An Open Letter to All Airlines

Dear CEOs of AirTran (NYSE: AAI  ) , Alaska Airlines, AMR (NYSE: AMR  ) , Continental Airlines (NYSE: CAL  ) , Delta Airlines, Hawaiian Airlines, JetBlue (Nasdaq: JBLU  ) , Midwest Airlines, Northwest Airlines, Southwest Airlines (NYSE: LUV  ) , UAL (Nasdaq: UAUA  ) , and US Airways (NYSE: LCC  ) ,

Thank you for your July 10 letter detailing the threat of rising oil prices to your businesses and our economy and for encouraging us to help you "Stop Oil Speculation Now." We have a few follow-up comments, questions, and suggestions.

First, we feel your pain. You have, historically, been a group of such well-run businesses that it's difficult to watch some of you pile up losses and flirt with bankruptcy. This is unprecedented in our economic history and the situation clearly requires urgent action.

Or not. Didn't Eastern Airlines collapse when oil was $12 per barrel? Come to think of it, U.S.-based airlines have eviscerated shareholder capital for decades. The Oracle of Omaha invested in U.S. Air one time, and has described the fact that he managed to make money as being indistinguishable from blind stinking luck (we're paraphrasing here). We even have a colleague who wrote recently that he wouldn't recommend airline stocks to his worst enemy.

So perhaps you shouldn't be blaming oil traders for your difficulties, but rather should focus on developing a robust, highly efficient industry based on the ideal of competition which ensures timely and enjoyable coast-to-coast (and even international) travel. That means, first and foremost, good service -- even for economy class passengers. After all, people will always need to travel. You might find out that airline passengers are more willing to pay up to fly (see the growth of a company like NetJets) when they know it won't be a dreadful experience.

But please let us know if your strategy works. We're pretty fed up with how the stock market has been declining recently. Perhaps we can convince Congress that the downturn threatens American savings and has been driven by "speculators" who are selling stocks without regard to their fundamental prospects and that we need regulations that will "Stop Stock Selling Now."

Yeah, that sounds like a foolproof solution.

Sincerely,

Us


Read/Post Comments (25) | Recommend This Article (62)

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  • Report this Comment On July 10, 2008, at 5:26 PM, chndaytrader wrote:

    I do somewhat++ agree what these folks saids. I think all US based airline offers too much FREE stuff to their customer like those Casino does, free room, free food, free limo, even free escorts service to those VIPS.

    I think US airlines should stop those Business class lounge, free alcohols, free upgrades, major damage is FREE tickets. Look at those Chinese airlines operate at China, their stock still high, company are healthy. I think they save tons of money by not offering all those free service.

    Also, stop those heavy books, newspaper, earphones on flight, who reads it? everyone carry latops, psp, mp3 or using Entertainment screen provided by airlines.

    When it comes to flying, all I care is safe, good food and on time.

    Hoping some of the airlines CEO see this message. Good luck to all.

    I do hold CAL stocks.

  • Report this Comment On July 10, 2008, at 5:28 PM, lgreenste wrote:

    OK. I agree that air travel is the last thing I want to do now that it makes taking a bus look like a fun experience. And of course you are right that most of the airlines have done a lousy job running their business. But you need to read the 2006 congressional staff report on energy specualtion. I see no reason why one comodity should get an exemption from the regulations while all of the other do not. We need to fix something that was broken by the miserable fraud and failure known as Enron. You can search on psi.gasandoilspec or go to www.senate.gov/~levin/newsroom/supporting/2006/PSI.gasandoil...

  • Report this Comment On July 10, 2008, at 7:21 PM, psa188 wrote:

    I agree with this letter. These airlines [with the exception of Southwest] are piss-poorly run [although the CEOs manage to collect their bonuses] and I have no sympathy for any of them. Maybe if they's charge honest fares without nickel and diming everyone I'd care.

  • Report this Comment On July 10, 2008, at 9:01 PM, SpeculatorHater wrote:

    Wow. I have been waiting for the punchline for hours now. I was hoping that this was all a joke. I am guessing that the authors have cars that run on the BS that is being shoveled on this site from time to time. Its great that you folks don't have a worry about the prices you pay at the pump, at the grocery store or for anything that requires any transportation for that matter. I guess you missed the part about the trucking associations being a party to this effort too?

    You fools seem very credible. Let's stick together and do nothing about the price of gas just like the fools in DC!

  • Report this Comment On July 10, 2008, at 9:37 PM, luscious25 wrote:

    the problems with airlines is they dont run a tight ship. these bonus getting ceos did not do their jobs growth should be the overall theme to any company and hard times that come every couple years should not cripple the company planning ahead for things such as oil spikes should have been planned for well in advance. i for one am glad the cost of oil is going up. its not a renewable resource nor is it abundant yet we act like it is. now maybe will wakeup and appreciate the true value of oil.

  • Report this Comment On July 10, 2008, at 11:59 PM, Texasguy757 wrote:

    Dear "Us",

    I've been around the airline industry for forty years now--first as a dependent, and now as a pilot for a major airline. When my dad went to work for the airlines in 1968, air travel was something to be experienced. People on both sides of the ticket counter treated people with civility and respect. The men wore ties and the ladies (and they WERE ladies then) wore dresses when they traveled. People were polite. The customers treated the agents, stewardesses, and pilots with respect. In return, the customers were treated with the respect they deserved. Meals were served on china, even in coach. The area above the seats were called "hat racks" and were used for storing hats and jackets during the flight. The executives who ran the airlines were men (and they were men--not that ladies couldn't have run the airlines just as well--or perhaps better) like CR Smith and Bob Six, Men who loved the industry and its people, both the employees and passengers.

    Along came deregulation, which was supposed to level the playing field and provide competiton, driving ticket prices down. Now, airline travel has become a commodity. The reason you don't see as many Greyhound busses on the road now is that their customers are all in the air. Our passengers, with their hundred-dollar tickets, get onboard in their shorts, flipflops, and t-shirts with vulgar slogans, and expect to be treated like royalty. They demand for the flight attendant to put their over-stuffed luggage into the overhead bin, and then ream out the poor flight attendant when it doesn't fit and they have to gate check it. When there is a glitch in the system, many passengers will do their best to alienate the gate agent, the one person who can help them get to their destination.

    In fairness, I've seen a lot of surly, overworked gate agents and flight attendants who are tired of being treated like dirt. They're tired of, trying in vain to get passengers to their destinations on time using an air traffic control system that was built to handle about half the traffic that it does now. Unfortunately, these employees--who admittedly should probably find other employment if they're so unhappy--take out their frustrations on innocent passengers.

    Here's the solution you proposed:

    >> focus on developing a robust, highly efficient industry based on the ideal of competition which ensures timely and enjoyable coast-to-coast (and even international) travel. That means, first and foremost, good service -- even for economy class passengers. After all, people will always need to travel. You might find out that airline passengers are more willing to pay up to fly (see the growth of a company like NetJets) when they know it won't be a dreadful experience. <<

    I absolutely agree with you--with the exception of NetJets. There you're comparing apples and oranges. NetJets is a "fractional ownership" operation where people buy--to the tune of many tens or hundreds of thousands of dollars--a "share" of a corporate jet, something well out of the reach of the average passenger.

    My answer to fix the system:

    1) Raise the fares to the point where the airlines CAN turn a profit at $145/barrel oil--this will eliminate most of the folks who stumble from the bar to the gate wearing t-shirts emblazoned with such witticisms as "F*** Authority"...

    To do that, we'll need to lose quite a few airlines--bring us down to perhaps two or three domestic carriers and one or two "long-haul" international carriers.

    2) Bring the air traffic control system from the mid-20th century to the 21st century. To do this, we'll have to increase appropriations for the system, which means Congress will have to worry about something more than baseball players' use of steroids and actually accomplish something useful. We'll also have to streamline the bureaucracy of the FAA so that someone can make a decision, bid on a product, and get it installed sometime before Chelsea Clinton's yet-to-be born child is in the race for the White House...

    3) Get people into airline management who are there because they love the airline business, not the short-term aspects of siphoning money and inflating stock price at the expense of the long-term viability of the company.

    4) Start--as a culture--treating people with the respect they deserve, and I mean that for both the passengers AND the employees...

  • Report this Comment On July 11, 2008, at 1:14 AM, SidelineObserver wrote:

    Dear "Us",

    Hey, why is Goldman Sachs the largest trader of oil futures on the NYMEX if the "evil speculator" isn't driving prices up?

    Any logic to that? Aren't crude futures so that energy intensive industries like airlines, railroads,utilities can know what crude will cost them in the near future,not so an investment bank can belly up to the trough and become the largest trader of crude futures.

    Don't you find it just a little bit unusual that GS comes out and says "$150.00 a barrel oil soon" and Whoosh! Crude takes right off.Throw in Morgan Stanley parroting the same thing a day later and look at that, we're at $142 a barrel in a matter of a two weeks.But you're right, there is no evidence at all of speculation taking place in the market.

    I keep hearing "Supply not meeting demand" yet I've never been turned away from a gas station, nor waited in the long lines I did as a kid in the 70's.

    Even after Katrina I didn't have to wait in a line for gasoline.

    Now, as for the rest of your letter "Us",

    The problem with what you've outlined there would cost money that the airlines don't have, and that the government isn't interested in spending.

    You are of course aware that the FAA is still using radar systems that rely on *Vacuum Tubes* aren't you? Never mind that same system isn't capable of handling the sheer volume of traffic in the system these days.Think of it in terms of ever interstate highway in the country being reduced to a two lane country road.Think traffic would be a tad tied up?

    For the record, Eastern crumbled under a strike and Frank Lorenzo siphoning everything of value away from Eastern and into Continental.

    You want the airlines to provide "Good Service" yet you expect to pay next to nothing for it.

    Airlines fed passengers and comedians made careers off of the "Airline Food" jokes.

    Airlines provided scores of top name magazines (Remember the inflight libraries?) And people walked off with them en masse.

    Getting onto an aluminum tube, flying at 600+ mph at 35,000 feet and landing across the state, country, ocean or WORLD costs money.

    The cheapo Expedia fares aren't paying the freight,the airlines are the only business that gives away the product for less than it costs to produce.

    I'm surprised that the "Investors" here haven't commented on the folly of that,but it's easier to just take shots at the airline industry I guess.

    Another thing "Us",

    The years since 9/11 have been brutal for the airline employee, they've seen pensions vanish like fog in the morning sunlight, wages slashed back to 1992 rates,benefits slashed to the point it's almost like not having health care, it is so expensive.Never mind the tens of thousands of jobs the industry has shed.While the top of the food chain members of management get "Retention Bonuses" "Bankruptcy Proof Pension Plans" and "Accelerated Retirement Credit",so the CEO who shows up for five years gets the retirement and benefits of a twenty year employee.

    Maybe "Us", you'll get it when a hub city or two loses it's main tenant and you've suddenly gone from being able to hop on a plane to anywhere in the world to hopping on a plane to a handful of cities.(If you're lucky of course,look at Pittsburgh.)

    Congratulations "Us"! You're getting the airline industry you're willing to pay for.

  • Report this Comment On July 11, 2008, at 8:51 AM, definer wrote:

    I am a work traveler who flies anywhere from 15 to 20 times a year and another 4-6 times a year for pleasure. I fly Airtran because I like the service, it's affordable for both me and my clients, and the employees are the best I have experienced.

    I flew with them on 7/8 and spoke to a flight attendant about their situation and will relate what he said:

    First, they are looking for early retirements to help cut their costs - 180 pilots and 300 flight attendants. No furloughs unless there are not enough takers of the early outs. They also hope that normal attrition will help with the reductions.

    Second, there is an across-the-board pay cut with the Company executives (director and above I believe) taking a 15% pay cut and others taking a lesser percentage based upon their pay rate.

    Third, the pay cut is only planned to last 6 months.

    Airtran is one of the few airlines that has shown increased loads and passenger revenue miles. In full disclosure I own and am buying Airtran shares and have own the stock in the past. I believe they will rebound once the appropriate actions are taken to stop the middlemen from making ridiculous amounts of money for never taking ANYTHING in hand but just running up the price.

    If these speculators were to take delivery of their purchases it would be a different situation but this speculation is nothing more than the transfer of electrons. The end commodity and the underlying cost of production are not changed. But the consumer price is hugely increased with the money going directly to their pockets for NO value added.

  • Report this Comment On July 11, 2008, at 8:55 AM, usmcboomman wrote:

    I do agree with the article, but I'm also a person that believes that we eventually decide our outcome. Maybe these high level executives can take a pay cut in order to open up some payroll, or are the $2500 toilet seats that hard to give up. I mean, there are many ways to save the industry and thats just an idea. Or maybe they would listen to Dave Ramsey and apply his lessons on a daily as well as in their business life.

  • Report this Comment On July 11, 2008, at 9:06 AM, alemunevar wrote:

    Everybody knows greedy CEO’s are in for the money and not to truly run the airlines for long term viability. However, the airline industry operates in an environment polluted with problems of which you seem to have total ignorance. It is easy to criticize; any fool can do it.

  • Report this Comment On July 11, 2008, at 9:07 AM, BifCondor wrote:

    The opinions expressed in your article showed an incredible lack of understanding business and airline economics. (Oil at 12$ a barrel had nothing to do with Eastern's demise - do your homework) The airline industry is teetering on bankruptcy primarily due to oil speculation. In the past, labor costs were their highest business expense. Fuel expenses now far exceed the price of labor (a controllable cost). The industry as a whole has slashed employee wages by nearly 50% with huge insurance and benefit cuts as well. It can't cut labor costs any deeper. Add to oil speculation (which is essentially gambling without using "real" money), the incredible taxes imposed on airlines after 9/11, FAA grounding of entire fleets, and airlines operating in bankruptcy for indefinite periods (US Air should have been disolved years ago), and it's clear that management is responsible - but not always to blame.

    I will agree with you about service not always being what it should. One reason the service is so bad is the flight attendants are old and tired. It is nearly impossible to get rid of cranky, fat FAs. Some airline have FAs over 75 years old. Are they there for your safety? In the event of a ground evacuation, you'll be throwing there huge butts down the slides. FAs need to have a mandatory retirement age, and be able to pass basic physical requirements - just like pilots. FAs used to have a mandatory retirement age of 35yo. I'm not advocating that, but if they are truly there for your safety (and not to serve coke and peanuts for 45K a year) then they should have to prove their abilities annually with a evaluation. More later...

  • Report this Comment On July 11, 2008, at 9:07 AM, Texasguy757 wrote:

    With oil at $146/barrel and ticket prices where they are, I think all of us in the airline industry, from the CEO's on down, could work for free (in fact, the top two guys at my airline have foregone all salary for the rest of the year), and the companies would still lose money. The only reason Southwest is doing relatively well are their fuel hedges.

  • Report this Comment On July 11, 2008, at 11:23 AM, opiner wrote:

    Texasguy757, a second generation airline employee, wrote a detailed commentary which, in part, exemplifies a serious problem with the industry: contempt for its customers. His prose is laced with derisive comments as to the attire of passengers and it is very apparent that he is both dismayed and resentful as to the manner in which passengers dress, somehow equating, what he subjectively considers to be poor dress, to objectively rude behavior by airline staff. Obviously, "the customer is always right" platitude is an exaggeration; however, the passenger is the customer who is paying for a service and therefore is entitled to polite service regardless of whether in a business suit of t-shirt. Texasguy757 seems to feel that passengers in sloppy clothing not only deserve rude service and a lack respect, but are the cause of such odious behavior by airline staff. Given such poor, angry and resentful reasoning by an airline employee, it's little wonder as to why one often encounters rude airline employees. And, my friends, rude airline employees, along with rude airport staff in general, from porters to security personnel, are why many people resent the airlines and refuse to fly when the flight is discretionary.

  • Report this Comment On July 11, 2008, at 11:35 AM, erdriggers wrote:

    For almost 30 years our the airline industry has been “de-regulated” and during that time has been consistently dysfunctional. Is that because only the greedy and inept manage and work for the airlines while other industrys attract those with a strong work ethic and bright minds? Safely operating a 50-100 million dollar aircraft at 600 mph in adverse weather with hundreds of lives at stake with inadaqate support from an underfunded air traffic control system is for the slackers that can’t get a real job with a good company like Starbucks.

    Most forms of public transportation in the world are government regulated and subsidized including rail and many airlines. In 1979 we chose to deregulate our airlines but we have not been able to fully accept the consequences of that decision. Most of us seem to think that our airlines operate in a deregulated free market, however, the airline industry faces an almost extreme level of government interference. Operationally the airline industry is far more regulated now than it was before “deregulation”. "Deregulation" has evolved into “mis-regulation”. Do lawmakers view airline mergers, bankruptcies, safety, security, and employe training the same as in other industries? Ticket prices are affected through high taxes and excessive competition created by overreaching bankruptcy protection. We like to regulate the airlines in the name of safety, security, and service, but we want deregulated, free market prices. It seem that with air travel we want to have our cake and eat it too. Lawmakers are already complaining that mergers will raise prices and reduce service to small communities. If an airline can’t make money flying an airplane to your city, sorry, take a bus. Airlines are deregulated now so they serve their shareholders not the public.

    Government controlled industries are regulated to serve the public. Industries exposed to free market capitalism serve their shareholders. We need to stop expecting the airlines to do both. The airline industry needs to be sensibly regulated, or, deregulated to allow airlines to operate in a free market.

  • Report this Comment On July 11, 2008, at 2:33 PM, 737flyboy wrote:

    opiner, you are attacking a person that actually knows what he is talking about...unlike you. I too, fly for a major airline and can completely relate Texasguy757. I can tell that you are probably in college and have absolutely no idea about the airline industry by the wording (that nobody ever uses...ever) in your reply. You also completely missed (or avoided) his point by choosing to fix yourself on his view of some passengers, which is a legitimate point of view. It appears to me that some people are under the impression that, when there is a delay, the airline is intentionally trying to screw them over. Going into the bathroom and giving each other a high five saying "Good job guys! We really screwed over those passengers!"

    There is a great saying about flight attendants: They are there to save your ass, not kiss it.

    Texasguy757: I completely agree with you on all of your points as I see it everyday on a first hand basis

    opimer: you will make a great politician someday after you graduate college with your law degree

  • Report this Comment On July 12, 2008, at 10:40 AM, alemunevar wrote:

    Opiner, you are as clueless as the fools that started this thread. No one is saying that a person who is not dressed up is automatically mistreated by airline personnel. Back when people treated traveling with respect and dressed up for a trip, the atmosphere was kinder for everyone involved. Those people were nice to airline employees, they were well behaved and they got the service they expected in return.

    Now you get the crowd dressed like slobs that have nothing but rights and absolutely no responsibilities. They put their feet up on the bulkheads; they allow their kids to write with crayons on the aircraft walls and argue with the flight attendants when they are ask not to do that; they board the airplane intoxicated and harass the crew all trip long; their behavior is sometimes borderline criminal and at times it crosses the line; they are rude to airline employees at the slightest sign of a rule or inconvenience, and when they deplane the aircraft looks like a movie theater after matinee.

    Put yourself in the shoes of a ticket agent, gate agent, flight attendant, or pilot and see how many hours, days, weeks, months or years you could put up with such a crowd. Yes, many flight attendants have endured too much for too many years. It is time for them to retire if they could afford it. Not only their patience have been exhausted, but their frustration grows as they were part of the days when traveling was just as good an experience for them as it was for their passengers.

  • Report this Comment On July 12, 2008, at 10:56 AM, investforvalue wrote:

    Hey, it's informative to see that the "contempt" for the passengers described by Opiner is so prevelant in the airline industry. Keep on posting. No wonder you're all so universally rude to customers. You too must actually lament the good 'ole days when passengers, as Texasguy757 said, "wore dresses." Yeah, those attitudes and suggestions will really help fix the airlines' problems. Oh yes, just put women passengers in dresses, men in ties and that'll cure the nasty attitude by employees. Obviously, airline employees are all very angry and, worse yet, taking out that anger out on the passengers. That's a sad state of affairs for everyone.

  • Report this Comment On July 12, 2008, at 12:44 PM, 737flyguy wrote:

    Definer had some nice words about Airtran. As an employee of Airtran I appreciate that. We do try to provide good service at a lower price. However, the statement that company officers are taking a 15% pay cut is misleading. 15% is true, but it is 15% of their salary which is one of the smallest parts of their compensation. By looking at public information (10-K filings, etc.) the CEO was paid about $5 million last year, which I don't bemoan at all. He has done an awesome job. His salary was under $500,000. His cut in pay would be about $65,000, as opposed to $750,000 if applied to his total compensation. I guess he will have to forgoe the new Mercedes this year, but thank God he will be able to buy that house on the beach.

  • Report this Comment On July 12, 2008, at 1:31 PM, 737flyguy wrote:

    sidelineobserver had a great post. Oil is killing us, and thousands of aviation professionals are losing their jobs because of it. I invested $100,000 in college and flight school to be an airline pilot. That was 17 years ago, it's alot more expensive today. My first job with a commuter airline paid $15,000 the first year, and I had to pay them $9,000 for the training. I invested that because I knew I would eventually become a wealthy airline pilot like my father was. Trouble is that my career expectations are half of what my father's were. Not a very good return on investment. Those thinking of becoming an airline pilot need to seriously think about that. As to service, flight attendants and gate agents are not the source of the problem. It's the general attitude of the American public that wants Walmart prices with Neman Marcus service. The Fools lauded Net Jets as a solution, but a previous poster already unmasked that as unrealistic to the average Joe. You get what you pay for, unfortuneately at these oil prices we cannot give you much service with these ticket prices.

    Flight attendants work up to 16 hours a day, with no food provided. Most of the time they are not allowed off the airplane all day except to run from one plane to the next. Therefore they bring their own food that they paid for and try to eat it during a slow moment while passengers grumble about the service. So be kind to them, I don't know why they continue to do it. They do hire some great flight attendants, but unless you have a lot of senority the life of a flight attendant is not very good. So most of the good ones quit within a year, fed up with being on reserve, having no life and low pay. They think it will be fun to travel. Try being away from home 20 days a month, staying in substandard hotels with crummy food you can't afford for around $25,000 per year. It gets a lot better with senority, but that takes a long time and now everyone is going backwards. It's understandable why many of them have fake smiles plastered on their faces. Many of them absolutely love their jobs and it shows everyday. They put up with a lot of s**t and always handle it professionally.

    A previous poster nailed it. The industry is not on a level playing field with the market. We are highly regulated (needed for safety) but are slaves to the shareholders. Every page of every manual in the company has to be approved by the FAA. We cannot be slaves to the public and slaves to the shareholders. We can have only one master. If you want the flying experience of yesteryear you will have to pay for it. That will mean a much smaller industry and hundreds of thousands of layoffs and flying out of reach for the masses. We are a highly mobile society and airlines have become our form of mass transit. Oil speculation has to be tightly controlled if we are to have flying as mass transit. Wages and benefits cannot be cut any further. If they are it won't be worth doing this job anymore. The only reason Southwest pays its employees better than anyone else right now is because of their fuel hedges. When those run out Southwest will become like everyone else. So either oil has to come down, the industry becomes heavily subsidized or radically shrinks. Don't come to the employees though, it's not our job to subsidize your flying.

  • Report this Comment On July 12, 2008, at 2:30 PM, TMFMmbop wrote:

    Thanks to everyone for the comments here. They are exceptional and very interesting to read. I just want to clarify one point that's come up a few times re: NetJets. We know the businiess model is very different. But, that's sort of the point. Something has happened in the airline industry that has pushed a certain segment of air travel passengers to NetJets, and NetJets is using a new business model to displace legacy airlines. I was just trying to make the point that legacuy airlines all sort of think in the same box and that that has hurt their prospects. For example, Southwest started doing well when it came in and focused on price. Every airline didn't have to do that, but they all followed suit. Perhaps one of them could have moved upmarket, another focused on solely a few long haul flights, etc. NetJets (and some of the air taxi services that have been written up in Forbes) proves that there's room in this industry for innovation; but the big companies aren't doing the innovating.

    Thanks again for the thoughftul comments.

    Tim

  • Report this Comment On July 15, 2008, at 1:45 AM, Strangelove1 wrote:

    The fact of the matter is that the attack on the speculators requires "the willing suspension of disbelief". It's a flagrant insult to our intelligence perpetrated by those in Congress who've blocked every opportunity for our country to regain our energy independence. To believe that speculators are to blame for high oil prices, one would similarly have to believe that Big Brown won the Derby merely because a lot of people bet on him. It's patently absurd and a distraction of attention from those who are really at fault.

    As far as air travel goes, I used to work for Continental in reservations. It is the people who pay the least that were the rudest and complained the most. Not only was that established on the phones, but also through observations at the gate area and on the planes. And despite popular belief, the persons paying $200 for a ticket is not paying for the plane to fly. The persons who paid $2,000 for a ticket are as well as the cargo and mail service. That's why the airlines can offer $200 tickets so that more people can fly.

    BTW, if you'd bother to read all of what Texasguy wrote, you'd be aware that he wasn't blaming the passengers solely. They are part of the equation though. Also, no, the customer is NOT always right. That's another misconception in business. A lot of people like to think so and try to milk it for all it's worth. If you run a business like that, you're not likely to last long.

  • Report this Comment On July 15, 2008, at 3:50 PM, pondee619 wrote:

    "That means, first and foremost, good service "

    When was the last time anyone picked a flight based on service? Is it going where I want to go for the least amount of money is all anyone asks about a flight. Perhaps the timeing of the flight, to fit their schedules, direct or mail run.

    Service has nothing to do with picking a flight. At least for those of us for whom money IS as object.

  • Report this Comment On July 15, 2008, at 7:21 PM, woodyinla wrote:

    There are hard feelings regarding the airlines on both sides of the counter. I am 50 years old and have been flying since I was two. Until recently I was a bona fide frequent flyer logging major miles flying around the country primarily for work.

    However, the higher prices of tickets, combined with the new nickel dime policies of the airlines have slowed me way down. I sat on more runways and airport floors than I can count waiting for late planes or for late take offs. I remember the days when an airline would try to get you on the next flight out even if it meant putting you on another airline. Those days are long gone. Even if oil prices dropped by half, the airlines are not going to lift all of these extra fees and lowered services so let's be realistic. I have cancelled five trips this summer, three for business, two for pleasure due to the hassles of air travel. I used to really enjoy flying back in the days of china plates, coach sections that weren't cattle cars and some effort to be on time. I still find most of the people who work for airlines as friendly as they can be under difficult circumstances. But...air travel is now something to be avoided. Too expensive with too much hassle. I remember air travel in the days before "deregulation" although my parents paid for the trips then. So much better, maybe more regulation should come back.

  • Report this Comment On July 16, 2008, at 3:40 PM, sobodobo75 wrote:

    Tim,

    Not to play gotcha on the whole NetJets example, but since you've already cast that stone... is NetJets profitable? It's certainly an alternative to the fly everywhere, hub and spoke model of major airlines, but this article and others seem to indicate that the business itself is far from proven:

    http://www.nytimes.com/2006/06/25/business/yourmoney/25jets....

    Add that in with the high-falutin crapouts of Eos and a couple other high-end, alternative airline business models and I don't think it's quite as easy to say: "Hey you idiot legacy airlines, why the hell aren't you more innovative? Can't you see that you just need to put a new twist on your dying model and then all of your labor and oil-price related issues would fall away? Look at all of these younger, smaller companies that have successfully carved out new niches and are turning the entire industry on its head."

    It has not exactly played out that way and I am tremendously skeptical of the argument that there are millions of upmarket jetsetters that are willing to pay up for a higher quality flying experience.

    So, is there an alternative airline business model that's out there right now that is killer profitable? I don't know of one.

    I am far from being an airline sympathizer, but if there isn't a successful model out there, then I don't think it's necessarily fair to say "why can't you do what noone has ever done successfully before?"

    Fool on.

  • Report this Comment On July 16, 2008, at 4:13 PM, lerej wrote:

    WOW are you all so angry!

    I think the airlines' inabilities to manage themselves efficiently has made itself more than obvious over the past 20 years. Is there really an argument?

    They seem to go from bankrupcy to bail out and back.

    Let's get mad at boeing for not developing solar / wind powered airplanes while we're at it.

    Isn't it really their fault?

    Actually blame George Bush, I mean after he's the source of every problem to ever exsist, ever.

    Also to everyone, you are not entitled to anything by being born. There is not a book of life that states you deserve to be treated as a king. We're all just bricks in the wall. Get over yourself. If you want treated like a king, become a king, in the meantime, sit there, shove your ipod plugs in your ears and thank god you live in a time where horse and buggy over mud isn't your primary means of transportation.

    If you're mad about money, vote for politicians that don't raise taxes.

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