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Old January 13th, 2006, 02:25 AM   #141
Kai Tak
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Quote:
Originally Posted by mr_storms
Checking Narita's website shows UA running 12 of their own flights today (that is no code shares) arriving today, which I guess could classify it as a "hub"
It's more of a focus city or secondary hub, along with Hong Kong.

NWA considers their Narita operations a hub.
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Old January 13th, 2006, 02:29 AM   #142
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So would I
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Old January 13th, 2006, 02:30 AM   #143
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Quote:
Originally Posted by Lee
Oh, you mean like Alitalia? Mind you that Eastern and Pan Am all went under without any problem.
What about Siwss and Sabena, and the mssive cost cutting at Aer Lingus or how Olympia is about to go bust. European airlines suffered just as much after 9/11 and yet got no subsidies.

Lee on this one you're europhobia is misplaced. Europe's big airlines actually operate in a freer market than US airlines. For example their are no restrictions on who can own shares in airlines. Richard Branson can only own 25% of his new US airline.
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Old January 13th, 2006, 02:33 AM   #144
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Quote:
Originally Posted by pricemazda
What about Siwss and Sabena, and the mssive cost cutting at Aer Lingus or how Olympia is about to go bust. European airlines suffered just as much after 9/11 and yet got no subsidies.

Lee on this one you're europhobia is misplaced. Europe's big airlines actually operate in a freer market than US airlines. For example their are no restrictions on who can own shares in airlines. Richard Branson can only own 25% of his new US airline.
Freer market? You mean like how LHR can only be open to a few U.S. airlines, or how each country is dominated by one single airline that flies long-haul? It's much easier to make a profit when you can single all of your traffic through just one airport. US airlines are decentralized.
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Old January 13th, 2006, 02:52 AM   #145
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Lee the reason why Heathrow is restricted is because NO Non American airline can operate on domestic US routes. The US govt however is twisting the arm of the UK govt to give that up without anything in return.

The US govt subsidises its airlines directly, they operate for years in bankruptcy protection (while launching new routes), foreign investment is restriced to 25%, and they operate in a completely closed market.

Europe has no such restrictions on competition.

Lee you usually like to lecture us Europeans about the Free Market yet you don't want to accept the US Airline industry is propped up by Congress and the White House while they bully smaller nations into free trade agreements.

The failure of US airlines to be profitable is because of state subsidies and bankruptcy protection which has enabled US airlines to not face the inevitable. They are merely prolonging the reality.

This is just like US Steel. In Europe in the 80's and 90's we went through massive restructing and we now have some of the most efficient and most profitable steel companies in the world. US Steel makers are always bailed out and yet still fail to compete on a global scale. What happens? The US govt puts massive import subsidies to protect its industry.

When the US govt can actually operate the fundementals of a free market economy then i am prepared to accept lessons.
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Old January 13th, 2006, 03:50 AM   #146
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I cannot for the life of me figure out what the problem is with saying that the US airline industry is heavily subsidized, and just plain ridiculous in general... what's the big deal? Perhaps someone might be able to enlighten me? It is what it is, and denial does nothing to change the reality.
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Old January 13th, 2006, 03:54 AM   #147
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When the US govt objects to other countries subsidising its industry then it does matter. The US govt is the biggest proponent of Free Trade.

For example take the airline industry the US govt wants the UK to remove restrictions on the number of US airlines that can fly into Heathrow but at the same time protects its own airlines from the same competition it is arguing against.

Its called hypocrisy.
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Old January 13th, 2006, 04:14 AM   #148
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I was agreeing with you.

I don't understand why my fellow Americans are so uptight about admitting that many of our airlines are an absolute joke.
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Old January 13th, 2006, 11:12 AM   #149
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My apologies, its so easy on the internet to read something in a different way than intended by the writer.

Lee really doesn't like anything European. To him Europe and everything in it is a joke. So instead of addressing that US airlines are subsidised he believes in 'attack is the best form of defence'.
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Old January 13th, 2006, 05:21 PM   #150
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Delta Welcomes Customers To Mexico With 12 New Routes Planned By June
12 January 2006

ATLANTA (Dow Jones)--Delta Air Lines Inc. (DAL) plans to offer flights on 12 new non-stop routes between the U.S. and Mexico by June, subject to Mexican government approvals.

In a press release Thursday, the bankrupt airline said the new routes, which will start in five U.S. cities, include the airline's first-ever service to Merida, Mexico.

Delta said it has already received Department of Transportation approval on the new routes, the flights for which are now available for sale.

In addition, the airline said it is seeking DOT approval to serve three more Mexican routes by the summer of 2006.

Delta filed for bankruptcy court protection on Sept. 14 after reporting losses of more than $11 billion over the past five years.
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Old January 13th, 2006, 09:32 PM   #151
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Quote:
Originally Posted by samsonyuen
^What's the other airline that can use Tokyo Narita as a hub?
Sorry samsonyuen, I just saw your post now. Yes, it is United and Northwest that can use Tokyo-Narita as a hub airport. This goes back to the early 1940's. It may have had something to do with the US occupation of Japan after WWII.
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Old January 13th, 2006, 09:38 PM   #152
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Quote:
Originally Posted by OhmehawJ
I cannot for the life of me figure out what the problem is with saying that the US airline industry is heavily subsidized, and just plain ridiculous in general... what's the big deal? Perhaps someone might be able to enlighten me? It is what it is, and denial does nothing to change the reality.
Besides after 9/11, when many US airlines were heavily damaged and the US Treasury gave the airlines a relatively small amount of money, there has not been subsidization of US airlines. If anyone can find a legitimate article on the US government giving money to a US airline then I'll believe it.
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Old January 13th, 2006, 11:04 PM   #153
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Quote:
Originally Posted by pricemazda
Lee the reason why Heathrow is restricted is because NO Non American airline can operate on domestic US routes. The US govt however is twisting the arm of the UK govt to give that up without anything in return.

The US govt subsidises its airlines directly, they operate for years in bankruptcy protection (while launching new routes), foreign investment is restriced to 25%, and they operate in a completely closed market.

Europe has no such restrictions on competition.

Lee you usually like to lecture us Europeans about the Free Market yet you don't want to accept the US Airline industry is propped up by Congress and the White House while they bully smaller nations into free trade agreements.

The failure of US airlines to be profitable is because of state subsidies and bankruptcy protection which has enabled US airlines to not face the inevitable. They are merely prolonging the reality.

When the US govt can actually operate the fundementals of a free market economy then i am prepared to accept lessons.
The reason is something called Bermuda II, which is outdated and gives BA an almost guaranteed profit. As far as not getting domestic routes, I ask you why would any airline want to get into the US domestic market in the first place? The market is oversaturated. If an airline like BA entered, they would lose money. As a matter of fact, I don't believe BA makes money on even their domestic and European routes, so just imagine what a slaughter it would be to get into the US market.

On the other hand, no US airport is blocked for any airline (unllike LHR), nor can they operate domestic routes in any other country. So basically, not only does BA operate with strict regulation at LHR, but they can fly to any airport in the US, because no other US airport has those regulations. Meanwhile, only two US airlines can get into Heathrow. This is not free-market!

And lets face it, if your national airline were in financial troubles, you would also want it to get help.
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Old January 14th, 2006, 12:17 AM   #154
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Actually no i wouldn't, BA has made losses before and the British govt does not bail them out, in any way. We don't subsidise our industry. May I remind you the way BA was before it was privatised, or British Steel they lost hundreds of millions every single year, the government sold them off and they had to streamline and make a profit, US airlines would make more profit if they didn't receive state help.

OK lets imagine then that the restrictions at Heathrow were lifted, you would have the likes of Delta which is expanding in transatlantic flights using those flights to expand while at the same time being in Bankruptcy protection, in other words not subject to the same market pressures as BA or Virgin and it is protected from foreign takeover and has a protected domestic market. Heathrow is the only major asset there is in the UK, it employs directly over 100'000 people, there are many major hubs operating in the US and the US has the advantage of economies of scale and a large domestic market that the small UK does not. If we lifted restrictions with nothing in return it would have a much bigger impact on the UK economy then US airlines having to downsize.

Tell me again why the UK govt should take lectures of Free Trade from a US govt?

You always criticise Europeans for having outdated economic practices and rile against European govts propping up their companies but you seem to be implying its ok for the US govt.

I'll repeat no US airline can be more than 25% owned by a non US national, no more than 25% of freely traded shares can be owned by a non US national or Non US incorporated company. That means all US airlines operate in a closed protected market while then they launch new routes taking business from other airlines. Not to mention the huge federal subsidies they have received which British airlines (who were just as affected as US ones after 9/11 on transatlantic routes) got nothing.

Its not just airlines its Steel, Boeing and loads of other companies that received subsidies. The US preaches free trade acting as bully for its companies but protects its domestic market from competition.

@Nick, US airlines received massive subsidies after 9/11. Remember all transatlantic flights suffered massively with the fall in passengers and BA made its first loss in years afterwards, but yet it received no emergency aid or help with insurance costs like US airlines did.

Does no one else see the double standard here?
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Old January 14th, 2006, 12:20 AM   #155
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American claims fare-war victory
The airline's response to Delta's pricing plan boosted sales, execs say
12:00 AM CST on Friday, January 13, 2006
By ERIC TORBENSON / The Dallas Morning News

A year after Delta Air Lines Inc. turned the airline industry upside down by lowering its business fares, officials at American Airlines Inc. think they've come out on top.
Last January, Delta whacked its most expensive fares by more than half in many cases, ending Saturday night stay restrictions and lowering fees for changing tickets.
All Delta's competitors matched the fares – including Fort Worth-based American.
And now that the dust has settled, American executives say they think the carrier has ended up better off than they had feared – largely because they tweaked their response in a few key ways.
American spread its simpler business fares across its entire U.S. system instead of merely matching prices on routes where it flew against Atlanta-based Delta.
But at the same time, American didn't cap its priciest tickets at $499, as Delta had done, instead selling its most expensive one-way tickets for $699. Both carriers later added $100 to their caps, citing soaring fuel costs.
"Now more than ever we think we did the right thing," said Scott Nason, American's vice president for revenue management.
American executives had worried that with the lower cap, some flights could end up completely sold out well before the day of departure, forcing some corporate fliers to turn to other carriers on last-minute trips.
The cheaper tickets have also resulted in a healthy boost to American revenue, as customers came back after abandoning the world's largest carrier when some of its one-way domestic fares exceeded $1,000.
"It's something we're pretty excited about," said David Cush, American's vice president for sales.
Flying from American's roughly 2,000 major corporate customers was up as much as 10 percent in 2005 over the prior year, and analysts are lauding American's revenue performance compared with its peers.
American's operating margin excluding jet fuel is now pushing over 25 percent, approaching that of Wall Street darling JetBlue Airways Corp., analyst Jamie Baker said in a note to investors this week.
American is still expected to post a huge loss next week when it reports fourth-quarter earnings, but its shares have soared on hopes it will turn a profit this year.
American's December revenue will be as much as 14 percent better than what it showed last year measured on the money it gets from each seat mile flown, Mr. Baker wrote. American has frequently outpaced all its foes in that measurement in the past year.
With major carriers flying about 6 percent less capacity in the domestic market and planning deeper schedule cuts, pricing is going to get even more favorable for airlines, analyst Michael Linenberg of Merrill Lynch said in a recent research note.
Analysts had frowned on the short-term effects of Delta's move last January, believing it could have cost American as much as $600 million in revenue because its most profitable fares had been chopped in half.
Whether American would have pulled in more revenue in 2005 under the higher business fares of 2004 isn't clear, Mr. Nason said, because the fuel price spike cluttered the market and even forced Delta to move its cap up $100. "It hurt us less than we feared," he said.
What's more certain, the American executives said, is that the carrier's strengths – a big network and lots of daily flights from major cities – helped snag more filers toting briefcases.
In negotiating new corporate contracts last year to adjust discounts in the wake of lower fares, American was "seen as an island of stability" in an industry where three of the top six players are now in bankruptcy, Mr. Cush said. The new agreements cut corporate discounts that were as high as 40 percent on the old fares to mostly "in the single digits," he said.
The airline said it has pulled more travelers off of connecting itineraries and from secondary airports to American's nonstop flights at primary airports, and the trends suggest bookings are still robust. Some fliers have come back from low-cost carriers as well, Mr. Cush said.
Delta's "Simplifares" worked as intended and have brought more customers to the carrier, said spokesman Anthony Black.
But Delta's timing could have been better, consultants have said, because the carrier needed every dime as fuel costs rose. Delta eventually filed for bankruptcy protection on Sept. 14.
"The Achilles' heel of all of this was fuel prices," Mr. Black said.
In theory, the lower pricing ought to hurt Dallas-based Southwest Airlines Co. because the gap between its $299 capped one-way fare and those found on its network competitors has narrowed.
But Southwest officials say they haven't seen much effect from the new pricing.
The carrier's mix of full-fare tickets – the tickets most likely to be bought by business travelers – held steady last year even as it grew about 10 percent, officials said.
"There would not be any reason to abandon our full fare to go to their full fare unless you're interested in losing money," said Southwest spokesman Ed Stewart.
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Old January 14th, 2006, 02:41 AM   #156
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Quote:
Originally Posted by Nick in Atlanta
Besides after 9/11, when many US airlines were heavily damaged and the US Treasury gave the airlines a relatively small amount of money, there has not been subsidization of US airlines. If anyone can find a legitimate article on the US government giving money to a US airline then I'll believe it.
The US has done numerous things to help prop airlines up, like passing the Air Transportation Safety and System Stabilization Act, which gave $15 billion in direct relief and loan guarantees to airlines; voiding US Airways' pension obligations, a default worth $3 billion; the SARS crisis which saw another bailout worth some-odd billions (I've read ranges from $2.9-3.2); and most obviously: voiding United's pension obligations, a default worth $9.8 billion. I can't think of any other obvious big examples like those off hand, but I'm sure if more thought were put into it, more instances of governmental assistance/interference would surface. Perhaps subsidization is not the most-applicable term to what the US government provides the airline industry? Either way, they're being "assisted".
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Old January 14th, 2006, 04:41 AM   #157
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Quote:
Originally Posted by pricemazda
OK lets imagine then that the restrictions at Heathrow were lifted, you would have the likes of Delta which is expanding in transatlantic flights using those flights to expand while at the same time being in Bankruptcy protection, in other words not subject to the same market pressures as BA or Virgin and it is protected from foreign takeover and has a protected domestic market. Heathrow is the only major asset there is in the UK, it employs directly over 100'000 people, there are many major hubs operating in the US and the US has the advantage of economies of scale and a large domestic market that the small UK does not. If we lifted restrictions with nothing in return it would have a much bigger impact on the UK economy then US airlines having to downsize.
So for you Bermuda II is justified, even though it defies "free market". If I were British, or worked for BA, you bet I would also defend Bermuda II. The UK actually would benefit by dismantling Bermuda II in the fact that having more competition lower prices. Of course BA would suffer, but that shouldn't bother you since you believe in open skies.

Quote:
You always criticise Europeans for having outdated economic practices and rile against European govts propping up their companies but you seem to be implying its ok for the US govt.
The airline sector is so small relative to an economy, that what little contradiction exists wont change my mind over this broad issue you brought up. The US airlines in bankrupcy are not getting direct aid from the gov't, rather from investors, which in my mind, is capitalistic. It is true that the US gov't has saved the pensions of many employees at UAL, proving that Bush is much more social than anyone thought.

Quote:
I'll repeat no US airline can be more than 25% owned by a non US national, no more than 25% of freely traded shares can be owned by a non US national or Non US incorporated company. That means all US airlines operate in a closed protected market while then they launch new routes taking business from other airlines. Not to mention the huge federal subsidies they have received which British airlines (who were just as affected as US ones after 9/11 on transatlantic routes) got nothing.
I personally disagree with that rule, but that does not mean that they operate in a closed market. How so? The federal subsidies given were after 9-11, not recently. Also, the British airlines never suffered as much in terms of losses.

Quote:
Its not just airlines its Steel, Boeing and loads of other companies that received subsidies. The US preaches free trade acting as bully for its companies but protects its domestic market from competition.
Niether of them receive any direct subsidy from the gov't. Tax cuts, yes, but that in the long term means more tax revenues for the gov't anyway. The US has every right to preach free trade, because it's the nation that most has it, despite some contradictions.

Quote:
@Nick, US airlines received massive subsidies after 9/11. Remember all transatlantic flights suffered massively with the fall in passengers and BA made its first loss in years afterwards, but yet it received no emergency aid or help with insurance costs like US airlines did.
Unlike BA, some airlines were going to collapse without the aid.
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Old January 14th, 2006, 05:17 AM   #158
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Lee, I believe in TRUE open skies, not open skies which allow US airlines to operate in a protected massive domestic market, with federal assistance with pension liabilities and insurance costs.

Remember for the UK, Heathrow is a huge part of our economy, and not just for the UK but London's position as the primary air centre for Europe is literally the only bargaining chip we have. If we give it away with a US domestic market that is off limits to foreigners, with all the federal assistance and everything that comes with it, what do we get left with?

Nothing. The UK has hardly any areas in which we are global leaders or globally competitive and we are not about to give them up without anything in return.
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Old January 14th, 2006, 11:55 AM   #159
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First of all Bermuda II is not some kind of BA monopoly. It allows two British airlines (British Airways and Virgin Atlantic) and two American airlines (American and United) access to Heathrow. Other American airlines such as Continental and Delta just use Gatwick instead - it's not as if they are being restricted from offering services to London. Secondly as pricemazda has said the US internal market is closed and American airlines are hugely protected. BA and Virgin suffered as much from the downturn as US carriers but survived through the bad years without a single penny of government support. By contrast the American government artificially props up loss making carriers and allows them to continue flying and taking business from airlines that actually generate a profit. The Americans are in no position to make demands over Heathrow given that they won't allow foreigners to buy controlling stakes in their airlines. They are scared because they know that if the market were truely opened up BA would just snap up American, Lufthansa would buy United, and Air France/KLM would buy Delta and the American industry would be in European hands.
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Old January 14th, 2006, 07:42 PM   #160
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Quote:
Originally Posted by pricemazda
Lee, I believe in TRUE open skies, not open skies which allow US airlines to operate in a protected massive domestic market, with federal assistance with pension liabilities and insurance costs.
Good. So then you don't believe in Bermuda II either.

Quote:
Remember for the UK, Heathrow is a huge part of our economy, and not just for the UK but London's position as the primary air centre for Europe is literally the only bargaining chip we have. If we give it away with a US domestic market that is off limits to foreigners, with all the federal assistance and everything that comes with it, what do we get left with?
If you believe in true open skies, then you should agree than any airline should fly any route, anywhere. I say go ahead and get into our domestic market! As long as you give us Heathrow, all is good.
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