Airlines flying empty planes to keep flight slots during coronavirus outbreak(businessinsider.com)
businessinsider.com
Airlines flying empty planes to keep flight slots during coronavirus outbreak
https://www.businessinsider.com/coronavirus-airlines-run-empty-ghost-flights-planes-passengers-outbreak-covid-2020-3
363 comments
It's also a common practice in any department that has their budget determined this way, e.g. https://vimeo.com/27060669
Yeah, I had a GF that worked for a government research department. The last quarter of the year the department staff did ridiculous things to ensure every penny of the budget was spent. Frivolous travel, non-relevant conferences, parties, etc. As someone who worked in the private sector and managed project budgets I was blown away haha.
I have experienced this in the private sector as well...
I'm not sure if I have ever heard of any budgeting that didn't have exactly that problem. Perhaps budgeting on specific problems? That still might require separating budget for headcount....
I workes for a big telecommunication company in Australia and they did tge same thing with theur yearly budget.
At tge end of the financial year they would hire consultants for "ghost" projects that were supposedly starting in the future eventually.
This meant that they could book the costs for the current financial year and reduced the chance of getting their budget cut due to unused money
At tge end of the financial year they would hire consultants for "ghost" projects that were supposedly starting in the future eventually.
This meant that they could book the costs for the current financial year and reduced the chance of getting their budget cut due to unused money
Australian University checking in. Use your budget, or get next year’s budget cut
This is the guiding mantra of every US Federal grant program.
I'm not too familiar with the practice, but Zero-based Budgeting (ZBB) seems like it can solve this problem. It basically requires constant justification of the budget (as if you were making a budget from scratch) rather than looking at relative changes year-over-year.
See https://en.wikipedia.org/wiki/Zero-based_budgeting for more.
See https://en.wikipedia.org/wiki/Zero-based_budgeting for more.
It's very unclear to me how this is all that different from basically any other means of allocating funds that people use.
The only fundamental difference seems to be the rate at which you re-evaluate allocations.
Conceptually I see how this mitigates the sort of waste described by the OP, but implementing it seems ridiculous. How would you conduct bureaucratic audits in the middle of military operations?
The only fundamental difference seems to be the rate at which you re-evaluate allocations.
Conceptually I see how this mitigates the sort of waste described by the OP, but implementing it seems ridiculous. How would you conduct bureaucratic audits in the middle of military operations?
That would only save money if the zero-based-budgeter is willing to fire all the humans who are making up bullshit to justify their budget.
Just goes to show the mentality of bean-counters in times of abundance. Their ledger is the world and the world is their ledger, no exceptions.
It's sad that we as organizations and citizens accept and perpetuate this kind of behavior.
It's sad that we as organizations and citizens accept and perpetuate this kind of behavior.
Yes, in the Army there is even a term for this: spendex. (spend exercise). A lot of fun blowing through all your extra ammo at the end of the year!!!
"Use it [budget] or lose it." End of the year buying 100 $2500 toilet seats and 1000 $100 spools of wire. Welcome to government!
PS: My mom was a civil service accountant with the Navy, and my dad and both grandfathers were USAF.
PS: My mom was a civil service accountant with the Navy, and my dad and both grandfathers were USAF.
That's absolutely not a "government" thing, it's an issue in every large organisation and large companies are absolutely not immune to it.
Government just happens to be the largest of the large.
Government just happens to be the largest of the large.
Yep, and the really interesting thing is when you combine libertarian principles with this insight. If large corporations (and large concentrations of individual wealth) are as undesirable as large governments, then the economic model starts to look very different!
Out of curiosity, how would a "libertarian" propose we achieve economic anything without large individual concentrations of wealth?
Remove limited liability as a concept: stop funding the extrinsic risks of large corporate actors. Don't shield stockholders from criminal and unethical acts committed in the organization's name. Watch the incentives change and only very small companies exist. Where necessary, big companies will be run VERY cautiously, as they should be.
EDIT: of course this would "economically devastating", at least to the present way of being, can you imagine the risk of being an officer in a large corporation or a stockholder? but maybe the economic advantages of reduced corruption and mega-corp inefficiency would soften the blow in the medium to long term?
EDIT: of course this would "economically devastating", at least to the present way of being, can you imagine the risk of being an officer in a large corporation or a stockholder? but maybe the economic advantages of reduced corruption and mega-corp inefficiency would soften the blow in the medium to long term?
Changing the landscape of the Savannah in favor of "only tiny cheetahs" risks deleting cheetahs altogether. What level of concentration is undesirable, and what level is necessary for the next investment?
Essentially much stronger anti-trust laws which break up large institutions, and distribute large concentrations of wealth. It's the only way to spread power.
Thanks for your reply! this is a very interesting dialogue about Wealth Concentration and Ability to Make Economic Moves. Recall Standard Oil, and how anti-trust laws were passed to try and break up this monopoly, but it was many decades too late as the damage had been thoroughly done -- wiring for oil oligarchy was set in place and could not be untangled. In these cases, is there a more elegant solution than the post-fact "since we cannot create competition, naturally or artificially, split your winnings with the government." ?
Destroying concentrations of wealth, but keeping individual humans responsible for wealth echoes the faulty assumptions of communism; if we dilute economic power too greatly by reducing concentration too much, we may be able to allocate excess funds to the creation of new competition in the domain (government-funded anti-monopols), but that simply deletes profit and deletes the profit-incentive of new industry.
"Power always comes from some abstract entity that everyone can talk about, but no one can point to."
I find a huge chasm in understanding between wealth concentrated on individual humans who have their own motivations, and concentrations of wealth in corporations or distributed decision making entities. Which are we opposed to?
Destroying concentrations of wealth, but keeping individual humans responsible for wealth echoes the faulty assumptions of communism; if we dilute economic power too greatly by reducing concentration too much, we may be able to allocate excess funds to the creation of new competition in the domain (government-funded anti-monopols), but that simply deletes profit and deletes the profit-incentive of new industry.
"Power always comes from some abstract entity that everyone can talk about, but no one can point to."
I find a huge chasm in understanding between wealth concentrated on individual humans who have their own motivations, and concentrations of wealth in corporations or distributed decision making entities. Which are we opposed to?
The wording of your question confuses me, it's not clear whether you're asking about "large individual concentrations of wealth" as a cause or effect of "economic anything", aka are you asking how one can achieve economic anything without a pre-conditional individual concentrations of wealth or are you asking how one can achieve economic anything while avoiding the subsequent trap of large individual concentrations of wealth.
In context and logically I would assume the latter as those large concentrations are why you get large organisations to manage them, but I wanted to be sure.
In context and logically I would assume the latter as those large concentrations are why you get large organisations to manage them, but I wanted to be sure.
I had not considered moving the question to either end of the bookshelf, is it concentrations first and then economic action, or economic action and then large concentrations. Instead of waiting for the boolean T or F on which it is, we could answer both and see:
"One needs money to make a business." (not possible without large concentrations of wealth, business as a result of wealth)
"Businesses occasionally make people super wealthy." (happens as a result of economic action, wealth as a result of business).
Does not the reaction halt if there is not enough wealth to make a business?
"One needs money to make a business." (not possible without large concentrations of wealth, business as a result of wealth)
"Businesses occasionally make people super wealthy." (happens as a result of economic action, wealth as a result of business).
Does not the reaction halt if there is not enough wealth to make a business?
sort of a weird question. libertarians don't necessarily consider large concentrations of private wealth to be a problem in and of itself. they are concerned more with the power of institutions, usually (but not always) the state.
the libertarian dream, as I understand it, is sort of like the unix philosophy applied to business: a large number of small/medium-size firms each offering a focused line of products. of course, libertarians disagree on exactly how to get to that world, but most don't oppose stuff like antitrust regulation on principle. intervening in the case of market failure is usually considered to be one of the (few) legitimate roles of the state.
the libertarian dream, as I understand it, is sort of like the unix philosophy applied to business: a large number of small/medium-size firms each offering a focused line of products. of course, libertarians disagree on exactly how to get to that world, but most don't oppose stuff like antitrust regulation on principle. intervening in the case of market failure is usually considered to be one of the (few) legitimate roles of the state.
Yes, but the position of libertarians with this attitude is inconsistent, because in a capitalist society, having a large concentration of wealth implies a concentration of power. To be a consistent libertarian you must oppose disproportionate concentrations of power in all forms.
joe_the_user(1)
Another one I dislike government programs that are “cut” when really they just have a reduced rate of increase, rather than a lower gross amount.
Is "thousands" of gallons even remotely accurate?
The numbers I can find are that a 747 uses 1 gal/second, so a single excess 5-hour flight is like 18,000 gallons. Even a ~45% efficiency reduction on that for more modern planes gives 10,000 gallons per excess flight. Multiply that by however many excess flights per airline per day and then by many airlines are doing this (I dunno, let's say 5 flights for 5 airlines? though this feels generous) and suddenly you have like 250,000 gallons/day being wasted per day. Multiplied by however many days they're doing this (idk, 10? though that also sounds generous) that's already like 2.5 million gallons every couple of weeks.
Did they mean "millions"?
The numbers I can find are that a 747 uses 1 gal/second, so a single excess 5-hour flight is like 18,000 gallons. Even a ~45% efficiency reduction on that for more modern planes gives 10,000 gallons per excess flight. Multiply that by however many excess flights per airline per day and then by many airlines are doing this (I dunno, let's say 5 flights for 5 airlines? though this feels generous) and suddenly you have like 250,000 gallons/day being wasted per day. Multiplied by however many days they're doing this (idk, 10? though that also sounds generous) that's already like 2.5 million gallons every couple of weeks.
Did they mean "millions"?
Generalizing total plane consumption from instantaneous consumption doesn't seem like a good idea. Their engines have high dynamic range between take-off, climb, steady flight and glide.
4.5l/s (1gal/s) seem like a lot, would that be take-off/climb consumption? Then again, a 747 is huge and usually heavy, carrying a lot of people and cargo..
4.5l/s (1gal/s) seem like a lot, would that be take-off/climb consumption? Then again, a 747 is huge and usually heavy, carrying a lot of people and cargo..
I mean, if you're aware of more accurate numbers, I'm all ears. These are just the numbers I was able to find, and I doubt that I'm off by 100x-1000x.
I think the instantaneous fuel consumption at take-off vs. a very long glide down could in fact be 1000x, but is at least 100x. So I ask, what do your numbers represent?
EDIT:
"747-400 has eight fuel tanks, with a combined capacity of 57,164 gallons of Jet-A fuel"[1].
So around 30-40k gal for a typical trans-oceanic flight? Meaning 1 gal per 1 second of flight time should be within order of magnitude, but far from take-off or peak consumption.
[1] http://www.boeing-747.com/boeing-747-internals/fuel-system.h...
EDIT:
"747-400 has eight fuel tanks, with a combined capacity of 57,164 gallons of Jet-A fuel"[1].
So around 30-40k gal for a typical trans-oceanic flight? Meaning 1 gal per 1 second of flight time should be within order of magnitude, but far from take-off or peak consumption.
[1] http://www.boeing-747.com/boeing-747-internals/fuel-system.h...
> So I ask, what do your numbers represent?
And I said, it's right there if you actually take 5 seconds to Google.
Literally the top result [1] says [2] that for a medium-haul flight (3,240–6,300 km), a 747-800 burns 9.9 kg/km of fuel, which at 917 km/h and 0.81 kg/L density, comes out to 0.82 gal/s if I'm doing my math correctly.
So I guess my bad for being off by a whopping... 20%?
Like I said, I'm all ears if you have better numbers, but it's quite inconsiderate to just casually dismiss what people say with so little effort and force them to spend 20 minutes to respond.
[1] https://www.google.com/search?q=plane+fuel+consumption
[2] https://en.wikipedia.org/wiki/Fuel_economy_in_aircraft#Mediu...
And I said, it's right there if you actually take 5 seconds to Google.
Literally the top result [1] says [2] that for a medium-haul flight (3,240–6,300 km), a 747-800 burns 9.9 kg/km of fuel, which at 917 km/h and 0.81 kg/L density, comes out to 0.82 gal/s if I'm doing my math correctly.
So I guess my bad for being off by a whopping... 20%?
Like I said, I'm all ears if you have better numbers, but it's quite inconsiderate to just casually dismiss what people say with so little effort and force them to spend 20 minutes to respond.
[1] https://www.google.com/search?q=plane+fuel+consumption
[2] https://en.wikipedia.org/wiki/Fuel_economy_in_aircraft#Mediu...
I mean, didn’t this entire thread start because you took issue with the word “thousands” in the headline, even though it’s technically correct? :)
It sounded like dataflow was doing a Fermi estimate, which usually need to be within one order of magnitude of the real answer to be considered decent.
I think the reason why they didn’t like the headline was because it seemed like it was several orders of magnitude off.
I think the reason why they didn’t like the headline was because it seemed like it was several orders of magnitude off.
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...
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...
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.
You might be buying too far out. People are assuming the virus will be contained by then.
I just looked at prices for a round trip ticket from San Francisco to Montreal for Monday. It was $389. I've never seen such a low price for buying two days in advance.
I just looked at prices for a round trip ticket from San Francisco to Montreal for Monday. It was $389. I've never seen such a low price for buying two days in advance.
Those buying tickets are probably people who need to travel and thus will pay more. The market for the cheaper tickets isn’t there
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.
I don't think that's a joke - I think that's exactly what's happening.
It's only going to work for customers who have to fly - which is a fairly small number. So instead of making up a shortfall, it's more likely to be a money-losing strategy.
I checked our local carrier and prices are down a lot. I was considering a flight at the end of April and prices are between a half and a third of what they were when I checked them in January.
It's only going to work for customers who have to fly - which is a fairly small number. So instead of making up a shortfall, it's more likely to be a money-losing strategy.
I checked our local carrier and prices are down a lot. I was considering a flight at the end of April and prices are between a half and a third of what they were when I checked them in January.
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?
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?
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.
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.
Prices cycle up and down when you are that far in advance. Lately airlines are changing rates multiple times per day and using ML to maximize their profit. It's much harder to predict when to buy. Many articles about ideal days and months to purchase are becoming obsolete.
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.
They can't fly half a plane if only half the seats are taken. During times of low demand you'll have to pay for the empty seats.
Airlines are reducing capacity by big percentages and margins are tight they know some people have to travel so will increase prices.
Yeah, someone has to pay for running a bunch of empty planes all the time.
This seems like a sensible rule that leads to unwanted behavior in this unforeseen case. Would make sense to grant a temporary exemption.
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.
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).
To deal with no-show airlines, I'd be (darkly) amused if airports sold somewhat more slots than their gates could physically accommodate.
Five pilots lined up.
"Ok, we're offering a $300 voucher to the airline willing to give up this slot... $300... ok, United, we're bumping you, you can pick up your voucher at the information desk."
"Ok, we're offering a $300 voucher to the airline willing to give up this slot... $300... ok, United, we're bumping you, you can pick up your voucher at the information desk."
How would you time the excess time slots?
As we see here demanding utilization just increases the price of squatting. The same effect could be had without demanding burning fuel.
The problem is that big airlines could buy up slots and then not use them.
The big airlines already do that. It's why the smaller airlines are forced into the smaller, outlying airports.
The big airlines already do that. It's why the smaller airlines are forced into the smaller, outlying airports.
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?
This is exactly why they HAVE to use them, but in the current situation it doesn't make sense.
How hard can it be to take the slots back from the big airlines if they are not using them?
The airlines bought them. They're property. Just like the car dealer can't take your car back if you're not using it.
The airlines bought them. They're property. Just like the car dealer can't take your car back if you're not using it.
American Airlines pushed United out of JFK for competitive reasons. Scott Kirby, president of United, but formerly of American:
> You can probably personally blame me, at least to some degree, for the fact that United pulled out. When I was at American Airlines, we were consciously trying to push United out of JFK. That was our goal.
Once you give up those slots at an airport like JFK, good luck getting them back.
> You can probably personally blame me, at least to some degree, for the fact that United pulled out. When I was at American Airlines, we were consciously trying to push United out of JFK. That was our goal.
Once you give up those slots at an airport like JFK, good luck getting them back.
The op addressed this issue with their comment about selling 1-5 year leases.
That didn't address the issue at all. They would just buy the leases and keep the competition out that way; no difference.
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.
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.
If you're an established player, keeping essential assets out of the hands of new competition has value in itself. Example: when the Vons and Kmart from my hometown got together and opened a new shopping complex together, they both retained their prior leases for years, knowing that those locations were the only real estate in town large enough to house a real competitor. The fact that neither could utilize that real estate didn't make it worthless, and in this case actually made it more valuable to them: the town couldn't support multiple large retailers simultaneously, so any competition ran the risk of putting them out of business.
The same concept easily applies to airline slots, an established player that is at capacity on how many slots they can profitably use still has some incentive to keep other airlines out, because any new players will be tapping into their existing market.
The same concept easily applies to airline slots, an established player that is at capacity on how many slots they can profitably use still has some incentive to keep other airlines out, because any new players will be tapping into their existing market.
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.
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.
“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?
> 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.
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.
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/
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/
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.
I don't think airlines do hold on to slots that they have no intention of ever using in practice - they tend to sell the slots in those circumstances.
What they do do though is hold onto slots at congested airports that they perhaps don't have a use for until a few weeks/months down the line.
What they do do though is hold onto slots at congested airports that they perhaps don't have a use for until a few weeks/months down the line.
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?
It's not about the passengers, it's about parking space for the planes.
You not taking off means someone else can't land.
You not taking off means someone else can't land.
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)
> 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.
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.
We ended up having to do this during 9/11. I don't know if there are relatively more or fewer planes than then now, but I do remember that many/most airports had Jets parked on the runways and we're nearly all of their taxi- and runways for storage.
I have no knowledge on this topic, but weren't most/all *US flights grounded during the 9/11 attacks?
It involved flooding various airports (especially in Canada) with planes that were already in the air destined to USA, others ended up diverting inside USA, generally lots of congestion and abnormal parking.
Slots are used to regulate congestion in normal conditions.
Slots are used to regulate congestion in normal conditions.
> Surely there are places to park planes in bulk (eg. same place where they're parking all the 737 MAX)
Not if the 737 MAXes are hogging all those spots, of course.
Not if the 737 MAXes are hogging all those spots, of course.
Parking planes in bulk isn't the issue here. Planes are expensive and nobody wants to mothball them, they want them at airports.
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.
> 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.
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.
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.
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.
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This rule says it's ok to squat on slots just as long as you burn fuel while you do it.
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).
Why not create a competitive market for slots, rather than incentivising people to literally burn fuel?
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.
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.
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.
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.
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.
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.
Better yet, institute a proper carbon tax and either a carefully thought-out market for slots and/or fines.
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.
- 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.
Sounds like the solution then is to just make the fines more severe.
5 billion might be an acceptable loss for Google. 50 billion might not be.
5 billion might be an acceptable loss for Google. 50 billion might not be.
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.
Because otherwise airlines can buy up all the slots so competitors can't operate.
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?
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).
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.
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).
If the fine is larger than the price of the fuel then they'll just fly the flights.
[deleted]
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.
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
The rule is under review for temporary suspension following a nudge from the EU and/or IATA. People are not always totally stupid, but bureaucracies work slowly.
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.
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.
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.
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.
Makes sense. As the saying goes: "Tax the inelastic".
What's the purpose of the "fully crewed" requirement?
Guess it is because this
> (some) jobs are kept secure
> (some) jobs are kept secure
Right, I guess it just seemed like a huge non sequitur. While we're expanding welfare, why not do it in a more principled and efficient way than "whoever happens to work for an airline right now"
Seems like that could be done by paying people, even if they don't show up.
"Paying people" seems like a good way to define "crewed"
"Paying people" seems like a good way to define "crewed"
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?
Or is that not really a factor here?
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...
[0] https://www.wsj.com/articles/port-of-los-angeles-sees-corona...
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.
Cheaper aviation fuel will incentivize airlines to keep their planes in the sky.
Short USO, long JETS: the next overcrowded trade
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.
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.
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
"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
When a metric becomes a target
Aren't all metrics targets?
I think what he is trying to say is that the metrics were meant be a check, a measure of knowing, for whether we are going to meet our vision/target.
Just yesterday, at our dev team at a trading firm, we went through our OKR review for the quarter. The metrics were the target yesterday. It was all about clicking those check boxes and not about delivering the bigger picture.
Just yesterday, at our dev team at a trading firm, we went through our OKR review for the quarter. The metrics were the target yesterday. It was all about clicking those check boxes and not about delivering the bigger picture.
Goodhart's law: "When a measure becomes a target, it ceases to be a good measure."
https://en.m.wikipedia.org/wiki/Goodhart%27s_law
https://en.m.wikipedia.org/wiki/Goodhart%27s_law
No, they are supposed to measure progress in one dimension towards a target. They are often misused, but it’s not necessary to conflate the improper use case with the original intent.
They used the wrong metric, but an easy one to measure. The right metrics (are the factories producing things correctly? Are those making it to consumers? Are the consumers paying for them?) are too difficult to measure discretely. And so we end up here.
Reminds me of "the 'return 200' health-check endpoint is working; how can the site be down?"
Reminds me of "the 'return 200' health-check endpoint is working; how can the site be down?"
And THIS is why crypto markets are dropping, because China is flooding the network with miners to meet energy quotas
IMO mining costs are dominated by chips, nobody has idle data centers on standby for such an occasion.
You need to look up China mining operations. They pop up “data centers” anywhere there is free or cheap electricity. Sounds like a perfect operation for factories that must use electricity
Just because a cost ain't a large share of the pie doesn't mean it ain't worth shaving anyway.
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.
> I wonder what this will do to the method of estimating Chinas economy via Electricity/Coal usage.
I think the causality goes the other way. I think that they are doing this because that is how their economy is measured.
I think the causality goes the other way. I think that they are doing this because that is how their economy is measured.
Im pretty sure that before this electricity usage was not the primary measure of productivity. I think the news is that this Is a new "easy" way of attemting to force ramp up
But if you know that people are using this method, so do the party leaders. It would be no surprise they are juicing their metrics.
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...
"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...
Not also in the US. They're entirely different situations with entirely different goals by the people doing it.
Microsoft was trying to avoid a penalty for itself, one company.
The businesses in China (not all obviously) are conspiring with the bureaucracy to fake economic activity on a massive scale, to put on a veneer for the outside world. This is about appearances to the world, because China is very scared right now.
Microsoft was trying to avoid a penalty for itself, one company.
The businesses in China (not all obviously) are conspiring with the bureaucracy to fake economic activity on a massive scale, to put on a veneer for the outside world. This is about appearances to the world, because China is very scared right now.
I think the thrust of the comment above was that this is not a class of behavior restricted to China or to communist states.
Microsoft was secretly wasting electricity to avoid fines -- gaming an economic system designed to encourage efficiency under bureaucrat-designed rules that make sense within market capitalism, and Chinese companies are secretly wasting electricity to avoid a loss in confidence, ie. business, under the direction of bureaucrats -- gaming a larger economic system designed for efficiency, but here specifically for efficiency of labor to product spend, versus efficiency of product sale.
Curiously, the need to maintain this appearance of productivity is only likely for the sake of capitalist clients who buy the services -- c.f. the classic entrepreneurial slogan, "fake it till you make it!"
Some people are saying in response to this, "only under communism", and in the specifics of who and how and why they may be correct, but waste to satisfy bureaucratic systems is not unique to any economic or social system. People are going to juke the stats under every regime, at all scales, under all circumstances.
Microsoft was secretly wasting electricity to avoid fines -- gaming an economic system designed to encourage efficiency under bureaucrat-designed rules that make sense within market capitalism, and Chinese companies are secretly wasting electricity to avoid a loss in confidence, ie. business, under the direction of bureaucrats -- gaming a larger economic system designed for efficiency, but here specifically for efficiency of labor to product spend, versus efficiency of product sale.
Curiously, the need to maintain this appearance of productivity is only likely for the sake of capitalist clients who buy the services -- c.f. the classic entrepreneurial slogan, "fake it till you make it!"
Some people are saying in response to this, "only under communism", and in the specifics of who and how and why they may be correct, but waste to satisfy bureaucratic systems is not unique to any economic or social system. People are going to juke the stats under every regime, at all scales, under all circumstances.
[deleted]
How about you stop with the nationalism?
People in China are actual human beings, not part of a hive mind. They react to individual incentives.
People in China are actual human beings, not part of a hive mind. They react to individual incentives.
Yep, they are human beings forced by the government to hide the truth under the guise of “harmony” with the threat of much worse.
Also, you can criticize the Chinese government without having any issues with Chinese people. Learn the difference or life is going to be hard.
Also, you can criticize the Chinese government without having any issues with Chinese people. Learn the difference or life is going to be hard.
You're literally just agreeing with me, but in a condescending tone. My point is that not literally every Chinese person is "conspiring" to "fake" a "veneer" because they're "scared", because people != government. It's GP who needs to learn the difference.
If they work with the government to participate in this data taking scheme, they are conspiring to fake a veneer. They just have no choice.
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).
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).
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.
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.
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?
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?
> You literally can't start an airline from scratch.
Gonna need a citation on this one. I would guess the actual reason airlines are hard to start from scratch is the massive capital required, but would be interested in having this guess proven incorrect.
Porter Airlines in Canada (which presumably has a very similar regulatory regime) was started from scratch about 20 years ago.
Gonna need a citation on this one. I would guess the actual reason airlines are hard to start from scratch is the massive capital required, but would be interested in having this guess proven incorrect.
Porter Airlines in Canada (which presumably has a very similar regulatory regime) was started from scratch about 20 years ago.
Porter tried to go around the problem by partnering with the government to revive a disused island airport, accessible only by ferry. Part of the deal was going to be a bridge.
The community organized vigorously against the prospect of new flights, and succeeded in kneecapping Porter by killing the bridge.
https://en.wikipedia.org/wiki/Porter_Airlines#History
The community organized vigorously against the prospect of new flights, and succeeded in kneecapping Porter by killing the bridge.
https://en.wikipedia.org/wiki/Porter_Airlines#History
You can also do like Kenmore Air and just land on the nearest body of water.
Very small airline. They have 29 planes that can hold 74 people. American airlines (including regional partnerships has 1700).
Few notes there:
* The parent comment didn't caveat "large airline".
* Porter is the third-largest airline in Canada. Canada has 10% of the population of the US, so our airlines will be accordingly smaller.
* American Airlines is the largest airline in North America [1], serves the entire country + international. Really not a reasonable comparison to a regional domestic airline.
[1] https://en.wikipedia.org/wiki/List_of_largest_airlines_in_No...
* The parent comment didn't caveat "large airline".
* Porter is the third-largest airline in Canada. Canada has 10% of the population of the US, so our airlines will be accordingly smaller.
* American Airlines is the largest airline in North America [1], serves the entire country + international. Really not a reasonable comparison to a regional domestic airline.
[1] https://en.wikipedia.org/wiki/List_of_largest_airlines_in_No...
That speaks to the lack of airlines in Canada if the third largest has 74 max people and 29 planes.
> That speaks to the lack of airlines in Canada if the third largest has 74 max people and 29 planes.
No, it speaks to the population of Canada... Porter still comes in at 18th largest in North America [1]
(It might also be because each of the two large carriers, Air Canada and WestJet, has a number of subsidiaries/wholly owned sub brands which would each be larger than Porter - eg Air Canada Rouge, WestJet Encore)
[1] https://en.wikipedia.org/wiki/List_of_largest_airlines_in_No...
No, it speaks to the population of Canada... Porter still comes in at 18th largest in North America [1]
(It might also be because each of the two large carriers, Air Canada and WestJet, has a number of subsidiaries/wholly owned sub brands which would each be larger than Porter - eg Air Canada Rouge, WestJet Encore)
[1] https://en.wikipedia.org/wiki/List_of_largest_airlines_in_No...
Porter Airlines appears to have started in an entirely unique regulatory regime, actually:
https://en.wikipedia.org/wiki/Porter_Airlines
> Porter Airlines appears to have started in an entirely unique regulatory regime, actually
I did a quick skim of that wiki article (skimmed a couple sections, ctrl+f'd for "regulat" and "monopoly"), but couldn't find anything about a unique regulatory regime. There has been regulatory issues with the Toronto Island Airport (where porter wants to extend the runway to allow jets to land, but no one* else wants this), but I don't see where they required a unique regulatory regime?
I did a quick skim of that wiki article (skimmed a couple sections, ctrl+f'd for "regulat" and "monopoly"), but couldn't find anything about a unique regulatory regime. There has been regulatory issues with the Toronto Island Airport (where porter wants to extend the runway to allow jets to land, but no one* else wants this), but I don't see where they required a unique regulatory regime?
No one wanted it because it would have meant more flights. That's precisely my point. There is no such thing as new traffic capacity anymore. You can only take it from someone else.
> There is no such thing as new traffic capacity anymore. You can only take it from someone else.
JetBlue started in the late 90s, and according to the wiki [0], "was awarded 75 takeoff/landing slots".
Sunwing Airlines [1] started about 15 years ago, with departures from Toronto Pearson. They targeted the southern vacation niche. I don't know the details of the traffic capacity at Pearson, but they didn't get their landing slots by buying some other airline.
I'm not disagreeing with your comment about the limitations of dividing up a limited resource - many airports in North America are at capacity, and there's no room there for new competition to start up. But you followed it up with an absolute "You literally can't start an airline from scratch", which I took issue with because there are several examples that disprove it.
[0] https://en.wikipedia.org/wiki/JetBlue
[1] https://en.wikipedia.org/wiki/Sunwing_Airlines
JetBlue started in the late 90s, and according to the wiki [0], "was awarded 75 takeoff/landing slots".
Sunwing Airlines [1] started about 15 years ago, with departures from Toronto Pearson. They targeted the southern vacation niche. I don't know the details of the traffic capacity at Pearson, but they didn't get their landing slots by buying some other airline.
I'm not disagreeing with your comment about the limitations of dividing up a limited resource - many airports in North America are at capacity, and there's no room there for new competition to start up. But you followed it up with an absolute "You literally can't start an airline from scratch", which I took issue with because there are several examples that disprove it.
[0] https://en.wikipedia.org/wiki/JetBlue
[1] https://en.wikipedia.org/wiki/Sunwing_Airlines
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.
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.
> Oh wait that will be immediately controlled by one player.
According to[1], the average number of competitors per US domestic city-pair is 3.5 and has been increasing over the last few decades.
[1] http://darinlee.net/pdfs/airline_competition.pdf
According to[1], the average number of competitors per US domestic city-pair is 3.5 and has been increasing over the last few decades.
[1] http://darinlee.net/pdfs/airline_competition.pdf
They won’t be gobbled up if they aren’t offering a better service. Then that just clears the way for yet another competitor to come in and offer better service again until the large airline improves enough to make entering the market unprofitable.
Big companies buying small companies is good. It’s a reward for improving the market. Big companies preventing smaller companies from even starting via government regulation (i.e. regulatory capture) is what’s bad.
Giving it to the government is just skipping to the worst possible outcome. Nobody has any incentive to compete.
Big companies buying small companies is good. It’s a reward for improving the market. Big companies preventing smaller companies from even starting via government regulation (i.e. regulatory capture) is what’s bad.
Giving it to the government is just skipping to the worst possible outcome. Nobody has any incentive to compete.
Freakonomics did a good episode related to this [1]
One of the takeaways was that as organizations grow they become more married to spending resources to maintain their existing system which comes at the cost of innovation. So they “innovate” by buying other firms/ideas and it eventually leads to consolidation of an industry.
[1] https://freakonomics.com/podcast/in-praise-of-maintenance/
One of the takeaways was that as organizations grow they become more married to spending resources to maintain their existing system which comes at the cost of innovation. So they “innovate” by buying other firms/ideas and it eventually leads to consolidation of an industry.
[1] https://freakonomics.com/podcast/in-praise-of-maintenance/
What I don't like is the DoD keeping the best 5G spectrum to themselves (3GHz-4Ghz) while the rest of the world is using it, putting our future lead in communiciations industry at risk.
Lead? Telecom in the US is an oligopoly, with most of the major spending backed by government grants. Many areas are still supported by rotting copper and old 2g/3g towers because there's no incentive for providers to upgrade them. Unless you meant something else by "communications industry".
That rotting copper is going to be immensely valuable after the collapse.
Yeah, go check out what type of ISP service you can get in Australia for comparison of a similarly sized country. Get ready for ADSL and quotas.
It has nothing to do with size and everything to do with politics. Plenty of small countries have crap internet too.
Australia's internet sucks because the conservative government nerfed the NBN plan.
Australia's internet sucks because the conservative government nerfed the NBN plan.
There is no large country that has amazing Internet everywhere. Size does matter in this regard.
What's keeping our "lead in communications industry" at risk (and has been for decades) is the broken pricing model for mobile data. With that model, whether you have 4G, 5G or 9G wouldn't change anything because the limiting factor is never the speed but the usage quotas.
To be fair, it seems to work just fine. I can choose from at least 5 carriers in my city for cell phones alone, multiple of which offer unlimited data now. That’s only cell phone spectrum.
For other spectrum, it’s easy enough to acquire spectrum that microwave ISPs are able to get into local markets with very limited capital. I graduated with 2 folks who started an ISP together and the spectrum was cheaper than the hardware to transmit on it at the time.
For other spectrum, it’s easy enough to acquire spectrum that microwave ISPs are able to get into local markets with very limited capital. I graduated with 2 folks who started an ISP together and the spectrum was cheaper than the hardware to transmit on it at the time.
Yeah, the problem with cellular in the US is that it is moderately expensive.
The institution of rules that aren't suitable when unforeseen conditions arise isn't a purely government thing. It happens in private organizations all the time.
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.
Don't forget that a company internally is run like a Soviet Style planned economy. 5 year plans, no way for people on the ground to adjust plans, inflexible leadership. I could also mention things like total disconnect between communication from leadership and reality or motivational posters. It's all there.
It's not surprising they create similar behaviors.
It's not surprising they create similar behaviors.
And yet, all of these companies that run like command economies have collectively out-competed all the companies that run like market economies. We know this, because the latter... Don't really exist. No company of any note operates like one.
Does that imply that command economies are actually more efficient than market ones?
Does that imply that command economies are actually more efficient than market ones?
It might be an issue of scale. Centralized control allows for faster decision making and exploitation of opportunity that outweighs inefficient resource allocation when you're a small organization, but once you get to a certain scale it's simply not feasible to make all the decisions at the top due to how opaque the view from the top becomes. Once you get to the largest of multinational companies, they try to mimic the competition in a market economy by using metrics to allocating more resources to profitable divisions.
That might also explain why centralized command was so common throughout history. The political entities of the past were much smaller than today and could be centrally organized, but they competed against their neighbors for resources in a regional market. It's only in the past 2 centuries that political entities have become large enough to encompass entire markets within themselves and have had to step back and let the market do the large scale economic allocation that they've become too large to do effectively.
That might also explain why centralized command was so common throughout history. The political entities of the past were much smaller than today and could be centrally organized, but they competed against their neighbors for resources in a regional market. It's only in the past 2 centuries that political entities have become large enough to encompass entire markets within themselves and have had to step back and let the market do the large scale economic allocation that they've become too large to do effectively.
The problem of command economies aren't related to being command economies, they tend to be related to communications.
A market is a form of communication, with various forces that are supposed to balance themselves. Many of them actually outside of market (the supposed anti-monopoly aspect heavily depends on externalities preventing concentration, like slow travel/shipping, non trade barriers, etc.)
A market is a form of communication, with various forces that are supposed to balance themselves. Many of them actually outside of market (the supposed anti-monopoly aspect heavily depends on externalities preventing concentration, like slow travel/shipping, non trade barriers, etc.)
"Does that imply that command economies are actually more efficient than market ones?"
I think it's probably similar to politics. A well-run dictatorship can do better than a democracy but usually dictatorships deteriorate after a while.
I think it's probably similar to politics. A well-run dictatorship can do better than a democracy but usually dictatorships deteriorate after a while.
I think it has to do with leadership.
Corporate leaders get sacked by the board rather quickly if they completely screw up. Most of them also don't blatantly steal from their firm.
Regime change in governments happens much slowly.
Corporate leaders get sacked by the board rather quickly if they completely screw up. Most of them also don't blatantly steal from their firm.
Regime change in governments happens much slowly.
I've thought about this for different reasons lately and concluded that companies that operate internally as a market would be vulnerable to second system syndrome, ie just becoming a poor imitation of the actual market. You could argue that some (rare) companies that act like markets are those with a safe income stream that insulate them from financial pressures enough to create a market of a second sort. The only sort I can think of is any sort of market of ideas where employees are reasonably free to invest their time as they see fit. Something like Google's 20% time (at least in the old days when that was apparently still a thing) or Valve, where they say the reason desks are on wheels is so you can move to join the team you think is doing the most important work. Whether that's how it works out is another matter...
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/
Slots at Heathrow can be sold for tens of millions of pounds.
https://simpleflying.com/flybe-heathrow-slots/
y and this optimizes for the highest bidder, i.e. most profitable and not the airline best serving the user.
Companies are only profitable because they serve their users better than their competitors.
You cannot seriously believe this. Is a parking company only successful due to how well it serves its users? No, it extracts rent.
If the parking compny pays rent to the parking space owner (based on the auction’s highest price), then yes (the owner gets all the rental profits).
I have seen multiple times cases where an establishment has parking spaces outside that are not paying to that establishment. The customer is basically tricked into parking on spots that seem to be free for customers, but is in fact not: those are further away. The only reason it seems is that this gives more fines, and more profit to the parking company. Neither customer nor the establishment benefit from this at all.
Is the parking company the only option? If not, then yes, it's serving it's customers better than competitors.
The proof is the fact that if they charged $100 per hour, they'd have no customers.
The proof is the fact that if they charged $100 per hour, they'd have no customers.
Maybe replying with "companies" was too broad, but within the context of airlines its correct
People paying to park there are getting something they value.
Only true in markets and industries where there is a low barrier to entry.
Or because there are no competitors. Allocating parking slots based only on bidding has the potential for one company to become a monopoly by purchasing all the slots, allowing them to charge ridiculous prices while providing bad service.
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.
Yeah, that will never happen. Because we are immortal! All the civilizations before us weren't that smart and rich!
Of course we will evolve into something else. Flying some empty planes isn’t going to be why.
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...
Edit: Found an article mentioning this practice: https://mont.thesentinel.com/2019/10/03/one-imperfect-day-in...
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).
A slightly related issue is that airline pilots need to fly certain amount of time/operations to remain in current training.
Part of the big problem with reactivating MiG-29 squadrons in Poland after the "aftermarket mods" resulted in grounding was that even the instructors lost the legal right to examine training level.
Part of the big problem with reactivating MiG-29 squadrons in Poland after the "aftermarket mods" resulted in grounding was that even the instructors lost the legal right to examine training level.
Never heard that, why would they in planed economy?
Same reason large corporations do redundant things and ignore their own best interests; bureaucratic hierarchies just don't scale well. A few layers removed from object reality, all that's left is loyalty politics and meeting your metrics.
I think communism can work, but the Soviet version with a giant state-controlled bureaucracy can't.
I think communism can work, but the Soviet version with a giant state-controlled bureaucracy can't.
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.
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.
> why would they in planed economy?
I hope this pun doesn't fly over everyone's heads
I hope this pun doesn't fly over everyone's heads
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.
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.
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.
AIUI, it isn't exactly that it is enshrined into law that if you don't use it, you won't get it next year. It's just that there's never enough money to give everybody what they want, and not using all your money is a primo-grade signal that you don't need it, so of course you lose it. I believe you'll find this isn't an "American" phenomenon at all.
With some kind of award for not using all your money, it's hard to justify it for the people spending it... and "rewards for not spending all the money" are also really easy to cut out of next year's budget...
Certain patterns just naturally emerge with budgeting at scale, and if you've got some brilliant idea about how to fix it I can assure you that with just some minimum business acumen you can become a very rich person.
With some kind of award for not using all your money, it's hard to justify it for the people spending it... and "rewards for not spending all the money" are also really easy to cut out of next year's budget...
Certain patterns just naturally emerge with budgeting at scale, and if you've got some brilliant idea about how to fix it I can assure you that with just some minimum business acumen you can become a very rich person.
so.. if I don't need $100 i.e. I can do all my work with $80. Then my budget for next year becomes 80. You have given a scenario where budget of one team is decreased.
So, where did that $20 go ? To some other team, right ?
What about the reverse scenario? If I cannot do all my work with $80, I ask for more, say $100. Then my budget for next year becomes 100.
I don't see a problem with this. Budgets are fluid and change from year to year. Because I saved the company $20 in year 6, I will be rewarded with $20 in year 7 if I ask for it.
So, where did that $20 go ? To some other team, right ?
What about the reverse scenario? If I cannot do all my work with $80, I ask for more, say $100. Then my budget for next year becomes 100.
I don't see a problem with this. Budgets are fluid and change from year to year. Because I saved the company $20 in year 6, I will be rewarded with $20 in year 7 if I ask for it.
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
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
Current client wrote-in a stupid policy into intermediate vendor's contract that I have to use a Mac.
Nothing, absolutely nothing that is used in the company is related to the Mac. In fact, a lot of the tools we use would work better on Windows, and many people use Windows. The Macs for direct employees are used as perks.
Nothing, absolutely nothing that is used in the company is related to the Mac. In fact, a lot of the tools we use would work better on Windows, and many people use Windows. The Macs for direct employees are used as perks.
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
It's actually even less efficient than that. On top of keeping spending high, every project that involves contractors must have at least 3 bidders [0]. So for smaller projects people often spend substantially more time modifying contract details and finding contractors than the project itself takes. (By playing with project requirements, you can increase the pool of contractors). At an unnamed national lab, 6-week projects typically took 6-18 months of hunting down contractors until the start of work.
[0] not sure if this is still true, but certainly was in 80s-early 00s.
[0] not sure if this is still true, but certainly was in 80s-early 00s.
Big companies often work this way too.
It doesn't have to be an authoritarian state, nor do you need the concept of "face".
It happens often enough in corporations. Which arguably are authoritarian... (with rare exceptions).
It happens often enough in corporations. Which arguably are authoritarian... (with rare exceptions).
I think I recall reading not too long ago about how in isolated cases recently, the price of electricity can go negative. This presumably would mean that people are being paid to waste it. But really, they're being paid to help keep the grid stable and running.
Most utilities don't have any way to store large amounts of energy, and it's non trivial to start up most energy generation. To me the grid looks like something between wizardry and a house of cards.
There are similar ghost trains in the UK: https://www.bbc.com/future/article/20150723-why-britain-has-...
Any large organisation will tend to run into exactly the same issues that the socialist centrally planned economies did. Centrally planning an economy simply can’t work and the inefficiency gets worse with scale. They have the politburo (the executive team), and apparatchiks (middle management). Large organisations are just a smaller version of a centrally planned economy.
Market forces have very limited opportunity to influence the micro-level internal resource allocation decisions of a large organisation. There’s some things you can to do mitigate this within an organisation, but having efficiency decrease with organisational complexity and scale is inevitable. There’s only two reasons I can see that this doesn’t devolve into soviet style catastrophe. Firstly, some of the lost efficiency is offset by the economies of scale. Secondly, if an organisation becomes too inefficient, their market position can (usually) be usurped by competition. Shareholders can also fire insufficiently competent management, but usually not before the damage is done, and they can’t exactly guarantee the replacements will be any better.
Market forces have very limited opportunity to influence the micro-level internal resource allocation decisions of a large organisation. There’s some things you can to do mitigate this within an organisation, but having efficiency decrease with organisational complexity and scale is inevitable. There’s only two reasons I can see that this doesn’t devolve into soviet style catastrophe. Firstly, some of the lost efficiency is offset by the economies of scale. Secondly, if an organisation becomes too inefficient, their market position can (usually) be usurped by competition. Shareholders can also fire insufficiently competent management, but usually not before the damage is done, and they can’t exactly guarantee the replacements will be any better.
Not really ironic given that these airlines would choose to stop if the expected future profit didn’t make up for it.
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.
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.
https://philip.greenspun.com/flying/unions-and-airlines is why airlines go bankrupt so often.
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."
I don't know, pro sports are all unionized and they make money. Blaming the workers seems like rightwing nonsense to me.
Who is blaming anyone? Link above is just observation. Senior pilots don't have less of a moral right to enrichment than e.g. airline stock investors. If anything the hope would be that the senior pilots might share more equitably with the junior pilots...
Railways are also often unprofitable, even when a monopoly (because of inflexible ticket pricing and high amortisation, depreciation, and maintenance costs).
Transportation is critical yet often unprofitable, which is why it's usually heavily regulated and subsidized.
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.
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.
ha - maybe passenger service but not freight in north america!
I find it interesting your word choice suggests that the price war is undesirable compared to a destabilizing monopoly.
I mean, what do you expect happens after airlines die from a price war? It’s not lower prices.
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.
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.
> 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.
And then what? Is that not a monopoly? I know the classic response to this is newcomers will come up with lower prices, but what if there's economy of scale, and newcomers just can't compete?
And then what? Is that not a monopoly? I know the classic response to this is newcomers will come up with lower prices, but what if there's economy of scale, and newcomers just can't compete?
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.
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.
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.
The risk is that you'll be the one who infects a new community.
This formula gives you the odds someone on a plane is infected:
1-(1-IR)^N
N is the number of seats.
IR is the infection rate.
Takes a lot of assumptions to get the odds someone on the plane is infected, and even more to get the answer you want. The biggest assumption would be how likely you are to get the virus just because someone on your plane has it.
You could replace the N with total number of people at an airport. Again, not that helpful because it takes a lot of assumptions and only gives you half the picture.
1-(1-IR)^N
N is the number of seats.
IR is the infection rate.
Takes a lot of assumptions to get the odds someone on the plane is infected, and even more to get the answer you want. The biggest assumption would be how likely you are to get the virus just because someone on your plane has it.
You could replace the N with total number of people at an airport. Again, not that helpful because it takes a lot of assumptions and only gives you half the picture.
That's assuming that the individual infection probabilities are independent, which is not at all warranted.
Depending on your destination, there's a non-trivial risk you'll be immediately bumped back to origin. Stay tuned.
The IPCC has good information on the climate effects. The growing amount of air travel looks quite worrying.
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It seems like this could be fixed with a bit of economics?
One idea would be to have airlines pay reservation fees for unused slots, where the cost is slightly lower than flying planes in that slot.
I also wonder how the waste compares with Bitcoin?
One idea would be to have airlines pay reservation fees for unused slots, where the cost is slightly lower than flying planes in that slot.
I also wonder how the waste compares with Bitcoin?
The point of the rule is "use it or lose it" - if you don't fly routes that can be boarded by passengers, you have to make space for another airline to compete.
Making it possible to just reserve space would result in obvious approach of squatting, especially when it's cheaper than flying a plane in.
Making it possible to just reserve space would result in obvious approach of squatting, especially when it's cheaper than flying a plane in.
Squatting is already effectively allowed by flying an empty plane. The airlines figured it out.
This would make squatting only slightly cheaper and avoids the waste of flying a plane. Plus the airport gets the revenue and there is less airport congestion.
The fee is still an incentive to give the slot up if they're not going to use it eventually.
It's somewhat similar to a land value tax discouraging vacant lots.
This would make squatting only slightly cheaper and avoids the waste of flying a plane. Plus the airport gets the revenue and there is less airport congestion.
The fee is still an incentive to give the slot up if they're not going to use it eventually.
It's somewhat similar to a land value tax discouraging vacant lots.
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.
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.)
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.)
They could solve this easily by having the airports “freeze” the current quotas till things achieve some equilibrium... else this is unnecessarily wasteful.
Who gives a fuck about some wasted gas? If the economic freeze lasts long enough, the service sector gets decimated.
People will be laid off and the secondary effects of this virus will be almost as bad as the life toll.
People will be laid off and the secondary effects of this virus will be almost as bad as the life toll.
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?
Honestly, how can we ever beat climate change if this is the norm.
This is just our typical air travel fuel usage. These flights are the norm. Our solution to climate change can't be to count on a black swan virus pandemic to reduce global demand.
Greta T's just gotta be shaking her head over this shit.
I mean the norm of flying empty planes when there is no demand. If there is no demand to travel but planes fly regardless how do we ever beat climate change. Does that make more sense?
I've been on three flights (domestic US) in the past week. Pretty much normal load factor as far as I could tell.
United States has only 3 Class 3 Airports (same number as Poland), only one of them on official IATA list. Unless you fly to/from/through NYC or D.C., your domestic flight doesn't touch any slot, and thus avoids the reason for flying empty.
[deleted]
Under Europe's rules, airlines operating out of the continent must continue to run 80% of their allocated slots or risk losing them to a competitor.
Risk losing their slots to a competitor? No airline is making money right now and none can afford to take over new slots to operate more flights. Your slots are completely safe - there are no buyers.
Risk losing their slots to a competitor? No airline is making money right now and none can afford to take over new slots to operate more flights. Your slots are completely safe - there are no buyers.
If the slots are so valuable that it makes sense to fly empty flights to keep them, then certainly it would also make sense for a disruptor to start flying empty flights to steal them if they were left unused.
Is this an excellent chance to rack up some safe miles with free upgrades to first class?
But no mention of which airlines or routes? What percentage of flights to Europe are empty?
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.
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So this is one of the reasons why startups can be competitive. I didn't know. Now I do. I find it a very compelling reason.
Who needs all that pesky oxygen anyway
The airlines that are stockpiling capacity at our expense will come hat in hand for a bailout at our expense.
The airlines that are stockpiling capacity at our expense will come hat in hand for a bailout at our expense.
Yep. The same airlines that today are crying because of their "razor-thin margins" are the same ones that recorded billions of dollars in profit just a few months ago.
Yep. The same airlines that today are crying because of their "razor-thin margins" are the same ones that recorded billions of dollars in profit just a few months ago.
Airline margins are highly cyclic. Making "billions" in one month, might be countered by huge losses in the next.
Evey yearly numbers don't tell the full story - you have to look at multi-year trends in profitability.
...and, indeed, they aren't great for the industry as a whole. Most nations operate a national carrier at a loss.
Evey yearly numbers don't tell the full story - you have to look at multi-year trends in profitability.
...and, indeed, they aren't great for the industry as a whole. Most nations operate a national carrier at a loss.
One of the biggest signals is always the price of fuel.
You need a ton of signals to actually interpret the condition of an airline.
You need a ton of signals to actually interpret the condition of an airline.
Just because profits are measured in the billions doesn't mean that they aren't still "razor-thin".
Yes and if we look how they have behaved in the US since the tax payer last bailout them out one can note they have:
Began charging for basic provisions that used to be included in the ticket price
Began cramming people into narrower and more uncomfortable seats
Added yet more fees
Reduced the frequency of flights on many routes so planes are more crowded
Fought to keep foreign carriers(competition) out of the domestic market
Began charging for basic provisions that used to be included in the ticket price
Began cramming people into narrower and more uncomfortable seats
Added yet more fees
Reduced the frequency of flights on many routes so planes are more crowded
Fought to keep foreign carriers(competition) out of the domestic market
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.
>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/jpmorgan-...
[1] https://www.newyorkfed.org/markets/primarydealers
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/jpmorgan-...
[1] https://www.newyorkfed.org/markets/primarydealers
What corporations are engaging in bank-like activities without access to the mentioned facilities??
Anyone you can think of that's not on this list: https://www.ffiec.gov/npw/StaticData/Y15SnapShot/20181231_20...
zerohedge.com is leaking again
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.
I do follow zerohedge since they often report on things others won't, but I take their analysis with a grain of salt.
That site is so cynical and toxic. I regret giving it any significant amount of time. WallStBets reminds me a lot of it. Lots of manipulative content.
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.
The fact that ZH speculates about conspiracies does not mean that everything on their site is BS.
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?
Summarizing published literature out of China with estimates for R0 and CFR is not doomsdaying.
CNN and Fox also misrepresent news regularly - that doesn't mean they have nothing useful to report.
CNN and Fox also misrepresent news regularly - that doesn't mean they have nothing useful to report.
Even a broken clock is right twice a day.
And a clock three seconds fast is never right.
They've been posting summaries of published literature out of China in real time.
> 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.
It's exactly that reason why they are a useless source for information.
The article is about rules in Europe.
Right now rates are very low.
they should do this with the 737 MAX for a while before they let passengers on them
Well, on the positive side, at least all the 737 Max planes being grounded isn't a factor anymore... /s
A non-original idea is to create a market for landing slots.
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.
Create? They're already auctioned off and traded freely.
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.
The fact that slots are not available to newcomers is a valuable moat for incumbents.
Who else proposed this idea?
Every reasonable economist should.
https://iea.org.uk/in-the-media/media-coverage/put-airport-s...
https://iea.org.uk/in-the-media/media-coverage/put-airport-s...
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.
Or, perhaps take off, and separately land, a smaller plane such as a Cessna.
Why empty? Why not let actual people travel for free/cheap? I believe there is enough people who don't care about the virus but don't have spare money to travel far away.
They are ... ticket prices are down.
They are paying for the fuel. So?
Climate change and depleted resources impact obviously
Fuel is being burned, creating more CO2, without any benefit to society.
If that’s a problem, maybe fuel should be more expensive.
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.
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.
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).
Correct. It should.
So if I have a corporation I have to benefit society with it? Else what, the government must expropriate my corporation from me?
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.
The first step on this long path is raising public awareness, which this article is doing.
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?
Do those two things concern people as much as you think? I don't see it as a major issue people vote on.
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-...
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-...
Joke's on them they're getting Biden anyway.
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.
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
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
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.
Also, you are exhibiting all the signs of a troll. Please reconsider the way you are presenting your opinions.
Crime or antisocial behavior can be treated as an isolated situation, but if it is profitable and leads to more of the same, it becomes a cancer.
Why would anyone want any organization to exist that on balance harms society? Profitability is one constraint that promotes welfare, but it's far from the only one.
Why would anyone want any organization to exist that on balance harms society? Profitability is one constraint that promotes welfare, but it's far from the only one.
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.
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
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.
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.
Another reason why work shouldn't be a precondition for being alive.
I think that would be a sensible change.
I think that would be a sensible change.
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.
Unless people are willing to take a massive decrease in quality of life to fund such a system, it will never happen.
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.
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.
Creating value requires some combination of labor and capital.
Take away any return on capital and that capital goes elsewhere.
Take away any return on capital and that capital goes elsewhere.
> Take away any return on capital and that capital goes elsewhere.
Currently, this capital is going to the überwealthy where it remains there and is hoarded there, providing no "value" to society.
Currently, this capital is going to the überwealthy where it remains there and is hoarded there, providing no "value" to society.
Hoarded? Jeff Bezo’s billions are tied up in Amazon. That’s providing no value?
No wealthy people are keeping their cash under their mattress. It’s actively invested and providing capital for future growth.
No wealthy people are keeping their cash under their mattress. It’s actively invested and providing capital for future growth.
> Hoarded? Jeff Bezo’s billions are tied up in Amazon. That’s providing no value?
Yes, hoarded. You're really bringing up Amazon?
You're talking about the same Amazon that paid no federal taxes last year? I paid more taxes than Amazon did. The same Amazon that encourages a work environment where their warehouse employees wear diapers [0]? The same Amazon that forces its employees to work around a dead body [1]?
Amazon itself started by exploiting USPS.
Amazon is a leach on society. Amazon gets tax breaks to build warehouses where their employees face horrendous working conditions. Tax money that could be used to provide better services not only to their workers, but to the rest of us.. You know, real value.
[0]: https://www.theverge.com/2018/4/16/17243026/amazon-warehouse...
[1]: https://www.theguardian.com/technology/2019/oct/17/amazon-wa...
Yes, hoarded. You're really bringing up Amazon?
You're talking about the same Amazon that paid no federal taxes last year? I paid more taxes than Amazon did. The same Amazon that encourages a work environment where their warehouse employees wear diapers [0]? The same Amazon that forces its employees to work around a dead body [1]?
Amazon itself started by exploiting USPS.
Amazon is a leach on society. Amazon gets tax breaks to build warehouses where their employees face horrendous working conditions. Tax money that could be used to provide better services not only to their workers, but to the rest of us.. You know, real value.
[0]: https://www.theverge.com/2018/4/16/17243026/amazon-warehouse...
[1]: https://www.theguardian.com/technology/2019/oct/17/amazon-wa...
Please stop spreading misinformation. Amazon paid $1.2B in taxes.[1] The net negative tax number was an estimate that doesn't capture their actual payments.
So that means Amazon didn’t spend any money on income taxes in 2018? No. Even though Amazon’s “current provision” number for 2018 was negative for federal taxes, Amazon said it made income-tax payments totaling $1.2 billion during that year, more than from 2011 through 2016 combined.
[1]https://www.wsj.com/articles/does-amazon-really-pay-no-taxes...
So that means Amazon didn’t spend any money on income taxes in 2018? No. Even though Amazon’s “current provision” number for 2018 was negative for federal taxes, Amazon said it made income-tax payments totaling $1.2 billion during that year, more than from 2011 through 2016 combined.
[1]https://www.wsj.com/articles/does-amazon-really-pay-no-taxes...
Non-productive work can't fund anything. It can be an arrangement used to move wealth (generated by actually productive work) around, but it's obviously a glaringly inefficient way to do so. The only reasons why it's preferred are cultural and political, not economic.
And there was many people putting food on the table by hauling ice, but neither of those things should impair progress.
And that's an adequate justification for polluting the environment?
In other words: a society predicated on working is obsolete and needs to be replaced.
"...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.
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.
So just because of some greedy business contracts the most fuel-inefficient mode of transport is running all the less efficiently. Think about it next time the airline shows you an offer to "Fly green" or "offset your carbon footprint".
"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.
It's not like having those planes full of people results in less environmental damage.
The difference is now the flights can be canceled without impact to anyone else.
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?
Does that seem likely to you when the impetus for not flying is the coronavirus?
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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).
> 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.
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.
Sure. Inter-city electric is a no-go. Autonomous, however, is way past due, and the price of aircraft could easily drop by an order of magnitude. That means an oversupply of planes waiting for passengers. Anything that grows addressable passenger demand above the lowered cost basis will take over the industry.
It seems consistent and efficient.
However it neglects human nature.
The soldiers want to avoid missing anything, they simply refuse to see their dotation reduced, therefore just before the end of the period they discreetly use (without any other reason) or destroy all unused goods.
Centralization and bureaucracy excel at breaking human will and things altogether.