View Full Version : Interesting article from the US

21st Jun 2007, 22:36
I realise its only a media report, however this one paragraph sums up my thoughts on the way airlines drive each other out of business. The race to the bottom as some would say.

“The fundamental problem with the U.S. airline industry is there are too many competitors,” Cordle said. “They compete away their revenue, and so they can’t properly invest in their companies. That leads to morale problems and the quality of service going down, and so the product is bad because earnings are inadequate."

The whole article is hear if you wish to read more.



21st Jun 2007, 23:14
It seems to me that Governments and business only understand the extremes of business.

You can have one end of the scale with an example being the two airline policy that existed here in Australia and at the other end total de-regulation.I suppose the problem is that in a de-regulated industry if someone sees money being made then they want to jump on the band wagon.

If a manufacturing business decides to cut costs to stay in business it is rarely a saftey issue.

Aviation is a little different to other areas of business in that if an airline is feeling the pinch ( or the upper levels of management want to receive a larger bonus :yuk:) then cost cutting can have dire results.

The trick is how do you semi regulate the industry to prevent every man and his dog wanting to start an airline.

21st Jun 2007, 23:22
I would be interesting to see a carrier/per capita for Australia V US. Then add in the new big feline carrier heading our way.

22nd Jun 2007, 00:29
sounds like GA to me.

Spanner Turner
22nd Jun 2007, 01:47
Another piece, also from the USA, though sounds familiar.

The CEO’s with the five fattest paycheques in 1999 all fired more than a thousand people, or at least 5 per cent of their employees. Since labour is generally the largest fixed cost for any corporation, CEO’s discovered they could achieve a nice little bounce in their stock prices, and consequently their bonuses, by downsizing aggressively. The speculative economy, once a way of raising capital for productive ventures, began cannibalising the productive economy.

In the business press, the phrase “a commitment to productivity” has come to mean a commitment to getting rid of the people who produce things. Then they have the nerve to lay down some :mad: line about how eliminating jobs benefits workers. As General Electric CEO “Neutron Jack” Welch once said, “Strong managers who make tough decisions to cut jobs provide the only job security in today’s world.” It’s not just that people like Welch are willing to slash hundreds of thousands of jobs, export work to countries with nineteenth-century labour laws and destroy years of union advocacy for well-paid work. They also have the nerve to insist that getting rid of good jobs somehow magically creates job security. If Jack Welch was your boss, how secure would you feel, knowing that the grand poobah has nary a qualm about firing tens of thousands of people at a shot? Nevertheless, the business press hails him as a managerial genius, and credit him with GE’s phenomenal market growth.

Quoted from Laura Penny

Relevance to Australian Aviation??
Could we have our very own "Neutron" Geoff running one of Australia's major Airlines??

22nd Jun 2007, 02:57
Spanner Turner...Did you mean 'neutron' or 'neuron'...

I ask this because I have my doubts as to how many neurons there are functioning in old Darth.

The quote though from Jack

"Strong managers who make tough decisions to cut jobs provide the only job security in today’s world.”

This type of quote seems disturbingly reminiscent of someone else in Australian aviation....