By Maxine Shapiro, KERA 90.1 Commentator
Dallas, TX – An obvious observation to make about the airline industry would be: they're in trouble. This was a fact before September 11th. And I've been patiently waiting for the day when these large airline carriers would resign to the fact that traveling has changed, and they must change along with it. Well, it's finally happened. I'm Maxine Shapiro with KERA Marketplace Middays.
As reported today on WallStreetJournalOnline, Donald Carty, Chairman and CEO of AMR Corp, parent to America Airlines, gave a very interesting analogy last week. It was to illustrate the current state of the airline industry. He recounted how Vikings, a thousand years ago after arriving in the new land, had burned their ships. This was to signal "to all that they had no choice but to make the new situation work." Now, Mr. Carty went on to say that he's not suggesting this dramatic resignation is necessary. But he did say, "We must accept the fact that, much as we'd like to, going back to 'the way things were before' is not an option." Admitting there's a problem is step one.
It's important to note here that it's only the five largest carriers that are feeling the pinch. As discussed in yesterday's Journal, the passenger traffic last month on these fab five fell ten percent from last year. And on the other side of the hub, the rivals, the big five discount carriers saw an increase in traffic by eleven percent.
Even those spoiled business travelers that used to pay the big bucks for last-minute-I-can-change-my-flight-at-anytime ticket are being told by their companies to join the rest of us and go cheap. Besides the discount carriers like Southwest Airlines, we have internet travel to thank. Why would anyone want to pay $1,000 for a ticket on American when they can go online and get it for less than half that price? So now the large airlines have to start finding ways to cut costs. And American has set up committees to do just that.
Did you know that years ago American saved hundreds of thousands of dollars just by eliminating olives from their salads? Now that's creative number crunching. For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.