Two commenters in the media caught my attention.  First, Gordon Bethune, the former CEO of Continental Airlines who said:

“This is the inevitability of an irrational workforce.”

Certainly true but it struck me that Bethune chose not to comment on the lack of leadership at American Airlines when it came to finding an agreement with the workforce.  I cannot say that I have seen good leadership.  Perhaps American Airlines has proposed good and decent contracts but they, and particularly Gerard Arpey, seemed to treat those negotiations more like arranging financing for an aircraft than providing a mutually beneficial agreement for their employees.

Leadership is something that Bethune understands and perhaps he even did comment on it but it sure never made the press.  And I think it would have.

Second, Robert Crandall didn’t miss his chance to offer his strong view that some sort of re-regulation of the airline industry was necessary.  I’ve always been in violent disagreement with this.  I think that the real problem is that we chose to deregulate the market side of the airline industry without doing so on the labor side.   Airlines got the markets deregulated but never were allowed to rid themselves of the legacy union contracts under the Railway Labor Act. 

Instead, airlines have had to fight far more than they should have to just manage a holding action against labor costs.  Bankruptcy became the only way for an airline to “deregulate” itself from those costs.  It is notable that every airline that has gone through bankruptcy reorganization has managed to not only right itself but actually earn fairly substantial profits in what has been arguably one of the worst decades ever for the industry.

The markets handled services well enough.  Those cities who justify it, generally get it.  (Yes, there is the exception of Essential Air Service subsidies but that really is paltry in the grand scheme of the industry.)  Mere small size doesn’t mean that service goes away.  The fact that Waco TX is just 100 miles from DFW airport but still has 6 daily flights to two different major airline hubs is evidence enough that if there is demand, the city will be served. 

Finally, a thought on choosing Tom Horton to be CEO and Chairman in Gerard Arpey’s place.  He is free to prove me wrong.  That said, I think American Airlines badly needs new leadership and leadership from someone outside the company.  Choosing Mr. Horton feels like inbreeding to me.

Filed under: Airline News by ajax