Re: Re-regulate Again (John Kurtzke)

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----- Original Message -----=20
From: "John Kurtzke" <kurtzke@xxxxxx>
To: <AIRLINE@xxxxxxxxxxxxxxxxx>
Sent: Friday, March 21, 2003 2:17 PM
Subject: Re: Re-regulate Again (John Kurtzke)


> Al,
> I believe monopolies hurt customers, workers, businesses, or any
> combination of those. Alfred Kahn was interviewed on a PBS program
> (Frontline?) a few years ago about deregulation, which he had pushed =
in
> the Carter Administration. Kahn said that he had never imagained that =
the
> government would stop enforcing the anti-trust laws.
>=20
> I think that David Ross hit the nail on the head about the Republic -
> Northwest merger; in fact, Detroit also became a Northwest city as =
well as
> Minneapolis. I am not sure what US air picked up in the South from its
> "merger" (takeover) of Piedmont, but in the Midwest, it removed an =
airline
> competing with US Air and put lots of people out of work in Dayton, =
the
> Piedmont hub. (Nick Laflamme mentioned reduced competition in this =
case
> too).
>=20
> I was probably wrong about Delta - Western, although, when the merger =
took
> place, Western was just beginning to fly into Dulles from Western's
> hub in Salt Lake. (I think :-) ).
>=20
> There were stupid mergers as well, but I don't think Congress should
> legilate against stupidity, except when it harms the public interest. =
Pan
> Am - National was stupid -- yes, the route systems did not overlap,
> National could have helped Pan Am, etc, etc, but both were sick =
airlines.
>=20
> The most insiduous result of deregulation was that airlines felt they =
had
> to go national. They did this with hub systems. Big hubs and security
> screening made it hard to transfer from one airline to another, which
> increased the pressure to go national.

This statement I whole heartedly agree with.  The trend among all =
airlines was to go national. It appears the  industry wanted to copy =
United route structures and success.  Each airline you spoke to was a =
regional or niche airline.  None approached UAL or American in any =
fashion.  It appeared at the time the easiest way to achieve that goal.  =
When these mergers started I predicted we would end up with five major =
airlines.  It sounds as though your biggest problem was hubbing rather =
that mergers.  United started hubbing in the 70's (they called it the =
bank system).  The theory behind hubbing was to keep the traffic not =
share it with anyone. I'm not defending the mergers.  At the time it =
seemed that all filled the need of the merger partner with an absolute =
minimum of route overlap.  The mergers in most all instances didn't =
work.  It's like bringing two women into your house that are set in =
their ways and both are hard headed and envious.  I do appreciate your =
views.
Al

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