skyangelnflight
Member
- Aug 22, 2002
- 83
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Airline execs: Greedy is one, dumb is another
By: BRADLEY J. FIKES - Staff Writer
The stupidest beasts in the business menagerie, are executives of the
major airlines.
Airlines have lost more money than they have made since commercial air
flight began. Aided by the Internet, consumers are in open revolt
against the airlines' incomprehensible and greedy pricing schemes. And
upstart low-cost airlines continue to slice away at their market share.
With their business model discredited, these executives can't think of
anything better to offer than more of the same.
Delta Air Lines provides the latest evidence of this species-extincting
dumbness. After numerous industry scandals in which well-paid executives
got special pay when workers got the ax, Delta still tried to push ahead
with a pension plan that rewarded its top executives, even when they
left Delta.
Only last week, under enormous pressure, did Delta cancel the plan.
It really seems that in their hearts, overpaid executives believe the
key to airline survival is to retain ... overpaid executives.
So now Delta is busy recouping its losses with another bold new idea
---- a low-cost carrier. Oh, wait, that idea has been around for at
least a decade. Anyway, the new low-cost carrier, called Song, began
operations in January. It's supposed to compete with upstarts such as
JetBlue, which is its own low-cost carrier.
Airlines are notorious for starting up such ventures only long enough to
drive competitors out of business ---- somehow, fares don't drop where
the low-cost airlines don't go. That seems questionable from an
antitrust perspective, but airlines seem to be immune to that sort of
thing.
In February, Delta will equip Song's crew with a secret weapon ---- new
costumes from accessory designer company Kate Spade.
Of course, Delta still has a heavy debt load to carry, while JetBlue
doesn't. Delta could wage a price war all the way into bankruptcy.
Delta and American Airlines also offered another old trick: a "free"
ticket for anyone who buys one of those super-expensive first-class or
business seats. When you do the math, it's no bargain at all. But
apparently based on the theory that rich people are stupid, they are
going ahead.
Perhaps it will take a few bankruptcies, not just some close calls, to
get things right at the major airlines. The high-priced executives with
their self-deception can't bring back the old business model of ignorant
travelers.
We have the Internet, so we know what competition is out there. We know
how to get the best prices, and how the airlines' yield management
strategy aims to get the last cent.
Even though antitrust laws apparently don't apply to the airlines, the
Deltas, Americans and Uniteds are no longer strong enough to enforce an
oligopoly system they can't afford.
h34r:
By: BRADLEY J. FIKES - Staff Writer
The stupidest beasts in the business menagerie, are executives of the
major airlines.
Airlines have lost more money than they have made since commercial air
flight began. Aided by the Internet, consumers are in open revolt
against the airlines' incomprehensible and greedy pricing schemes. And
upstart low-cost airlines continue to slice away at their market share.
With their business model discredited, these executives can't think of
anything better to offer than more of the same.
Delta Air Lines provides the latest evidence of this species-extincting
dumbness. After numerous industry scandals in which well-paid executives
got special pay when workers got the ax, Delta still tried to push ahead
with a pension plan that rewarded its top executives, even when they
left Delta.
Only last week, under enormous pressure, did Delta cancel the plan.
It really seems that in their hearts, overpaid executives believe the
key to airline survival is to retain ... overpaid executives.
So now Delta is busy recouping its losses with another bold new idea
---- a low-cost carrier. Oh, wait, that idea has been around for at
least a decade. Anyway, the new low-cost carrier, called Song, began
operations in January. It's supposed to compete with upstarts such as
JetBlue, which is its own low-cost carrier.
Airlines are notorious for starting up such ventures only long enough to
drive competitors out of business ---- somehow, fares don't drop where
the low-cost airlines don't go. That seems questionable from an
antitrust perspective, but airlines seem to be immune to that sort of
thing.
In February, Delta will equip Song's crew with a secret weapon ---- new
costumes from accessory designer company Kate Spade.
Of course, Delta still has a heavy debt load to carry, while JetBlue
doesn't. Delta could wage a price war all the way into bankruptcy.
Delta and American Airlines also offered another old trick: a "free"
ticket for anyone who buys one of those super-expensive first-class or
business seats. When you do the math, it's no bargain at all. But
apparently based on the theory that rich people are stupid, they are
going ahead.
Perhaps it will take a few bankruptcies, not just some close calls, to
get things right at the major airlines. The high-priced executives with
their self-deception can't bring back the old business model of ignorant
travelers.
We have the Internet, so we know what competition is out there. We know
how to get the best prices, and how the airlines' yield management
strategy aims to get the last cent.
Even though antitrust laws apparently don't apply to the airlines, the
Deltas, Americans and Uniteds are no longer strong enough to enforce an
oligopoly system they can't afford.
h34r:
