[HN Gopher] Airlines flying empty planes to keep flight slots du...
___________________________________________________________________
Airlines flying empty planes to keep flight slots during
coronavirus outbreak
Author : angrygoat
Score : 128 points
Date : 2020-03-07 13:43 UTC (9 hours ago)
(HTM) web link (www.businessinsider.com)
(TXT) w3m dump (www.businessinsider.com)
| smkellat wrote:
| As a halfway answer to this, I ask if specific plane types are
| required on these routes. If not then swap out current craft for
| smaller vehicles so that your pilots can maintain proficiency
| time while still moving cargo and the reduced number of
| passengers. Flying isn't like riding a bike and pilots can't sit
| in simulators ground-side indefinitely. You won't be swapping in
| a Dash 8 for an A380 in every case but smaller Embraer jets in
| lieu of the Airbus heavies could help keep the
| training/proficiency side going.
| sokoloff wrote:
| Most anything over 12500 lbs (about 5500 kg) max takeoff weight
| or powered by jet engines requires the pilots to have a rating
| specific to the type. This means anything used in commercial
| service larger than a medium-sized (~8+1 seat) King Air.
|
| A pilot type rated in an A320 isn't necessarily going to have a
| current type rating in a Dash-8 or ERJ/CRJ. (This is both a
| regulatory and an actual safety hurdle.)
|
| (And of course, many of the trans-Atlantic routes can't be
| covered by significantly smaller equipment, though I'd expect
| that those routes are not flying literally empty anyway.)
| blondie9x wrote:
| Honestly, how can we ever beat climate change if this is the
| norm.
| dtech wrote:
| This seems like a sensible rule that leads to unwanted behavior
| in this unforeseen case. Would make sense to grant a temporary
| exemption.
| scrollaway wrote:
| Yep. Featured on HAI a year ago, it's not a new practice it's
| just been exacerbated due to COVID-19.
| https://youtu.be/X8XZriAdB1g
| chrisseaton wrote:
| > This seems like a sensible rule
|
| Does it?! Why would you ever want to motivate an airline to fly
| just for the sake of it? Whether there's a pandemic or not it
| seems like a bad thing.
| martinald wrote:
| Because otherwise airlines can buy up all the slots so
| competitors can't operate.
| chrisseaton wrote:
| But it's ok with you that they buy up all the slots so
| competitors can't operate... just so as long as they burn
| fuel while they do it?
| dodobirdlord wrote:
| If they buy up all of the slots and then fly them,
| customers can take the flights. The goal isn't to
| (necessarily) to ensure that competitors can operate,
| it's to ensure that passengers have flights they can
| travel on.
| qubex wrote:
| As I've answered elsewhere: burning fuel (and sustaining
| other operating costs) while they squat on slots
| ultimately ensures that squatting on too grand a scale
| and/or for too long will result in bankruptcy and thus
| ensures that the system is self-correcting (by limiting
| incumbent advantage).
| [deleted]
| cmcaine wrote:
| If you just give fines to companies that don't run
| flights on routes then you can impose a penalty without
| incentivising empty or near-empty flights.
| qubex wrote:
| Excellent idea! So now you only have two more problems:
| lobbyists being paid to influence the fines (so that they
| don't cause their clients so much harm as to make their
| anti-competitive strategies unprofitable); and regulatory
| capture (where regulatory bodies become beholden to those
| whom they regulate).
| [deleted]
| cmcaine wrote:
| Those are already problems with aviation, so that's
| nothing new. The existing rules didn't emerge from
| primordial ooze, they were also influenced by lobbyists
| and have certain effects.
| dodobirdlord wrote:
| If the fine is larger than the price of the fuel then
| they'll just fly the flights.
| noinsight wrote:
| Because on the flip side, airlines could keep canceling
| flights on less popular routes when they're not at full
| capacity (i.e. not/less profitable). That would inconvenience
| passengers. Under this regulation they could lose that route
| to a competitor that is more willing to service customers (or
| can operate at a lower cost).
|
| EDIT: I found the EU page outlining the regulation here:
| https://ec.europa.eu/transport/modes/air/airports/slots_en
|
| EDIT 2: This appears to be a global practice:
| https://www.iata.org/en/policy/slots/
| noinsight wrote:
| Another reason springs to mind: if airports are congested -
| as they probably are - if an airline continually wastes
| allocated take-off/landing slots by not actually using
| them, the whole airport becomes less efficient and those
| precious slots could have been better used by someone else.
| This disincentivizes doing that. I'll leave why someone
| would hog slots they have no intention of using as an open
| question.
| chrisseaton wrote:
| This rule says it's ok to squat on slots just as long as
| you burn fuel while you do it.
| qubex wrote:
| Yes -- because such behaviour results in losses for the
| company and, if sufficiently extreme (i.e., pushing them
| to bankruptcy) is self-correcting (they leave the market
| and vacate the slots).
| cmcaine wrote:
| You can just fine the companies rather than incentivising
| them to run empty planes.
|
| Better yet, institute a proper carbon tax and either a
| carefully thought-out market for slots and/or fines.
| m000 wrote:
| Fines are not a solution. When you hear about fines, it
| is typically some government trying to save face on the
| media:
|
| - The collected fine will not be used to undo the damage
| to the market/competitors.
|
| - The fine won't _ever_ exceed the profits gained by the
| company because of the infringement. Or else the company
| will contest it as unfair.
|
| That's why you read "EU fines Google with 5 billion" and
| Google doesn't really care. They will go through the
| moves of pretending they care, maybe try to shave off
| part of the fine, but at the end of the day, it's
| business as usual.
| ascar wrote:
| The whole point of the rule is that it's more expensive
| to not run the flights than to run them with few
| passengers. So the fine would need to be higher than the
| cost of operating the flight resulting in the exact same
| outcome.
| chrisseaton wrote:
| Why not create a competitive market for slots, rather
| than incentivising people to literally burn fuel?
| qubex wrote:
| Because (as is argued elsewhere in this thread), large
| airlines could buy up all slots and then not operate
| flights on them, starving their would-be competitors of
| opportunity to create a basis for themselves.
| oerpli wrote:
| But they could just do the same with the current ruling -
| the only difference would be whether they spend their
| money on more expensive slots or on wasting fuel.
| tialaramex wrote:
| No. There are multiple levels of regulation.
|
| Internationally the rule is that you can have "slots" if
| your airport is busy enough. IATA classifies airports
| into three levels with only the busiest class 3 "Co-
| ordinated" airports having slots. A relatively small
| number of generally very globally important airports
| qualify, very few of them in the US - but of course these
| seem notable because you've heard of them. My local
| airport (which is a ghost town because the airline that
| ran most flights from there recently collapsed) does not
| have slots. If you had told them last year you wanted to
| take off and land six planes a day there they'd just say
| that sounds great, let us know when to expect them and
| where to send the bills. London Heathrow on the other
| hand obviously doesn't have capacity to just have you
| show up with six extra planes and not cause chaos.
|
| But, the international rule doesn't say how you get
| slots. IATA organises conferences to discuss strategy,
| but it's completely legal for, say, Russia to decide that
| all slots in its major airports are for Russian
| companies. The EU has its own regulations which say if
| you're a EU member state with an airport that gets slots,
| you must meet certain EU criteria that aim to create a
| competitive marketplace, keep unsafe carriers out of
| European airspace and make everything efficient.
|
| The UK implements those regulations through a private
| company because _of course it does_ the Tories (party
| presently in government) love private companies, and that
| 's what Airport Coordination Limited is for.
|
| Anyway, the EU level regulation means you can't "just"
| buy more slots, you need to qualify to even be allowed
| them. If Big Airline A buys Small Airline B, it would not
| be unusual for the rules to say that too bad, the
| resulting company still named Big Airline A doesn't get
| all the resulting slots, some of them must be auctioned
| off to competitors.
| gpvos wrote:
| There is such a market. It's just that in some cases, it
| can be economical for an airline to hang on to an unused
| slot at cost in the short term if it expects the slot to
| be profitable in the longer term.
| gruez wrote:
| Mandating flights seems like a bad solution to carriers
| canceling flights unilaterally. Why not just force them to
| provide comparable alternate arrangements and/or pay the
| passengers financial compensation?
| DeedsMoraine wrote:
| It's not about the passengers, it's about parking space
| for the planes.
|
| You not taking off means someone else can't land.
| gruez wrote:
| If that's really the issue, why are they constantly
| making ghost flights? Surely there are places to park
| planes in bulk (eg. same place where they're parking all
| the 737 MAX)
| redis_mlc wrote:
| > Surely there are places to park planes in bulk
|
| No, there aren't for airliners. Most are in the air at
| any given time.
|
| There's boneyards and mfg. airports, and that's about it.
|
| A possibility would be a non-operating airport in a
| friendly country - thinking about the new Berlin airport.
|
| Boeing likely finally stopped making the 737 MAX after
| they ran out of parking space, which forced a decision.
|
| To park even one airliner long-term requires prior
| permission and monthly payments.
| dodobirdlord wrote:
| Parking planes in bulk isn't the issue here. Planes are
| expensive and nobody wants to mothball them, they want
| them at airports.
| dodobirdlord wrote:
| The flights aren't mandated, the airlines can not fly
| them if they want. But if they don't they may lose them
| to another airline willing to fly them. If _nobody_ wants
| to fly the route, then there 's no threat of losing it to
| a competitor.
| barry-cotter wrote:
| > Because on the flip side, airlines could keep canceling
| flights on less popular routes when they're not at full
| capacity (i.e. not/less profitable).
|
| This would lead to them getting fewer customers as they got
| a name for awful reliability, like Alaska Airlines have a
| reputation for being assholes from top to bottom, or United
| have a reputation for destroying musical instruments.
|
| If you want to more directly disincentivise cancelling
| flights when people have booked already set a minimum
| payment to the affected passengers, as in the V EU.
| Johnny555 wrote:
| _Alaska Airlines have a reputation for being assholes
| from top to bottom, or United have a reputation for
| destroying musical instruments_
|
| As a frequent flyer on both airlines, I'm not sure that
| either of those reputations exist, at least I've never
| heard them. I vaguely remember some incident with a
| broken guitar (?) But I couldn't tell you which airline.
| barry-cotter wrote:
| https://m.youtube.com/watch?v=5YGc4zOqozo
|
| https://en.wikipedia.org/wiki/United_Breaks_Guitars
|
| United Breaks Guitars
| [deleted]
| barry-cotter wrote:
| This is a stupid rule. This is not an unforeseeable case. Just
| sell the slots. You can sell them once and forever or you can
| auction them yearly or every two, three, five years, whatever.
| Demanding planes run for no one's benefit is just setting
| money, and more importantly resources, on fire.
| qubex wrote:
| I don't think you understand the problems associated with the
| "just sell the slots" idea. The problem is that big airlines
| could buy up slots and then not use them. They wouldn't
| _necessarily_ have an incentive to sell them, either, because
| the buyers could be small, regional, or low-cost companies
| that could leverage them to build up a small but profitable
| business and later take on the bigger airlines (as happened
| with Europe's budget airlines, most notably EasyJet and
| Ryanair).
| yardstick wrote:
| The op addressed this issue with their comment about
| selling 1-5 year leases.
| sho wrote:
| That didn't address the issue at all. They would just buy
| the leases and keep the competition out that way; no
| difference.
| barry-cotter wrote:
| That means one of two things; the slots aren't worth that
| much or they were sold for less than they were worth. If
| they're almost worthless, as not using them suggests
| their not being used is no great loss. If they are
| worthwhile then either they'll be used, someone else will
| buy them or the owner is setting money on fire by not
| using a valuable asset, in much the same way as someone
| who uses a vacant lot in Manhattan as a planning lot
| instead of building a skyscraper on it.
|
| If you want a slot to go to its most valuable use sell it
| to the entity that values it most, whether permanently or
| by auctioning it yearly.
| m000 wrote:
| The objective is not fairness among companies. The
| objective is to keep the market competitive for the
| benefit of the consumers.
|
| If you can afford a 5 year lease on a slot you won't
| actively use, you're still stifling the competition. And
| since EU prohibits EU-governments to subsidy airlines,
| this paves the way for non-EU countries with deep pockets
| to eventually control the EU air travel market.
| barry-cotter wrote:
| "Big" airlines buying up slots and not using them is a non-
| problem. Most airlines go bust over thirty years because
| the entire industry is so awful to be in. Flying busses
| don't have that much better profit margin than the kind on
| the roads and the customers shop almost solely on price.
| That's why Delta, Pan Am etc. are in and out of Chapter 11
| or actual bankruptcy. You think companies in those kinds of
| financial straits won't sell assets they're not using, like
| slots?
| germanier wrote:
| As we see here demanding utilization just increases the
| price of squatting. The same effect could be had without
| demanding burning fuel.
| tuesday20 wrote:
| I don't understand this. Can't we put rules in place to
| prevent this? How hard can it be to take the slots back
| from the big airlines if they are not using them?
| sfj wrote:
| Hence, the problem with empty planes being flown around.
| dukoid wrote:
| This is exactly why they HAVE to use them, but in the
| current situation it doesn't make sense.
| heliodor wrote:
| Unforeseen? Only because the people who created this rule
| couldn't be bothered or allowed to spend a few extra minutes
| thinking of edge cases. This is just one example of many blunt
| rules and laws we have on the books. Maybe in 100 or 500 years
| we'll implement governance systems that can serve us better.
| drivebycomment wrote:
| It is difficult to write a rule that works perfectly all the
| time. It is even more difficult to write a concise rule that
| does so. And complex rules potentially increase the cost for
| everyone. I think this particular behavior isn't as bad as
| people make it out to be. I would assume this increases
| overall airline industry's carbon emission in tiny fraction
| while the rule probably prevented the tragedy of the commons
| for those slots.
| chrononaut wrote:
| Is this article being slightly over-dramatic? I would've thought
| most of these planes carry a significant amount of cargo, which
| likely has increased since there are fewer passengers and more
| room, and there might also be more remote/online purchasing as of
| recent.
|
| Or is that not really a factor here?
| i_am_proteus wrote:
| Passenger carriers do use extra weight/space for LTL shipments,
| but bear in mind that shipping in general is down due to
| supply-side effects (c. 25% reduction at Long Beach, the West
| Coast's busiest commercial port[0]) so there will be
| significant reductions in demand for LTL freight as a knock-on
| effect.
|
| [0] https://www.wsj.com/articles/port-of-los-angeles-sees-
| corona...
| arbuge wrote:
| The other thing to note is that an oil price crash is going on.
| It had started before the outbreak, was accelerated because of
| it, and accelerated further by the OPEC+ talks failing yesterday.
|
| Cheaper aviation fuel will incentivize airlines to keep their
| planes in the sky.
| quickthrowman wrote:
| Short USO, long JETS: the next overcrowded trade
| JoeAltmaier wrote:
| Busses run empty at odd hours, because its necessary to have a
| regular schedule to keep customers? Not so crazy...its a fact of
| scheduled transportation.
| pengaru wrote:
| "asking for the rules to be suspended during the outbreak to
| prevent further environmental and economic damage"
|
| It's not like having those planes full of people results in less
| environmental damage.
| [deleted]
| [deleted]
| gruez wrote:
| The difference is now the flights can be canceled without
| impact to anyone else.
| pbhjpbhj wrote:
| Doesn't it depend on whether the people are then on additional
| trips, or transferred from other trips. If they're taking ghost
| planes instead of other modes of transport, then they _may_ be
| reducing environmental damage?
| pengaru wrote:
| Does that seem likely to you when the impetus for not flying
| is the coronavirus?
| capkutay wrote:
| Does anyone have any reliable information on the risks of flying
| right now? I took a couple flights this week, seemed to be status
| quo. People of all ages flying with no one practicing any special
| hygiene measures.
| jaynetics wrote:
| Are you referring to the risk of getting infected on board?
| I've read about a German case where a passenger was found to be
| infected. They tried to trace everyone who sat within 2 rows of
| him. Not sure if this is a very thorough approach and really
| represents the "danger zone". Might even depend on the plane
| model and quality of air conditioning.
| EamonnMR wrote:
| The risk is that you'll be the one who infects a new community.
| avip wrote:
| Depending on your destination, there's a non-trivial risk
| you'll be immediately bumped back to origin. Stay tuned.
| hrdwdmrbl wrote:
| A non-original idea is to create a market for landing slots.
| hnarn wrote:
| Create? They're already auctioned off and traded freely.
| markbaikal wrote:
| They are currently auctioned almost nowhere. Instead, they
| are permanently owned by incumbent airlines who never paid
| for them. Additionally, incumbent airlines lobby against slot
| auctions, see e. g. https://airlines.iata.org/analysis/the-
| dangers-of-slot-aucti...
|
| The fact that slots are not available to newcomers is a
| valuable moat for incumbents.
| ipnon wrote:
| Who else proposed this idea?
| markbaikal wrote:
| Every reasonable economist should.
|
| https://iea.org.uk/in-the-media/media-coverage/put-
| airport-s...
| tyingq wrote:
| They probably just need a temporary way for the airlines to pay
| to keep their slots directly, versus having a minimum number of
| payments tied to takeoffs and landings.
| jsjddbbwj wrote:
| They are paying for the fuel. So?
| gpvos wrote:
| Fuel is being burned, creating more CO2, without any benefit to
| society.
| jsjddbbwj wrote:
| So if I have a corporation I have to benefit society with it?
| Else what, the government must expropriate my corporation
| from me?
| salawat wrote:
| Yes, actually.
|
| Used to be you couldn't even incorporate unless you could
| make the case that granting the writ of incorporation would
| have a tangible benefit to the community granting it at
| large.
|
| It was not a right, but rather a privilege. While it is
| rarer to see a refusal nowadays, it is still a possibility,
| and the corporate death sentence is a thing; even if we
| haven't exercised it in a long while.
|
| https://en.m.wikipedia.org/wiki/Corporation
|
| https://en.m.wikipedia.org/wiki/Judicial_dissolution
| gpvos wrote:
| Maybe not your corporation per se. But the fact that
| corporations, which are legal fictions, can be created is
| because many societies have deemed them to be, on balance,
| beneficial. Once the balance goes the other way, things
| should, and are likely to, change.
|
| Also, you are exhibiting all the signs of a troll. Please
| reconsider the way you are presenting your opinions.
| pavlov wrote:
| If your corporation is doing harm, laws will be passed to
| prevent it and ultimately courts will shut you down if
| needed.
|
| The first step on this long path is raising public
| awareness, which this article is doing.
| untog wrote:
| Are you just mindlessly trolling here or do you have a
| point? Climate change is a thing that concerns people.
| Waste is a thing that concerns people. Is any of this
| surprising?
| mrmonkeyman wrote:
| Tax fuel. Airlines don't create it.
| jsjddbbwj wrote:
| Do those two things concern people as much as you think?
| I don't see it as a major issue people vote on.
| danso wrote:
| Not a lot of people vote primarily on issues regarding
| criminal justice or technology (e.g. backdoor encryption)
| and yet I do think we should care about those things.
| untog wrote:
| Equating "what people are concerned about" with "what
| people vote on" is unwise. It's not as if we all get a
| direct vote on "should we tackle climate change?"
|
| But hey: "For Democrats, climate change is now one of the
| two most important issues in politics, according to a new
| poll."
|
| https://www.theatlantic.com/science/archive/2020/02/poll-
| us-...
| jessaustin wrote:
| Joke's on them they're getting Biden anyway.
| jsjddbbwj wrote:
| And rightly so, because people would vote to tackle
| climate change and to have travel and economical growth
| at the same time.
| cmcaine wrote:
| You can have a more expressive voting system than that.
| People can rank their priorities, etc.
| egdod wrote:
| If that's a problem, maybe fuel should be more expensive.
| gpvos wrote:
| Correct. It should.
| pbhjpbhj wrote:
| Yes, fuel should be more expensive, but in order to take in
| all the externalities it would probably be so expensive
| that all airlines would immediately have to close down.
|
| Maybe that's where we need to get to, all jet fuel based
| air journeys stopping, but it's not going to please the
| many rich people - who control the regulations - who wish
| to use air travel.
|
| If we could properly price in externalities then yes, we'd
| probably have a better system.
|
| There is a proviso to that, should monetary wealth dictate
| access to resources like 'ability of the planet to sink
| carbon' or should that be a separate thing, like access to
| water. Shouldn't we share such natural resources rather
| than hand them over to those who already own everything
| else? In which case, you'd need to price in externalities,
| and pay to acquire carbon credits (or whatever) if they
| were available: under such a system people might choose to
| not "spend" their share of carbon credits in order to
| faster reduce planetary decline.
| qubex wrote:
| The cost of oil has plummeted (which is worrying, but not
| unexpected, because it's a leading indicator of economic
| health and the consensus seems to be that we're six months
| away from the next global recession anyway).
| everyone wrote:
| What 'benefit to society' do full planes achieve?
| gruez wrote:
| Transportation of passengers ?
| everyone wrote:
| But what % of passengers purpose for travel has any
| utility? Close to zero I would imagine.
| wahnfrieden wrote:
| Climate change and depleted resources impact obviously
| sonofgod wrote:
| I feel like there's a short-term solution to this:
|
| You can keep your slot and not fly the plane, as long as you pay
| some large percentage* of the cost of each ghost trip to the
| organisation that'd resell your slot. Your 'flight' must be fully
| crewed.
|
| That way the carbon isn't emitted, (some) jobs are kept secure,
| and the airline recoups a little of the money they would have
| otherwise lost.
| Scoundreller wrote:
| Makes sense. As the saying goes: "Tax the inelastic".
| yumraj wrote:
| If planes are really empty, why can they not just pay the airport
| fees since I believe that is all the airports care about.
|
| Or, perhaps take off, and separately land, a smaller plane such
| as a Cessna.
| partiallypro wrote:
| The oddity I've personally had, is I had been planning a summer
| trip to Germany for the Euro 2020 tournament (assuming they don't
| get cancelled.) However, I hadn't bought plane tickets yet. Due
| to the virus, I figured I might get cheaper rates. The opposite
| has been true. The round trip went from ~$1200 up to ~$1800 in
| just a month or two. I'm still tracking flights, but so far I
| haven't seen a good dip in pricing. I don't know if airline
| pricing isn't reacting to supply/demand, or if there hasn't been
| that big of a dip in US to Europe passenger traffic.
| fma wrote:
| Coworker of mine is in a similar situation. He said tickets
| were 2x before. I joked he's making up for the other person who
| cancelled.
| chrisseaton wrote:
| I've also seen this! I went casually looking at the route I fly
| most often (but I'm not flying myself at the moment) and both
| economy and business fares seem to have gone up very
| substantially.
|
| What's going on?
|
| The airlines have changed their rebooking policy to make it
| much more lenient for the next few months. Maybe this is making
| the tickets more valuable and pushing up the price?
| JulianMorrison wrote:
| I think that if passenger numbers go down and fixed costs
| stay the same, and if passengers aren't very price sensitive
| (their company is paying their fare) then it makes sense to
| raise prices.
|
| The trouble is that this will drive out the holiday flyers
| and leave them dependent on business flyers whose companies
| can turn off the tap on a whim. And will have every
| incentive, and excuse, to do so.
| adingus wrote:
| That's opposite of my experience, although I am not flying
| until September. I booked a flight from JFK to Athens and back
| for around $400. The day after I booked (earlier this week)
| alerts were almost 2x as high. I wonder if I just got lucky.
| iso947 wrote:
| Those buying tickets are probably people who need to travel and
| thus will pay more. The market for the cheaper tickets isn't
| there
| everyone wrote:
| Covid 19 is a good opportunity for extremely sensible change.
| Lets all stop needlessly flying, lets all work from home (if your
| just doing an office job anyway), lets use local products and not
| stuff from half way across the world.
| standardUser wrote:
| "...lets use local products and not stuff from half way across
| the world."
|
| That ship sailed 70 years ago. We could maybe go back to the
| brief era of limited international trade in the inter-war era,
| aka the Great Depression, but it won't be fast or easy.
| bob33212 wrote:
| A decent percentage of people put food on the table and a roof
| over their head by doing a job we could classify as needless
| redwall_hp wrote:
| In other words: a society predicated on working is obsolete
| and needs to be replaced.
| capitol_ wrote:
| And there was many people putting food on the table by
| hauling ice, but neither of those things should impair
| progress.
| the8472 wrote:
| And that's an adequate justification for polluting the
| environment?
| code_duck wrote:
| That's part of the case for universal basic income.
|
| There's no reason to have half of the workforce participating
| in work that makes them seem busy but does not have any real
| usefulness.
| EarthIsHome wrote:
| Another reason why work shouldn't be a precondition for being
| alive.
|
| I think that would be a sensible change.
| refurb wrote:
| Yet it's work that funds the taxes that would pay for basic
| income.
|
| Unless people are willing to take a massive decrease in
| quality of life to fund such a system, it will never
| happen.
| EarthIsHome wrote:
| Your statement isn't true in the US. The wealthiest in
| this country don't really do any work.
|
| In fact, the wealthier you are, the less you actually
| have to work.
|
| The people who are working for a wage are the ones who
| are working to live, and the wealthiest don't have to do
| that. Often, people who work the hardest make the least.
|
| I reject your premise that that people will have a
| reduced quality of life. These taxes will go to public
| services and increase the quality of life for the masses
| instead of for the few.
| dhdhhagvahwu wrote:
| Somewhat related:
|
| My father was a Navy pilot during the Cold War. He told me fuel
| budgets were based on the last period's consumption. If their
| actual use was below what was considered their predicted amount,
| they would put planes on a schedule where they would take off
| fully loaded, fly to 30k (or whatever made sense) and dump all of
| their fuel into the atmosphere.
|
| They would then land, empty, and repeat the process.
|
| That was a shitload of avgas dropped into the atmosphere but hey,
| military bureaucracy...
| [deleted]
| mikhailfranco wrote:
| Airlines almost never make profits, because their revenue and
| main cost are strongly pro-cyclical: In the
| booms, they fly full, but with high fuel prices. In
| the recessions, they fly empty, but fuel is cheap.
|
| Covid-19 has devastated travel, but also dropped the oil price -
| still no profits.
| viburnum wrote:
| Airlines (and other businesses with very high fixed costs) can
| be profitable if there's enough consolidation in the industry.
| Otherwise they get into price war death spirals with no way
| out.
| erik_seaberg wrote:
| https://philip.greenspun.com/flying/unions-and-airlines is
| why airlines go bankrupt so often.
| refurb wrote:
| _The answer is to look at who controls the pilot 's union:
| very senior pilots. The airline management is mostly
| interested in what percentage of its revenues are paid out
| to pilots; the distribution of the money among the pilots
| does not affect profitability. The very senior pilots on
| the other side of the table say "We need the most senior
| pilots to get $300,000 in pay and benefits." The airline's
| response is "The only way that could work is if we pay the
| new pilots $16,000 per year." The group of senior pilots
| responds "We can live with that."_
| qubex wrote:
| Railways are also often unprofitable, even when a monopoly
| (because of inflexible ticket pricing and high amortisation,
| depreciation, and maintenance costs).
| api wrote:
| Transportation is critical yet often unprofitable, which is
| why it's usually heavily regulated and subsidized.
| mathieuh wrote:
| Further, it acts as a multiplier. Which is why I believe
| rail travel should be nationalised--very few people take
| a train for the sake of being on a train, people take
| trains to work or to spend money somewhere else. It makes
| no economic sense to insert competition into a natural
| monopoly whose main purpose is to multiply people's
| productivity. Everyone loses out.
| api wrote:
| The only benefit and rationale for competition there is
| to prevent bureaucratic sclerosis. Its easy for any
| monopoly to become top heavy with corrupt or incompetent
| chair warmers who just extract from it and barely do
| their job.
| nogabebop23 wrote:
| ha - maybe passenger service but not freight in north
| america!
| salawat wrote:
| I find it interesting your word choice suggests that the
| price war is undesirable compared to a destabilizing
| monopoly.
| yzmtf2008 wrote:
| I mean, what do you expect happens _after_ airlines die
| from a price war? It's not lower prices.
| salawat wrote:
| Generally speaking, I'd hope it wouldn't be "Everything
| consolidates without bound."
|
| Doing that just sets the stage for a monopoly to form,
| just add time. The price war should be won by the airline
| that can most efficiently manage resources and adapt
| different business models to provide stable service with
| fewer inputs. That is what the Market is purportedly for,
| no?
|
| Consolidation is not good. High variety distributes
| society's eggs across many baskets, creating fault
| tolerance. Consolidation leaves us one black Swan away
| from a potentially unrecoverable calamity.
| jessaustin wrote:
| The people downvoting you actually have never paid any
| attention to airline profits. In USA the deals with pilots'
| unions are set up to transfer all profits to senior pilots. In
| many other nations it's more important that the "flagship"
| airline appear impressive than that taxpayers not be fleeced.
| otterley wrote:
| Source post: https://www.thetimes.co.uk/edition/news/airlines-
| are-flying-...
| jl2718 wrote:
| I've been waiting for airlines to give up on scheduling
| altogether and move to JIT routing. Maintaining schedules seems
| fragile, and I think demand would increase dramatically if
| customers didn't have to plan ahead. This will definitely happen
| when the industry gets disrupted by cheap autonomous and electric
| mini-planes, but it seems that schedules are so broken already
| that the biggest thing keeping up the facade are FAA rules (e.g.
| massively unnecessary runway intervals).
| dodobirdlord wrote:
| > I think demand would increase dramatically if customers
| didn't have to plan ahead
|
| I think customers won't be a fan of showing up and waiting 17
| hours or whatever until the next flight has enough people to
| fly.
|
| > This will definitely happen when the industry gets disrupted
| by cheap autonomous and electric mini-planes
|
| Battery energy density is a looooong way from matching jet
| fuel, especially since the weight of the carried jet fuel
| doesn't have to include the oxygen to react with. And smaller
| planes are less efficient. I don't see this happening.
| mathattack wrote:
| The airlines that are stockpiling capacity at our expense will
| come hat in hand for a bailout at our expense.
| 0x8BADF00D wrote:
| Except there won't be money available when they ask for it.
| When the dollar collapses after the Fed cuts rates, the
| interest rate will rise very high. The government will be
| forced to cut spending, and there will be no bailouts this
| time.
| cinquemb wrote:
| >When the dollar collapses after the Fed cuts rates, the
| interest rate will rise very high.
|
| As long as the dollar denominated debt outstanding continues
| to dwarf the amount of dollars in circulation (claims on
| future dollars far exceeds the amount of dollars that exist),
| I don't see the dollar collapsing. Interest rates can also
| rise due to credit risk. Fake interest rates set by FRBNY
| cant fix credit risk, they cant make corporations/goverments
| with severely stressed/ no cash-flow solvent.
|
| > The government will be forced to cut spending
|
| This is the usually the opposite that happens during credit
| busts, they increase deficits. If you doubt a governments
| ability to generate cashflow, then one should worry.
|
| > and there will be no bailouts this time.
|
| For whom? Some banks merely have to go to the discount window
| and keep rolling over their loan with any illiquid asset they
| have as collateral with FRBNY, JPM is doing this now[0]. A
| few other banks[1] can go to the FRBNY repo market for either
| a daily/term bailout with their rehypothicated UST/MBS
| collateral at fake interest rates.
|
| I'd be more worried about the corporates (and the assets they
| may be holding that will have to get liquidated) who were
| engaging in bank like activities without the access to these
| facilities.
|
| [0] https://www.bloomberg.com/news/articles/2020-02-25/jpmorg
| an-...
|
| [1] https://www.newyorkfed.org/markets/primarydealers
| onlyrealcuzzo wrote:
| What corporations are engaging in bank-like activities
| without access to the mentioned facilities??
| cinquemb wrote:
| Anyone you can think of that's not on this list: https://
| www.ffiec.gov/npw/StaticData/Y15SnapShot/20181231_20...
| mathattack wrote:
| Right now rates are very low.
| bdcravens wrote:
| The article is about rules in Europe.
| zukzuk wrote:
| zerohedge.com is leaking again
| allovernow wrote:
| Zerhoedge has also been a month ahead of the media with
| respect to coronavirus reports.
|
| The fact that ZH speculates about conspiracies does not
| mean that everything on their site is BS.
| hilbertseries wrote:
| If you doomsay about everything that could possibly cause
| a crisis, you may eventually be right about one of them
| causing a crisis. Does it make their articles in 2018
| about how the economy has about to collapse more
| accurate?
| seppin wrote:
| > The fact that ZH speculates about conspiracies does not
| mean that everything on their site is BS.
|
| It's exactly that reason why they are a useless source
| for information.
| bdcravens wrote:
| Even a broken clock is right twice a day.
| SirYandi wrote:
| Yet useless for telling the time
| refurb wrote:
| Indeed. Anyone who follows zerohedge has probably noticed
| that the economy was on the brink of collapse every single
| week of the past decade.
|
| I do follow zerohedge since they often report on things
| others won't, but I take their analysis with a grain of
| salt.
| phkahler wrote:
| Tangential question: is there a significant reduction in flights
| over the US? Is it my imagination or are we having more blue
| skies like the days after 9/11?
| tedunangst wrote:
| But no mention of which airlines or routes? What percentage of
| flights to Europe are empty?
| tyingq wrote:
| Mentioning the heavily slot controlled airports would make more
| sense. The airlines aren't really at fault here. The airports
| that take your slot when they don't get their takeoff/landing
| fees are.
| emiliobumachar wrote:
| Ironic. I had heard tales of the old Soviet Union about trains
| running empty to fill distance quotas. It was presented as the
| ultimate proof of how messed up their system was.
| dukoid wrote:
| I heard they were running heavily loaded (= not empty) trains
| back and forth without any purpose other than meeting ton-km
| quotas, but I wasn't able to find a source...
|
| Edit: Found an article mentioning this practice:
| https://mont.thesentinel.com/2019/10/03/one-imperfect-day-in...
| llukas wrote:
| I read that some types of track require stressing every so
| often otherwise it loses its properties (in context of Polish
| railway laying new track then not running heavy trains on it
| and in consequence track had to be replaced again).
| betaby wrote:
| Never heard that, why would they in planed economy?
| allovernow wrote:
| In authoritarian states you frequently get situations where
| you're punished for not meeting certain bureaucratic metrics.
| For example, in China word is factory output is used as a
| proxy for productivity, so they're allegedly running
| factories without producing anything just to raise the power
| bill to _appear_ productive.
|
| Face is ingrained in Chinese culture partly because in an
| authoritarian state where your behavior must fall within
| rigidly defined qualitative and quantitative metrics,
| appearances are everything.
| stevenwoo wrote:
| The American model for government funding is also a bit
| messed up ( at least what I remember from high school
| civics in the 1980s) where each department must spend what
| they are allocated or the department is guaranteed to get
| less money in the next fiscal year budget. I could be wrong
| but this creates a disincentive for saving money as most
| states and the federal government work on the same model.
| mamon wrote:
| It seems reasonable at first: if you weren't able to
| spend all the money you've got that means you've got too
| much of them. But you're right, that does create the
| incentive to needlesly spend.
|
| Also, it is not limited to gorvernment: a Director in a
| Fortune 100 company that I'm working for right now is
| buying 40 16" MacBook Pros for a team of .Net developers,
| because:
|
| a) he had spare $100k in his budget.
|
| b) it is easier to get VPN access approved for external
| contractors if they are using Macs
| NikolaeVarius wrote:
| As much as I've seen people complain about use-it-or-
| lose-it I've never actually seen an alternative that
| seems to work better for the amount of effort put into it
| refurb wrote:
| Politics and the impact of bureaucracy?
|
| It was common that quotas were created by leadership who were
| often not close enough to the need to properly design the
| quota. That got passed down through multiple layers of
| management, all of whom could care less if the trains were
| full and were more interested in meeting the quota so could
| advance in their career.
|
| People complain about unethical behavior in capitalist
| systems, but that's not a property of capitalism, that's a
| property of humans.
| rolltiide wrote:
| > why would they in planed economy?
|
| I hope this pun doesn't fly over everyone's heads
| closeparen wrote:
| This is just another instance of the classic Soviet problem. A
| scarce resource is allocated by a government bureaucracy
| instead of a market, and the bureaucracy's design is imperfect,
| so nonsensical incentives fall out of it sometimes.
|
| There's no irony. It's just kind of quirky for the West to
| manage flight/landing slots this way, instead of an auction (as
| the FCC does with spectrum).
| Nextgrid wrote:
| To be fair, the auction model doesn't seem to work well when
| it comes to spectrum. What you end up with is a few big
| players delivering awful service while having enough money to
| outbid anyone, essentially preventing any competitor from
| ever breaking into the market to provide better service.
| derefr wrote:
| I would consider that an anti-trust problem, not an scarce-
| resource-allocation-system problem. The concept of an
| auction is predicated on having a liquid market--both that
| there are replacement goods available from other sellers,
| and that there are many buyers "at the top" with enough
| bidding power to compete fairly between themselves, such
| that they'll "pick their battles" by buying only what
| matters most to them.
| closeparen wrote:
| The government can only give away slices of a fixed
| resource for so long. Eventually it runs out.
|
| You literally can't start an airline from scratch. You have
| to first buy one that already has landing slots, then
| figure out how to dispose of the
| planes/staff/operations/debts that come with the package.
| Is that really better for competition than just having a
| market for slots?
| kroep93nd wrote:
| Only for them to immediately be gobbled up by 1 or 2 big
| players.
|
| How about a market for destinations? Oh wait that will be
| immediately controlled by one player.
|
| Hm it seems consolidation is the natural path we prefer
| towards solving a problem. Why not let the bureaucracy
| manage it then?
|
| Give up the pretense. This is all market capture of
| finance by low effort grifters who will throw a fit when
| they don't get privilege for nothing but being an
| obnoxious talking head.
| Symbiote wrote:
| At least in Britain, there's an open market for the landing
| slots.
|
| Slots at Heathrow can be sold for tens of millions of pounds.
|
| https://simpleflying.com/flybe-heathrow-slots/
| asah wrote:
| y and this optimizes for the highest bidder, i.e. most
| profitable and not the airline best serving the user.
| joshschreuder wrote:
| I used to work for a consulting company and heard similar
| stories for IT budgets. Companies nearing the end of
| financial year with budget to spare would scramble to get
| more consultants in to spend the remainder, otherwise the
| following year their budget would be scaled back to whatever
| they actually spent.
| Reedx wrote:
| This appears to be happening in China with electricity quotas.
| Running AC and machines in empty factories to make quota.
|
| _" Local companies and officials are fraudulently boosting
| electricity consumption and other metrics in order to meet
| tough new back-to-work targets"_
|
| https://asia.nikkei.com/Spotlight/Caixin/Lights-go-on-but-no...
|
| _" Video evidence. In #Wenzhou, factory manager told they must
| consume 3000 kWh electricity by midnight, as the authorities
| use electricity usage as a criterion of re-open rate. Even this
| factory has not re-opened for lack of supply and manpower due
| to #COVID2019, manager had to.."_
|
| https://twitter.com/jenniferatntd/status/1233793672497573894
|
| _" Argh. A Wenzhou-based factory owner tells how district
| officials are telling him his closed factory (he has no
| workers) must turn on the machines and consume electricity or
| he'll get "a visit". Higher ups are watching the electricity
| numbers."_
|
| https://twitter.com/You_Shu_China/status/1233535925185122305
| Krasnol wrote:
| Same happened on this "New Silk Road" track:
|
| "Empty trains on the modern Silk Road: when Belt and Road
| interests don't align"
|
| https://pandapawdragonclaw.blog/2019/08/23/empty-trains-
| on-t...
| formercoder wrote:
| When a metric becomes a target
| NikolaeVarius wrote:
| I wonder what this will do to the method of estimating Chinas
| economy via Electricity/Coal usage. What is next on the line
| that isn't being actively tampered with.
| Skunkleton wrote:
| This is similar, but different. We have an system that works in
| the normal case, that is struggling with an exceptional case.
| Could it be improved? Sure. Is it a sign that western
| civilization is doomed? No.
| Bombthecat wrote:
| Yeah, that will never happen. Because we are immortal! All
| the civilizations before us weren't that smart and rich!
| Skunkleton wrote:
| Of course we will evolve into something else. Flying some
| empty planes isn't going to be why.
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