Da Vinci is looking down in awe

As I finished my 2 week jaunt across the globe - 6 flights of 2,500+ miles and other shorter ones, I had plenty of time on those flights to think about why the airline industry is so maligned.

Bob Brooks of Hooters Air said last week as he shut it down : "The flying industry is in a terrible mess," Brooks said. "I've got a fair amount of money, but I don't have enough to fix this animal."

I saw Donald Trump say on Larry King's show a couple of weeks ago "the airline business is a terrible business ..between the fuel and the unions and the problems and the technology"

Warren Buffet : "...it would have been far better for airline investors if Orville had failed to get off the ground at Kitty Hawk"

They are, of course, talking about a $ 400 bn global market which has become clogged with government monopolies and private companies which treat their employees worse than just about any other industry. And price their product opportunistically – and try to get away with it. We howl when a gas station gouges us for another 20c a gallon. We have quietly accepted the airlines yo-yo pricing with simple demand and supply explanations. And yet they lose money – and lose money.

Thank God for the handful of dreamers in the industry who survive in the mess, delight their customers and treat their employees like family. I was pleased to open an issue of Business 2.0 on one of my flights and see a smiling Richard Branson quoted in a Samsonite ad:  “To me, business isn’t about wearing suits or pleasing stockholders. It’s about being true to yourself, your ideas, and focusing on the essentials”. Good for you, Sir Richard. The best single flight I have had was London Heathrow to JFK on Virgin Airways. Upper Class pampering – massages, open bars. Virgin has survived and thrived against overwhelming odds and raised the bar for trans-atlantic flights.

In the same Business 2.0 issue I read about Michael O’Leary of RyanAir experimenting with zero-fares while running Europe’s most profitable airline. The “Open Source” alternative to the convoluted (and failed) yield management generated opportunistic fares so many US and European airlines cling to.

I wrote recently about Jet Airways blazing a trail in India, a country where government-run monopolistic airlines cling to old ways of doing business. I was speaking to a pilot who recently resigned from one of the government airlines, and the government bullied him in to a 6 month notice, when his contract said a month. They are losing pilots in droves to dreamers like Naresh Goyal who got tired working for one of those government airlines and turned entrepreneur and started Jet.

Singapore Air which has taken over from the role Pan Am played in global aviation by being an early adopter of so many new pieces of equipment Boeing and Airbus keep innovating. Soon it will be flying A380s on key global routes while US airlines try to compete with it on international routes with under-sized, dated 767s. Singapore Girl delights businesspeople by stretching the bounds of non-stop travel while making it pleasant. She is not too shabby to its economy passengers either.

I have marveled before about Southwest Airlines and its customer empathy and its predictable (and amazingly profitable) approach to air transport. And Jetblue innovating with technology in its operations and passenger comforts.

These airlines and their employees love the business. In different ways, they keep tweaking, innovating – keeping the airline industry viable. If governments did not intervene and keep sick and broken-model and attitude airlines alive, these airlines would each have much more market share, and deliver numbers Warren and Donald would salivate over.

I am finishing this post on a Southwest flight and a gentlemen had a medical problem on the flight. A doctor next to me jumped up and put him on oxygen and 2 flight attendants have been fawning over him for most of the flight. He would not have received anywhere near the care on the ground. God bless these crews who put their heart in to this business.

Leonardo Da Vinci dreamed of flying – he is looking down in awe at the marvel of modern aviation and those who keep pushing the industry envelope. Even as those on earth love to hate the industry.

Update : BusinessWeek on how a new generation of airlines is bringing Europe together

Comments

[Angela Vargo]

What a wonderful post...you are a true aviation enthusiast and all of us at Southwest appreciate your dedication to this industry. We are so proud of what we do - and taking care of our Customers is what we do best.

Angela Vargo
www.blogsouthwest.com

[viinnie mirchandani]

Angela, thanks! And appreciate your not puoting about my being nice to some of your peer/competitor airlines...

[Jeff Nolan]

It's somewhat lost in these critiques of the airline industry, but one major reason why Southwest has remained profitable since 2001 is their very successful fuel hedging strategy which has enabled them to avoid the short term impact of higher fuel costs. For example, in 2005 they were buying fuel under 2001 and 02 contracts.

Of course, all of this is smart strategy and one more reason why Southwest has been perenially successful, but it also points out that success in complex businesses is much more than 'they have a great service' or 'their flight attendants are so cheerful'.

[vinnie mirchandani]

Jeff, agree - as they say it is very complex to make things look simple...I wrote a note last year about many facets about SW including this hedge - it was aimed at offshore vendors and I suggested they look at hedging strategies around their growing wage inflation...