Bob Crandall: How I'd Save The Industry

Veritas

Veteran
Aug 19, 2002
882
148
www.usaviation.com
BusinessWeek

Selected highlights:
During Bob Crandall’s long tenure as CEO of American Airlines, the airline was truly an innovator—so much so that employees at AA had a certain swagger about them. They knew they were the best and brightest of the industry. It was on Crandall’s watch that American created one of the first frequent flyer programs in the industry, developed the most sophisticated reservation system of its time, and pioneered the concept of “yield managementâ€￾—using sophisticated algorithms to constantly reprice fares to maximize the revenue for each flight. Labor relations was another matter, but Crandall knew—and knows—his business.

Crandall doesn’t mince words about the industry’s condition:
Our airlines, once world leaders, are now laggards in every category, including fleet age, service quality and international reputation. Fewer and fewer flights are on time. Airport congestion has become a staple of late-night comedy shows. An even higher percentage of bags are lost or misplaced. Last-minute seats are harder and harder to find. Passenger complaints have skyrocketed. Airline service, by any standard, has become unacceptable.

For his part, Crandall doesn’t believe that mergers are the salvation of the industry:
In my view, the arguments in favor of consolidation are unpersuasive. Mergers will not lower fuel prices, they will not increase economies of scale for already sizable major airlines. They will require major capital expenditures and are likely to increase labor costs. Finally, they will disadvantage many employees, who incentive to provide good service will be further reduced.

Crandall says airlines and their unions should be required to settle disputes in binding arbitration.
“The threat of binding arbitration would encourage both labor and management to adopt more moderate positions than has been true in the past while simultaneously moving all airlines closer to labor cost parity."

Revising U.S. bankruptcy laws to...
“...deprive failed carriers of the right to use lower costs to undercut the fares offered by their more prudent rivals, forcing both management and labor to face the twin specters of liquidation and unemployment.â€￾

Here’s the most intriguing of Crandall’s ideas: Return the industry to a greater degree of government regulation, at least on fares.
“Unfettered competition just doesn’t work very well in certain industries, as amply demonstrated by our airline experience and by the adverse outcomes associated with various state efforts to deregulate electricity rates. In my view, it is time to acknowledge that airlines look and are more like utilities than ordinary businesses."

Crandall notes that the extreme view would be to...
“...establish minimum fares sufficient to cover full costs and produce a reasonable return. While I would fully support such an approach, the idea is deeply offensive to those who cling to the belief that the markets can solve everything.â€￾
 
Uncle Bob needs to go back to his rocking chair and leave the aviation industry to people who aren't outdated by more than a decade.
 
He needs to just stop acting, or allowing his words to be construed as if he speaks for American Airlines, because he doesn't. Yet, every word that comes out of his mouth is perceived to be from AA since that is all that he is, or ever was, associated with. The man hasn't done a single noteworthy thing since leaving the industry.

He needs to activate his own advanced reservation down at the home.
 
And your your solution to the industry's problem would be? At least Crandall is putting a solution on the table. You may not like it, but the one thing "Uncle Bobby" has always done is not "BS" the employees...You may not like what he has to say, but at least you know where he is coming from..."AA"Rpey and others here are more worried about their next bonus check, and other compensations then worry about the company as a whole...Without the "baseline" workforce here at AA this company is doomed to fail..Unfortantely, management here at AA doesn't see it that way and only time will tell the outcome of this once "Legacy" airline.
 
And your your solution to the industry's problem would be? At least Crandall is putting a solution on the table. You may not like it, but the one thing "Uncle Bobby" has always done is not "BS" the employees...You may not like what he has to say, but at least you know where he is coming from..."AA"Rpey and others here are more worried about their next bonus check, and other compensations then worry about the company as a whole...Without the "baseline" workforce here at AA this company is doomed to fail..Unfortantely, management here at AA doesn't see it that way and only time will tell the outcome of this once "Legacy" airline.


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AMEN....Flyboy4u,.....AMEN !

WNP/FrequentFlyerCA,.......NO offense meant, but since you gents are NOT AA employees,......You can never really know what it meant to have "uncle Bobby" at the Helm !
 
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AMEN....Flyboy4u,.....AMEN !

WNP/FrequentFlyerCA,.......NO offense meant, but since you gents are NOT AA employees,......You can never really know what it meant to have "uncle Bobby" at the Helm !

Sometimes being on the outside looking IN gives one a much better perspective. Crandall treated labor like mushrooms, and all that that entails.

Revere him all you like but thankfully, no one is stupid enough to give him another airline to run ever again.
 
Quote: Revere him all you like but thankfully, no one is stupid enough to give him another airline to run ever again.


Certainly, Bob in on the next US President's short list for Secretary of Transportation.
 
Sometimes being on the outside looking IN gives one a much better perspective. Crandall treated labor like mushrooms, and all that that entails.

Revere him all you like but thankfully, no one is stupid enough to give him another airline to run ever again.

Perhaps not Uncle Bob, but a real businessman would be a very welcome change as compared to the spoiled rotten fraternity brats running the show now.

Unfortunately, Bob's very near to being the last of his kind, one of a very few men that used common sense to run a business as opposed to running said business out of a MBA textbook with a generous helping of personal greed thrown in.

Did I cuss Crandall on a daily basis while he was the CEO? You betcha! You'd be hard pressed to find anyone that didn't (that is, if they were telling the truth).

A man like him is like air - not missed or noticed until it's gone.
 
Perhaps not Uncle Bob, but a real businessman would be a very welcome change as compared to the spoiled rotten fraternity brats running the show now.

Unfortunately, Bob's very near to being the last of his kind, one of a very few men that used common sense to run a business as opposed to running said business out of a MBA textbook with a generous helping of personal greed thrown in.

Nice cheap shots against management, but they don't come even close to describing Bill Ayer, Bob Fornaro, Dave Barger or David Neeleman.

There's common sense business practices all over the place. You're just too full of vitrol and hatred for the lot you've been cast to realize it. Just like your air analogy, you really have no idea how good you have it right now. Just ask the guys working at the IND maintenance base for UAL, the mechs working the DFW hangar for Delta, or the guys who work for ATA.
 
Nice cheap shots against management, but they don't come even close to describing Bill Ayer, Bob Fornaro, Dave Barger or David Neeleman.

There's common sense business practices all over the place. You're just too full of vitrol and hatred for the lot you've been cast to realize it. Just like your air analogy, you really have no idea how good you have it right now. Just ask the guys working at the IND maintenance base for UAL, the mechs working the DFW hangar for Delta, or the guys who work for ATA.

It would appear as though I'm not the only one taking the opportunity for a cheap shot or three.

I'm really not so ignorant of the world, Eric; I realize that whatever anyone's situation, it can always be worse and also realize it could be better. Making the assumption that many others don't understand this exemplifies your severe lack of understanding re: hourly personnel and your rather stereotypical bias against us.
 
It would appear as though I'm not the only one taking the opportunity for a cheap shot or three.

I'm really not so ignorant of the world, Eric; I realize that whatever anyone's situation, it can always be worse and also realize it could be better. Making the assumption that many others don't understand this exemplifies your severe lack of understanding re: hourly personnel and your rather stereotypical bias against us.

Oh would I love to have that arbitration job!
 
Is there really anything wrong with management that has to outsource their decision making processes to consulting firms, then enjoys a stock bonus award that pays off greatly even in unprofitable times? I mean really, these folks would leave and go elsewhere if we didn't allow them to be compensated so well for outsourcing their decision making and work load.

What a great deal! When mechanics or human resource functions are outsourced employees hit the street. When management decision making is outsourced, we pay huge bonus awards and pretend the airline would suffer without their continued employment.

I guess that I really don't have hatred towards this policy, it is more like major anger from envy.

I will continue to subsidize this ignorance and greed for a little while longer with my pay and benefit concession, but my exit plan is coming together nicely. I am not near as important to this operation as those that hire the consultants, so don't fret about rewarding me for my future efforts, because those efforts are driven by own survival not the airline or the failing industry.

I HAD ENOUGH ALONG TIME AGO.
 
Dave, what's funny about your assumptions there is there are probably less than 50 consultants on the property, if that. They'd be hard pressed to be doing the work of the 4000 other people at HDQ.

Goose, I don't have any particular disdain for hourly workers. I do have a problem with people who play the victim card for decades, though.
 
Dave, what's funny about your assumptions there is there are probably less than 50 consultants on the property, if that. They'd be hard pressed to be doing the work of the 4000 other people at HDQ.

Goose, I don't have any particular disdain for hourly workers. I do have a problem with people who play the victim card for decades, though.

Who's playing the victim? I'm just trying to get in a good whine.
 
Dave, what's funny about your assumptions there is there are probably less than 50 consultants on the property, if that. They'd be hard pressed to be doing the work of the 4000 other people at HDQ.

How do you know? I thought you didnt work at AA anymore? :blink:

Is that "50" Consultants or Consulting Firms? And how many resourced individuals support those consultants from their remote home office?

What's funny about your postings (including) all alias' is that you claim to not be associated with AA anymore, yet you are clearly here to defend the worthless management policies that are sinking this airline, and apparently have an agenda to not let one negative comment about the management team go by without some form of AA management slanted answer.

I get flash backs when reading your current USAviation postings of the Plane Business days just before the proxy authorization was shut off to the work force once the bulletin board had been outed for the real reason we were all allowed access on company property to begin with. Maybe your employment status has changed but your job function has not changed one bit in my opinion.

BTW, Who exactly would those "probably less than 50 consultants" be advising anyway? I never said anything about doing the work of 4,000, I simply mentioned those receiving the envious stock bonus awards.

HAPPY FATHER'S DAY TO ALL THOSE INDIVIDUALS TRYING TO MAKE LIFE BETTER FOR THEIR CHILDREN IN THE MIDST OF THE RICH AGAINST MIDDLE CLASS WAGE WAR.