Right now, a number of airline companies are in the headlines with real financial worries. Delta is in real trouble and may have to file bankruptcy. United is looking to unload pensions for its employees and flight attendants and mechanics are threatening to strike if they do. US Airways is in bankruptcy and is getting ready to merge with America West. What’s the problem? What do these airlines continue to struggle?
For years, many air carriers in the U.S. have struggled terribly. They were tired of exorbitant rates and crappy food and flights not making it on time. Heck, you can get meals that good in the frozen food section of your grocery. How much did I pay again? Then came 9/11 and the situation got even worse. People weren’t going that way. Or were they? Some airlines have managed to do pretty well.
Southwest figured out how to do it. You give inexpensive rates and get pretty good at being where you need to be on time. Hawaiian Airlines got very good at making it on time. They consistently get good marks industry wide for being on time, not screwing up the luggage, etc. Basic stuff in most people’s book.
The big airlines have been sloppy. They’ve developed reputations of lousy service and lousy food. They’re planes don’t arrive on time. They don’t leave on time. The rates are too high and several of them continue to struggle to barely survive. What are they gonna do? I’ll tell you what they need to do.
They need to either toughen up or die. The federal government doesn’t need to bail them out again. They’ve been doing it for years. There are a lot of jobs at stake certainly. I’ve lost a job before and it’s not always easy to recover. The unions need to accept they can’t do things the way the did before and at the same time, executives don’t need to make quite so much money. They need to tie those salaries to performance on the executive level. It needs to be tied directly to the bottom line of the corporation and if employees need to take a paycut, it needs to go across the board, no questions asked. And if the company loses money, the executives should lose it too. Maybe then they could get enough sense to alter their strategy and model enough to make a difference.
I feel for all the employees who are getting ready to lose their jobs because of executive inflexibility and union ineptitude. Maybe that’s the other way around. No matter. My words are harsh but every day for years, the big airlines constantly ask for help and bailouts from the government and they get them. It’s time for it to stop. If we’re in a real free market economy, act like it. Airlines, like any other businesses, should be number one by doing it right. Not by continuously asking for help when things get bad. If business can’t compete, then they won’t. Survival in the business world is evolution of a sorts, if you will not or cannot adapt, you won’t survive and by the laws of nature, you shouldn’t survive.
John Stith is a staff writer for Murdok covering technology and business.
