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Southern Air

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By Anson Busch. Type of airline. Published at Friday, March 22nd, 2019 - 06:20:28 AM.

Codesharing is the most common type of airline partnership; it involves one airline selling tickets for another airline s flights under its own airline code. An early example of this was Japan Airlines (JAL) codesharing partnership with Aeroflot in the 1960s on Tokyo–Moscow flights; Aeroflot operated the flights using Aeroflot aircraft but JAL sold tickets for the flights as if they were JAL flights. This practice allows airlines to expand their operations at least on paper into parts of the world where they cannot afford to establish bases or purchase aircraft. Another example was the Austrian–Sabena partnership on the Vienna–Brussels–New York/JFK route during the late 60s using a Sabena Boeing 707 with Austrian livery.

Major airlines dominated their routes through aggressive pricing and additional capacity offerings often swamping new start-ups. In the place of high barriers to entry imposed by regulation the major airlines implemented an equally high barrier called loss leader pricing. 37 In this strategy an already established and dominant airline stomps out its competition by lowering airfares on specific routes below the cost of operating on it choking out any chance a start-up airline may have. The industry side effect is an overall drop in revenue and service quality. 38 Since deregulation in 1978 the average domestic ticket price has dropped by 40%. 39 So has airline employee pay. By incurring massive losses the airlines of the USA now rely upon a scourge of cyclical Chapter 11 bankruptcy proceedings to continue doing business. 40 America West Airlines (which has since merged with US Airways) remained a significant survivor from this new entrant era as dozens even hundreds have gone under.

The advent of advanced computerized reservations systems in the late 1970s most notably Sabre allowed airlines to easily perform cost-benefit analyses on different pricing structures leading to almost perfect price discrimination in some cases (that is filling each seat on an aircraft at the highest price that can be charged without driving the consumer elsewhere).

The options facing those charged with responsibility for guaranteeing the general flying population that they can fly without fear of terrorism is either to fix the problems in the existing system or create a new security strategy.


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