What is that called…..collusion??

Over at the Huffingtonpost there is an article on even more possible airline fees that may be forced onto passengers.  But this parargraph made me take notice,

Ideas for fees don’t come out of thin air. Last month in Miami most of the big U.S. carriers and many overseas airlines attended a conference devoted to a-la-carte pricing and fees. (Motto, next to a cartoon of an airliner: “Discovering the flying store.”)

So does that sound like this definition of collusion from wiki?

In the study of economics and market competition, collusion takes place within an industry when rival companies cooperate for their mutual benefit

And this is what we have from the US Department of Justice,

The competitive process only works, however, when competitors set prices honestly and independently. When competitors collude, prices are inflated and the customer is cheated. Price fixing, bid rigging, and other forms of collusion are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.

So I think they need to examine this “meeting” for possible collusion.

-Josh

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Southwest and WestJet to code share

What does this mean?  I think it really depends on two things, does Southwest add Canadian destinations or does WestJet add more northern US destinations?

Right now WestJet flies into these cities in the US:

  • Fort Lauderdale, FL – Toronto.  Seasonal city – Montreal
  • Fort Myers, FL – Toronto
  • Honolulu, HI – Vancouver
  • Kona, HI – Vancouver (seasonal only)
  • Las Vegas, NV – Toronto, Vancouver, Edmonton, Calgary, Winnipeg.  Seasonal cities – Victoria, Kelowna, Saskatoon, Regina
  • Los Angeles, CA – Toronto, Calgary.  Seasonal city – Edmonton
  • Maui, HI – Vancouver
  • Newark, NJ (NYC) – Calgary (seasonal only)
  • Orlando – Toronto.  Seasonal cities – Montreal, Calgary, Ottawa, Halifax, London, Hamilton
  • Palm Springs, CA – all seasonal cities – Vancouver, Edmonton, Calgary
  • Phoenix, AZ – all seasonal cities – Calgary, Edmonton, Winnipeg
  • Tampa, FL – Toronto.  Seasonal city – Ottawa

So right now all the flights but the seasonal flight from Calgary to Newark are to Sunbelt states or Hawaii.  Las Vegas has the most routes to Canadian cities, but while Las Vegas is a big hub for Southwest, its real draw is as a destination, not a layover, same for Orlando which is another big Southwest hub.

What I expect to happen is that either WestJet and/or Southwest will open some Canada to northern US city routes that are huge hubs for Southwest.  I bet a Toronto to Chicago Midway and Toronto to Baltimore will show up first.  I would also expect to see a Vancouver to Chicago Midway route too.  I suspect that WestJet would actually fly the routes since they already fly to the US.

On the Caribbean front, if a partnership with Spirit Airlines happens, then Fort Lauderdale becomes a more prominent city as that is their entry hub (kind of like San Juan, PR for American Airlines).  If it is Air Tran, well from what I can see they don’t go to more than two cities in the Caribbean, San Juan, PR and Cancun, MX, so that doesn’t make sense for an entry into the Caribbean market.

On the Mexico front, there are bigger issues as I don’t see Southwest or Volaris Airlines crossing the border right now.  I bet that Houston will be an entry city into Mexico as it is a strong hub for Southwest.  I also wonder if some the Volaris flights to Tijuana, a huge hub, will shift to San Diego, Los Angeles, or Las Vegas.

On the Hawaii front, they mention Alaska Airlines and Hawaiian Airlines.  Alaska gives you Alaska, a lot of the west coast of the US, and west coast of Mexico.  Unfortunately for their route map, Anchorage and Seattle appear to be the only cities that fly to the islands.  While Hawaii doesn’t give you much more than Hawaii and some Pacific locations, it does give you more west coast of the US access with Seattle, Portland, Sacramento, Oakland, San Francisco, San Jose, Los Angeles, San Diego, Phoenix, and Las Vegas all flying to Honolulu.  Using routes on WestJet through Vancouver is quite a hassle as I think you would have to pass through customs to enter Canada, and depart Canada.  Not the best use of my time unless I get dirt cheap airfare.

With my hometown legacy airline, Northwest, now part of Delta, and Southwest finally entering the Minneapolis/St Paul market, things sure are getting interesting out there.

-Josh

Question of the Day – July 16, 2008

With airlines asking customers to have Congress look into speculation in the oil markets, and the American Medical Association asking us to call Congress to restore Medicare and Medicaid payment rates, when are these industries going to pay us for this lobbying?