Excellent Wall Street Journal article
In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.
Long Flight
How Airlines Resisted Change
For 25 Years, and Finally Lost
After Deregulation, Carriers
Failed to Cut Labor Costs;
Internet Helps Upstarts
US Airways' Turbulent Ride
By SUSAN CAREY and SCOTT MCCARTNEY
Staff Reporters of THE WALL STREET JOURNAL
October 5, 2004; Page A1
When Congress deregulated the U.S. airline industry in 1978, many fares came down, flights increased and air travel took off.
But one side of the business changed much less: airline costs. To keep their grip on the market for more than two decades without rewriting expensive labor contracts or improving efficiency, big airlines used a bag of tricks: frequent-flier plans, the "hub" system of controlling key markets and international alliances to keep business customers. The airlines often gouged business travelers, their best customers, and bedeviled vacation travelers with restrictions and fees.
Now the airlines have run out of tricks. As upstart carriers spread across the nation with across-the-board cheap fares, the traditional higher-cost carriers are struggling to transform themselves into versions of the low-cost model. The most desperate to change is US Airways Group Inc., which entered bankruptcy last month for the second time. No other airline has tried as many gambits to avoid the day of reckoning as US Airways, and no other airline is in as much danger.
In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.
PORTION DELETED BY MODERATOR.....PROVIDE A LINK PLEASE...
In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.
Long Flight
How Airlines Resisted Change
For 25 Years, and Finally Lost
After Deregulation, Carriers
Failed to Cut Labor Costs;
Internet Helps Upstarts
US Airways' Turbulent Ride
By SUSAN CAREY and SCOTT MCCARTNEY
Staff Reporters of THE WALL STREET JOURNAL
October 5, 2004; Page A1
When Congress deregulated the U.S. airline industry in 1978, many fares came down, flights increased and air travel took off.
But one side of the business changed much less: airline costs. To keep their grip on the market for more than two decades without rewriting expensive labor contracts or improving efficiency, big airlines used a bag of tricks: frequent-flier plans, the "hub" system of controlling key markets and international alliances to keep business customers. The airlines often gouged business travelers, their best customers, and bedeviled vacation travelers with restrictions and fees.
Now the airlines have run out of tricks. As upstart carriers spread across the nation with across-the-board cheap fares, the traditional higher-cost carriers are struggling to transform themselves into versions of the low-cost model. The most desperate to change is US Airways Group Inc., which entered bankruptcy last month for the second time. No other airline has tried as many gambits to avoid the day of reckoning as US Airways, and no other airline is in as much danger.
In an era where business moves at warp speed, it turns out airlines are an anomaly. The rise of efficient, low-cost airlines and the ever-expanding benefit for consumers are just what deregulators envisioned -- it merely took a quarter-century.
PORTION DELETED BY MODERATOR.....PROVIDE A LINK PLEASE...