The airline business is having their 1980’s dreams come true.

Back in the early and mid-1980’s the airline business was reeling from deregulation, fuel prices and emerging low cost competition. The world as it had been know in this industry was turned upside down by a Government who while hiding behind the benevolent stance of increasing competition and lowering prices for the consumer, was really playing Russian roulette with this country’s transportation system. It was never a mystery to me that many of these “consumer advocates” went on to become low cost airline entrepreneurs. It was kind of like creating your own game where you understood that no established player really would be capable of competing due to many of your previous actions. In my opinion, there should have been a bit of a grace period for airlines who had been pressured into purchasing equipment to help out ailing manufactures by the very same government. Some of these junk planes were the gas guzzlers that made profitability over the next 10 years virtually impossible.
There were other factors, of course, that proved to condemn some airlines from the very outset. Politically palatable CEO’s, like at Eastern Airlines (one of my Alma Mata’s) were not business savvy enough to run a small store, never mind a multinational transportation company. I witnessed, first hand our marketing reaction to our fresh and nimble, new competitors and it was like an elephant chasing a chicken, if we caught it we could kill it, but you weren’t ever going to catch it. Those of us doing the actual chasing were well aware of that fact but our politically savvy friends at the top thought consumer loyalty actually applied to air transportation in the pre-frequent traveler world. (Foolish men) “People love us and our service”, was my favorite quote from our CEO. What he didn’t realize was that they loved saving their own money more. We were clandestine to bleed from every spending orifice until alas, there was no more blood to give. Changing mindsets, labor agreements, chairs at the top were too little, too late and Eastern’s post mortem serves as a lesson in how not to run an airline in the deregulated world.
Many other carriers lived to fight on with the understanding that the world changed and they would need to evolve as well. Several of the issues we struggled with would finally be tackled, things like: frequency on unprofitable routes, travel agents’ commissions, labor cost and fuel efficient aircraft. The world kept turning and with frequent fuel cost spikes airlines have finally gotten the consumers attention by cutting, cutting, cutting service and forcing them into a position of competing with fellow consumers for precious few seats to many popular destinations. In 2013 load factor numbers are spiking to all-time highs, and that is the sweet spot for any carrier, less flights, and the same amount of passengers means higher fares, simple. If you combine this with all of their new fees and lack of new competition on most routes you have the very scenario we dreamed about back in 1985. Oh yeah, cutting travel agents was also a big part of that dream. We just didn’t have any way to deliver tickets directly back then so the invention of the “E” ticket and Internet booking took care of this quite nicely.
So for everyone that supported deregulation you now see what you have created, an industry that finally is controlling their own skies, with no one to rein them in. They can maneuver you to book how they want, when they want, and provide you no more than a high altitude bus ride, for which you will pay much more than you did just a few years ago. Oh yeah, checking that bag, eating that snack, having a drink, that is all going to cost you as well. All this while the employees you count on to clean and maintain your aircraft are paid thousands less per year than in 1985.
Less flights, less service, more travelers, lower costs, no commissions and a free an unencumbered ability to do whatever you like, ah dreams do come true after all…..


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