Let foreign airlines fly inside USA ???

[Cherokee_Cruiser]

http://www.usatoday.com/news/opinion...-elliott_x.htm

Is this guy on crack?

[aloft]

[ QUOTE ]
Is there a market for foreign carriers stateside? Absolutely. For example, Oh said he would be willing to pay extra to fly a foreign airline domestically because he wouldn't have to endure the inconsistent service levels he finds on the American carriers.

[/ QUOTE ]

To say nothing--and he said NOTHING--of the inconsistent SAFETY levels one finds on the foreign carriers.....

[MQAAord]

Cabotage = Very Bad Idea


It's been hashed here before, a search for "Cabotage" will bring up all the old posts.

[Doug Taylor]

Cabotage is very bad news for all of us. In fact, UPS pilots had a full page advertisement about some of the issues pertaining to the current administration allowing Air China to fly certain cargo routes.

If cabotage laws get rescinded, we're toast, bro!

[mpenguin1]

No, negative, not in a thousand years........

[Doug Taylor]

Actually, Sen. John McCain has been after dismantling cabotage laws for years.

[thaina09123]

I think there was a time when foreign airliners used to fly in the US. Somebody told me that THAI used to fly from Seattle, WA to Dullas, TX and Korean Air used to have the similar route. But I don't think we were able to carry the doemstic passengers though.

[Mr_Creepy]

[ QUOTE ]
Actually, Sen. John McCain has been after dismantling cabotage laws for years.

[/ QUOTE ]

Another of the many reasons McCain is not on my favorites list!

[flyover]

[ QUOTE ]
[ QUOTE ]
Is there a market for foreign carriers stateside? Absolutely. For example, Oh said he would be willing to pay extra to fly a foreign airline domestically because he wouldn't have to endure the inconsistent service levels he finds on the American carriers.

[/ QUOTE ]

To say nothing--and he said NOTHING--of the inconsistent SAFETY levels one finds on the foreign carriers.....

[/ QUOTE ]

Yeah, this article has some unreal analogies. Talking about international food service as if it would appear on domestic routes. Obviously the proper comparison would be to look at intra-Europe service.

As to the safety levels, my only comment there is that has always been a consumer choice issue. Some airlines demonstrate serious safety issues, Value Jet comes to mind, and consumers kept flying on it. Even legacies have gone through times like that. So make them fly by the rules, but the consumer can choose to fly someone we might not think is "safe".

[Pfly]

"Letting foreign carriers in might raise questions about security. Fortunately, the U.S. government has a new federal agency, the Transportation Security Administration, to make sure such questions are resolved."

Because they're doing so well now.

[A300Capt]

Business » News Thursday, November 04, 2004

Mediators press UPS, pilots
Union says company UPS is outsourcing work
--------------------------------------------------------------------------------
By Bill Wolfe
bwolfe@courier-journal.com
The Courier-Journal

Federal mediators have asked UPS and its pilots union to agree to a contract by the end of March. But a new wrinkle — pilot concerns about what it considers outsourcing of flights to a Chinese carrier — has entered the talks.

Linda Puchala and John Livingood of the National Mediation Board are "trying to bring pressure on both sides to try to get us moving to a conclusion, which we are thrilled about," said Independent Pilots Association spokesman Brian Gaudet.

QUICK TAKE
Last we knew
Contract talks between UPS and its pilots union, the Independent Pilots Association, have been under way since November 2002 and went under federal mediation in August.

The latest

Mediators have asked the two sides to reach a final agreement by the end of March. But pilots are voicing new concerns over what they consider outsourcing of flights to a Chinese carrier.

Why it's news

UPS Airlines and the 2,500-member IPA are based in Louisville.

For more info

www.ipapilot.org; www.ups.com


Four days of talks conclude today, and negotiations resume Dec. 13-16. Additional sessions are planned for Jan. 10-13, Feb. 14-17 and March 14-17, said UPS spokesman Mark Giuffre in Louisville.

Talks have been under way since November 2002. Mediation began in August after the two sides were unable to reach agreement. So far, talks have included issues such as scheduling, training, facilities and vacation. Discussions have not focused yet on pay and other economic issues.

There is no imminent danger of a strike because of U.S. laws that govern airline contracts. The contract does not expire until the negotiating processes under the Railway Labor Act are exhausted.

"We've made good progress throughout this time," Giuffre said, but the mediators "control the schedule. We certainly think it's good to set a goal and say, `OK, here's what we're shooting for.'"

A portion of the contract called scope — defining what work and flights should belong to IPA pilots — has become "absolutely the No. 1 one issue for us," Gaudet said. "I think scheduling has even been trumped."

The pilots union ran a full-page ad in The Wall Street Journal Oct. 25 accusing UPS of outsourcing flights because its logistics arm, Supply Chain Solutions, uses a China Airlines flight six nights a week to move air freight from Penang, Malaysia, to Taipei, Taiwan, then on to Anchorage, Alaska, and Nashville, Tenn.

Giuffre said the flights — added to fill a contract with Supply Chain Solutions to bring in computer parts for Dell — don't constitute outsourcing. UPS always tries to use its own people and equipment to move goods, but didn't have the air rights or the planes available to run the route, he said.

The pilots contend that arrangements could have been made to ship the parts by UPS. "Clearly it's a violation of our contract," said Gaudet, arguing that UPS and any of its affiliate companies must use IPA pilots.

The disagreement has been voiced in negotiations, and "it's changed the dynamics. That's really all I can say about it," Gaudet said.

Giuffre said the China Airlines issue should not delay a contract agreement. "This is nothing new. Scope is one of the five major issues" in the contract "and we've talked about this issue months ago."

[SteveC]

Here is one possible scenario for the next twenty to fifty years of the airline industry:

1. Only a few of the current major airlines will survive the current economic situation.
2. Code sharing arrangements and partnerships will increase with foreign carriers.
3. Co-ownership or quasi-mergers will begin to blur the lines between US and foriegn owned entities.
4. Lower cost structures of some of the foriegn carriers (read lower labor cost) will be subtly integrated into the new multi-national conglomerates.
5. The political clout of newly forming multi-national airlines (and other large corporations) looking to reduce travel costs will chip away at the cabotage laws.
6. Smaller foriegn airlines (even some nationalized ones) will see benefits to working out agreements with large airline conglomerates and will push their countries to rework agreements in place regarding airport access and landing rights.
7.Cabotage will become, in some ways, a non-issue because of the blurring of ownership and control of the airlines.
8. World-wide route structures will evolve from the current system, including multi-country hub systems for the multi-national airlines. (Think of the NWA-KLM partnership with MSP, DTW, MEM, and AMS hubs as a small example)
9. Third world country pilots will be willing to work for much lower wages, driving the prevailing rates downward. This may be integrated through multi-tier wage structures to begin with, slowing infiltrating throughout the multi-national corporation (as surely as water flows downhill).
10. Labor rates for pilots throughout the world will eventually reach a stabilized standard (probably with regional variations) based on the pilot demand / supply curves of the time.
11. As in any commodity, an excess number of pilots (or pilots willing to work for lower pay scales) will drive overall wages downward. Lowering wages will reduce the number of people willing to make the sacrifices to be a pilot. The pool of available pilots will stabilize or even decrease. Wages will rise only to a level that supports the number of pilots needed.

Not a pretty scenario, and not necessarily one I believe will come true. In fact, I can see many holes in this scenario myself. I can also see down the road far enough to know, though, that these types of market forces will slowly act on the airline industry as we currently know it, and change it into something that current pilots wouldn't recognize.

All that it takes is a good look at the factors driving manufacturing and service jobs to lower wage countries to get the idea that it could happen to the airlines.

Granted, there are many impediments to this happening. Current laws and labor agreements being two. I see the economic forces that are at work and believe that they will drive this industry (as many other industries have already gone) to a truly world-wide playing field. The world is becoming smaller every year, and economies are becoming more and more interdependent.

Anybody else want to pull out their crystal ball on this one?

Just floating some thoughts to get the discussion ball rolling......

[flyover]

Looks about right to me.

[ QUOTE ]
1. Only a few of the current major airlines will survive the current economic situation.

[/ QUOTE ]

Yep.

[ QUOTE ]
2. Code sharing arrangements and partnerships will increase with foreign carriers.
3. Co-ownership or quasi-mergers will begin to blur the lines between US and foriegn owned entities.

[/ QUOTE ]

The big issue here is foreign investment in domestic carriers, point 3. This is a source of badly needed capital in this industry. Obviously, labor will fight it tooth and nail, mainly citing security issues (military airlift contracts).

[ QUOTE ]
4. Lower cost structures of some of the foriegn carriers (read lower labor cost) will be subtly integrated into the new multi-national conglomerates.
9. Third world country pilots will be willing to work for much lower wages, driving the prevailing rates downward. This may be integrated through multi-tier wage structures to begin with, slowing infiltrating throughout the multi-national corporation (as surely as water flows downhill).

[/ QUOTE ]

This will happen. While debt loads are the driving force that finally got both labor and management to confront cost issues, it was deregulation that started the trickle in the dam. Now the question becomes where pilot rates go to in the US and whether point 4 will have a big impact or not. It is mostly a supply and demand issue with unions able to have some impact if they are smart enough to not make any heoric stands.

[ QUOTE ]
10. Labor rates for pilots throughout the world will eventually reach a stabilized standard (probably with regional variations) based on the pilot demand / supply curves of the time.
11. As in any commodity, an excess number of pilots (or pilots willing to work for lower pay scales) will drive overall wages downward. Lowering wages will reduce the number of people willing to make the sacrifices to be a pilot. The pool of available pilots will stabilize or even decrease. Wages will rise only to a level that supports the number of pilots needed.

Not a pretty scenario, and not necessarily one I believe will come true. In fact, I can see many holes in this scenario myself. I can also see down the road far enough to know, though, that these types of market forces will slowly act on the airline industry as we currently know it, and change it into something that current pilots wouldn't recognize.

[/ QUOTE ]

I see few holes in your analysis. Market forces are one of the unstoppable forces. Efforts to fight them ususally end badly. The best strategy is to recognize them and try to use them to advantage as much as possible. The big wildcard here is how much the US is opened up to foreign investment and labor in this specialized industry. I think that will be a slowly evolving process.

All of this is why management and labor has got to work together. There will be casualties and survivors in this process and any company that is wasting any energy on internal fighting is way behind the curve. The enemies and the opportunities are external. That's why CAL and SWA look so strong to me right now. AMR seems to be working along those lines. This would be a great time for DAL to bring in a leader that everyone can move forward with.

[MikeD]

Speaking of Cabotage, I remember when Britsh Airways flew into PHX (maybe they still do or not) and their 747 would go something like PHX to JFK then across the ocean to London. For the PHX to JFK portion, were they allowed to fly pax that desired to only go from PHX and deplane at JFK, or would that fall under the cabotage laws?

[Doug Taylor]

[ QUOTE ]
Speaking of Cabotage, I remember when Britsh Airways flew into PHX (maybe they still do or not) and their 747 would go something like PHX to JFK then across the ocean to London. For the PHX to JFK portion, were they allowed to fly pax that desired to only go from PHX and deplane at JFK, or would that fall under the cabotage laws?

[/ QUOTE ]

Probably didn't drop off any pax in JFK.

[tonyw]

God, people are idiots.

They seem to think that on a one hour flight between DCA and ATL or DCA and ORD, they're going to get the same kind of service that they get on when they're flying Singapore or Emirates for 12 hours. And that they'll pay low, low fares to do it.

Morons.

[Doug Taylor]

A few years ago, I had someone write me about my opposition to enabling foreign carriers to operate in the US. He went on and on about how US Airlines suck and how when he flies business class on X airline, all of the flight attendants are this, and the service is that, etc.

I don't think he understood that you're going to suddenly see a Qantas 747-400 between SFO and DEN, you're probably doing to have a Tu-154 TWA flight "Operated by Air Kazackstan" in a worst case scenario.

I do think that once we start allowing foreign competition in the US, the whole idea of going to a flight school, training and then working your way up to where you want to be in aviation is dead.

No point in hiring an American at US rates when they could deadhead crews over on TDY from eastern Europe for pennies on the dollar.

Look at the work visa situation in Silicon Valley before the bubble burst.

[flyover]

My favorite was the Eastern European flight attendants who got drunk and started beating up the passengers when they complained about it.

[tonyw]

Stop agreeing with me. You're going to ruin your reputation.

[Doug Taylor]

Yes, this is too weird!