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Comment by davidf18 | Hacker News Reader

"The U.S. Department of Transportation, besieged with opposition from domestic airlines, labor unions, and other interest groups, took three years to approve Norwegian’s transatlantic plan."

This is the same government under Obama and Democrats that allowed for consolidation of United buying Continental and American buying US Air which resulted in less competition.

The Democrats used to represent regular people instead of favoring special interests that result in higher prices.

Instead of allowing the legacy carriers to slow down Norwegian and other innovators, the legacies should copy them. They have much more capital and they can make it happen if they want to.

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At what expense of high paying, quality, American jobs?

A huge cost advantage that NAI enjoys on many of their international flights is through a flag-of-convenience scheme. NAI is a Norwegian majority owned company but has established their base of operations for international flying in Ireland. Through this arrangement they are able to hire pilots and cabin crews under contracts and work rules of southeast Asia where wages are low and work rules are less restrictive. You might imagine how cutting costs in that regard might have an impact on quality of service and more importantly SAFETY.

If this precedent is allowed there is no doubt the major American airlines will do the same in the interest of remaining competitive but shockingly airlines in the US have actually resisted this in the interest of the jobs of American people. I can't speak to each airline individually but for example Delta Air Lines directly employs 80,000 people in addition to 10s of thousands of contractors. Multiply that by 3 or 4 and you're looking at a ton of well paying American jobs. Not to mention when is the last time you remember a fatality on a major US airline?

I think the flag-of-convenience scheme leads us down a slippery slope where getting the lowest bidding pilot cadets trumps safety.

> "At what expense of high paying, quality, American jobs?"

When I fly to Israel with a layover in Istanbul to visit friends in Istanbul, I am using Turkish pilots, thus depriving Americans of jobs. They are lower cost than many European pilots. Are you saying I shouldn't be flying Turkish Air? I don't understand? Incidentally, the flights from NYC to Istanbul use very modern planes and are staffed with very friendly staff.

Direct flights to Israel on El Al use Israeli pilots whom I guessing don't get paid as much as their American counterparts and yet, highly trained as probably almost all of them were in the Israeli Air Force.

So, please explain your position.

I am concerned with safety and in fact part my work deals with safety in healthcare. Airlines landing in US airports should be following FAA regulations. It is important that the FAA regulate this.

I encourage US domestic carriers to change the way they operate so that they can match the Norwegian fares while retaining American jobs.

But to complain that Norwegian is offering fares that make Europe more accessible for people with fixed or limited income is just wrong.

How would you "encourage US domestic carriers to change the way they operate so that they can match the Norwegian fares while retaining American jobs." I think the point is that that is impossible.

I don't agree. The consolidation of major carriers under Obama administration (United buying Continental, and American buying US Air) has reduced competition and thus higher fares, worse service.

They don't fly out of regional airports at least in NYC I think that is rare.

I"ll bet there are a lot of operational issues.

Delta, United and others own low-cost carriers (the famous United case where the senior was dragged off the plane screaming and kicking was not on United but a low cost fully owned subsidiary carrier of United) as it is, so they could have a low-cost carrier that travels to Europe. These low-cost wholly owned carriers are domestic only.

But none of them have them because they want to cannibalize the higher fares charged. They enjoy their margins.

Norwegian (like Amazon, like Uber) is in a contest to capture market share and thus may be willing to operate on thin margins or even take a short term loss to capture share. The major American carriers may not want to invest the money to retain share and prefer to use politics instead.

In good years, airlines have some of the lowest profit margins of any industry. Maybe instead of allowing a bunch of crappy carriers to come and go, it would be better to allow consolidation into a few majors. Ticket prices might be somewhat higher, but they would still be more affordable than they were when the industry was fully regulated.

EasyJet, Ryan Air, and Norwegian are not crappy carriers that come and go. Low profit margins have to do with an industry that by-and-large is a commodity. But prices have to do with operating costs and Norwegian and Ryan Air and Easy Jet have done a better job of controlling their operating costs than US carriers.

> the famous United case where the senior was dragged off the plane screaming and kicking was not on United but a low cost fully owned subsidiary carrier of United

United does not own Republic Airways and they are not a subsidiary of United Continental Holdings (United's parent). Republic is its own airline operating flights under contract for United, Delta and American.

The legacies by and large do not own the regional carriers, nor are those airlines intended to be low-cost carriers. The differences primarily lie in the aircraft operated and result from union contracts that inhibit the legacies from profitably operating smaller (non-mainline) aircraft.

According to Wikipedia, United Continental Holdings is the parent of United Express: https://en.wikipedia.org/wiki/United_Express

> "and result from union contracts that inhibit the legacies from profitably operating smaller (non-mainline) aircraft."

And it is these union contracts then that keep the US carriers from earning such low profits.

United Express doesn't operate flights themselves. They own no aircraft and employ no flight crews. They contract out all operations to carriers like Republic.

United Express is nothing more than a brand serving as an umbrella for a group of subcontractors.

United seems to have some operational control since the CEO of United said that they would no longer be dragging people off of flights and in the media that passenger was listed as being on a "United Express" flight.

These subcontractors seems to run with lower operational expenses and yet use Americans as pilots following FAA guidelines. United could have a similar arrangement with lower operational costs for overseas flights.

> At what expense of high paying, quality, American jobs?

Are they high-paying because of the time and effort it takes to procure necessary skills (anesthesiologists) or are they high-paying through artificial throttling of the supply and monopolistic anti-competitive practices (taxi medallions)?

One is the boon to the economy, another one is rent-seeking and employs a broken window fallacy to justify itself.

> I think the flag-of-convenience scheme leads us down a slippery slope where getting the lowest bidding pilot cadets trumps safety.

So far pilot safety has been associated with the number of hours flown, not the specific rates one was paid for those hours. If somebody proves that, given the same number of hours flown, a higher-paid pilot produces more safety per capita, FAA regulations for acquiring the commercial/ATP licenses can be modified accordingly.

Moreover, things are not all rainbows and unicorns in the airline world, especially once you start drilling into those "contractors" you mentioned http://californiawatch.org/dailyreport/pilots-can-earn-less-...

Jobs at major airlines are high paying because of the high cost of time, effort, and dollars necessary to procure the skills necessary for the job. A new pilot can expect to spend at least $150,000-200,000 at a 4 year program largely due to the expense needed to gain those hours you mention that make him or her safer. Once that's done you'll spend at least a couple thousand hours working to get experience in low paying jobs like those explained in the article you linked. All of this experience is necessary to get those high paying jobs ($200,000+ within a few years) at a major carrier to make the pay off worth it.

The major airlines are paying high wages to attract the best, most experienced pilots in the world. There is definitely no rent-seeking in this employment market.

> Jobs at major airlines are high paying because of the high cost of time, effort, and dollars necessary to procure the skills necessary for the job.

An ATP license for a major airline is no different than an ATP license for Bob's Discount Airlines, so the costs of obtaining either one are the same. Airlines (or in the US, their unions, who usually govern this) generally promote on seniority, which does relate to the number of hours flown, but considering it's the hours that are flown on the job, it's airline's investment at that point.

In reality, though, jobs at major airlines pay well for senior pilots because the unions for major airlines are run by senior pilots, who see no problem in negotiating a payscale with significant income inequality between junior and senior levels. I'd urge you to read Philip Greenspun's "Unions and Airlines" to understand the way the industry is structured in the US http://philip.greenspun.com/flying/unions-and-airlines

> The major airlines are paying high wages to attract the best, most experienced pilots in the world.

If they were, senior pilots from United would be jumping ship for better compensation packages with Delta, and then American would have to raise the stakes to attract the best and the brightest. But a senior pilot at United will have to restart as a junior pilot with Delta, all that "high cost of time, effort, and dollars necessary to procure the skills" be damned.

> "But a senior pilot at United will have to restart as a junior pilot with Delta, all that "high cost of time, effort, and dollars necessary to procure the skills" be damned."

That doesn't make any sense at all. That sounds like some sort of anti-trust issue that keeps airline costs low by making it impossible to "poach" highly qualified pilots from other carriers and raise wages.

Seniority rules are written by unions, not airlines. From airline management point of view, they have a fixed liability (number of pilot man-hours) and a fixed resource (pool of money to pay for those man-hours). How that fixed resource is applied to the fixed liability is up to the union.

To quote a letter to the editor in 2003 WSJ https://www.wsj.com/articles/SB105149633146672400

"A 45-year-old captain who has been with an airline for 15 years cannot quit and go elsewhere, because doing so would mean starting all over at the bottom, earning $25,000 a year at a new airline and working every holiday. Imagine if a surgeon had to go back to being an intern every time he changed hospitals."

It's exploitable somewhat by airline management (definitely takes the metaphor of golden handcuffs to the next level), but then the number of airlines is not fixed, with new start-ups coming on board every few years or so, so you'd think that at least someone would exploit these inefficiencies, if it made economic sense for them.

For what it's worth, just because one party has a president in office, doesn't mean the other parties, businesses, and special interests stop trying to push their agendas.

I think you've forgotten that.

What I know is that the Democratic Obama Justice Dept wrongly bowed to the special interests to weaken competition among domestic carriers (perhaps bowing to union interests which also want less competition so that they can get higher wages). It clearly was an anti-trust issue and yet they approved not one but two consolidations.

Consumers paid for these consolidations with higher fares and worse service.

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