Credit: This rebuttal was published in Aviation Daily, Friday April 10th, 2009.
I was amazed by many of Doug Parker’s media day comments. (March 25) He began with standard industry observations on the past and the need for change. But by paragraph seven (“I know what you are thinking—I am nuts.”) I began to believe that his assertion might be true. Arguing that for many years market domination, rather than sustainable profit, was a driving force, he then promotes consolidation, premised on the idea that larger—and hence more dominant—carriers are a panacea. Help me if I am misreading, but that sounds like a position that equates success with market share. Furthermore, like almost all legacy managers, he ignored the fact that there is minimally, one U.S. carrier that has for years operated quite well in a fragmented market.
He then tackled labor relations—an area of first-hand experience given that years following the merger “completion” his company still has outstanding labor issues. I agree that the ingrained boom and bust mentality clearly is untenable. But the idea that management has unilateral power to change the situation strikes as patronizing and the playing field far from level. While management is quick to “adjust” employment and wages, it has been far less willing to curb its own compensation and perks in a similar way. And there is no hint as to just how management might resist demands for better terms in good times. Unfortunately, as long as these groups perceive each other as antagonists, there will be little progress. Both factions need to relearn that everyone at every airline is tied to its long-term success, and should share equally in profit and loss.
The real meat however, comes in the discussion of service and frequent flyer programs. The service aspect is especially intriguing since U.S. legacy carriers have been regularly pilloried for indifferent, and even rude, service. Social media sites reveal that passengers are generally most upset by employees unable or unprepared to deal with everyday problems. If many reviewers cite surliness, or some variation thereof as the predominant problem, the fix is pretty evident; see that staff are better trained and friendlier. There is scant evidence that that is happening. Southwest and JetBlue have not won customer satisfaction surveys because of their lavish meals but by consistently meeting the expectations of their customers. Attitude is a differentiator that resonates with the consumer.
And then miles. Unless US Airways differs markedly from its peers, it sells miles as well as seats—and quite profitably. At times some carriers have reported that this was the most profitable aspect of their operation so it’s pretty clear that airlines have done well by this strategy. To assert that any carrier’s sole benefit is a bunch of freeloaders is fantasy. Is US Airways ready to relinquish that revenue source? If so, I wish him well in his singular attempt to abolish the practice, at least more success than the airline’s failed attempt to charge for water and coffee.
Finally, while I would agree that the politics surrounding airlines can be complicated, the carriers themselves regularly play the system to their advantage. Witness the continuing hulabaloo surrounding Virgin America’s ownership. Apparently, arcane rules are only deemed absurd when one’s own ox is being gored.
Few would disagree with the idea that aviation both in the U.S. and globally badly needs new ideas and insights. As an industry vital to global commerce, it still is often treated as a local fiefdom, and regulated with disregard of the bigger picture. Until the world’s airlines and their regulators take a broader view, no company, irrespective of size, will achieve its full potential. Mr. Parker’s suggestions provide little to advance that goal.
Ron Kuhlmann is an aviation analyst and former editor of the Unisys Scorecard. http://web.me.com/ronkuhlmann/Site/Welcome.html
He then tackled labor relations—an area of first-hand experience given that years following the merger “completion” his company still has outstanding labor issues. I agree that the ingrained boom and bust mentality clearly is untenable. But the idea that management has unilateral power to change the situation strikes as patronizing and the playing field far from level. While management is quick to “adjust” employment and wages, it has been far less willing to curb its own compensation and perks in a similar way. And there is no hint as to just how management might resist demands for better terms in good times. Unfortunately, as long as these groups perceive each other as antagonists, there will be little progress. Both factions need to relearn that everyone at every airline is tied to its long-term success, and should share equally in profit and loss.
The real meat however, comes in the discussion of service and frequent flyer programs. The service aspect is especially intriguing since U.S. legacy carriers have been regularly pilloried for indifferent, and even rude, service. Social media sites reveal that passengers are generally most upset by employees unable or unprepared to deal with everyday problems. If many reviewers cite surliness, or some variation thereof as the predominant problem, the fix is pretty evident; see that staff are better trained and friendlier. There is scant evidence that that is happening. Southwest and JetBlue have not won customer satisfaction surveys because of their lavish meals but by consistently meeting the expectations of their customers. Attitude is a differentiator that resonates with the consumer.
And then miles. Unless US Airways differs markedly from its peers, it sells miles as well as seats—and quite profitably. At times some carriers have reported that this was the most profitable aspect of their operation so it’s pretty clear that airlines have done well by this strategy. To assert that any carrier’s sole benefit is a bunch of freeloaders is fantasy. Is US Airways ready to relinquish that revenue source? If so, I wish him well in his singular attempt to abolish the practice, at least more success than the airline’s failed attempt to charge for water and coffee.
Finally, while I would agree that the politics surrounding airlines can be complicated, the carriers themselves regularly play the system to their advantage. Witness the continuing hulabaloo surrounding Virgin America’s ownership. Apparently, arcane rules are only deemed absurd when one’s own ox is being gored.
Few would disagree with the idea that aviation both in the U.S. and globally badly needs new ideas and insights. As an industry vital to global commerce, it still is often treated as a local fiefdom, and regulated with disregard of the bigger picture. Until the world’s airlines and their regulators take a broader view, no company, irrespective of size, will achieve its full potential. Mr. Parker’s suggestions provide little to advance that goal.
Ron Kuhlmann is an aviation analyst and former editor of the Unisys Scorecard. http://web.me.com/ronkuhlmann/Site/Welcome.html
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