[jimworcs]

Here is the shock news. Create a monopoly and they will abuse their customers...

http://travel.yahoo.com/p-interests-36360593

[stevicus]

I noticed that under the entry for United Airlines, they wrote this:

Now that the merger with Continental Airlines is official, United can turn its attention to improving customer service.

Do they really believe this? It would seem that they would more likely do just the opposite, since they have a captive customer base.

[jimworcs]

Exactly, we have failed to learn the lessons of history. Monopolies abuse customers... from the Robber barons to Delta... and United and Continental want to merge so that they can eliminate competition, stregthen their monopoly "fortress hubs" and screw the customers.

[azstar]

"Monopolies abuse customers... from the Robber barons to Delta"

I agree that U.S. airlines are mostly pretty horrible when it comes to customer service, but I don't understand why you constantly refer to them as "monopolies",jimworcs. They are anything BUT a monopoly. Wherever you fly in the world you have a choice of, at least, ten companies to choose. A monopoly suggests that you have NO alternatives and that simply is not the case.

[Butch Cassidy Slept Here]

Wherever you fly in the world you have a choice of, at least, ten companies to choose.

First of all, when it comes to commuter cities, nothing could be further from the truth. Then what about hub cities? Atlanta: It's Delta and Air Tran/Southwest. Frankfurt: Just what is left when you take Lufthansa out of the equation? Even on a busy route like NYC (EWR, JFK) - LON (LHR, LGW, LCY) I doubt there are more than six airlines providing service of any consequence.

[azstar]

A monopoly provides NO alternatives.

[jimworcs]

Wrong Azstar, monopoly refers to where one entity exercises sufficient control over a market as to determine or control the access or pricing within that market. It does not mean there is NO alternatives. Don't take my word for it... here is the wikipedia definition...

In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. (This is in contrast to a monopsony which relates to a single entity's control over a market to purchase a good or service. And contrasted with oligopoly where a few entities exert considerable influence over an industry)[1][clarification needed] Monopolies are thus characterised by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods.[2] The verb "monopolise" refers to the process by which a firm gains persistently greater market share than what is expected under perfect competition.

The legacy carriers have effectively divided up the country into regions and taken dominant positions in these markets, either by acquisition, merger or anti-competitive behaviour. Delta controls over 68% of the passengers using Atlanta. By anyone's definition that is a dominant position.

For comparison, the US DOT initially rejected the BA/AA collaboration on the North Atlantic routes because of BA's dominant position at LHR. At the time, BA controlled 38% of the slots at LHR.

These fortress hubs are replicated throughout the US. You get very little choice who you fly with if you fly from Minneapolis, Charlotte, Denver, Salt Lake City, Newark, etc..

Once they have a controlling position, any competition is entirely at the margins... it is exactly what the robber barons did and exactly what the airlines are doing. Azstar, you are naive...

[azstar]

I stand corrected. Thanks for the definition, jimworcs.

[mars6423]

oh jim please dont quote wikipedia unless it is just a quick overview as they are not a credible source, high school teachers dont even accept it when students write papers or make powerpoints........and with something like monopoly it is easy and quick to find a definition of monopoly that is coming from a more acceptable source

im not saying you are wrong, im just saying wikipedia sucks `

FYI azstar is actually correct.........Jim what you are talking about is actually Monopolistic Competition but many sources incorporate it into being in the definition of monopoly but for all intensive purposes it is a monopoly

I could write up a whole bunch and show the differences but it still comes down to the fact that monopoly means one where monopolistic compitition means few players in the market with little chance of expansion (either through barriers from existing companies or regulations) and some other stuff but im not gonna get into it unless asked.......straight from two textbooks that i looked at this morning

so while many people and definitions will include monopolistic competition as being a monopoly it isn't the case, they are two different but similar structures, monopolistic competition fits between a monopoly and oligopoly

jim is pretty much correct though, smaller airlines have the opportunity to get bigger and become bigger players but they will find it very hard and it depends if they are there for a niche or looking to grow

[jimworcs]

Wikipedia is sometimes nonsense and sometimes correct... however, the definition I quoted is a reasonable and fair definition and perfectly adequate for this discussion. This isn't Harvard.

The simple facts are clear. Initially de-regulation brought new entrants into the market with innovative ideas. However, the big airlines (on both sides of the Atlantic incidently) conspired to eliminate them, by fair means and foul.

It is not a co-incidence that these fortress hubs have developed... they simply sought to create regional and local monopolies, rather than compete. Whereever they can, they seek to control the markets. Look at how the major's handled the upstart regionals. Initially these regionals were independents competing by opening up markets the majors had previously ignored and competing on price and service on popular routes. The majors then bought them and re-branded them. They are now divesting themselves of the regionals, but they are so dependent on the majors now, that they must compete to carry the brand. Their own brands were destroyed by the majors.

What is remarkable is the failure of the public or politicians to demand better. Sooner or later this abuse has to end..but I don't see it happening any time soon.