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>Is the airline industry disrupt-able enough for market forces to make changes? It has been disrupted already ... many times. Some disruptions came as a result

>Is the airline industry disrupt-able enough for market forces to make changes? It has been disrupted already ... many times. Some disruptions came as a result of relaxation of certain regulations, such as allowing twin engine jets to fly over the oceans, or not forcing airlines to fly direct routes. There's also the revolution around using deep statistical modeling for capacity and route planning and scheduling. There's the business models of RyanAir and Emirates ... I mean, this industry has changed quite a bit. Flying is also cheapest AND safest it has ever been (though more uncomfortable). Seems like market forces are working just fine.

jpmoral 8y ago
I think the 'safest' part is due to regulation, not market forces.
- macspoofing 8y ago
  Regulations are certainly part of the story, but make no mistake, regulation don't work without market buy-in. If a regulation stands in opposition to market forces it will fail miserably. For example, car fuel efficiency regulations tend to lead to cheating, and non-compliance (which leads to non-enforcement because regulators give up on them) if they stray too far from reality. Furthermore regulations don't innovate. It took aviation engineers to design and build super-safe passenger jets, and airlines (along with engineers) to maintain them - bureaucrats don't do any of that. But yes, regulations have a place.
  - jpmoral 8y ago
    >It took aviation engineers to design and build super-safe passenger jets, and airlines (along with engineers) to maintain them - bureaucrats don't do any of that. Companies won't do that unless forced to by regulations. Also, your post that I replied to implied that it was all market forces.
    - macspoofing 8y ago
      >Companies won't do that unless forced to by regulations. Even if you were to take a cyncical view that companies don't care about people, they sure as heck would not want to lose a $300 million plane. I'm not arguing against the utility of regulations. I'm saying don't overstate it.
      - fzeroracer 8y ago
        Companies don't care about people, for one and for two, the problem is that safety is one of those things that companies will gladly brush right against the edge of for the sake of profits. To draw a point of comparison many companies know that their infrastructure is vulnerable to hacking or data leaks. The reason why they don't fix the problem in the first place is because they've ran the cost analysis and realized that the cost of securing their system is more than the potential ramifications of losing customer data.
      - Dylan16807 8y ago
        > Even if you were to take a cyncical view that companies don't care about people, they sure as heck would not want to lose a $300 million plane. If safety didn't matter, you might have $200 million planes with a 3% chance of crashing during their service life. Nobody 'wants' to lose equipment, but optimizing for zero crashes ever is not done for cost reasons.
  - akiselev 8y ago
    The FAA and the NTSB are the reason there is market buy-in to begin with. Consumers would never have adopted air travel and driven global economies of scale to the extent that they have without those two agencies reassuring the public that they wouldnt go up in a giant fireball along with 200 others just to go to Cabo.
mbesto 8y ago
> Seems like market forces are working just fine. Are they though? How come the US doesn't have the equivalent of a Emirates/Singapore quality level airline? You can't tell me there is no demand for that level of service by business folk? Laymen's explanation - there are a limited number of routes that can physically be established and those who have the routes exhibit rent seeking behavior with only just a small amount of competition. In other words an oligopoly.
- rayiner 8y ago
  Emirates is a state-owned enterprise and there are a lot of accusations that it's subsidized by the state through below-market borrowing. Your question is also kind of like asking why HP laptops are lower quality than Apple laptops. Emirates uses its Dubai base to serve primarily lucrative international flights, just like Apple targets the premium end of the market. That doesn't mean that HP is in a market segment without competition, however. Rather, it targets a cost-sensitive portion of the market where people aren't willing to pay extra for quality.
  - jacques_chester 8y ago
    My view is that is the Emiratis want to squander their money on giving at-cost fuel and basically-zero-interest loans to their flag carrier, that's on them. It's not as though the US air market isn't heavily protected. You'll note that foreign carriers like Emirates can't fly domestic routes. If I fly Qantas to NYC, half the plane gets off in LA and nobody else can get on. Which is part of why "Qantas ticket" is the ancient Yolŋu word for "financial ruin".
  - mbesto 8y ago
    > why HP laptops are lower quality than Apple laptops. So why can I choose to buy either an Apple laptop or an HP one in the US, but don't have the choice to fly on Emirates from Chicago to NYC? I think you missed my point entirely. There is a market of people willing to pay for superior quality airline service, there is just no supply for it, because of regulation.
- jessaustin 8y ago
tomjen3 8y ago
Not really. Market forces should have forced the airlines to kill TSA long ago. Also I am not sure how you quantify safety. Overall it may have increased, but nobody ever shot a buik missile against my car and got away with it.

jpmoral 8y ago

I think the 'safest' part is due to regulation, not market forces.

macspoofing 8y ago
Regulations are certainly part of the story, but make no mistake, regulation don't work without market buy-in. If a regulation stands in opposition to market forces it will fail miserably. For example, car fuel efficiency regulations tend to lead to cheating, and non-compliance (which leads to non-enforcement because regulators give up on them) if they stray too far from reality. Furthermore regulations don't innovate. It took aviation engineers to design and build super-safe passenger jets, and airlines (along with engineers) to maintain them - bureaucrats don't do any of that. But yes, regulations have a place.
- jpmoral 8y ago
  >It took aviation engineers to design and build super-safe passenger jets, and airlines (along with engineers) to maintain them - bureaucrats don't do any of that. Companies won't do that unless forced to by regulations. Also, your post that I replied to implied that it was all market forces.
  - macspoofing 8y ago
    >Companies won't do that unless forced to by regulations. Even if you were to take a cyncical view that companies don't care about people, they sure as heck would not want to lose a $300 million plane. I'm not arguing against the utility of regulations. I'm saying don't overstate it.
    - fzeroracer 8y ago
      Companies don't care about people, for one and for two, the problem is that safety is one of those things that companies will gladly brush right against the edge of for the sake of profits. To draw a point of comparison many companies know that their infrastructure is vulnerable to hacking or data leaks. The reason why they don't fix the problem in the first place is because they've ran the cost analysis and realized that the cost of securing their system is more than the potential ramifications of losing customer data.
    - Dylan16807 8y ago
      > Even if you were to take a cyncical view that companies don't care about people, they sure as heck would not want to lose a $300 million plane. If safety didn't matter, you might have $200 million planes with a 3% chance of crashing during their service life. Nobody 'wants' to lose equipment, but optimizing for zero crashes ever is not done for cost reasons.
- akiselev 8y ago
  The FAA and the NTSB are the reason there is market buy-in to begin with. Consumers would never have adopted air travel and driven global economies of scale to the extent that they have without those two agencies reassuring the public that they wouldnt go up in a giant fireball along with 200 others just to go to Cabo.

mbesto 8y ago

> Seems like market forces are working just fine. Are they though? How come the US doesn't have the equivalent of a Emirates/Singapore quality level airline? You can't tell me there is no demand for that level of service by business folk? Laymen's explanation - there are a limited number of routes that can physically be established and those who have the routes exhibit rent seeking behavior with only just a small amount of competition. In other words an oligopoly.

rayiner 8y ago
Emirates is a state-owned enterprise and there are a lot of accusations that it's subsidized by the state through below-market borrowing. Your question is also kind of like asking why HP laptops are lower quality than Apple laptops. Emirates uses its Dubai base to serve primarily lucrative international flights, just like Apple targets the premium end of the market. That doesn't mean that HP is in a market segment without competition, however. Rather, it targets a cost-sensitive portion of the market where people aren't willing to pay extra for quality.
- jacques_chester 8y ago
  My view is that is the Emiratis want to squander their money on giving at-cost fuel and basically-zero-interest loans to their flag carrier, that's on them. It's not as though the US air market isn't heavily protected. You'll note that foreign carriers like Emirates can't fly domestic routes. If I fly Qantas to NYC, half the plane gets off in LA and nobody else can get on. Which is part of why "Qantas ticket" is the ancient Yolŋu word for "financial ruin".
- mbesto 8y ago
  > why HP laptops are lower quality than Apple laptops. So why can I choose to buy either an Apple laptop or an HP one in the US, but don't have the choice to fly on Emirates from Chicago to NYC? I think you missed my point entirely. There is a market of people willing to pay for superior quality airline service, there is just no supply for it, because of regulation.
jessaustin 8y ago

tomjen3 8y ago

Not really. Market forces should have forced the airlines to kill TSA long ago. Also I am not sure how you quantify safety. Overall it may have increased, but nobody ever shot a buik missile against my car and got away with it.