What's wrong with the airlines?

Joe Nocera suggests in today’s NY Times that the problem with airlines is that they don’t have enough executives like tough-talking wise guy Gordon Bethune, the former airline mechanic who until recently ran Continental. Here’s a guy the business press has to love. (He’s the real life version of Martin Sheen’s mechanic/union boss Carl Fox in the film Wall Street (discussed here)).

Having just gotten through criss-crossing the world and this country, I’ve had a chance to reflect on the mess of our airlines. We were forced onto the bankrupt and hopeless United by circumstances beyond our control, and therefore had an opportunity to observe an understaffed and endless check-in line at LAX on Christmas day. You would think that an airline would KNOW how many people were going to show up on a given day and PREPARE for that. Especially after a similar holiday disaster shortly before at O'Hare, when the city of Chicago had to rescue freezing United passengers from checkin lines that extended outside the building.

Although the vision of airlines run by the likes of Bethune is an attractive one, what’s wrong with the airlines would seem to be simpler to diagnose: a big part of the U.S. industry is in or near bankruptcy. Hard to manage firms on a long-term-profit basis when that’s the case. When your firm is in bankruptcy you don’t want a ceo like Bethune who thinks about maximizing customer and employee relations over the long term. You want a ceo whose big idea is charging five bucks for pretzels.

The prescription for the airlines is to take them off bankruptcy welfare and let one or two fail (my candidate continues to be United). Then they can start being managed like real businesses. And maybe Gordon Bethune will have a job.

Comments

[Cathy]

Why make United the whipping boy? I'm extraordinarily satisfied with the carrier, and I fly them over 25,000 miles every year (ok, some of that is on other Star Alliance carriers, but the bulk is on United).

They get me where I want to go comfortably, competantly, and consistently. More so than other airlines I've tried.

If I had to nominate a candidate for failure based on operational ineptitude I would have suggested USAir (at least pre-America West merger) but I think it would be vastly better for travellers in general if NO carrier failed, particularly not a large one.

To further explain my experience, I don't pick up all those miles from flying back and forth on the same route. Rather, I traverse the globe, hither and yon. Being able to do this within one carrier's system makes this kind of travel much more possible. Without these large carriers such trips would be much longer and more arduous, and probably also more expensive as travellers cobble together separate tickets on different carriers to complete their journeys. And woe be one who misses a connection, since it won't be within any one carrier's ability or responsibility to make sure rerouting is possible.

Yes, perhaps there still would be other large carriers. But I think it's better to have more to choose from than fewer. The competition ultimately works to the travellers' favor, not just in terms of pricing pressure but through the differentiation in the market. Each carrier has its own culture and way of doing things. I don't particularly enjoy the way the other large carriers like American, Continental, or Delta do things; I like the United way. And when I'm on United, because I'm so familiar with it, it feels very homey to me and takes away a lot of the stress of travelling. It would therefore make my globe-trotting lifestyle much less pleasant for me if I couldn't give them my travel business anymore.

[Larry E.Ribstein]

I'm agnostic about which carrier should die. (I should add, FWIW, that most of my miles are on United, I belong to the Red Carpet Club, and I often fly between two markets (ORD and D.C.) that United dominates.) I certainly don't think that large airline systems are necessarily a bad idea. And competition is good. But I'd like the market to determine how many and what sort of competitors we should have. Bankruptcy is currently interfering with that process.

[Cathy]

> But I'd like the market to determine how many and what sort of competitors we should have. Bankruptcy is currently interfering with that process.

I definitely agree with that.

[The Phantom]

I would like to see United die.

Their pilots had an unofficial wildcat strike a few years back, and two friends of mine were stuck over it.

Many fliers have a long memory over this sort of thing.

If United died, other airlines would pick up the slack, and those pilots could get jobs at Wal Mart where they belong.