop by mom. We asked the city to
create no-parking zones near some school bus stops since monster SUVs
were blocking traffic.
Post by Clark W. Griswold, Jr.
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory
requirement to
have a car before you are allowed to attend high school.
Pooh Bear
2005-09-17 23:22:31 UTC
Permalink
Post by Clark W. Griswold, Jr.
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory requirement to
have a car before you are allowed to attend high school.
When I was at my 'middle' school I even used to walk home every lunchtime for lunch
( 2 km round trip ).

When I was at 'high school' I occasionally cycled the 5 or so miles ( each way )
there and back.

It helped keep me fit.

Graham
john smith
2005-09-18 00:32:06 UTC
Permalink
Post by Clark W. Griswold, Jr.
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory requirement to
have a car before you are allowed to attend high school.
I live two blocks from the elementary and middle schools. My kids get
bused. Did I mention that they have to cross a five lane state highway
to get to school? Did I mention that the school system no longer hires a
crossing guard? Did I mention that on two occasions, when there was a
crossing guard, I personally witnessed the crossing guard escape with
her life after almost being run over by drivers going 50 mph in a 20 mph
zone?
sechumlib
2005-09-18 01:18:36 UTC
Permalink
Post by Clark W. Griswold, Jr.
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory requirement to
have a car before you are allowed to attend high school.
In our town, they still have to stand out on the street (WITHOUT
sidewalks) to catch the school bus. Yes, that includes HS students, and
they're doing it earlier than anyone else.

I'm not saying DST is evil. I'm just saying there comes a time when the
amount of daylight isn't enough to make it worthwhile.
George Patterson
2005-09-18 02:18:15 UTC
Permalink
Post by Clark W. Griswold, Jr.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct.
That's not the case here. It's like a stream of tiny Sherpas packing their books
and stuff to school every day in front of my house. We're about 1/4 mile from an
elementary and a junior high.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
Gord Beaman
2005-09-18 03:03:45 UTC
Permalink
Post by Clark W. Griswold, Jr.
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Don't know about your neighborhood, but around here the "kids walking to school"
species has long since gone extinct. It blows my mind at the number of kids who
get in the family vehicle at one end of the neighborhood and get dropped off at
the school at the other end. And that's grade & middle school. Walk to the high
school down the street? ha! I think it must now be a mandatory requirement to
have a car before you are allowed to attend high school.
Yeh...my 16 year old grand daughter just cannot walk to McDonalds
(work) just up the street (max two blocks - you can see it!) yet
I see her schlepping along the street with a group of her friends
across town (2 miles?). Disgusting...I bite my tongue a lot when
I'm talking to my son...he sure as hell wasn't brought up that
way...nor his three siblings either...
--

-Gord.
(use gordon in email)
RJ
2005-09-17 16:27:44 UTC
Permalink
Post by Jay Honeck
Now, with farmers
Post by Jay Honeck
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Every place I have seen roads without sidewalks, I have seen school
buses servicing them.

Where do kids have to walk to school without sidewalks?

RJ
Abe
2005-09-17 18:08:03 UTC
Permalink
Post by RJ
Where do kids have to walk to school without sidewalks?
Many areas outlying Seattle and Tacoma, WA. That's all I can speak to
personally.
RJ
2005-09-17 22:34:46 UTC
Permalink
Post by Abe
Post by RJ
Where do kids have to walk to school without sidewalks?
Many areas outlying Seattle and Tacoma, WA. That's all I can speak to
personally.
Washington laws on busing students must be radically different from
the rest of the states, if that's true.

RJ
sechumlib
2005-09-18 01:24:03 UTC
Permalink
Post by RJ
Post by Abe
Post by RJ
Where do kids have to walk to school without sidewalks?
Many areas outlying Seattle and Tacoma, WA. That's all I can speak to
personally.
Washington laws on busing students must be radically different from
the rest of the states, if that's true.
Apparently your idea of self-interest doesn't concern itself with kids
having to stand around before daylight waiting for school buses on
streets without sidewalks, even though not everyone turns lights on.
That's the situation here in Niskayuna, NY.

Daylight savings time? Great, but ONLY when it makes sense.
sechumlib
2005-09-18 01:20:09 UTC
Permalink
Post by RJ
Post by Jay Honeck
Now, with farmers
Post by Jay Honeck
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Every place I have seen roads without sidewalks, I have seen school
buses servicing them.
Where do kids have to walk to school without sidewalks?
Right here in the town of Niskayuna, NY. We have no sidewalks in 90% of
the town. What's more, we have kids standing in (or very close to) the
street at 7:00 a.m. waiting for school buses. Safe? Not necessarily.
Pooh Bear
2005-09-18 02:10:14 UTC
Permalink
Post by sechumlib
Right here in the town of Niskayuna, NY. We have no sidewalks in 90% of
the town.
Why is that ?

Graham
Jay Honeck
2005-09-18 03:09:38 UTC
Permalink
Post by Pooh Bear
Post by sechumlib
Right here in the town of Niskayuna, NY. We have no sidewalks in 90% of
the town.
Why is that ?
I used to live in an area like that. Everyone liked the look of "no
sidewalks" -- and a majority fought the city's attempts to force their
installation. (Me, too, BTW.)

You can't have it both ways. It's either "safe" or "rural"...
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
nobody
2005-09-18 03:58:55 UTC
Permalink
Post by Pooh Bear
Post by sechumlib
Right here in the town of Niskayuna, NY. We have no sidewalks in 90% of
the town.
Why is that ?
Because urban engineers no longer consider human activities, they only
cater to SUVs and Hummers. They've been told it is impossible for
humans to walk such distances are that they must absolutely drive their
air conditioned tanks. Won't be long before US cars don't even have
openable windows.

If americans were willing to buy cars such as the SMART car
(http://www.thesmart.ca for instance), you could have sidewalks since
you won't need streets wide enough to handle multiple hummers.

ameijers
2005-09-18 02:18:32 UTC
Permalink
(snip)
Post by sechumlib
Post by RJ
Post by sechumlib
Well, you have to be a little careful not to shift so much of it to the
morning hours that young school kids have to walk to school in the dark,
on busy roads not equipped with sidewalks.
Every place I have seen roads without sidewalks, I have seen school
buses servicing them.
Where do kids have to walk to school without sidewalks?
Right here in the town of Niskayuna, NY. We have no sidewalks in 90% of
the town. What's more, we have kids standing in (or very close to) the
street at 7:00 a.m. waiting for school buses. Safe? Not necessarily.
Chuckle- it is like that around here- Since I started getting up earlier,
and the schools started up, I see herds of kids on various corners at 0645,
often spilling into the traffic lanes. And being immortal, of course, they
don't watch, often having their back to traffic so they can gab with their
pals.

FWIW- I think DST is just silly. Like making a blanket longer by cutting a
foot off one end and sewing it on the other. Want more daylight? Change the
bloody schedule, and leave the clocks alone. Saddens me to see my former
state of Indiana rolling over after all these years. And can anyone confirm
the previous accounts about who invented it? I always thought it was Ben
Franklin, which seemed awful strange for an otherwise sensible man.

aem sends...
Jay Honeck
2005-09-18 03:11:06 UTC
Permalink
Post by ameijers
FWIW- I think DST is just silly. Like making a blanket longer by cutting a
foot off one end and sewing it on the other. Want more daylight? Change the
bloody schedule, and leave the clocks alone. Saddens me to see my former
state of Indiana rolling over after all these years. And can anyone confirm
the previous accounts about who invented it? I always thought it was Ben
Franklin, which seemed awful strange for an otherwise sensible man.
Good luck getting millions of Americans to change their schedules in
lock-step, in hopes of getting more daylight!

That would be like herding cats.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
George Patterson
2005-09-18 02:21:17 UTC
Permalink
Post by RJ
Where do kids have to walk to school without sidewalks?
One place is the West Hills subdivision of Knoxville, TN.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
Gene Seibel
2005-09-17 15:21:35 UTC
Permalink
But if time is shifted all year, wouldn't the people eventually shift
their schedules to cancel it out?
--
Gene Seibel
Confessions of a Pilot - http://pad39a.com/publishing/
Because I fly, I envy no one.
sfb
2005-09-17 15:58:31 UTC
Permalink
Very complex situation without simple answers. Not only are there north
south length of day light differences in the US, but east west
differences in each time zone. The challenge is most adults work on the
clock time regardless of daylight and want their children going to and
from school during daylight regardless of the clock. There are
businesses on the Florida peninsula which is on the western edge of the
Eastern Time Zone that would like to work on sun time in the winter, but
work on the clock since the wife and kids are on the clock. The cows
don't care as long as they are milked twice a day, but some dairy farms
even change milking schedules to match people schedules.
Post by Gene Seibel
But if time is shifted all year, wouldn't the people eventually shift
their schedules to cancel it out?
--
Gene Seibel
Confessions of a Pilot - http://pad39a.com/publishing/
Because I fly, I envy no one.
mrtravel
2005-09-17 19:05:17 UTC
Permalink
Post by Jay Honeck
Post by mrtravel
Post by mrtravel
It does save energy, and it should be implemented all year.
Cite?
http://www.energy.ca.gov/daylightsaving.html
According to this, Russia has gone to +2 hours in the summer and one hour
the rest of the year.
Equally -- or more -- important: This would be a lifestyle enhancement for
us all.
Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?
In the old days, farmers represented a large percentage of the population,
and had the clout to "shift" (or, in this case, "hold") time into the
morning, so that they could work in the daylight. Now, with farmers
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
One of the arguments against all year DST stated in the article was that
some farmers believed it would "confuse the lifestock"
Why would the lifestock care what time it was?
DevilsPGD
2005-09-17 20:40:19 UTC
Permalink
Post by mrtravel
One of the arguments against all year DST stated in the article was that
some farmers believed it would "confuse the lifestock"
Why would the lifestock care what time it was?
Not only that, but are farmers actually required to get up when it says
it's 6am on the clock? Couldn't they get up at 5am or 7am to be less
confusing to the animals?
--
God must love stupid people; He made so many.
nobody
2005-09-17 19:25:22 UTC
Permalink
Post by Jay Honeck
Post by mrtravel
It does save energy, and it should be implemented all year.
Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?
If it gets dark at 16:30, then having time 1 hour ahead would make it
dark at 17:30, so you still eat in the dark. And you're still cooking
with lights on.

Where there are energy savings is when you shift time so you wake-up
just as the sun rises, thus extending the number of hours during your
awake period where there is light. If you wake up 2 hours after sunrise,
those are 2 hours of daylight which are wasted, and it means that you'll
need 2 extra hours of artificial light at night.

But in the winter, when daylight is short enough that you both wake up
and come home in darkness, shifting hours doesn't make a difference in
total artificial lighting needs. What you won't use at night, you'll use
in morning.

One difference is that in north america, household energy needs tend to
have the peak during evening meal. Reducing lighting requirement during
this period reduces the peak demand. But it simply shifts that demand to
the morning.


In the summer, daylight savings makes sense because the days are long
enough and you can extend the daylight into evening without requiring
you wake up in the dark. But in the winter, the shifting of hours simply
shifts lighting demand the hour of lighting you save at night , you need
to spend in the morning.

And one can also argue the opposite in some cases:

Consider a time zone where you wake-uo with sunrise. No need for lights
in morning. And it gets dark at 16:30 when you are still at work. You
get home at 17:30, and your house has just spent 1 hour of darkness with
its lights OFF.

Shift the time one hour, and you need lights on in morning, and it gets
dark at 17:30, so you still need the exact same amount of lights at night.
Post by Jay Honeck
In the old days, farmers represented a large percentage of the population,
and had the clout to "shift" (or, in this case, "hold") time into the
morning, so that they could work in the daylight.
Farmers don't need time shifting to work in daylight. They get up at the
same time (relative to sun) no matter what time zone they are in.
Whether the clock says it ia 04:00 or 05:00 when they wake up doesn't
make a big difference.

The difference is with TV at night. The lack of DST allows them to
effectively go to bed an hour later in relation to TV schedules. If they
need 8 hours of sleep, getting up at 04:00 means that they go to bed at
20:00. If they get up at 05:00, it means they go to bed at 21:00 and can
thus watch 1 hour of prime time programming.

Note that Saskatchewan still has no DST in summer. So farmers still have
plenty of clout.

And I believe that Hawaii also does not have DST since they live south
enough that length of day doesn't vary much throughout the year.
Post by Jay Honeck
Now, with farmers
representing far less than 1% of the population, to have darkness every
afternoon is just silly, unsafe, and expensive.
When you shift evening rush hour darkness to morning rush hour darkness,
does it really change much ?


Extending DST to cover extra month at both ends may make sense. But
beyond that, it makes no diference.
Jay Honeck
2005-09-17 21:13:11 UTC
Permalink
Post by nobody
Extending DST to cover extra month at both ends may make sense. But
beyond that, it makes no diference.
Well, you make a good argument for it not really saving any energy --
although I believe that more daylight in the evening would save more
energy than it would cost by adding darkness to the morning.

Personally, just the thought of being able to fly after supper all
winter long is enough to make me vote for a MAJOR time-shift!

:-)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
nobody
2005-09-17 22:13:40 UTC
Permalink
Post by Jay Honeck
Personally, just the thought of being able to fly after supper all
winter long is enough to make me vote for a MAJOR time-shift!
Then do like the cows: ignore the clocks and live by sunlight
alltogether. Who says you must eat at 18:00 ? And with VCR technology,
you can record shows while you sleep and watch them the next day.


As a matter of fact, with computers today, it is no big deal to have
some alarm clock combined with GPS that rings at exactly sunrise time
for where you are. They don't even need to show time.

Prior to Stanford Flemming developping the concept of standard time
zones, each city had its own time zone matched to that of the sun.

Compare this to today where Gaspé Québec on the east coast is in the
same time zone as Thunder Bay Ontario some 986nm almost exactly due west.

During one hour, the sun travels 21,600/ 24 = 900 nm in the
circumference of the earth. So thunder bay is more than one hours apart
from Gaspé according to the sun time, but they are in the same time
zone. Yet, go to the next town west of Thunder Bay and they are in the
central time zone.


So sunrise and sunset happen more than an hour apart between Gaspé and
Thunder bay, yet they are in the same time zone.

And back in 1988, NewFoundland experimented with a 2 hour daylight
savings. That meant that the town of Blanc Sablon , Québec (north short
of St-Lawrence), and Forteau Bay Labrador/NFLD a few km to the east
across the border, were 2.5 hours apart.


And when you look at Singapore, they are in the same time zone as Hong
Kong and Taiwan, mostly because of everyone wanting the same business
hours. Singarpore and Taipei are 1735km apart, 1423nm with the east-west
vector alone, more than 1:30 apart in sun time.


If the USA wants to save energy, it should instead focus on energy
efficiency. Changing lightbulbs to energy efficient ones would do a lot
more to save money and energy than shifting the time.
Steve
2005-09-17 22:28:12 UTC
Permalink
Excerpts from http://www.nytimes.com/2005/08/09/opinion/09downing.html


After nearly 100 years, daylight saving has yet to save us anything.

The idea of falsifying clocks was proposed by the British architect
William Willett in 1907, but the Germans were the first to try it in
1916, hoping that it would help them conserve fuel during the First
World War. Then Britain and America gave their clocks a whirl. The
fuel savings never materialized, and daylight saving was so unpopular
here that Congress repealed it before officially declaring an end to
the war.

That most Americans still believe we save daylight to help farmers
tells you something about the quality of debate on this perennial
controversy. In fact, farmers hated daylight saving. They needed
morning light to get their dairy and crops to markets, and they were
powerful enough to rally popular opinion against the law. For that
reason, except during the Second World War, Congress did not dare to
pass a national daylight saving policy for almost 50 years.

It was New York City that kept the practice alive, and it did so by
passing a local daylight ordinance in 1919. This served the powerful
department stores, which wanted evening light to tempt working people
to shop on their way home. Wall Street profited too - fast time
preserved one hour of overlap with London traders, whose clocks sprung
forward every year.

By 1965, 71 of the largest American cities practiced daylight saving
and 59 did not. One airline reported 4,000 calls a day from customers
asking what time it would be in their destination cities. The US Naval
Observatory dubbed the nation "the world's worst timekeeper."

And so in 1966, Congress passed the Uniform Time Act, which gave us
six months of Standard Time and six months of daylight saving. This
wise compromise has since been compromised out of existence. We now
face eight months of daylight saving. Before we bargain our way into a
permanent, year-round policy, we should know whom we have to thank for
saving us nothing.

Richard Nixon infamously mandated year-round daylight saving in 1974
and 1975. This decision did not soften the blow of the OPEC oil
embargo, but it did put school children on pitch-black streets every
morning until the plan was scaled back.

A Department of Transportation study concluded that Nixon's experiment
yielded no definitive fuel saving. It optimistically speculated,
however, that daylight saving might one day help us conserve as many
as 100,000 barrels of oil a day. Based on that projection and the hope
of reducing street crime, in 1986 and again this year Congress
extended daylight saving by a month. But there has been no
corresponding reduction in oil consumption or crime.

The new four-week daylight saving extension won't save fuel or lives,
but it will put our clocks seriously out of sync with Europe's,
costing airlines $150 million a year. It will foul up clocks in
computers and confuse trade with our continental neighbors.

Sure, later sunsets will encourage Americans to go outside, but this
will only put more cars on the road for more hours of the day. The
petroleum industry recognized daylight saving's potential to increase
gasoline consumption as early as 1920. And it is a sweet deal for
retailers: candy makers have long lobbied to extend daylight saving
past Halloween.

In 1986, the golf industry told Congress the extension would boost
fees and retail sales by as much as $400 million annually. The
barbecue industry saw a $150 million bonanza. And 7-Eleven convenience
stores stocked up for a $50 million rise in sales.
mrtravel
2005-09-17 22:49:07 UTC
Permalink
Post by Steve
Excerpts from http://www.nytimes.com/2005/08/09/opinion/09downing.html
After nearly 100 years, daylight saving has yet to save us anything.
And you know this because..........
Post by Steve
Richard Nixon infamously mandated year-round daylight saving in 1974
and 1975.
How did he manage this, by Executive order?
Not really, Congress passed the law and he signed it. You make it sound
like something Nixon stood alone on. It's a bit like blaming Bush for
the war. Bush didn't have any power to do anything without Congressional
approval.
Dennis M
2005-09-18 00:04:24 UTC
Permalink
It's a bit like blaming Bush for the war. Bush didn't have any power to
do anything without Congressional approval.
And Congress assumed the president of the United States wouldn't tell them
a pack of bald-faced lies about something so important.

Republicans are great at fucking up royally and then making the other side
share some/all of the blame.
mrtravel
2005-09-18 03:07:51 UTC
Permalink
Post by Dennis M
It's a bit like blaming Bush for the war. Bush didn't have any power to
do anything without Congressional approval.
And Congress assumed the president of the United States wouldn't tell them
a pack of bald-faced lies about something so important.
LOL.. Do you think Congress is that naive?
Frank F. Matthews
2005-09-18 02:08:13 UTC
Permalink
Falsifying clocks is what standard time involves. Let noon be when the
sun is straight overhead and let the chips fall where they may. Clocks
are mostly a waste anyway.
Post by Steve
Excerpts from http://www.nytimes.com/2005/08/09/opinion/09downing.html
After nearly 100 years, daylight saving has yet to save us anything.
The idea of falsifying clocks was proposed by the British architect
William Willett in 1907, but the Germans were the first to try it in
1916, hoping that it would help them conserve fuel during the First
World War. Then Britain and America gave their clocks a whirl. The
fuel savings never materialized, and daylight saving was so unpopular
here that Congress repealed it before officially declaring an end to
the war.
That most Americans still believe we save daylight to help farmers
tells you something about the quality of debate on this perennial
controversy. In fact, farmers hated daylight saving. They needed
morning light to get their dairy and crops to markets, and they were
powerful enough to rally popular opinion against the law. For that
reason, except during the Second World War, Congress did not dare to
pass a national daylight saving policy for almost 50 years.
It was New York City that kept the practice alive, and it did so by
passing a local daylight ordinance in 1919. This served the powerful
department stores, which wanted evening light to tempt working people
to shop on their way home. Wall Street profited too - fast time
preserved one hour of overlap with London traders, whose clocks sprung
forward every year.
By 1965, 71 of the largest American cities practiced daylight saving
and 59 did not. One airline reported 4,000 calls a day from customers
asking what time it would be in their destination cities. The US Naval
Observatory dubbed the nation "the world's worst timekeeper."
And so in 1966, Congress passed the Uniform Time Act, which gave us
six months of Standard Time and six months of daylight saving. This
wise compromise has since been compromised out of existence. We now
face eight months of daylight saving. Before we bargain our way into a
permanent, year-round policy, we should know whom we have to thank for
saving us nothing.
Richard Nixon infamously mandated year-round daylight saving in 1974
and 1975. This decision did not soften the blow of the OPEC oil
embargo, but it did put school children on pitch-black streets every
morning until the plan was scaled back.
A Department of Transportation study concluded that Nixon's experiment
yielded no definitive fuel saving. It optimistically speculated,
however, that daylight saving might one day help us conserve as many
as 100,000 barrels of oil a day. Based on that projection and the hope
of reducing street crime, in 1986 and again this year Congress
extended daylight saving by a month. But there has been no
corresponding reduction in oil consumption or crime.
The new four-week daylight saving extension won't save fuel or lives,
but it will put our clocks seriously out of sync with Europe's,
costing airlines $150 million a year. It will foul up clocks in
computers and confuse trade with our continental neighbors.
Sure, later sunsets will encourage Americans to go outside, but this
will only put more cars on the road for more hours of the day. The
petroleum industry recognized daylight saving's potential to increase
gasoline consumption as early as 1920. And it is a sweet deal for
retailers: candy makers have long lobbied to extend daylight saving
past Halloween.
In 1986, the golf industry told Congress the extension would boost
fees and retail sales by as much as $400 million annually. The
barbecue industry saw a $150 million bonanza. And 7-Eleven convenience
stores stocked up for a $50 million rise in sales.
sfb
2005-09-18 02:19:51 UTC
Permalink
Do you smoke that crap when you are flying? Prior to 1883, the chips
were falling where they may as each town used some form of local time.
The railroads were going bonkers so standard time was established in the
US and Canada.
Post by Frank F. Matthews
Falsifying clocks is what standard time involves. Let noon be when
the sun is straight overhead and let the chips fall where they may.
Clocks are mostly a waste anyway.
Jay Honeck
2005-09-18 03:13:28 UTC
Permalink
Post by nobody
Then do like the cows: ignore the clocks and live by sunlight
alltogether.
Gee, you think our guests at the Inn will understand?

:-)
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
George Patterson
2005-09-18 02:26:58 UTC
Permalink
Post by Jay Honeck
Personally, just the thought of being able to fly after supper all
winter long is enough to make me vote for a MAJOR time-shift!
Unless you eat supper awfully early, you're going to need about a 3 hour time
shift to do that. It gets dark here about 4:30 during the shortest days of the year.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
mrtravel
2005-09-18 03:10:55 UTC
Permalink
Post by George Patterson
Post by Jay Honeck
Personally, just the thought of being able to fly after supper all
winter long is enough to make me vote for a MAJOR time-shift!
Unless you eat supper awfully early, you're going to need about a 3 hour
time shift to do that. It gets dark here about 4:30 during the shortest
days of the year.
And.. with year round DST, it would get dark at 3:30.
Jay Honeck
2005-09-18 03:24:46 UTC
Permalink
Post by mrtravel
Post by George Patterson
Unless you eat supper awfully early, you're going to need about a 3 hour
time shift to do that. It gets dark here about 4:30 during the shortest
days of the year.
And.. with year round DST, it would get dark at 3:30.
I think you've got that backwards.

With a one hour DST, it would be light until 5:30 PM. I would prefer to see
a 2-hour time shift, which would "buy" us light until 6:30 PM, even in
December/January.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
mrtravel
2005-09-18 03:41:02 UTC
Permalink
Post by Jay Honeck
Post by mrtravel
Post by George Patterson
Unless you eat supper awfully early, you're going to need about a 3 hour
time shift to do that. It gets dark here about 4:30 during the shortest
days of the year.
And.. with year round DST, it would get dark at 3:30.
I think you've got that backwards.
With a one hour DST, it would be light until 5:30 PM. I would prefer to see
a 2-hour time shift, which would "buy" us light until 6:30 PM, even in
December/January.
Yeah, you're correct :)
sfb
2005-09-18 03:32:05 UTC
Permalink
The are north-south variations in the length of the day and west-east
variations in sunrise and sunset.

Couple that with elementary, middle, and high schools starting at
different times since each bus runs three routes and one size doesn't
fit all in the US.
Post by Jay Honeck
Post by mrtravel
Post by George Patterson
Unless you eat supper awfully early, you're going to need about a 3
hour time shift to do that. It gets dark here about 4:30 during the
shortest days of the year.
And.. with year round DST, it would get dark at 3:30.
I think you've got that backwards.
With a one hour DST, it would be light until 5:30 PM. I would prefer
to see a 2-hour time shift, which would "buy" us light until 6:30 PM,
even in December/January.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
George Patterson
2005-09-18 02:14:23 UTC
Permalink
Post by Jay Honeck
Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?
Imagine what it's like to send your small children off to school in the dark.
Georgia opposed DST in the first place in part for that reason.

George Patterson
Give a person a fish and you feed him for a day; teach a person to
use the Internet and he won't bother you for weeks.
Hatunen
2005-09-18 03:55:54 UTC
Permalink
On Sun, 18 Sep 2005 02:14:23 GMT, George Patterson
Post by George Patterson
Post by Jay Honeck
Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?
Imagine what it's like to send your small children off to school in the dark.
Georgia opposed DST in the first place in part for that reason.
Arizona does not go on daylight time (save the Navajo
Reservation), but it did try it for one year, largely due to
failure of expeditious action by the state legislature in the
mid-1960s. In the autumn the local paper published a photo of a
bunch of kids waiting for the school bus in the dark, having lit
a fire to "keep away coyotes".

************* DAVE HATUNEN (***@cox.net) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
mrtravel
2005-09-18 03:09:38 UTC
Permalink
Post by George Patterson
Post by Jay Honeck
Imagine how wonderful it would be to have some daylight in the
evenings after supper -- in January?
Imagine what it's like to send your small children off to school in the
dark. Georgia opposed DST in the first place in part for that reason.
DST was created to save energy. It wasn't designed to protect children.
Jay Honeck
2005-09-18 03:18:51 UTC
Permalink
Post by George Patterson
Post by Jay Honeck
Imagine how wonderful it would be to have some daylight in the evenings
after supper -- in January?
Imagine what it's like to send your small children off to school in the
dark. Georgia opposed DST in the first place in part for that reason.
During the darkest months of the year, my kids already go to school in the
dark.

And I know they would vote whole-heartedly for having some kind of life
after school, rather than feeling like it's bedtime.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"
Bill McKee
2005-09-17 07:29:05 UTC
Permalink
Post by Bob Ward
On Fri, 16 Sep 2005 17:16:33 +0100, "Miss L. Toe"
Post by Miss L. Toe
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically
And how does this "excess crude" get transformed into lower price
gasoline if there is no refinery capacity to convert it?
You probably think that "daylight saving time" actually saves
daylight, as well.
Crude production got cut also. All the drilling rigs in the area were shut
down.
TOliver
2005-09-17 14:02:27 UTC
Permalink
Post by Miss L. Toe
Post by Matt Barrow
Hurricane Katrina sent oil prices soaring to $US70 a barrel because it
shut several US Gulf Coast refineries, which turn crude oil into products
like diesel, gasoline and jet fuel.
Wrong - if refineries are not working then logic dictates that less crude
can be turned into petrol/gasoline and therefore there will be excess crude
lying around and prices should fall.
Those who dictate the oil price didn't think logically.
Post by Matt Barrow
"If we don't start now to get more refineries built then fuel prices
could
Post by Matt Barrow
literally rocket to $US100-$US200 (per barrel of oil) and the world
economy
Post by Matt Barrow
would come to a grinding halt," Branson said in an interview on financial
news network CNBC overnight.
NO - If 'we' DO build more refineries we will allow demand to increase and
prices will rocket, if 'we' DONT build more refineries demand (for crude)
will not be able to increase and prices will change only with supply.
(Obviously if refineries are not built demand for refined fuel will outstrip
supply and alternatives will become more cost effective).
Lady, I'm in the oil and gas business for part of my income, and while I
don't doubt your sincerity, I must admit to having broken in to howls of
laughter, spilt my coffee and had to take a "time out" after reading your
post. I don't know which editorial columnists from which you've gained
your supernatural knowledge of "bidness", but like a hamstrung filly in a
claiming race, you'll not get far or far ahead with the impediement of that
fallacious a position.

I would commend to you any number of books about the extraction and refining
of oil, but I suspect that your perspective is so unalterably skewed,
prejudiced and badly concceived that "remedial education" is unlikely to
benefit you.

.....But as a hint.....Demand for gasoline remains as it has been for a
number of years predictably "inelastic", rising slightly over time. Demand
for diesel fuel has risen (and continues to rise) much more rapidly, as the
trucking business grows. The largest and continuing leaps in demansd are
not for fuels, but in all that myriad of seemingly unrelated byproducts of
refining and "cracking", from medicines to the keyboard upon which you peck
out your numbskulled nonsense.

When hurricanes shut down the platforms in the Gulf from which cometh 20-25%
of US oil, the part closest to the major refineries, speculators and buyers
for companies which refine oil will inevitably bid up the price, worlkdwide,
because oil is a "worldwide" commodity.

When a Gulf hurricane shuts the valves and pumps at major US refineries
(producing among other products, gasoline and jet fuel), in the face of
steady demand, the decreases in supplies cause prices to jump. The
realities of transport and markets being what they are, at least two to
three weeks must pass before higher priced (subject to unmet demand) refined
products from across the seas show up in US fuel terminals.

Of course, Katrina had also closed down the US large Gulf Coast fuel
terminals, further squeezing an element of the supply equation, the buckets
in which to keep gasoline.

Meanwhile, underground, vastly slowing the movement oil and refined
byproducts to the US Southeast and MidAtlantic, a major pipeline shut down.
Supply was even more disrupted, and gasoline prices, especially in areas
most rapidly affected like Atlanta, soared, supply falling, with steady
demand.

We're stuck with a capacity for refining gasoline that has not increased in
several decades. Any twitch or kink in the process means importing refined
product and paying higher prices. More refinery capacity will not increase
demand and will have only modest, likely barely noticeable effect on price,
which has more to do with the supply of oil. We've pretty substantial and
continuing evidence that raising the price of gasoline (only now slightly
above the levels of the 50s or early 80s adjusted for inflation) doesn't
diminish demand. Is there a US "price point" at which demand drops? Yes,
probably somewhere in the $5.00 in today's dollars, but even then demand
would be unlikely to decline more than 5-10%. We need more refining
capacity so that our ability to "weather" storms such as Katrina without
rapid rises in gasoline prices (which in my market have actually dropped to
slightly below preKatrina levels).

High oil prices do mean that more folks who make their living exploring and
drilling (their number sadly diminished by years of potential supply
outweighing demand) will look for oil. But there's a basket of problems
with oil.....your magic $70.00 a barrel product is for a "benchmark"
variety, the premium sort in the market, what's called "West Texas Low
Sulphur" or "Sweet Crude", a thin light easy to refine product. Then
there's the cost of delivery (which includes when dealing with heavy oils
frrom cold climates, heating simply to get the stuff in a tank or pipeline),
tankers, pipelines, rail cars (the lowest of low efficiency transport for
crude). Why, there's heavy, high sulphur cruse today trading at bargain
basement prices simply because of where it's located and the cost of
bringing it to market.

You do know of the several hundred years of "supply" squeezed into Canada's
tar sands, just waing for the price to rise to the point of economic
recovery? That's what the Canadians are hanging on for, not all taking
early outs and fleeing, the day upon which they all imagine that they will
become as rich as Saudi prices and Omani oil traders. It never quite works
out that way, since the Saudis and the Omanis will have long before bought
all Canada's assets from the banks which had to foreclose on the collateral.

TMO
Steven P. McNicoll
2005-09-16 16:28:25 UTC
Permalink
Post by Matt Barrow
Hurricane Katrina sent oil prices soaring to $US70 a barrel because it
shut several US Gulf Coast refineries, which turn crude oil into products
like diesel, gasoline and jet fuel.
Why would the loss of refining capacity drive up the cost of crude oil? I
would think the effect to be the opposite, if everything else remains the
same. If the same amount of crude is extracted but there's less capacity to
refine it the we'd be swamped with crude oil and the price should fall. But
I don't think everything else has remained the same. I think Katrina has
shut down a significant number of offshore wells.
sfb
2005-09-16 15:42:05 UTC
Permalink
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today. The risk all goes to the buyer of
the hedge with the hedges becoming an airline asset. The risk isn't the
total price of fuel, but the difference between the hedge price and the
current spot price. The worst that could happen is price of oil drops
big time and the airline is stuck paying more for fuel than the current
spot market.
Post by nobody
Post by Earl Grieda
That's interesting. I would expect business expenses to be a
competitive
secret. I wonder what sort of prices the other airlines negotiated.
Airlines with bad credit cannot buy hedges. The better your credit, the
longer ahead you can buy hedges. Your ability to pay for the fuel you
contracted for 2 years down the road is very important.
mrtravel
2005-09-17 00:22:18 UTC
Permalink
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
sfb
2005-09-17 00:48:04 UTC
Permalink
The seller of the futures isn't extending credit. The buyer has a
contractual obligation to pay. Oil is a commodity that somebody will buy
so the exposure is limited to the difference between the future price
and the spot market price. If the airline goes broke and closes the
doors, it sells the futures contract for cash.
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the
hedge isn't extending credit. The only credit question is whether the
airlines have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the
option, but the actual commodity isn't paid for at that time. The
ability to pay for the commodity in the future requires
creditworthiness. Options trading does require creditworthyness.
mrtravel
2005-09-17 01:33:09 UTC
Permalink
Post by sfb
The seller of the futures isn't extending credit. The buyer has a
contractual obligation to pay. Oil is a commodity that somebody will buy
so the exposure is limited to the difference between the future price
and the spot market price. If the airline goes broke and closes the
doors, it sells the futures contract for cash.
Since there is an exposure, this requires the seller to know that the
purchaser has the ability to buy the commodity. After all, if the
contract was for $30 per barrel and the price of oil dropped to $20,
then the seller would be getting $10 less per barrel then they would
have receive had a more stable entity had purchased the option.

Do you think they just sell options to anyone with the cash to cover the
cost of the option or do you think they look at the person's/company's
ability to actually covre the purchase of the commodity? IF it was only
an issue of cash to pay for the option cost, then why wasn't this done
by the other carriers?
Bill McKee
2005-09-17 07:11:23 UTC
Permalink
Post by sfb
The seller of the futures isn't extending credit. The buyer has a
contractual obligation to pay. Oil is a commodity that somebody will buy
so the exposure is limited to the difference between the future price and
the spot market price. If the airline goes broke and closes the doors, it
sells the futures contract for cash.
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
The option buyer does not have to exercise the option. The seller is the
one who has to supply the crude at the time, or at least another contract.
If you buy an option on crude at $60/ barrel and you paid $5/barrel and oil
drops to $55 a barrel you just let the option expire. But if the oil went
to $70 the seller of the option has to come up with the difference of
$10/barrel. To make a small fortune in options, start with a large fortune.
mrtravel
2005-09-17 07:19:35 UTC
Permalink
Post by Bill McKee
The option buyer does not have to exercise the option. The seller is the
one who has to supply the crude at the time, or at least another contract.
If you buy an option on crude at $60/ barrel and you paid $5/barrel and oil
drops to $55 a barrel you just let the option expire. But if the oil went
to $70 the seller of the option has to come up with the difference of
$10/barrel. To make a small fortune in options, start with a large fortune.
Is it your impression that when you buy oil futures that your only risks
are the cost of the options, and you can't lose money if the price drops
when you thought it would rise?
Frank F. Matthews
2005-09-17 15:51:17 UTC
Permalink
Post by mrtravel
Post by Bill McKee
The option buyer does not have to exercise the option. The seller is
the one who has to supply the crude at the time, or at least another
contract. If you buy an option on crude at $60/ barrel and you paid
$5/barrel and oil drops to $55 a barrel you just let the option
expire. But if the oil went to $70 the seller of the option has to
come up with the difference of $10/barrel. To make a small fortune in
options, start with a large fortune.
Is it your impression that when you buy oil futures that your only risks
are the cost of the options, and you can't lose money if the price drops
when you thought it would rise?
There appears to be a good bit of confusion between options and futures.
Bill McKee
2005-09-17 19:54:21 UTC
Permalink
Post by mrtravel
Post by Bill McKee
The option buyer does not have to exercise the option. The seller is the
one who has to supply the crude at the time, or at least another
contract. If you buy an option on crude at $60/ barrel and you paid
$5/barrel and oil drops to $55 a barrel you just let the option expire.
But if the oil went to $70 the seller of the option has to come up with
the difference of $10/barrel. To make a small fortune in options, start
with a large fortune.
Is it your impression that when you buy oil futures that your only risks
are the cost of the options, and you can't lose money if the price drops
when you thought it would rise?
If you buy an option, it is optional if you exercise it. If you buy the
futures contract you own it.
DevilsPGD
2005-09-17 01:09:08 UTC
Permalink
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
--
I'm sorry sir, you can't park your van on the diving board.
Pooh Bear
2005-09-17 01:25:50 UTC
Permalink
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.

It's a bet about whether price will go up or down. As in 'hedging your bets'.
The seller or buyer are equally likely to 'win'. The advantage for a large user
of fuel is to negotiate a stable price.

Graham
DevilsPGD
2005-09-17 03:02:55 UTC
Permalink
Post by Pooh Bear
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.
You misunderstand. The seller is still no worse off then if the deal
had never existed at all (which is essentially what would happen if the
company owning the option disappeared completely)

I'm also curious about the name "option" -- Doesn't that typically mean
optional?
--
The preceding post may have contained foul language,
and should not have been read by young children.
Pooh Bear
2005-09-17 03:13:27 UTC
Permalink
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.
You misunderstand. The seller is still no worse off then if the deal
had never existed at all (which is essentially what would happen if the
company owning the option disappeared completely)
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !

You really don't understand the futures market one tiny bit do you ?

Try this for starters.

http://en.wikipedia.org/wiki/Futures_contract
http://en.wikipedia.org/wiki/Options
http://en.wikipedia.org/wiki/Hedge_%28finance%29

Graham
mrtravel
2005-09-17 03:36:20 UTC
Permalink
Post by Pooh Bear
Post by DevilsPGD
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !
You really don't understand the futures market one tiny bit do you ?
Try this for starters.
http://en.wikipedia.org/wiki/Options
Graham
According to the link above

"offers the right (but imposes no obligation)"

So, it is optional for the buyer, according to this.
Pooh Bear
2005-09-17 04:15:32 UTC
Permalink
Post by mrtravel
Post by Pooh Bear
Post by DevilsPGD
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !
You really don't understand the futures market one tiny bit do you ?
Try this for starters.
http://en.wikipedia.org/wiki/Options
Graham
According to the link above
"offers the right (but imposes no obligation)"
So, it is optional for the buyer, according to this.
No - you didn't read it right !

An option is *addition* to a futures contract. It gives the buyer extra
rights - specifically the option to decline to purchase at the contrast date.
The seller will *charge extra* for the option to cover his risk of potential
loss if the option is exercised. The buyer uses the option if he deems it
necessary to hedge the risk of the contract price being more than the market
price at the contract date.

Graham
DevilsPGD
2005-09-17 04:48:37 UTC
Permalink
Post by Pooh Bear
No - you didn't read it right !
An option is *addition* to a futures contract. It gives the buyer extra
rights - specifically the option to decline to purchase at the contrast date.
The seller will *charge extra* for the option to cover his risk of potential
loss if the option is exercised. The buyer uses the option if he deems it
necessary to hedge the risk of the contract price being more than the market
price at the contract date.
Makes sense... But even so, compare where the buyer fails to fulfill
their obligation vs when the contract doesn't exist at all.

In either case the seller will be able to sell as much oil as they've
got at the market rate -- It's not as though the amount of oil Southwest
consumes would vastly alter worldwide oil prices.
--
You're not as stupid as you look, or sound, or our best testing indicates.
Pooh Bear
2005-09-17 05:15:33 UTC
Permalink
Post by DevilsPGD
Post by Pooh Bear
No - you didn't read it right !
An option is *addition* to a futures contract. It gives the buyer extra
rights - specifically the option to decline to purchase at the contrast date.
The seller will *charge extra* for the option to cover his risk of potential
loss if the option is exercised. The buyer uses the option if he deems it
necessary to hedge the risk of the contract price being more than the market
price at the contract date.
Makes sense... But even so, compare where the buyer fails to fulfill
their obligation vs when the contract doesn't exist at all.
What do you mean by 'the contract doesn't exist at all'. The whole point of
trading futures is that it is a *firm contract* to purchase at a pre-negotiated
price at some fixed date in the future.
Post by DevilsPGD
In either case the seller will be able to sell as much oil as they've
got at the market rate -- It's not as though the amount of oil Southwest
consumes would vastly alter worldwide oil prices.
If the buyer is unable to complete the contract, e.g. as a result of insolvency
then the buyer may make a real loss compared to what he might righfully have
expected through that contract ( specifically a negative difference betwen the
the market price and the contract price ). Maybe there is insurance against this ?
The seller may however do even better if the same difference is *positive* though.

It's really a betting game.

Graham
Bill McKee
2005-09-17 07:22:33 UTC
Permalink
Post by Pooh Bear
Post by DevilsPGD
Post by Pooh Bear
No - you didn't read it right !
An option is *addition* to a futures contract. It gives the buyer extra
rights - specifically the option to decline to purchase at the contrast date.
The seller will *charge extra* for the option to cover his risk of potential
loss if the option is exercised. The buyer uses the option if he deems it
necessary to hedge the risk of the contract price being more than the market
price at the contract date.
Makes sense... But even so, compare where the buyer fails to fulfill
their obligation vs when the contract doesn't exist at all.
What do you mean by 'the contract doesn't exist at all'. The whole point of
trading futures is that it is a *firm contract* to purchase at a pre-negotiated
price at some fixed date in the future.
Post by DevilsPGD
In either case the seller will be able to sell as much oil as they've
got at the market rate -- It's not as though the amount of oil Southwest
consumes would vastly alter worldwide oil prices.
If the buyer is unable to complete the contract, e.g. as a result of insolvency
then the buyer may make a real loss compared to what he might righfully have
expected through that contract ( specifically a negative difference betwen the
the market price and the contract price ). Maybe there is insurance against this ?
The seller may however do even better if the same difference is *positive* though.
It's really a betting game.
Graham
An "call option" is an option to purchase at the negotiated price in the
future. If you do not want to purchase, you just let the option expire.
Options have a valid time frame. If the price goes up, you exercise the
option, or sell your option to someone else. If the price goes up above the
option price and the cost of the option, you win, the seller loses If the
price does not go you lose the cost of your option and the seller wins the
cost of your option. The only person that really has to honor the contract
with oil is the seller. The same holds true for options on any stock. A
"put option" is an agreement to sell a stock / commodity at a certain price.
If you believe a commodity is going to decline, you buy "puts". If you
believe it is going to rise you buy a "call". If you sell a covered call on
stock, it says you have the stock in your account. If you are selling naked
calls, no stock in your account, you must have credit worthiness to cover
the loss, if your bet wrong.
Pooh Bear
2005-09-17 08:30:10 UTC
Permalink
Post by Bill McKee
Post by Pooh Bear
Post by DevilsPGD
Post by Pooh Bear
No - you didn't read it right !
An option is *addition* to a futures contract. It gives the buyer extra
rights - specifically the option to decline to purchase at the contrast date.
The seller will *charge extra* for the option to cover his risk of potential
loss if the option is exercised. The buyer uses the option if he deems it
necessary to hedge the risk of the contract price being more than the market
price at the contract date.
Makes sense... But even so, compare where the buyer fails to fulfill
their obligation vs when the contract doesn't exist at all.
What do you mean by 'the contract doesn't exist at all'. The whole point of
trading futures is that it is a *firm contract* to purchase at a pre-negotiated
price at some fixed date in the future.
Post by DevilsPGD
In either case the seller will be able to sell as much oil as they've
got at the market rate -- It's not as though the amount of oil Southwest
consumes would vastly alter worldwide oil prices.
If the buyer is unable to complete the contract, e.g. as a result of insolvency
then the buyer may make a real loss compared to what he might righfully have
expected through that contract ( specifically a negative difference betwen the
the market price and the contract price ). Maybe there is insurance against this ?
The seller may however do even better if the same difference is *positive* though.
It's really a betting game.
Graham
An "call option" is an option to purchase at the negotiated price in the
future. If you do not want to purchase, you just let the option expire.
Options have a valid time frame. If the price goes up, you exercise the
option, or sell your option to someone else. If the price goes up above the
option price and the cost of the option, you win, the seller loses If the
price does not go you lose the cost of your option and the seller wins the
cost of your option. The only person that really has to honor the contract
with oil is the seller. The same holds true for options on any stock. A
"put option" is an agreement to sell a stock / commodity at a certain price.
If you believe a commodity is going to decline, you buy "puts". If you
believe it is going to rise you buy a "call". If you sell a covered call on
stock, it says you have the stock in your account. If you are selling naked
calls, no stock in your account, you must have credit worthiness to cover
the loss, if your bet wrong.
Yup, I know this.

Some others got some weird ideas about how they work which is how I got here.

The underlying question related to that very credit worthiness you mention.

What happens if ( and this doesn't apply to options - since it would be the same
as declining the option - just futures ) the buyer becomes insolvent and can't
honour the purchase contract ?

Graham
TOliver
2005-09-17 14:19:03 UTC
Permalink
"Pooh Bear" wrote...
Post by Pooh Bear
The underlying question related to that very credit worthiness you mention.
What happens if ( and this doesn't apply to options - since it would be the same
as declining the option - just futures ) the buyer becomes insolvent and can't
honour the purchase contract ?
Somebodies breaks his kneecaps with a ball bat, stuffs him in an oil drum
ands buries him in a New Jersey swamp.

An insolvent buyer would be subject to an action for debt for the difference
between the contracted price and the price at the seller could dispose of
the commodity on the contracted delivery date. That's why commodity brokers
require customers to maintain deposits judged to be sufficient to meet
"margins".

WN could/can trade in the fuel markets because it had/has adequate cash to
cover its positions. Brokers of fuel and other commodities are trusting
fellows but require some cash up front. A simple telephone call asking to
buy several million gallons of JetA for delivery iin March, 2006, simply
won't make the deal... The legacies, cash poor and with the drain already
open wide, simply did not and do not have the projected future cash
positions and are not creditworthy enough to allow them to purchase
contracts to deliver fuel (or pork bellies or soybeans, etc.). In Chapter
11, they certainly can't.....

TMO
sfb
2005-09-17 14:30:01 UTC
Permalink
"Brokers of fuel and other commodities" will require a contract that
protects their interests as they see them.

A company in Chapter 11 is an entirely different risk as the
pre-bankruptcy creditors are on hold pending resolution of the
bankruptcy. What is breaking the backs of the legacy airlines is the
un-founded pension obligations. Operating cash flow "smells" OK.
Post by TOliver
"Pooh Bear" wrote...
Post by Pooh Bear
The underlying question related to that very credit worthiness you mention.
What happens if ( and this doesn't apply to options - since it would be the same
as declining the option - just futures ) the buyer becomes insolvent and can't
honour the purchase contract ?
Somebodies breaks his kneecaps with a ball bat, stuffs him in an oil
drum ands buries him in a New Jersey swamp.
An insolvent buyer would be subject to an action for debt for the
difference between the contracted price and the price at the seller
could dispose of the commodity on the contracted delivery date.
That's why commodity brokers require customers to maintain deposits
judged to be sufficient to meet "margins".
WN could/can trade in the fuel markets because it had/has adequate
cash to cover its positions. Brokers of fuel and other commodities
are trusting fellows but require some cash up front. A simple
telephone call asking to buy several million gallons of JetA for
delivery iin March, 2006, simply won't make the deal... The legacies,
cash poor and with the drain already open wide, simply did not and do
not have the projected future cash positions and are not creditworthy
enough to allow them to purchase contracts to deliver fuel (or pork
bellies or soybeans, etc.). In Chapter 11, they certainly can't.....
TMO
DevilsPGD
2005-09-17 04:22:12 UTC
Permalink
Post by Pooh Bear
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.
You misunderstand. The seller is still no worse off then if the deal
had never existed at all (which is essentially what would happen if the
company owning the option disappeared completely)
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !
You really don't understand the futures market one tiny bit do you ?
Try this for starters.
http://en.wikipedia.org/wiki/Futures_contract
Understood.
Post by Pooh Bear
http://en.wikipedia.org/wiki/Options
This confirms that it's only an option, so as I said, the seller is no
worse off is the buyer 1) chooses to not exercise their option, or 2)
goes out of business, or 3) is unable to exercise their option.

So if I'm not mistaken, you're agreeing with me, right?

However, lets go back to assuming the buyer is committed (that would be
a futures contract, rather then an option as implied by this thread),
assuming the product is something that the seller can easily sell on the
open market, the seller is no worse off then if the contract didn't
exist, if the buyer fails to meet their commitments.

Now obviously if the seller was counting on that money and it didn't
show up, it might financially impact them, true enough, but at the end
of the day, they can't end up worse off then if the contract didn't
exist at all.
--
You're not as stupid as you look, or sound, or our best testing indicates.
Pooh Bear
2005-09-17 05:20:49 UTC
Permalink
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.
You misunderstand. The seller is still no worse off then if the deal
had never existed at all (which is essentially what would happen if the
company owning the option disappeared completely)
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !
You really don't understand the futures market one tiny bit do you ?
Try this for starters.
http://en.wikipedia.org/wiki/Futures_contract
Understood.
Post by Pooh Bear
http://en.wikipedia.org/wiki/Options
This confirms that it's only an option, so as I said, the seller is no
worse off is the buyer 1) chooses to not exercise their option, or 2)
goes out of business, or 3) is unable to exercise their option.
So if I'm not mistaken, you're agreeing with me, right?
However, lets go back to assuming the buyer is committed (that would be
a futures contract, rather then an option as implied by this thread),
assuming the product is something that the seller can easily sell on the
open market, the seller is no worse off then if the contract didn't
exist, if the buyer fails to meet their commitments.
Now obviously if the seller was counting on that money and it didn't
show up, it might financially impact them, true enough, but at the end
of the day, they can't end up worse off then if the contract didn't
exist at all.
Sure, if there had been no contract then the seller would always simply receive the
going market price. However in the same way that buyers want to 'insure themselves'
against fluctuating prices, so also do the sellers in order to ensure a steady
income. They will use the assurance of a steady income to influence their contract
prices. There will be a potential real loss if the contract isn't honoured.

Graham
Bill McKee
2005-09-17 07:27:42 UTC
Permalink
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by Pooh Bear
Post by DevilsPGD
Post by mrtravel
Post by sfb
What has credit worthiness have to do with it? The seller of the hedge
isn't extending credit. The only credit question is whether the airlines
have the cash to buy the hedges today.
When you buy options, you might pay upfront for the cost of the option,
but the actual commodity isn't paid for at that time. The ability to pay
for the commodity in the future requires creditworthiness. Options
trading does require creditworthyness.
Does it though? Worst case for the seller, the buyer backs out, goes
out of business or whatever, and the seller is no worse off then if the
deal was never made in the first place, right?
The seller is worse off if the market price drops below that negotiated in the
option.
You misunderstand. The seller is still no worse off then if the deal
had never existed at all (which is essentially what would happen if the
company owning the option disappeared completely)
I'm also curious about the name "option" -- Doesn't that typically mean
optional?
No !
You really don't understand the futures market one tiny bit do you ?
Try this for starters.
http://en.wikipedia.org/wiki/Futures_contract
Understood.
Post by Pooh Bear
http://en.wikipedia.org/wiki/Options
This confirms that it's only an option, so as I said, the seller is no
worse off is the buyer 1) chooses to not exercise their option, or 2)
goes out of business, or 3) is unable to exercise their option.
So if I'm not mistaken, you're agreeing with me, right?
However, lets go back to assuming the buyer is committed (that would be
a futures contract, rather then an option as implied by this thread),
assuming the product is something that the seller can easily sell on the
open market, the seller is no worse off then if the contract didn't
exist, if the buyer fails to meet their commitments.
Now obviously if the seller was counting on that money and it didn't
show up, it might financially impact them, true enough, but at the end
of the day, they can't end up worse off then if the contract didn't
exist at all.
--
You're not as stupid as you look, or sound, or our best testing indicates.
The contract is worth money. If the option price is higher than the present
selling price, the option is worth nothing. The seller of the option made
the option cost less commisions. If the present selling price is higher
than the option price, even if the buyer goes out of business, the contract
is a tangible asset, as can be sold for a profit. If the seller goes out of
business, the brokerage will probably have to cover the loss of money. That
is why the brokerage requires enough assets to cover the contracts you sell.
Pooh Bear
2005-09-15 20:30:24 UTC
Permalink
Post by khobar
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline tickets, so
carriers often cannot pass along cost increases. Look how long it took
them
Post by nobody
Post by John Mazor
to dare to impose modest price increases to partially offset rising fuel
costs.
They have to wait until the healthy carriers's fuel hedges run out and
these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until Southwest's
$25/barrel hedges ran out in early 2006 if I remember correctly, at
which point, airlines in the USA would be able to raise fares systemwide
and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run out
and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike legacy
careriers who have traditionally set fares without considering actual
operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of their
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
Somone's going to take an utter caning over that little arrangement !

Graham
Gig 601XL Builder
2005-09-15 21:45:18 UTC
Permalink
Post by Pooh Bear
Post by khobar
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of their
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
Somone's going to take an utter caning over that little arrangement !
They basically did that on the futures market. There's nothing to keep them
from selling those contracts should they think the price is going to peak
and then drop.
Bertie the Bunyip
2005-09-16 01:03:37 UTC
Permalink
Post by Pooh Bear
Post by khobar
Post by nobody
Post by John Mazor
Overcapacity is causing the cut-throat pricing of airline
tickets, so carriers often cannot pass along cost increases.
Look how long it took
them
Post by nobody
Post by John Mazor
to dare to impose modest price increases to partially offset
rising fuel costs.
They have to wait until the healthy carriers's fuel hedges run out
and these carriers are then forced to increase their prices.
I believe that Delta had been hoping very much to last until
Southwest's $25/barrel hedges ran out in early 2006 if I remember
correctly, at which point, airlines in the USA would be able to
raise fares systemwide and stop profusely bleeding money.
Southwest is in for a very rude awakening when its fuel hedges run
out and it needs to start paying going rates for fuel. Being a real
business, they will not hesitate to raise ticket prices, unlike
legacy careriers who have traditionally set fares without
considering actual operating costs at all.
Southwest is locked in at $32/barrel for 65% of their fuel needs in
2006, $31/barrel for 45% of their fuel needs in 2007, $33/barrel for
30% of their fuel needs in 2008, and $35/barrel for 25% of their fuel
needs in 2009. So they have a little breathing room.
Somone's going to take an utter caning over that little arrangement !
Leave your dirty little Brit sex habits at home, netkkkop.


Bertie
nobody
2005-09-16 02:14:20 UTC
Permalink
Post by khobar
Southwest is locked in at $32/barrel for 65% of their fuel needs in 2006,
$31/barrel for 45% of their fuel needs in 2007, $33/barrel for 30% of their
fuel needs in 2008, and $35/barrel for 25% of their fuel needs in 2009. So
they have a little breathing room.
"little" ???? If the above is true, Southwest will be able to continue
to wreak havok on the USA airline industry for a long time by keeping
low fares.

However, hedges have their limits. Of Southwest grows, it will need to
buy more fuel outside its hedges, so growth would come at big cost.
nobody
2005-09-15 08:03:41 UTC
Permalink
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a truly free
market, the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels
Congress isn't the one constantly bailing out airlines. The banks are
the ones doing that. Why ? because when a bank as so much capital
invested in a company, it doesn't want to see that company fail. (unlike
actions banks have towards citizens where banks love to pull the rug
from under retail customers 2 seconds after their missed a payment).


In a hypothetical example of Citibank having 2 billion dolars worth of
aircraft leased to Delta, as long as Delta pays a certain amount in
monthly payments (even if not full amounts), Citibank can report to
their shareholders that this investment is still productive.

Should Delta be liquidated, Citibank would recover the aircraft, and
would have to pay parking fees in the desert. It would then have to
report to shareholders that 2 billion dollars worth of capital is not
productive and is in fact costing Citibank money. And if there is no
hope of ever leasingf those aircrtaft, the banks would sell the
aircrtaft for parts/scrap and have to write off huge amounts of money,
something which shareholders wouldn't appreciate since reported profits
woudl go way down.


And with an airline the size of Delta failing, it would put some 400
planes on the used aircraft market, a market already a buyer's market.
Not only would the odds of leasing many of those aircraft low, but it
would further depress the used aircraft market due to ample supply of
used aircraft.

Not only does a ample supply of used aircraft lower revenu potential
should a customer be found, but when the time comes for other airlines
to renew leases for their own aircraft, they will point to the lower
market value of used aircraft and negotiate lower leasing rates, thus
lowering investment yield for the lessors.


The solution would be to make it illegal for airlines to lease aircraft.
If you can't afford to buy aircraft, don't buy new aircraft. And instead
of buying round number of aircraft like "100", airlines would really
calculate exactly how many aircraft they really need to operate their
route network.


Now, lets say GE is the biggest stakeholder for Delta and Citibank is
the biggest stakeholder for United. Both know there is overcapacity and
that a large number of aircraft need to be taken out of circulation. GE
will take every possible action to ensure that it is Citibank that is
stuck with aircraft in teh desert while GE's aircraft are still flying
and generating leasing revenus. Citibank will do the same on its side,
wanting to see GE's planes in the desert.

As a result, both will prop up the airlines and make sure they survive.
And in the end, the overcapacity doesn't get resolved.
zak
2005-09-15 17:36:48 UTC
Permalink
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will be
needed in the future. There isn't really a need for more than three
major airlines, probably AA, DL (merged with CO and NW), and UA
(merged with US).
Absolutely. The reason the airlines are in this mess is because Congress
refuses to let any major airline FAIL.
Unfortunately, that's what capitalism requires for success. In a truly free
market, the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood behind.
In our current dream-world of "protected deregulation", Congress keeps
bailing out failing airlines, allowing them to continue operating at
below-profitable levels -- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that NONE of
the airlines can charge what it actually costs to fly.
Until the Feds let Northworst and Delta fail, this situation will continue
to get worse.
Problem is, the damage is already done. They should have never bailed
the airlines out after 9/11. They let Eastern and Pan Am go under and
never bailed them out back in the late 1980s/early 1990s even though
there were huge cries back then with many people saying "oh, the U.S.
will never let Eastern/Pan Am go under, they're too big, too
important, they have too much history, etc."
Richard Steiner
2005-09-17 22:28:25 UTC
Permalink
Post by zak
Problem is, the damage is already done. They should have never bailed
the airlines out after 9/11.
I wasn't aware that too many airlines received federal assistance after
9/11 (the conditions attached to the presented federal aid were far too
draconian for most carriers to accept, so most didn't accept that aid).

So how exactly did the feds "bail out" any of the bankrupt carriers?
--
-Rich Steiner >>>---> http://www.visi.com/~rsteiner >>>---> Mableton, GA USA
OS/2 + eCS + Linux + Win95 + DOS + PC/GEOS + Executor = PC Hobbyist Heaven!
WARNING: I've seen FIELDATA FORTRAN V and I know how to use it!
The Theorem Theorem: If If, Then Then.
James Robinson
2005-09-17 23:02:55 UTC
Permalink
Post by Richard Steiner
Post by zak
Problem is, the damage is already done. They should have never bailed
the airlines out after 9/11.
I wasn't aware that too many airlines received federal assistance after
9/11 (the conditions attached to the presented federal aid were far too
draconian for most carriers to accept, so most didn't accept that aid).
The Feds initially gave all the airlines a total of about $5 billion right
after 9/11 though the airline stabilization board, and offered to back
loans up to $15 billion. Only a few of the airlines got loans with the
government backing.

Therefore, to some extent, you are both right.
Jonathan Goodish
2005-09-18 01:35:53 UTC
Permalink
Post by James Robinson
Post by Richard Steiner
I wasn't aware that too many airlines received federal assistance after
9/11 (the conditions attached to the presented federal aid were far too
draconian for most carriers to accept, so most didn't accept that aid).
The Feds initially gave all the airlines a total of about $5 billion right
after 9/11 though the airline stabilization board, and offered to back
loans up to $15 billion. Only a few of the airlines got loans with the
government backing.
Therefore, to some extent, you are both right.
I'm not sure that "all" of the airlines accepted aid. And if I recall
correctly, the worst ones were the ones who applied for (and received)
aid from the stablization board. There were more than a couple.


JKG
James Robinson
2005-09-18 02:12:23 UTC
Permalink
Post by Jonathan Goodish
Post by James Robinson
The Feds initially gave all the airlines a total of about $5 billion
right after 9/11 though the airline stabilization board, and offered
to back loans up to $15 billion. Only a few of the airlines got
loans with the government backing.
I'm not sure that "all" of the airlines accepted aid. And if I recall
correctly, the worst ones were the ones who applied for (and received)
aid from the stablization board. There were more than a couple.
All the airlines, including a number of cargo operators, accepted the
initial aid. Even Southwest, which said they didn't really need it, but
wouldn't refuse free money.
Peter
2005-09-18 02:49:56 UTC
Permalink
Post by James Robinson
Post by Jonathan Goodish
Post by James Robinson
The Feds initially gave all the airlines a total of about $5 billion
right after 9/11 though the airline stabilization board, and offered
to back loans up to $15 billion. Only a few of the airlines got
loans with the government backing.
I'm not sure that "all" of the airlines accepted aid. And if I recall
correctly, the worst ones were the ones who applied for (and received)
aid from the stablization board. There were more than a couple.
All the airlines, including a number of cargo operators, accepted the
initial aid. Even Southwest, which said they didn't really need it, but
wouldn't refuse free money.
As my friend calls it, "socialism for the rich, and capitalism
for the poor".

Or put another way, corrupt oligarchy.
John Mazor
2005-09-15 04:52:39 UTC
Permalink
<Dunno what's happening, but ada got cut>
Post by Bertie the Bunyip
Post by John Mazor
I'm not disagreeing with your premises here, just amplifying on them.
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will
be needed in the future. There isn't really a need for more than
three major airlines, probably AA, DL (merged with CO and NW), and
UA (merged with US).
Absolutely. The reason the airlines are in this mess is because
Congress refuses to let any major airline FAIL.
Well, there is the minor matter that until the US Airways/America West
merger, the administration also refused to allow mergers. Mergers
provide a rational, orderly reduction of capacity. Bankruptcy is a
weapon of mass destruction if reducing excess capacity is your goal.
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a
truly
free market,
...the government would have been open to proposals for mergers.
Post by Jay Honeck
the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood
behind.
That already happens. You don't need bankruptcy for that.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress
keeps bailing out failing airlines, allowing them to continue
operating at below-profitable levels
That goes all the way back to the Airline Deregulation Act of 1978,
where Congress hedged its bets by providing "Essential Air Service"
subsidies. The problem has been that Congress and consumers want it
both ways - competition resulting in cheaper fares, while maintaining
the expectation of service levels that were possible under regulated
pricing.
Post by Jay Honeck
-- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that
NONE of the airlines can charge what it actually costs to fly.
True as far as it goes, but there are other factors that have undercut
airlines' ability to set pricing or clear a profit, such as Internet
fare shopping (which the airlines foolishly embraced at first), the
rising cost of oil (even the carriers in bankruptcy would have had
operating profits except for rising fuel prices), the way that the
government has treated airlines as a cash cow (the taxes on a typical
airline ticket are higher than the "sin taxes" on alcohol and
tobacco).
The irony here is that allowing airlines to go into bankruptcy allows
them a competitive edge over solvent carriers. The solution is to
reduce the period for management to have exclusionary control over the
enterprise, and not allow a bankrupt carrier to expand operations.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will
continue
to get worse.
That's one solution, but not the only one. There are more rational
approaches to the capacity problem.
Best solution is to limit it to the types of people that used to fly.
People that needed to. People that could afford to. People with class.
Bring back the DC-7, I say.
Oh wait, wrong problem.
Bring back the Connie. Now THERE was an airplane to fly in.

As to the pax, a simple literacy test would filter out the worst of the
riff-raff.
Bertie the Bunyip
2005-09-15 05:03:16 UTC
Permalink
Post by John Mazor
<Dunno what's happening, but ada got cut>
Post by Bertie the Bunyip
Post by John Mazor
I'm not disagreeing with your premises here, just amplifying on them.
Post by Jay Honeck
Post by zak
Anyway, it seems like some more consolidation among the majors will
be needed in the future. There isn't really a need for more than
three major airlines, probably AA, DL (merged with CO and NW), and
UA (merged with US).
Absolutely. The reason the airlines are in this mess is because
Congress refuses to let any major airline FAIL.
Well, there is the minor matter that until the US Airways/America West
merger, the administration also refused to allow mergers. Mergers
provide a rational, orderly reduction of capacity. Bankruptcy is a
weapon of mass destruction if reducing excess capacity is your goal.
Post by Jay Honeck
Unfortunately, that's what capitalism requires for success. In a
truly
free market,
...the government would have been open to proposals for mergers.
Post by Jay Honeck
the surviving airlines would feed on the carcass of a truly bankrupt
airline, plucking the profitable routes and leaving the deadwood
behind.
That already happens. You don't need bankruptcy for that.
Post by Jay Honeck
In our current dream-world of "protected deregulation", Congress
keeps bailing out failing airlines, allowing them to continue
operating at below-profitable levels
That goes all the way back to the Airline Deregulation Act of 1978,
where Congress hedged its bets by providing "Essential Air Service"
subsidies. The problem has been that Congress and consumers want it
both ways - competition resulting in cheaper fares, while maintaining
the expectation of service levels that were possible under regulated
pricing.
Post by Jay Honeck
-- which means they can continue to charge less than
what it really costs to fly the routes, which, in turn, means that
NONE of the airlines can charge what it actually costs to fly.
True as far as it goes, but there are other factors that have undercut
airlines' ability to set pricing or clear a profit, such as Internet
fare shopping (which the airlines foolishly embraced at first), the
rising cost of oil (even the carriers in bankruptcy would have had
operating profits except for rising fuel prices), the way that the
government has treated airlines as a cash cow (the taxes on a typical
airline ticket are higher than the "sin taxes" on alcohol and
tobacco).
The irony here is that allowing airlines to go into bankruptcy allows
them a competitive edge over solvent carriers. The solution is to
reduce the period for management to have exclusionary control over the
enterprise, and not allow a bankrupt carrier to expand operations.
Post by Jay Honeck
Until the Feds let Northworst and Delta fail, this situation will
continue
to get worse.
That's one solution, but not the only one. There are more rational
approaches to the capacity problem.
Best solution is to limit it to the types of people that used to fly.
People that needed to. People that could afford to. People with class.
Bring back the DC-7, I say.
Oh wait, wrong problem.
Bring back the Connie. Now THERE was an airplane to fly in.
You're too old now. Noone over thirty five can hanle three tails at the
same time.
Post by John Mazor
As to the pax, a simple literacy test would filter out the worst of the
riff-raff.
Sigh. I know of a guy who cant read who's in possesion of a private. He has
to bring his wife to his medicals so she can fill out the paperwork. One
can only wonder how he got past the written..
John Mazor
2005-09-15 05:31:42 UTC
Permalink
Post by Bertie the Bunyip
Post by John Mazor
Bring back the Connie. Now THERE was an airplane to fly in.
You're too old now. Noone over thirty five can hanle three tails at the
same time.
Groan...
Post by Bertie the Bunyip
Post by John Mazor
As to the pax, a simple literacy test would filter out the worst of the
riff-raff.
Post by Bertie the Bunyip
Sigh. I know of a guy who cant read who's in possesion of a private. He has
to bring his wife to his medicals so she can fill out the paperwork. One
can only wonder how he got past the written..
WTF? I hope you're talking about Ralphie!
Bertie the Bunyip
2005-09-15 21:51:22 UTC
Permalink
Post by John Mazor
Post by Bertie the Bunyip
Post by John Mazor
Bring back the Connie. Now THERE was an airplane to fly in.
You're too old now. Noone over thirty five can hanle three tails at
the same time.
Groan...
Exactly.
Post by John Mazor
Post by Bertie the Bunyip
Post by John Mazor
As to the pax, a simple literacy test would filter out the worst of the
riff-raff.
Post by Bertie the Bunyip
Sigh. I know of a guy who cant read who's in possesion of a private.
He
has
Post by Bertie the Bunyip
to bring his wife to his medicals so she can fill out the paperwork.
One can only wonder how he got past the written..
WTF? I hope you're talking about Ralphie!
Unfortunately no.. At least I don't think so. I don't know who it is, just
the nurse to the doc who performed the medical.

Bertie
John Mazor
2005-09-15 04:53:28 UTC
Permalink
<Another repost to cover ada, which got cut>
Post by Bertie the Bunyip
Post by Robert J Carpenter
Post by Robert J Carpenter
I recall that at the time of the previous rash of airline failures,
1991???, Mr. Kahn ? - the chief architect of airline deregulation -
said that foreign airlines / owners ought to be let in to show how to
run an aitline. Back then that was particularly silly since most
European airlins still had protected turf and some subsidies (real or
hidden).
To compound the idiocy, we still hear proposals to allow foreign
airlines to compete in U.S. domestic markets (cabotage).
Hey, US airlines do it in Europe....
*Originate* a flight that *starts out* in, say, Paris, and drops them at the
final destination of, say, Bordeaux, with the flight not stopping or
continuing elsewhere? That's cabotage. Many countries allow lesser
freedoms, such as if a United flight originating as JFK-Bordeaux makes a
stop in Paris - the next leg could pick up Paris-Bordeaux riders. You just
can't have a United flight that starts and ends as Paris-Bordeaux, which
would be cabotage. I may be wrong, but I can't recall any nation that
allows that, except maybe for some minor countries where they're glad to
have any service at all.
Jonathan Goodish
2005-09-15 14:32:11 UTC
Permalink
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.


JKG
sfb
2005-09-15 14:40:45 UTC
Permalink
Southwest, which starting flying in 1971, didn't fly outside Texas
until after deregulation in 1978 when they started service to New
Orleans in 1979.

http://www.southwest.com/about_swa/airborne.html
Post by Jonathan Goodish
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
JKG
Jonathan Goodish
2005-09-15 15:39:45 UTC
Permalink
Post by sfb
Southwest, which starting flying in 1971, didn't fly outside Texas
until after deregulation in 1978 when they started service to New
Orleans in 1979.
I believe that Southwest did fly outside of Texas prior to 1979, but
they didn't have scheduled service outside of Texas prior to that time.
In any case, how is that relevant? They are still a major carrier that
existed prior to deregulation that has never landed in bankruptcy court.



JKG
sfb
2005-09-15 15:50:15 UTC
Permalink
Maybe charters outside Texas, but their history page is specific about
schedule service to New Orleans in 1979. By staying inside Texas as an
intrastate airline regulated by the state, they escaped the "help" the
US Government was giving to regulated interstate airlines.
Post by Jonathan Goodish
Post by sfb
Southwest, which starting flying in 1971, didn't fly outside Texas
until after deregulation in 1978 when they started service to New
Orleans in 1979.
I believe that Southwest did fly outside of Texas prior to 1979, but
they didn't have scheduled service outside of Texas prior to that time.
In any case, how is that relevant? They are still a major carrier that
existed prior to deregulation that has never landed in bankruptcy court.
JKG
Jonathan Goodish
2005-09-15 17:00:45 UTC
Permalink
Post by sfb
Maybe charters outside Texas, but their history page is specific about
schedule service to New Orleans in 1979. By staying inside Texas as an
intrastate airline regulated by the state, they escaped the "help" the
US Government was giving to regulated interstate airlines.
According to the limited research I've done on Southwest, your last
statement is simply not true. But regardless, it's still irrelevant
because there's no proof that Southwest would have done any worse had
they flown interstate from day one. The fact is that they are a major
carrier that existed prior to deregulation that has never been to
bankruptcy court, and I believe that was the subject of the thread.


JKG
zak
2005-09-15 17:17:55 UTC
Permalink
Post by Jonathan Goodish
The fact is that they are a major
carrier that existed prior to deregulation that has never been to
bankruptcy court, and I believe that was the subject of the thread.
JKG
Nope.

I realize many Southwest fanatics' obsession with their airline
reaches religious fundamentalism proportions, but I spelled out the
topic of this thread very clearly in the first paragraph, and many
people understood (except the Southwest fundies):

"Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court."

pre-deregulation U.S. major carrier = LEGACY carriers

Southwest is not, was never, and will never be a U.S. legacy carrier.
Even many Southwest fundies understand that. Others, apparently, do
not.

If you want to discuss your religious fanaticism and obsession with
Southwest, start your own thread. Don't hijack someone else's.
Bob Moore
2005-09-15 15:40:58 UTC
Permalink
Post by sfb
Southwest, which starting flying in 1971, didn't fly outside Texas
until after deregulation in 1978 when they started service to New
Orleans in 1979.
That's right. Both Southwest and Air Florida (where I served as Director
of Operations) started as INTRASTATE air carriers, not INTERSTATE.
They were both regulated by state authority instead of the CAB/Dept of
Transportation.
We had quite a rush to certificate Air Florida prior to October 1972 at
which time the Florida Public Service Commission intended to implement
route and fare regulations similar to those in effect by the CAB for
Interstate Air Carriers. We grandfathered a lot of stuff on Sep 29, just
before the Oct 1 cutoff date. :-)
Many in the airline industry do not remember that Air Florida was started
with an ex-PanAm B-707-331, N705PA, and after one year, exchanged it for
three ex-Eastern L-188 Electras.

Bob Moore
Air Florida 1972-73
Chief Pilot, Director of Operations
Marcio
2005-09-15 21:32:40 UTC
Permalink
Post by Jonathan Goodish
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
"Certainly" doubtful. Southwest is at a point of growth where some
consider it a major airline while others consider it a regional
airline. Most in the stock market industry, for example, still
consider Southwest a regional airline. It depends on your criteria
for a major carrier: revenue, number of passengers carried, number of
routes, etc.

To me, there is one distinction that separates a major carrier from a
regional one: international destinations. When I'm at Brazil's GRU or
Japan's NRT airports, I see the counters for American, Delta, and
United. I have yet to see one for Southwest anywhere. With or
without code sharing, Southwest doesn't fly anywhere but to 50 to 70
domestic destinations. So, Southwest is not a major carrier, only a
regional one.
Gig 601XL Builder
2005-09-15 21:49:41 UTC
Permalink
Post by Marcio
Post by Jonathan Goodish
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
"Certainly" doubtful. Southwest is at a point of growth where some
consider it a major airline while others consider it a regional
airline. Most in the stock market industry, for example, still
consider Southwest a regional airline. It depends on your criteria
for a major carrier: revenue, number of passengers carried, number of
routes, etc.
To me, there is one distinction that separates a major carrier from a
regional one: international destinations. When I'm at Brazil's GRU or
Japan's NRT airports, I see the counters for American, Delta, and
United. I have yet to see one for Southwest anywhere. With or
without code sharing, Southwest doesn't fly anywhere but to 50 to 70
domestic destinations. So, Southwest is not a major carrier, only a
regional one.
I don't know of anyone else's definition of a major US carrier being that
they have international routes. There was a time when TWA and PanAm were the
only international US carriers.
nobody
2005-09-16 02:37:44 UTC
Permalink
Post by Gig 601XL Builder
I don't know of anyone else's definition of a major US carrier being that
they have international routes. There was a time when TWA and PanAm were the
only international US carriers.
For the USA market, there is no question that Southwest is TODAY a major
carrier. In the last decade, it has grown tremendously.

But back in 1978, it was not a major carrier in the USA.
Gig 601XL Builder
2005-09-16 15:31:06 UTC
Permalink
Post by nobody
Post by Gig 601XL Builder
I don't know of anyone else's definition of a major US carrier being that
they have international routes. There was a time when TWA and PanAm were the
only international US carriers.
For the USA market, there is no question that Southwest is TODAY a major
carrier. In the last decade, it has grown tremendously.
But back in 1978, it was not a major carrier in the USA.
None of what I posted in anyway said that SW was a major in 1979 and the
part you quoted above was in response to a statement that if an airline
didn't have international routes it isn't a major and that's just silly.
Bob Moore
2005-09-16 15:46:40 UTC
Permalink
Post by Gig 601XL Builder
None of what I posted in anyway said that SW was a major in 1979 and
the part you quoted above was in response to a statement that if an
airline didn't have international routes it isn't a major and that's
just silly.
Definitions have changed from time to time, but currently, the US
Government defines "Major", "National", "Large Regional", and
"Medium Regional" air carriers. The difference is solely based on
annual revenue except in the case of the "Medium Regional" where
there is a cutoff of 30 seat a/c as I recall. There are other
definitions such as Domestic/Flag and Scheduled/Supplemental.

Bob Moore
zak
2005-09-15 22:14:56 UTC
Permalink
Post by Marcio
Post by Jonathan Goodish
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
"Certainly" doubtful. Southwest is at a point of growth where some
consider it a major airline while others consider it a regional
airline. Most in the stock market industry, for example, still
consider Southwest a regional airline. It depends on your criteria
for a major carrier: revenue, number of passengers carried, number of
routes, etc.
To me, there is one distinction that separates a major carrier from a
regional one: international destinations. When I'm at Brazil's GRU or
Japan's NRT airports, I see the counters for American, Delta, and
United. I have yet to see one for Southwest anywhere. With or
without code sharing, Southwest doesn't fly anywhere but to 50 to 70
domestic destinations. So, Southwest is not a major carrier, only a
regional one.
I've always thought of them as a regional airline with a major
complex. :)

At heart they are still a local Texas airline which, through a
combination of luck and a folksy chain-smoking alcoholic CEO, have
found themselves with a coast-to-coast route map.

There's no big mystery to what they've done, nothing supernatural
about flying between Dallas, Houston, and San Antonio for $19.

Kelleher just seems to be a guy with a huge chip on his shoulder and
an inferiority complex who seemed to feel the need to play a "mine is
bigger than yours" contest with the ghosts of Charles Lindberg, Eddie
Rickenbacker, Juan Trippe, and Walter T. Varney.
Jeff Hacker
2005-09-15 23:53:36 UTC
Permalink
Post by zak
Post by Marcio
Post by Jonathan Goodish
Post by zak
Well, after today's Chapter 11 filing by Delta and Northwest, it
appears that American Airlines is now the only pre-deregulation U.S.
major carrier left that hasn't seen a trip to Bankruptcy Court.
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
"Certainly" doubtful. Southwest is at a point of growth where some
consider it a major airline while others consider it a regional
airline. Most in the stock market industry, for example, still
consider Southwest a regional airline. It depends on your criteria
for a major carrier: revenue, number of passengers carried, number of
routes, etc.
To me, there is one distinction that separates a major carrier from a
regional one: international destinations. When I'm at Brazil's GRU or
Japan's NRT airports, I see the counters for American, Delta, and
United. I have yet to see one for Southwest anywhere. With or
without code sharing, Southwest doesn't fly anywhere but to 50 to 70
domestic destinations. So, Southwest is not a major carrier, only a
regional one.
I've always thought of them as a regional airline with a major
complex. :)
At heart they are still a local Texas airline which, through a
combination of luck and a folksy chain-smoking alcoholic CEO, have
found themselves with a coast-to-coast route map.
Actually, it is a lot more than luck. I personally don't like Southwest
(and I live in Dallas) and try to avoid them. But they made their product
simple, kept to their business plan, and have done well. And Southwest
itself was modeled on PSA in California.
Post by zak
There's no big mystery to what they've done, nothing supernatural
about flying between Dallas, Houston, and San Antonio for $19.
Actually, it was $10 in 1972 as a result of the $10 war with Texas
International and Braniff. And everybody lost money on it. Southwest just
made lots of friend.
Post by zak
Kelleher just seems to be a guy with a huge chip on his shoulder and
an inferiority complex who seemed to feel the need to play a "mine is
bigger than yours" contest with the ghosts of Charles Lindberg, Eddie
Rickenbacker, Juan Trippe, and Walter T. Varney.
Don't forget Jack Fry (TWA), W.A. Patterson (United), Donald Nyrop
(Northwest), Bob Six (Continental), and TE Braniff (Braniff) while you're
talking about U.S. aviation pioneers.
Frank F. Matthews
2005-09-16 00:39:53 UTC
Permalink
snip
Post by Jeff Hacker
Post by zak
I've always thought of them as a regional airline with a major
complex. :)
At heart they are still a local Texas airline which, through a
combination of luck and a folksy chain-smoking alcoholic CEO, have
found themselves with a coast-to-coast route map.
Actually, it is a lot more than luck. I personally don't like Southwest
(and I live in Dallas) and try to avoid them. But they made their product
simple, kept to their business plan, and have done well. And Southwest
itself was modeled on PSA in California.
I wondered if folks were going to ignore PSA forever. Now lets think
why PSA isn't today's carrier.

snip
beavis
2005-09-16 17:46:59 UTC
Permalink
Post by Frank F. Matthews
I wondered if folks were going to ignore PSA forever. Now lets think
why PSA isn't today's carrier.
Well, perhaps because PSA was purchased by USAir in 1988, and their
operations merged into a larger carrier and ceased operating
independently?

<http://www.usairways.com/about/corporate/profile/history/company_histor
y.htm>
Timothy J. Lee
2005-09-15 22:20:51 UTC
Permalink
Post by Marcio
To me, there is one distinction that separates a major carrier from a
regional one: international destinations.
By that definition, Jet Blue (US <-> Dominican Republic) and WestJet
(Canada <-> US) are "major" carriers.
--
------------------------------------------------------------------------
Timothy J. Lee
Unsolicited bulk or commercial email is not welcome.
No warranty of any kind is provided with this message.
Marcio
2005-09-15 23:17:54 UTC
Permalink
Post by Timothy J. Lee
Post by Marcio
To me, there is one distinction that separates a major carrier from a
regional one: international destinations.
By that definition, Jet Blue (US <-> Dominican Republic) and WestJet
(Canada <-> US) are "major" carriers.
Don't be a smartass. You know exactly what I mean. I'm not talking
about one or two destinations. Pick an international destination with
a major airport. A major carrier will most likely fly your there,
either with their own planes or via code sharing. A regional airline
will not. Same as for domestic flights. A major carrier will fly you
almost anywhere. A regional one will not. Southwest has possibly
crossed into major carrier territory domestically but not
internationally.
Jonathan Goodish
2005-09-16 00:40:31 UTC
Permalink
Post by Marcio
Post by Jonathan Goodish
What about Southwest? They are certainly a major carrier, and were
flying for several years before deregulation.
"Certainly" doubtful. Southwest is at a point of growth where some
consider it a major airline while others consider it a regional
airline. Most in the stock market industry, for example, still
consider Southwest a regional airline. It depends on your criteria
for a major carrier: revenue, number of passengers carried, number of
routes, etc.
Huh? Southwest a regional airline? Maybe if the "region" is the United
States, which is the largest air travel market in the world my a huge
margin.

I haven't studied the airline industry, but I suspect that there is far
more domestic travel than international travel my a wide margin, which
means that an international presence is fairly insignificant in
determining which carrier is a "major."

And all of that is beside the point. The point is that Southwest has
been consistently successful since 1971, and has consistently been in a
conservative growth mode. Any airline who can't say the same thing is
obviously doing something, or multiple things, wrong. If the
international markets aren't profitable, carriers should exit them. If
certain domestic markets aren't profitable, carriers should exit them.
If carriers aren't doing that and then find themselves in bankruptcy, it
is usually a result of their [poor] business model, or mismanagement of
their business model.



JKG
Richard Steiner
2005-09-17 22:24:42 UTC
Permalink
Post by zak
American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11
National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001
What about Republic? Or weren't they considered a major carrier before
the merger with NW?
--
-Rich Steiner >>>---> http://www.visi.com/~rsteiner >>>---> Mableton, GA USA
OS/2 + eCS + Linux + Win95 + DOS + PC/GEOS + Executor = PC Hobbyist Heaven!
WARNING: I've seen FIELDATA FORTRAN V and I know how to use it!
The Theorem Theorem: If If, Then Then.
zak
2005-09-17 23:12:31 UTC
Permalink
Post by Richard Steiner
Post by zak
American
Continental - several trips to bankruptcy court
United - currently in bankruptcy
Delta - filed Ch. 11 today
Northwest - filed Ch. 11 today
US Airways - wasn't a major pre-deregulation, then a regional known as
Allegheny; several trips to Ch. 11
National - gobbled up by Pan Am in 1979
Braniff (original) - shut down 1982
Western - gobbled up by Delta in 1987
Eastern - shut down 1991
Pan Am (original) - shut down 1991
TWA - several trips to Ch. 11, remains gobbled up by AA in 2001
What about Republic? Or weren't they considered a major carrier before
the merger with NW?
Well I figured someone was going to ask about Republic. I'm surprised
it didn't happen sooner.

Here, let me save some more people the trouble:

"What about:

North Central
Southern
Piedmont
PSA
Air California
Empire
Mohawk
Allegheny
Northeast
Southeast
Lake Central
Capital
Capitol
World
Pacific
Pacific Northern
West Coast
Bonanza
AirWest
Hughes Airwest
Air Florida
People Express
Frontier
New York Air
Provincetown Boston
Presidential
Air Atlanta
Ransome
Trans International
Transamerica
Arrow Air
Air South
Wien Air Alaska
Reeve Aleutian
Aloha
Hawaiian
Hawaiian Express
ONA
Metro Air
Tower Air
MGM Grand
Regent Air
UltrAir
Robertson
Robinson
Mid-Continent
American Overseas
Varney Air Lines
Varney Speed Lanes/Lines
National Air Transport
Boeing Air Transport
Western Air Express
Transcontinental Air Transport
Huff Daland Dusters
Pitcairn Aviation
Ben Franklin Air
Abe Lincoln Air
Civil War Airways
George Washington Speed Lines
John Hancock Air Transport
Ice Age Air Lines
XXX Airlines
YYY Airlines
ZZZ Airlines ???"

Hope I've saved at least some people some work.

Although I'm sure someone will bitch that I've missed some!
mrtravel
2005-09-17 23:53:02 UTC
Permalink
Post by zak
Hope I've saved at least some people some work.
Although I'm sure someone will bitch that I've missed some!
Well, Ozark is missing.
John
2005-09-18 00:43:04 UTC
Permalink
Post by mrtravel
Post by zak
Hope I've saved at least some people some work.
Although I'm sure someone will bitch that I've missed some!
Well, Ozark is missing.
On which planet was Ozark a major before deregulation?
Robert J Carpenter
2005-09-18 02:16:10 UTC
Permalink
Post by John
Post by mrtravel
Post by zak
Hope I've saved at least some people some work.
Although I'm sure someone will bitch that I've missed some!
Well, Ozark is missing.
On which planet was Ozark a major before deregulation?
Almost all on that list were local or regional service lines.
Remember Ozark's slogan "Two-thirds transcontinental". That was at
their peak, just before being taken over by TWA.
John
2005-09-18 02:25:02 UTC
Permalink
Post by Robert J Carpenter
Post by John
Post by mrtravel
Post by zak
Hope I've saved at least some people some work.
Although I'm sure someone will bitch that I've missed some!
Well, Ozark is missing.
On which planet was Ozark a major before deregulation?
Almost all on that list were local or regional service lines.
Remember Ozark's slogan "Two-thirds transcontinental". That was at
their peak, just before being taken over by TWA.
Is there anyone left on Usenet who knows how to read for comprehension
anymore?

A) The OP started a thread about major airlines before deregulation.
Specifically, that American Airlines is that last major airline before
deregulation left that hasn't filed for bankruptcy.

B) A bunch of morons posted saying "what about this or that airline,"
none of which were majors before deregulation. Most weren't after,
either.

C) The OP mocked the morons with some humor, and an even bigger moron
showed up and took it seriously.
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