Sunday, January 15, 2006
Goin' to the Chapel?...I hope so....
In an article getting "industry" response to comments made by Transportation Secretary Norman Minetta, USA Today has an article here that has analysts up in arms over a possible merger between Delta Airlines and Northwest Airlines.
I think most of these experts are too narrow in their thinking. While I am no expert on the airline industry, I have given some thought to their problems, and I think the merger would be a great idea. In two columns about the airline industry(here and here), George Will makes some great points about the industry having too many seats and not enough passengers. This should be macroeconomics 101. When I have too much product, the only way I can increase demand is to lower price on said product. In the airlines case, their seats are essentially a commodity that loses value very quickly if it is empty or if the plane is idle. Allowing Delta and Northwest to merge would be a great idea because it would force the new carrier to trim the number of planes and thus seats from the sky. Short of government enforced regulation of prices or government enforced collusion, I don't see how the airlines can raise fares on tickets for any appreciable length of time.
A merger of the two airlines would make sense in two ways as well. First, the airlines have been code sharing for at least five years. I vaguely remember people warning that the code sharing of tickets between airlines would effectively make two carriers one in practice at the end of the day. My family, when we flew out west this past September, were direct beneficiaries of this arrangement because we were flying both airlines at various points in our trip. I have no doubt that code sharing has made one airline in de facto, if not formally. Merging the two carriers would simply eliminate the Kabuki dance they go through everyday already.
Second, merging the two companies would make sense because it would have a truly national reach. With the biases in routes between the two, I think the two companies route maps would compliment each other very well and thus allow for greater use of remaining resources.
I am not an expert analyst, but some common sense and my own observations tell me that merging Delta and Northwest would be a great idea for the companies involved as well as for the industry as a whole.
NOTE!
This is my 100th post! With my lazy behavior and hectic work schedule, I'm rather proud of this accomplishment. *strains his arm patting himself on the back*
I think most of these experts are too narrow in their thinking. While I am no expert on the airline industry, I have given some thought to their problems, and I think the merger would be a great idea. In two columns about the airline industry(here and here), George Will makes some great points about the industry having too many seats and not enough passengers. This should be macroeconomics 101. When I have too much product, the only way I can increase demand is to lower price on said product. In the airlines case, their seats are essentially a commodity that loses value very quickly if it is empty or if the plane is idle. Allowing Delta and Northwest to merge would be a great idea because it would force the new carrier to trim the number of planes and thus seats from the sky. Short of government enforced regulation of prices or government enforced collusion, I don't see how the airlines can raise fares on tickets for any appreciable length of time.
A merger of the two airlines would make sense in two ways as well. First, the airlines have been code sharing for at least five years. I vaguely remember people warning that the code sharing of tickets between airlines would effectively make two carriers one in practice at the end of the day. My family, when we flew out west this past September, were direct beneficiaries of this arrangement because we were flying both airlines at various points in our trip. I have no doubt that code sharing has made one airline in de facto, if not formally. Merging the two carriers would simply eliminate the Kabuki dance they go through everyday already.
Second, merging the two companies would make sense because it would have a truly national reach. With the biases in routes between the two, I think the two companies route maps would compliment each other very well and thus allow for greater use of remaining resources.
I am not an expert analyst, but some common sense and my own observations tell me that merging Delta and Northwest would be a great idea for the companies involved as well as for the industry as a whole.
NOTE!
This is my 100th post! With my lazy behavior and hectic work schedule, I'm rather proud of this accomplishment. *strains his arm patting himself on the back*
Tuesday, January 03, 2006
New Year's Resolutions
I know everyone makes these sorts of things and eventually they get away from them, but I have only three simple resolutions that I intend to carry out:
1. Work on getting out of debt. Compared to some, my debts are pretty light, but I am tired of having this money sucked out of my budget each month. I have better things to do with my money than send it to the student loan administrators.
2. Gather information and knowledge about what it would take to start my own business. I am tired of my schedule being chewed up between two employers, whiny backbiting co-workers, and two corporations financial interests working against my own. I have a good idea of where I want to go, I have to gather information and start making some permanent changes.
3. Don't buy another Cincinnati Enquirer or Cincinnati Post. How much competition can two papers give each other when they operate out of the same building and are owned by the same corporation? If the editorials or features aren't irrelevant, then they tend to be ones I disagree with. Hugh Hewitt has a piece here dealing with the pratfalls of the Los Angeles Times and Washington Post over national stories that illustrate their bias. The post was the inspiration for this new year's resolution. Perhaps I should get local here. This past year, the Enquirer ran a huge feature on the state of women's lives here in the city. They published essentially ver batum a loaded "study" that found women weren't doing as well as they could be professionally. I questioned to myself at the time how many homemakers were interviewed in this study. The "solutions", for example, offered NOTHING about the need for stronger marriages to help women's earnings. Finally, the exclusive focus on "women's issues" severely irritated me as a man, husband and father working two jobs about 70 hours a week.
Another "feature" later on in the year was a sob story of a teenage black girl who had been paralyzed by a gunshot wound. The fact she had a child out of wedlock was completely bypassed in the rush to condemn gun violence. Also in their rush to ring their hands over the issue, the papers continually missed the white elephant in the room. There is a lot of gun violence because the Gospel of Jesus Christ hasn't penetrated to the hearts of many, especially young black men.
The same problems that have blinded bigger papers also blinds many of the local scribes as well. My views aren't represented by them. at. all. Hugh is right. They won't change until they are forced to. If it's free, I'll take it. But not one more dime to the newspapers in this town.
1. Work on getting out of debt. Compared to some, my debts are pretty light, but I am tired of having this money sucked out of my budget each month. I have better things to do with my money than send it to the student loan administrators.
2. Gather information and knowledge about what it would take to start my own business. I am tired of my schedule being chewed up between two employers, whiny backbiting co-workers, and two corporations financial interests working against my own. I have a good idea of where I want to go, I have to gather information and start making some permanent changes.
3. Don't buy another Cincinnati Enquirer or Cincinnati Post. How much competition can two papers give each other when they operate out of the same building and are owned by the same corporation? If the editorials or features aren't irrelevant, then they tend to be ones I disagree with. Hugh Hewitt has a piece here dealing with the pratfalls of the Los Angeles Times and Washington Post over national stories that illustrate their bias. The post was the inspiration for this new year's resolution. Perhaps I should get local here. This past year, the Enquirer ran a huge feature on the state of women's lives here in the city. They published essentially ver batum a loaded "study" that found women weren't doing as well as they could be professionally. I questioned to myself at the time how many homemakers were interviewed in this study. The "solutions", for example, offered NOTHING about the need for stronger marriages to help women's earnings. Finally, the exclusive focus on "women's issues" severely irritated me as a man, husband and father working two jobs about 70 hours a week.
Another "feature" later on in the year was a sob story of a teenage black girl who had been paralyzed by a gunshot wound. The fact she had a child out of wedlock was completely bypassed in the rush to condemn gun violence. Also in their rush to ring their hands over the issue, the papers continually missed the white elephant in the room. There is a lot of gun violence because the Gospel of Jesus Christ hasn't penetrated to the hearts of many, especially young black men.
The same problems that have blinded bigger papers also blinds many of the local scribes as well. My views aren't represented by them. at. all. Hugh is right. They won't change until they are forced to. If it's free, I'll take it. But not one more dime to the newspapers in this town.
