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Another airline pulls out of MSP-ORD


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#21 railiner

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Posted 04 August 2018 - 12:03 PM

 

 

 

This decision by Spirit Airlines seems to be to be more in their corporate interests than in what is in the interests of their customers.  MSP is not a small airport.  But, it is experiencing airlines pulling out?

Sadly, that's pretty much always the case. It's a company, and the true goal is to turn a profit, not do what is in the best interests of the customer.
 
That is why I believe that airline re-regulation is needed.  Not an economist, but, prior to deregulation, the airlines seemed to make money and the public was better served.

That couldn’t be further from the truth. Prior to deregulation, airline service was barely a skeleton of what we see today, and, inflation-adjusted, airfares were considerably higher. Yes, you got a microwaveable dinner for that much higher fare, but paying for a checked bag, economy plus, and a buy-on-board meal item still puts you much further ahead today than you would have been in the 1970s.

Meanwhile, airlines are posting profits in the billions of dollars. Airlines did lose a ton of money in the 1980s through the 2000s, but that can be attributed to a few factors:

First, in the 1980s, the airline industry was still adjusting to the deregulation era and hadn’t yet figured out how things would work. A few legacy carriers bit the dust (or were on their way to doing so) because they hadn’t figured out how to operate in the new model without regulation protecting them (Pan Am being a big one there). Then there were a couple of cases of corporate raiders figuring out that they could personally profit by raping companies for all they had and sending the skeletons of the company to bankruptcy (Lorenzo and Eastern, Carl Icahn and TWA). Other carriers started and failed because they hadn’t figured out a business model that worked.

Then in the 1990s you had the Gulf War which had the double-whammy of spiking fuel prices and depressing demand. Yet, most airlines had fuel-inefficient planes from the 1960s and 70s and were too slow to replace them. Incidentally, much of the legacy airlines’ fleets were purchased in the era of regulation, such as DC-10s, L1011s, and even domestic 747s. They could fly them profitably when fares were regulated and they didn’t have to worry about competition. When deregulation hit, smaller planes killed the larger planes in terms of economics on most routes, which is why a carrier like Southwest, flying only 737s, was able to take on larger competitors. It’s also why the number of domestic wide bodies significantly decreased when the first generation were ready for retirement. You used to see DC-10s and 747s on short hops such as Chicago-Cleveland, Milwaukee-Detroit, etc. But once the carriers dumped them, they didn’t replace them with other 300-seaters, but with much smaller planes.

The early 2000s had, of course, 9/11, which led to a couple of bankruptcies, and the fuel cost spike and economic decline of 2006-2008 was the last major negative event to hit the airlines economically. However, since then, and following the latest consolidation, airlines are more profitable than they have ever been (and this with the fares still being lower than pre-deregulation).

I’m not sure what you expect regulation to bring that we don’t have already.

 

That's a pretty thorough, and fair, capsule history...nicely done! :)


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#22 Dakota 400

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Posted 04 August 2018 - 04:33 PM

Trogdor,

 

I agree with some of what you say; I disagree with some of your other points.

 

The legacy carriers were behind the curve in replacing large planes.  For me, the most obvious example was a TWA flight from ORD to DAY using a 707.  If the plane was one-third full, I would be surprised.  (Great service, as I recall, and no "fighting" for luggage bin space.)

 

"Prior to deregulation, airline service was barely a skeleton of what we see today...", you stated.  I disagree.  Using my home airport as an example, prior to deregulation, we had L-1011 service to the West Coast:  LAX-DAY-IND-LAX.  More non-stop flights on planes, including jets, that were larger and more comfortable than the regional jets of today.  An AA non-stop 727 flight to LGA with a good dinner(!) in Coach.  We were a hub airport with many non-stop choices for Piedmont Airlines including flights to/from Boston with meal service in Coach.  

 

DAY has not quite a skeleton service, yet.  But, if the reduction/elimination of TSA security check points take place as has been proposed very recently, our air service will be negatively affected, in my opinion.  Only Delta is flying larger jets and that is only on the DAY-ATL itinerary.  Deregulation has promoted the rise of the budget airlines and lowered the fares so that flying is now like traveling by bus was when I was in college.  But, even airports such as DAY have suffered the loss of some of these budget airlines.    You may disagree with this statement if you wish.  But, my hometown airport is very much under served given the tax payer's money that has been spent in building and maintaining and improving our airport. 

 

Deregulation allowed for the development of the low cost carriers and making flying less expensive:  no doubt.  The development of more fuel efficient aircraft was encouraged by deregulation.  Has it led to the airlines being more profitable?  Yes, since they now can tack onto one's ticket fees for "whatever" they wish and raise/lower fares as they wish.

 

Has the public been better served by these changes?  In my opinion based upon my flying experience from a non-major airport or hub, this member of the public has not been better served. 



#23 cpotisch

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Posted 04 August 2018 - 04:52 PM

Trogdor,

 

I agree with some of what you say; I disagree with some of your other points.

 

The legacy carriers were behind the curve in replacing large planes.  For me, the most obvious example was a TWA flight from ORD to DAY using a 707.  If the plane was one-third full, I would be surprised.  (Great service, as I recall, and no "fighting" for luggage bin space.)

 

"Prior to deregulation, airline service was barely a skeleton of what we see today...", you stated.  I disagree.  Using my home airport as an example, prior to deregulation, we had L-1011 service to the West Coast:  LAX-DAY-IND-LAX.  More non-stop flights on planes, including jets, that were larger and more comfortable than the regional jets of today.  An AA non-stop 727 flight to LGA with a good dinner(!) in Coach.  We were a hub airport with many non-stop choices for Piedmont Airlines including flights to/from Boston with meal service in Coach.  

 

DAY has not quite a skeleton service, yet.  But, if the reduction/elimination of TSA security check points take place as has been proposed very recently, our air service will be negatively affected, in my opinion.  Only Delta is flying larger jets and that is only on the DAY-ATL itinerary.  Deregulation has promoted the rise of the budget airlines and lowered the fares so that flying is now like traveling by bus was when I was in college.  But, even airports such as DAY have suffered the loss of some of these budget airlines.    You may disagree with this statement if you wish.  But, my hometown airport is very much under served given the tax payer's money that has been spent in building and maintaining and improving our airport. 

 

Deregulation allowed for the development of the low cost carriers and making flying less expensive:  no doubt.  The development of more fuel efficient aircraft was encouraged by deregulation.  Has it led to the airlines being more profitable?  Yes, since they now can tack onto one's ticket fees for "whatever" they wish and raise/lower fares as they wish.

 

Has the public been better served by these changes?  In my opinion based upon my flying experience from a non-major airport or hub, this member of the public has not been better served. 

 

In your post, you keep on bringing up how great it was that they used large planes on short routes. Those might have been more comfortable, it 100% does not refute Trogdor's point that airline service was skeletal back then. The rise of regional jets is primarily because it can now be profitable to run low capacity, short distance routes, whereas planes used to be too large and inefficient to justify that.


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#24 Dakota 400

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Posted 04 August 2018 - 06:19 PM

 

Trogdor,

 

I agree with some of what you say; I disagree with some of your other points.

 

The legacy carriers were behind the curve in replacing large planes.  For me, the most obvious example was a TWA flight from ORD to DAY using a 707.  If the plane was one-third full, I would be surprised.  (Great service, as I recall, and no "fighting" for luggage bin space.)

 

"Prior to deregulation, airline service was barely a skeleton of what we see today...", you stated.  I disagree.  Using my home airport as an example, prior to deregulation, we had L-1011 service to the West Coast:  LAX-DAY-IND-LAX.  More non-stop flights on planes, including jets, that were larger and more comfortable than the regional jets of today.  An AA non-stop 727 flight to LGA with a good dinner(!) in Coach.  We were a hub airport with many non-stop choices for Piedmont Airlines including flights to/from Boston with meal service in Coach.  

 

DAY has not quite a skeleton service, yet.  But, if the reduction/elimination of TSA security check points take place as has been proposed very recently, our air service will be negatively affected, in my opinion.  Only Delta is flying larger jets and that is only on the DAY-ATL itinerary.  Deregulation has promoted the rise of the budget airlines and lowered the fares so that flying is now like traveling by bus was when I was in college.  But, even airports such as DAY have suffered the loss of some of these budget airlines.    You may disagree with this statement if you wish.  But, my hometown airport is very much under served given the tax payer's money that has been spent in building and maintaining and improving our airport. 

 

Deregulation allowed for the development of the low cost carriers and making flying less expensive:  no doubt.  The development of more fuel efficient aircraft was encouraged by deregulation.  Has it led to the airlines being more profitable?  Yes, since they now can tack onto one's ticket fees for "whatever" they wish and raise/lower fares as they wish.

 

Has the public been better served by these changes?  In my opinion based upon my flying experience from a non-major airport or hub, this member of the public has not been better served. 

 

In your post, you keep on bringing up how great it was that they used large planes on short routes. Those might have been more comfortable, it 100% does not refute Trogdor's point that airline service was skeletal back then. The rise of regional jets is primarily because it can now be profitable to run low capacity, short distance routes, whereas planes used to be too large and inefficient to justify that.

 

 

How does one define "skeletal service"?  What service DAY now has is not "skeletal service"--yet.  But, if proposed TSA reduction of security check points in small airports is put in place, I fear what service we will have will be a shadow of what our airport is capable of handling and a waste of the taxpayers money that put such a facitlity in place.  

 

I don't defend the use of a TWA 707 for my ORD-CHI flight many years ago.  Shocked, I was, to see that I was boarding such a plane.



#25 BCL

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Posted 04 August 2018 - 06:53 PM

DAY has not quite a skeleton service, yet.  But, if the reduction/elimination of TSA security check points take place as has been proposed very recently, our air service will be negatively affected, in my opinion.  Only Delta is flying larger jets and that is only on the DAY-ATL itinerary.  Deregulation has promoted the rise of the budget airlines and lowered the fares so that flying is now like traveling by bus was when I was in college.  But, even airports such as DAY have suffered the loss of some of these budget airlines.    You may disagree with this statement if you wish.  But, my hometown airport is very much under served given the tax payer's money that has been spent in building and maintaining and improving our airport. 

 

Location doesn't seem to be ideal though.  It seems to be located within reasonable distance of a couple of major airports.  It going to be tough getting the airlines to serve an airport where they don't necessarily see any profitability.

 

You want "barely there" service?  I was looking to book a trip to Seattle around Christmas, and possibly the lowest fare was at Charles Schultz Sonoma County Airport.  Never been there, but apparently it has even fewer passengers than Dayton.  Does seem kind of cute though.  I wonder if Lucy really charges a nickel for help.

 

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#26 Dakota 400

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Posted 04 August 2018 - 07:25 PM

BCL,

 

Quite correct, I think, that we are surrounded by three very competitive airports currently.  But, those airports have existed as long as DAY has.  I assume all have improved their facilities, but DAY has also as well.

 

DAY is clearly a step-Sister in my opinion in the minds of the airline executives and I don't clearly understand why.

 

If because of deregulation that profitability of the airlines is the prime motive for such an action. it is a "win" for them.  But, what about, "We, the People"?  This seems to becoming a lost concept in the America of the 21st Century.
  


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#27 railiner

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Posted 04 August 2018 - 07:28 PM

Part of the problem with deregulation, is the constant merging of carrier's, and consequently the closing of many hubs, or reducing service drastically.   Look at what happened to St. Louis, Pittsburgh, Raleigh, Nashville, Las Vegas, Reno, etc....all just from AA merger's and acquisition's....add to them the other hubs suffering from similar on DL, and UA....


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#28 Anderson

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Posted 06 August 2018 - 05:12 AM

On airlines:
I think it is questionable as to just how "skeletal" service was then, and a lot of that depends on the question of hub-and-spoke services versus through-routing.  I would note that, for example, PHF (Newport News) had quite a bit of service pre-deregulation.  In the years since, it has been a veritable yo-yo at times (as mergers knocked out service due to consolidation at RIC (Richmond) or ORF (Norfolk).  So I think this is a case where your mileage may vary.

With that being said, I do think that deregulation combined with the mass consolidation did ultimately screw the pooch for many smaller-to-midsized airports.  One thing I would note is that while in "real terms" airfares have been declining for a long time, this has been largely invisible after inflation (they've been reasonably static in nominal terms since about 2000 or so) and is also masked by the steady increase in ancillary revenue (e.g. seat selection fees, baggage fees) in recent years. [1]

I do agree that in many cases, we're coming out ahead of where we were 40 years ago...but in many cases I suspect that at least some share of the gains are down to more efficient engines reducing fuel consumption, increases in seat density, and reduced operating crew requirements (and costs, once you take into account the splitting-off of many short-haul flights to "regional" operators such as SkyWest, who IIRC have much lower costs; remember, pre-deregulation, many of those routes would have been on "mainline" through-routings).  Trying to disentangle what elements of deregulation worked out well and which ones "misfired" would be an interesting exercise for a PhD student in transportation economics.

With all of this being said, I think that security regulation hasn't helped anything on the airline front.  In particular, I suspect it has made it an increasingly dubious proposition to support airports (and city pairs) on the lower end of the passenger count range (I think you face mounting viability issues anywhere below 250k pax/yr).  It has also engendered what I can only call a racket in "expedited security" options (how many airlines sell this as an option now?).

The new TSA plans are a mixed bag that I can't quite sort out.  On the one hand, I feel like they would help smaller airports in some specific cases (particularly where you've got a lot of traffic that isn't connecting onwards), but there's a risk of enough operationally "blown" connections, airports not set up to handle kicking a bunch of pax on smaller planes out and sending them back through security (anyone want to imagine trying to deal with this at Atlanta?), and issues with having to do a Chinese fire drill wich checked luggage that some airlines may just say "screw it" and cut service.  I can also imagine being a little bit annoyed at boarding a regional plane going XXX-YYY and then having to go through security at YYY to transfer to a similar plane going YYY-ZZZ (and in this case, I could see the emergence of "unsecured terminals"...there's already a side-market in quasi-general aviation services in different markets, after all...just seeing the market fully bifurcate, with the "unsecured" market having a size limit on the planes involved, would be interesting).



On CHI-MSP:
I tend to think a corridor on this route would work pretty well.  As noted, there are a number of decent internal traffic-generating stops, and the timing is pretty competitive with taking a bus or driving.  I suspect you could nudge that down by a bit as well (shooting for the 6:45 timetabled times of the 1950s seems like a reasonable goal for a corridor project; I'm not sure if you could pull it off with a MAS of 90 MPH or you'd need to go to 110 MPH).  I'm also trying to find some of the studies from the old Chicago-Madison-Minneapolis project to figure out what the proposed end-to-end runtimes were like.

My guess is that with 2-3 "dedicated" trains (that is, not LD trains) on the route you'd have something that was pretty successful.  Ideally you'd want something closer to the hourly service of Brightline, but I think you'd have to seriously knock away at travel time to make it work (pushing your average speed to 80 MPH, offering a 5-hour travel time, would almost assuredly require getting MAS to 125 MPH for some portion of the route...and I think 5 hours is just too long for a Brightline-esque model to work).

Whether there would ever be either serious interest in or funding for anything beyond this (aside from perhaps an alternate routing via Rochester) is an open question...the 400-ish miles between Chicago and Minneapolis is /just/ long enough to start stretching the viability of any sort of HSR plan (you start needing average speeds in the 130 MPH range (not far off of the Nozomi trains on the Tokaido Line, and above that of the Hikari trains).  There's also the hand-wringing fact that a "true" bullet train from end-to-end would probably risk dropping intermediate stops.


[1] I'm reminded of one time when I bought my brother a ticket in F on a flight.  He was confused, until I pointed out to him that buying a Y ticket, a checked bag (he was going to need one since a wedding was involved, at best straining his carry-on's capabilities), and an extra-legroom seat (he's all legs) would actually be /more/ expensive than the F seat, and F came with breakfast and drinks.


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#29 railiner

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Posted 06 August 2018 - 09:35 AM

Reminds me of some of those 'super-short' flights, pre-deregulation...

UAL had DC-8's flying between Norfolk and Newport News, as well as between San Francisco and Oakland... :)

Those were part of longer, multi-leg flights, another thing that is fairly rare in this hub and spoke era....Alaska Airlines still has quite a few of those...


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#30 cpotisch

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Posted 06 August 2018 - 09:45 AM

Reminds me of some of those 'super-short' flights, pre-deregulation...
UAL had DC-8's flying between Norfolk and Newport News, as well as between San Francisco and Oakland... :)
Those were part of longer, multi-leg flights, another thing that is fairly rare in this hub and spoke era....Alaska Airlines still has quite a few of those...

Those kinds of flights are still around, just not to the extent they used to:


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#31 Swadian Hardcore

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Posted 06 August 2018 - 10:20 AM

Delta carries more than 70% of the passengers at that airport, it is very hard for anyone else to match their worldwide reach. But MSP - ORD also adds United and American to the mix. For an airline that is more geared towards point to point leisure travel as opposed to business travel, competing on price alone to get passengers on a plane with little opportunity/reason for a connecting flight is a losing proposition.


Exactly. People are jumping on this like it's a big deal but NK only had a fraction of the market and the Big Three were farming revenue from hub connections.

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#32 Anderson

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Posted 06 August 2018 - 12:08 PM

Also, don't forget that "Chicago" also includes Midway, and WN flies that route something like 8x daily.  So between the "big four" MSP-CHI you have:
DL: 14x (7 ORD/7 MDW)

UA: 10x (10 ORD/0 MDW)

AA: 6x (6 ORD/0 MDW)

Nobody else is in the market, granted, but (looking at the other carriers) B6 and AS are based on the coasts while NK and G4 simply have different models (Spirit doesn't "do" connections, for example).  SY is the one that's sort-of a "shame" but my guess is that they couldn't make do trying to supplement their MSP hub with a bunch of CHI flights.

One other possibility: The article says that NK started out with 3x daily flights to Chicago.  It is quite possible that if they didn't increase this rate, between (possiblly) lousy OTP and low frequency they just couldn't "cut it".


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#33 jebr

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Posted 06 August 2018 - 01:32 PM

3x/day is actually pretty frequent for NK. Most of their routes they only operate once/day, at least out of MSP. LAS may be an exception to that rule (I think they do 2-3x/day there,) and there may be a Florida destination or two that gets multiple frequencies. NK does do connections, but they're often not severely discounted like their direct flights are, and sometimes the layover times are abysmal.

 

G4 doesn't directly serve MSP or a different airport within most generally accepted definitions of the MSP metro area. G4 does serve STC, but their routes generally have other LCC/ULCC competition at MSP and so their market seems to be more outstate Minnesota where MSP would require more driving and paying for parking (STC does not charge for parking.) F9 does serve MSP, and for a time they did serve ORD, but that ended pretty quickly and most of their routes are less-than-daily (DEN is two-three times a day and I think there's a Florida destination or two that's daily, but the rest are less-than-daily.) SY is kind of an odd duck and when they switched to ULCC but didn't immediately drop fares in the way that I would have expected I've kinda ignored their progress. Their snafu with their last flight of the season from a Mexican destination (the flight didn't operate, but they didn't offer any rebooking or rescheduled flight option and they only refunded the fare amount, which was significantly lower than last-minute tickets on a non-ULCC carrier) has made me swear them off for almost all travel at this point.

 

My guess is that NK was either close to or fully breaking even on the flights (which is why they kept them for so long) but once they expanded their route map and had less connecting traffic the load factor or fares that it generated weren't panning out. Maybe they were also hoping to get some of the lower end of the business market but weren't able to capture it. For a while they dropped to a single flight, but the timing didn't work for us and I'm guessing they found that it didn't work well enough to capture the business needed for it. It makes sense, considering the corridor is still short enough that driving or Megabus/Greyhound are viable options for a wide swath of leisure travel. A flight only saves a few hours, which probably isn't enough to register as "saving vacation days" if you're flying. There's always the parking cost worry, but there's enough easy-ish alternatives (staying in a suburb and using a park-and-ride, parking a car outside the city somewhere and transit/Lyft/taxi in, or simply paying for parking downtown) that paying a bunch for a flight doesn't pan out cost-wise.

 

Maybe at some point someone will try again, but I'm not hopeful. It's disappointing, since the time savings made it so a day trip to CHI was possible as a long day instead of having to sleep overnight somewhere/on a bus, but I really can't justify spending $400 for two people round-trip just for a day trip.



#34 BCL

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Posted 06 August 2018 - 07:15 PM

BCL,

 

Quite correct, I think, that we are surrounded by three very competitive airports currently.  But, those airports have existed as long as DAY has.  I assume all have improved their facilities, but DAY has also as well.

 

DAY is clearly a step-Sister in my opinion in the minds of the airline executives and I don't clearly understand why.

 

If because of deregulation that profitability of the airlines is the prime motive for such an action. it is a "win" for them.  But, what about, "We, the People"?  This seems to becoming a lost concept in the America of the 21st Century.
  

 

Certain airports qualify for Essential Air Service subsidies, but that's typically places where there isn't another passenger airport for 100 miles.  As it is, Dayton has service to major hubs already.  Unless someone can persuade an airline to make Dayton a hub, it's going to be underutilized for passenger traffic.

 

For example, Charlotte gets something like 45 million passengers a year as an American Airlines hub, even though it's pretty obvious that most of the traffic comes from connecting flights where nobody leaves the airport.



#35 BCL

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Posted 06 August 2018 - 07:20 PM

Reminds me of some of those 'super-short' flights, pre-deregulation...

UAL had DC-8's flying between Norfolk and Newport News, as well as between San Francisco and Oakland... :)

Those were part of longer, multi-leg flights, another thing that is fairly rare in this hub and spoke era....Alaska Airlines still has quite a few of those...

 

United had an SFO-OAK-DEN route although it was possible to book SFO-OAK separately.  I think before they canned it, the equipment used was 727s.  I saw some ABC News puff piece article on it during the early 80s.  They started off on the set of a soap opera, but it was because one of the actresses was moonlighting there, where her full time job was as a flight attendant where she flew the SFO-OAK route.

 

I heard that it was pretty popular near the end of the year for those who needed a certain number of miles (500 minimum) or one more segment to reach status.  They could then take public transportation home.



#36 Bob Dylan

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Posted 06 August 2018 - 07:34 PM

I flew on many flights that did short hops during Long Distance Routes.

Most memorable to me were Ft. Worth to Dallas, and Austin to San Antonio!
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#37 JayPea

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Posted 06 August 2018 - 08:25 PM

While I never flew on it, there used to be, not all that long ago, flights between Pullman/Moscow (WA/ID) and Lewiston, ID, a distance of 35 highway miles and considerably shorter by air. It was part of a longer distance route.
Amtrak Miles and Trains Traveled: 89811-City of New Orleans, State House/Lincoln Service, California Zephyr, Southwest Chief, Empire Builder, Cascades, Crescent, Capital Limited, Coast Starlight, Texas Eagle/Sunset Limited, Silver Meteor, Lake Shore Limited,  Pacific Surfliner, Cardinal, Vermonter, Northeast Regional, Downeaster, Heartland Flyer, Wolverine. 
Pre-Amtrak Miles Traveled: 8478-- North Coast Limited, Panama Limited, Empire Builder, Abraham Lincoln, City of Hinkle

#38 BCL

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Posted 06 August 2018 - 10:30 PM

I flew on many flights that did short hops during Long Distance Routes.

Most memorable to me were Ft. Worth to Dallas, and Austin to San Antonio!

 

I remember even shorter flights.  I used to hang out with a relative who was a travel agent back in the late 70s.  Air California used to have supremely short flights.  Stuff like Oakland to San Jose - I think at a standard fare of $8 back in the late 70s.  I've read that sports teams playing games in Oakland often fly into San Francisco (to be closer to the team hotel) and their charters might have to be repositioned to Oakland (to pick them up closer to the venue).

 

But SFO-OAK was supposedly the shortest regularly scheduled jet flight in the world.  There might have also been regularly scheduled helicopter flights.  These days BART is more or less direct between those two airports, although that would mean a transfer from a special airport connector that's integrated into the BART fare system.  It's $6 for the airport connector, and I believe there's a $5 surcharge for SFO, so the fare would be $16.15.



#39 jis

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Posted 07 August 2018 - 08:52 AM

At one time United had regular positioning flights between SFO and Oakland (allegedly including a wide-body one) on which they sold tickets. I have no idea how popular they were.



#40 PVD

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Posted 07 August 2018 - 09:12 AM

Many years ago I did MIA to FLL (Eastern Airlines) Back in that era, airlines had to maintain route authorities, satisfy mail/cargo contracts as well as repositioning. With the old student standby fare, it wasn't much more than the bus...You could be "traded" really desirable routes if you took some "less desirable" routes. Or you bought someone who had the ones you wanted. Think PanAm buying National, or Delta buying Northeast. 






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