Get ready for the bailout - Air Transat merger with Air Canada cancelled

[ExtraSlow]

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Maybe in some cases the consumer wins, but in others they don’t. United would love to come in and fly just the profitable Vancouver to Toronto route. However they have no interest in running the smaller unprofitable ones. If the government removed protectionism and allowed foreign carriers to take away market share on Canadian airline bread and butter routes, many small communities would see their air service price skyrocket or cease to exist.

This is a win to many of the people in this thread.

[Buster]

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No they won’t. They can’t. It’s against the law, like I said above (with certain exceptions.) It’s the same reason AC or WJ can’t launch a LA-Fort Lauderdale route. If it’s entirely within another country, it’s verboten for a foreign carrier to fly that flight. It’s not just the USA and Canada either. It’s applied globally by the international air transport association. (IATA)

So, that leaves only another Canadian carrier to come in and start serving routes. There are already dozens of smaller airlines doing that.

Change the law.

The IATA is just a trade association, is it not?

[killramos]

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Change the law.

But then we wouldn’t need Air Canada, then who would we bail out?

Someone needs to get bailed out. Otherwise what would we need government for?

[71/454]

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This is a win to many of the people in this thread.

But maybe because it negatively impacts many other Canadians this is why it is this way.

Besides, there are many Canadian start up airlines that aren’t required to fly these smaller routes that still go bust, remember Jetsgo and Canjet?
The risk could be that a large airline could run the route at a loss until the other players went bankrupt. Then prices go up on the main routes and the service to small communities also suffers. Then of course is the loss of Canadian jobs.

[Buster]

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But maybe because it negatively impacts many other Canadians this is why it is this way.

Besides, there are many Canadian start up airlines that aren’t required to fly these smaller routes that still go bust, remember Jetsgo and Canjet?
The risk could be that a large airline could run the route at a loss until the other players went bankrupt. Then prices go up on the main routes and the service to small communities also suffers. Then of course is the loss of Canadian jobs.

This is exactly the type of situations open markets solve

[Antonito]

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This is exactly the type of situations open markets solve

How?

[Buster]

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How?

the "then prices go up" bit

[kertejud2]

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the "then prices go up" bit

Doesn't seem good for the consumer.

[Buster]

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Doesn't seem good for the consumer.

but good for new entrants into the market.

[killramos]

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Doesn't seem good for the consumer.

It’s net good to the consumer, once you acknowledge that the residents of sandspit aren’t a market worth pursuing.

[Antonito]

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the "then prices go up" bit

That’s not a solution, that’s a consequence

[Buster]

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That’s not a solution, that’s a consequence

au contraire

Higher prices lead to more competition.

[Antonito]

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au contraire

Higher prices lead to more competition.

Which would solve the problem how? Like, actually how, not just some gibberish you learned in Econ 101. Come up with a reason why "competition" would lower the cost of inefficient flight routes, why would anyone want to compete on a losing proposition?

[71/454]

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This is exactly the type of situations open markets solve

This is actually what started the demise of Canadian Airlines, when they partnered with American and all the international traffic started being funneled through Chicago. You might know how that one ended.

[ExtraSlow]

It's like there's two parallel conversations in this thread.

[Buster]

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Which would solve the problem how? Like, actually how, not just some gibberish you learned in Econ 101. Come up with a reason why "competition" would lower the cost of inefficient flight routes, why would anyone want to compete on a losing proposition?

There is no such thing as an inefficient flight route. There are more expensive routes, and less expensive routes. Competition doesn't change the COST of doing those routes.

[Antonito]

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There is no such thing as an inefficient flight route. There are more expensive routes, and less expensive routes. Competition doesn't change the COST of doing those routes.

So it wouldn't solve the problem

[Maxx Mazda]

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But then we wouldn’t need Air Canada, then who would we bail out?

Someone needs to get bailed out. Otherwise what would we need government for?

You don’t fly much, do you?

The airline industry, when you look at all the ancillaries attached, is one of the largest sources of GDP in the country. Without flights, there are no hotel bookings, no taxi fares, no people eating in restaurants, or spending money on tourism, no car rentals, etc. And the tertiary effects of that, such as the restaurant workers, the hotel housekeeping staff, the airport security workers, the airport restaurant owners, the ramp guys and fuellers, hell even the guy washing the cars for enterprise rental all get shit canned because the airline industry isn’t moving people.

But I guess (according to you) allllll of those companies have unsustainable business models, right?

[Buster]

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So it wouldn't solve the problem

What problem?

If your "problem" is that we need to force the passengers of low cost routes to subsidize the prices of high cost flights ...then the entire premise is dumb.

[ExtraSlow]

Maybe we can make domestic air travel like postage. One price for every route regardless of distance or cost. That would work to solve one of the problems that's beening discussed here.