Chapter 1893 Encounter with the Airport COO

Charles admitted that he was biased, that's how human nature is.

Yang Cheng warned again, "If you want to make money in country Z, you must lower your profile, otherwise you will only end up with failure."

"I know~"

Originally planning to stay in Charleston for two more days, he suddenly received a call from Yang Sen, asking him to return to New York quickly. He had no choice but to say goodbye to Luo Yue at the airport. He asked the plane to take Luo Yue off, and he took a Delta Airlines flight back. New York.

It had been a long time since he had taken a public flight, and he was still a little unaccustomed to it. First class on domestic short-haul flights was no different from ordinary business class, but he still received a warm welcome from the entire crew when he boarded the plane.

It was an honor for the entire crew to have the majority shareholder and boss fly on their flight.

Yang Chengquan regarded it as a business inspection, cordially greeted the crew, and sat down in his seat to wait for takeoff.

The passengers who boarded the plane in advance did not know that there was a big shot on the same flight. Yang Cheng deliberately waited until the economy class passengers had boarded before boarding the plane.

Unfortunately, the flight attendants of American Airlines are basically aunts. VIPs like Yang Cheng naturally have to be served by the flight attendant personally, otherwise there is no guarantee that there will be no romantic encounters.

Because Yang Cheng was on the plane, Delta Airlines specifically communicated with the control tower to request priority for release. Otherwise, it would have been waiting in line. Didn't you see that there were more than a dozen flights waiting to be released?

While the plane was taxiing, the flight attendant came over to help collect the water cups. At the same time, she lowered her head and said, "Mr. Yang, there is a senior member of Delta Airlines behind me who knows you are on the plane and wants to meet you~"

Yang Cheng frowned slightly and was about to refuse when the aunt added, "It's Tyrell, the operations officer of Philadelphia Airport~"

It turns out that his background is not small, and he is idle anyway, so let’s talk, “Let him come over~”

He turned to Hansen and said, "Have someone change seats with Mr. Tyrell~"

The chief operating officer of Philadelphia International Airport suddenly came to see me. What could happen? Could it be that he recommended himself?

Yang Cheng was thinking in his heart while waiting for someone.

"Mr. Yang~"

Just as I was thinking about it, I heard someone saying hello. I turned my face and saw, good guy, a typical example of a white man who is a polite and scumbag. Among other things, his gold-rimmed glasses are proof that he has many QGZ beautiful stewardesses.

"Take a seat, Mr. Tyrell, it's about to take off~" Yang Cheng pointed to the seat next to him.

When the others sat down, Yang Cheng asked, "What does Mr. Tyrell have to say?"

"There are indeed some things I want to discuss with Mr. Yang. I think this chance encounter on the plane was God's arrangement~"

Yang Cheng waved his hand, "Let's get down to business, Mr. Tyrell~"

He didn't want to discuss the origin of God with foreigners.

This is also in line with Tyrell's wishes. The flight is only more than two hours in total. There are too many things to say, and every second counts. "Mr. Yang should have some understanding of the current situation at airports across the United States, right?"

Yang Cheng said vaguely, "What are you referring to?"

“The wave of consolidation sweeping the U.S. airline industry has significantly reduced competition at many major U.S. airports, but travelers are paying the price as they pay higher airfares and fees.

Over the past decade, major airline mergers and acquisitions have reduced the number of the nine largest U.S. airlines to four - American Airlines, United Airlines, Delta Air Lines and Southwest Airlines.

As a result, travelers are finding their home airports increasingly dominated by one or two airlines.

During the same period, domestic air ticket prices in the United States have increased faster than inflation, and I think a leading factor is reduced competitive pressure.

Competition among airlines is less fierce than in the past because each airline owns its own territory and rarely competes with one another.

Measured by the number of seats available for sale, 40 of the 100 largest U.S. airports have a majority of their market controlled by a single airline, up from 34 airports a decade ago.

According to my analysis of airline schedule tracking data, 93 of the top 100 U.S. airports have most of their seats controlled by one or two airlines, up from 78 airports. .

The exception is Denver International Airport, where United's market share dropped from 56% to 41% while airfares were almost 15% lower than elsewhere in the country.

Overall, domestic airfares in the U.S. have climbed 5% over the past decade, adjusted for inflation.

That’s in addition to the $25 checked bag fee and other surcharges many travelers now pay.

Of course, there are other factors driving up ticket prices, such as economic growth, increases in average flight distances, and fuel prices that have been at record highs for much of the past few years. Of course, this year’s fuel prices have made travelers nervous. The burden has been reduced a lot, and I think this is the beginning of the next wave of airline competition. "

When Tyrell said these words, the plane was already taxiing, and the air pressure created by the strong pushing sensation pressed against the eardrums.

Yang Cheng did not pay attention to the interference from the outside world. He was thinking about Tyrrell's words. Now the benefits of the airline merger strategy are emerging. In the past few years, U.S. airline profits have reached a record high of 20 billion US dollars, although air travel has only grown moderately. .

Yet the rise in airfares reflects increased travel demand, not just airline mergers, as airlines use their new profits to buy new planes and upgrade airport facilities.

This is also an important part of improving the passenger travel experience. He believes that Tyrrell said that the increase in air ticket prices caused by the merger of airline companies will harm the interests of passengers.

Besides, as the operations officer of a large airport, shouldn’t we consider issues from the airport’s perspective?

You must know that the number of flights at each hub airport has increased, and the airport will also expand as a result. This is good news, but why does Tyrrell mean that he is not optimistic about the impact of airline mergers?

And compared with the four major airlines that now control 95% of the aviation market, before the United States deregulated aviation in 1978, passengers once faced fewer choices and higher ticket prices by check.

At that time, which airline flew to which city and how much it could charge were all controlled by the U.S. government.

In the 1980s, competition among airlines increased, and ticket prices fell sharply only as new airlines entered the market.

After the 9/11 incident and the subsequent economic recession, major U.S. airlines fell into financial chaos. Several airlines reorganized through bankruptcy. A wave of airline mergers that began in 2008 led to the merger of Delta, Northwest Airlines, United Airlines merged with Continental Airlines, Southwest Airlines merged with AirTran, and American Airlines merged with US Airways.

Antitrust regulators approved the airline mergers but forced some airlines to give up their slots at major airports in an attempt to encourage competition.

However, airlines are not stupid. Everyone has reached a tacit understanding. Although some people encourage competition, the current competition situation is far less fierce than in the past. If cooperation can make money, why should we engage in competition and consumption?

Consolidating their own turf is currently the main job of the major airlines. They insist on their strategy of dominating one airport and abandoning marginal services at other airports.

United Airlines, for example, abandoned JFK and moved its dwindling JFK flights to Newark, New Jersey, where it now controls 68% of seats.

At the same time, if regulators agree, Delta will further reduce the number of flights at Newark Airport and take over United's original share of JFK Airport. Delta currently occupies the largest market share at JFK Airport.

This is the tacit understanding between airline companies!

Airline mergers and acquisitions have changed the competitive environment and average ticket prices at airports large and small.

At Indianapolis, where the two leading airlines controlled 37% of seats a decade ago, domestic airfares there are 9% lower than the national average.

Later, ATA Airlines in Indianapolis went bankrupt and was acquired by Southwest Airlines. Another of its airlines, Northwest Airlines, was also absorbed and merged by Delta.

Currently, Southwest Airlines and Delta Air Lines control 56% of the seats at Indianapolis Airport, where airfares are 6% higher than the national average.

In 2005, 10 airlines served Dayton, Ohio, and airfares there were 5% less than the U.S. average. Today, only four airlines serve Dayton, and airfares there are also less than the U.S. average. The level is nearly 10% higher.

Large hub airports are no exception. In 2005, US Airways controlled nearly 66% of the seats at Philadelphia Airport. Now, US Airways has merged with American Airlines. After the merger, American Airlines controls 77% of the seats at Philadelphia Airport. Ticket prices have also increased from From 4% below average to 10% above average.

During the same period, Delta's market share at Atlanta, the world's busiest airport, also increased, with the number of seats it controls rising from 78% to more than 80%.

At the same time, low-cost carrier AirTran merged with Southwest Airlines, reducing the number of flights at Atlanta, and domestic airfares at Atlanta rose from about 6% below average to 11% above average.

All in all, no matter from the perspective of the airline or the airport, there is no doubt that the synergistic benefits brought about by the price increase. Yang Cheng really doesn't understand why Tyrrell thinks making money is a bad thing?

He asked Tyrrell, "Do you think the monopoly of an airport by a single airline is harmful to the airport?"

Tyrell said truthfully, "From a profit perspective, no, but from an operational perspective, yes!"

This is like a human saying, "So what you are actually worried about is that your operating power is restricted? Or, are you worried that one day in the future, American Airlines will suddenly go bankrupt, which will affect the operation of Philadelphia Airport?"

Tyrell hesitated for a moment, then nodded, "For this reason, only competition can promote development. The final result of a dominant family is a pool of stagnant water. Even if the water was once clear, it will eventually turn into a pool of quagmire. !”

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