By Elizabeth Souder
Dow Jones Newswires
NEW YORK -- Former AMR Corp.(NYSE:AMR) (AMR) chief executive Robert Crandall said he doesn't expect business fares will ever return to their height during the go-go days of the late 1990s.
Even though the economy and the stock market are now recovering, and even though airline experts say improvement in business travel is in the works, Mr. Crandall said he thinks it will be a long time before even the amount of business travel is so high again.
"Business fares are not going to bounce back to the levels of the late 1990s, not now, not ever," Mr. Crandall said during a speech at a meeting of the Association of Travel Marketing Executives. "And business volume won't go back to its peak for a long, long time."
Business travel nose-dived as the economy dropped and more people began booking cheaper leisure fares for business trips.
Mr. Crandall said another problem for business travelers is the long wait at airports due to more thorough security checks since Sept. 11, 2001. He said the best way to cut down the wait is to form a trusted-traveler program.
Under such a program, travelers who agree to allow the federal government access to their personal and financial records would be added to a database and given special identification. Those travelers could breeze through a separate security line at airports by showing their ID, while other travelers wait to go through the usual metal detectors and carry-on checks.
"We need to collectively make clear to the government that these security arrangements are unacceptable," said Mr. Crandall, who is a board member of the Aviation Safety Alliance, a non-profit organization created to inform the public about air travel safety. "A trusted-traveler program is the only thing that makes sense."
Mr. Crandall said some politicians have opposed the trusted-traveler idea because groups of passengers would be treated differently. For instance, people who travel often to the Middle East -- no matter what the reason -- might not be allowed to participate in the program. Other people oppose the idea because of privacy concerns.
Mr. Crandall further said the biggest problem for the network airlines is labor costs, which are preventing the big airlines from defending their turf against the growing low-cost carriers.
"If the legacy carriers can get their costs down, they will prevail," he said. "Labor's what you've got to cut. But it isn't a matter of cutting salaries. It's a matter of productivity."
Mr. Crandall said airline workers should be expected to work more hours with less vacation. He acknowledged that cutting labor costs is extremely difficult because of the power of airline unions. He predicted that some network carriers may eventually managed to whittle those costs down.
Dow Jones Newswires
NEW YORK -- Former AMR Corp.(NYSE:AMR) (AMR) chief executive Robert Crandall said he doesn't expect business fares will ever return to their height during the go-go days of the late 1990s.
Even though the economy and the stock market are now recovering, and even though airline experts say improvement in business travel is in the works, Mr. Crandall said he thinks it will be a long time before even the amount of business travel is so high again.
"Business fares are not going to bounce back to the levels of the late 1990s, not now, not ever," Mr. Crandall said during a speech at a meeting of the Association of Travel Marketing Executives. "And business volume won't go back to its peak for a long, long time."
Business travel nose-dived as the economy dropped and more people began booking cheaper leisure fares for business trips.
Mr. Crandall said another problem for business travelers is the long wait at airports due to more thorough security checks since Sept. 11, 2001. He said the best way to cut down the wait is to form a trusted-traveler program.
Under such a program, travelers who agree to allow the federal government access to their personal and financial records would be added to a database and given special identification. Those travelers could breeze through a separate security line at airports by showing their ID, while other travelers wait to go through the usual metal detectors and carry-on checks.
"We need to collectively make clear to the government that these security arrangements are unacceptable," said Mr. Crandall, who is a board member of the Aviation Safety Alliance, a non-profit organization created to inform the public about air travel safety. "A trusted-traveler program is the only thing that makes sense."
Mr. Crandall said some politicians have opposed the trusted-traveler idea because groups of passengers would be treated differently. For instance, people who travel often to the Middle East -- no matter what the reason -- might not be allowed to participate in the program. Other people oppose the idea because of privacy concerns.
Mr. Crandall further said the biggest problem for the network airlines is labor costs, which are preventing the big airlines from defending their turf against the growing low-cost carriers.
"If the legacy carriers can get their costs down, they will prevail," he said. "Labor's what you've got to cut. But it isn't a matter of cutting salaries. It's a matter of productivity."
Mr. Crandall said airline workers should be expected to work more hours with less vacation. He acknowledged that cutting labor costs is extremely difficult because of the power of airline unions. He predicted that some network carriers may eventually managed to whittle those costs down.
Thoes who are currently working in the airline business who believe that in the next year or two that business passengers will come back and pay thoes high fares like the ones in the late 90's better wake up to reality. Now getting back to the above comment I don't think that he may try to blame the red ink that is currently in the industry on workers but what he is saying that workers must become more productive in this industry and I have been observing that some of the CEOs in the industry are not very knowlegable or lack the abilities in Leadership and change which is a critical aspect of being a good manager and leader and this is the main reason why the majors lost too much money.
