[lbo-talk] Transport deregulation

Doug Henwood dhenwood at panix.com
Mon Aug 31 08:35:34 PDT 2009


Joanna:


> but where exactly did that money go

That's a very good question. I'm guessing here, but some of it may be a revenue issue - periods of competition led to below-cost pricing, led to failures, then temporary monopolies, followed by more cutthroat competition, etc. Also, even though flying got suckier for customers, it may be more costly for the airlines to get someone from NY to SF via St Louis than nonstop, even if it served some weird competitive purpose. So the falling costs per mile may have put profit pressure on the airlines, even if passengers were having to fly longer distances. Also, they took on a lot of debt, so a lot of money went to interest. But it'd take a really detailed study to figure it out for sure.

Doug



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