Thursday, January 01, 2009
Doom is a Good Choice
A good word choice for this article in USA Today
New bankruptcies could doom some airlines
”In previous downturns, carriers often used Chapter 11 as a reset button that let them emerge from bankruptcy even stronger by shedding debt and other obligations, such as pensions." Now, however, BusinessWeek says "many airlines have hocked most of their assets, leaving them little to borrow against.“
If they were “even stronger” I wonder why they’re facing “doom” now ? Could it be that the folks running the airline industry aren’t any smarter than the guys running Wall Street ? And those that have been setting public policy all these years aren't either ? That would be my bet.
Lets face it folks -- we’ve watched as some of the giants of American business fell: PanAm, TWA and Eastern. Do you remember a time when owning airline stocks was a good thing ? When the job of an airline captain was a desirable job with great pay ? I do.
To quote Robert Crandall (allegedly), ”You %$#&ing academic eggheads ! You’re going to wreck this industry !”
It just took them 30 years to spend all the money, steal the pensions and sell the planes. Along those lines, a retired airline pilot put a thought in my head that just won’t go away. What’s the angle with frequent flier miles ? I read Hard Landing -- I know how they started. But what have they turned into ? How many millions (billions ?) of dollars worth of frequent flier miles are there out there ? Have the airlines sold off their past (reputations), their present (employees) and their future (frequent flier miles) too ?
When are we going to face it ? Their business model does not work. Our public policy regarding airlines does not work. If we let them, they’ll sell the industry to foreign competition and you’ll be flying to see Grandma on Singapore Airlines -- just like you drive a Honda now. And before you give the Pavlovian response of “So what ?”, you need to think long and hard about the implications and consequences. One of which is, “What’cha gonna do when they come for you ?”
January 1, 2009