BEFORE THE

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

_________________________________________

)

In the Matter of )

)

ENHANCING AIRLINE PASSENGER )

PROTECTIONS ) Docket No. 2010-0140

)

)

)

_________________________________________ )

 REPLY COMMENTS OF

BUSINESS TRAVEL COALITION

AND 

CONSUMER TRAVEL ALLIANCE 

Mr. Charles Leocha Mr. Kevin Mitchell

Director, Consumer Travel Alliance, Inc. Chairman, Business Travel Coalition

PO Box 15286 214 Grouse Lane

Washington DC 20003 Radnor, PA 19087

(202)713-9596 

www.consumertravelalliance.org www.businesstravelcoalition.com

leocha@consumertravelalliance.org mitchell@businesstravelcoalition.com

Decembr 13, 2010
1

BEFORE THE

OFFICE OF THE SECRETARY

U.S. DEPARTMENT OF TRANSPORTATION

WASHINGTON, DC

_________________________________________

)

In the Matter of )

ENHANCING AIRLINE PASSENGER ) Docket No. 2010-0140

PROTECTIONS ) 

_________________________________________ )

 JOINT REPLY COMMENTS OF

BUSINESS TRAVEL COALITION

AND CONSUMER TRAVEL ALLIANCE

The Business Travel Coalition (BTC) and the Consumer Travel Alliance (CTA) 

hereby jointly submit consumer responses to the reply comments submitted by 

American Airlines, Continental Airlines, Delta Air Lines, United Air Lines, and US 

Airways (the airlines) submitted on November 17, 2010 concerning the disclosure 

of airline fees.

BTC and CTA praise DOT's inspired leadership and significant results as the most 

consumer‐centric DOT in a generation. The June 8, 2010 Notice of Proposed

Rulemaking (NPRM) published at 75 Fed. Reg. 32318 is sweeping and contains 

important safeguards for air passengers.

This reply comment is made in the interest of keeping the discussions about the 

proposed rulemaking focused on the airline passenger protections that were the 

original intent of the rulemaking.

DOT should not allow this important rulemaking to become a battleground between 

different parts of the air transportation community. Contract negotiations and 

related strategies between the airlines and their GDSs and ticket agents are outside 

of the purview of DOT and are not pertinent to this rulemaking and should not be 

allowed to obscure the pro‐consumer focus.

Both BTC and CTA strongly protest current airline practices that deceptively offer 

the specter of lower airfares in order to gain enhanced positioning on Internet 

displays while aggressively increasing and hiding ancillary fees for transportation 

elements that were once considered an integral part of the ticket price.  
2

This “unbundling,” as the practice is termed, coupled with the airlines’ decision to 

withhold the new ancillary fees from ticket agents and not fully disclose them to 

stifle price comparison shopping for consumers, deceives U.S. and foreign 

passengers into believing the prices offered are lower than the eventual full cost of 

travel. Often ancillary fees add dramatically to published airfares. 

All suggested remedies offered by the airlines eliminate the ability to easily compare 

total, all‐in prices across airlines. Consumers’ confusion is only exacerbated when 

potential travel costs involve connections between different airlines that are 

sometimes within the same airline alliance, airlines that have no alliance affiliation

or codeshares.

Robert Crandall, former CEO of American Airlines has recently agreed with our view 

of the need for airline fare and fee transparency in a speech delivered to IATA.

More recently, the industry has objected to consumer efforts to display a 

complete list of ancillary charges in every distribution channel in which a 

carrier participates. Again, I think the industry courts unnecessary customer 

discontent and risks its good name and reputation by opposing a request 

entirely consistent with normal retail practice. In my opinion, everyone 

needs to recognize that adopting operationally attractive policies that are 

inconsistent with customer welfare and satisfaction are, in the long run, 

unlikely to be rewarding.1

Evidently, DOT agrees with our consumer‐focused point of view. Otherwise, this 

portion of the rulemaking would not be under consideration. 

Consumers need to know the full cost of airline travel

Consumers can only compare fares and fees that are disclosed to them and their 

agents by the airlines.  Both BTC and CTA urge DOT to focus on the need for a 

simple, basic rule that will require airlines to disclose their ancillary fees at the same 

time and in a similar manner that they disclose their airfares to their travel agents 

and the GDSs in which they participate. 

The basic technology exists and is thoroughly tested by the broader airline 

community.  Comments already filed earlier by many different parties have outlined 

the tested and affordable ATPCO systems2 (ironically, owned by the airlines) that 

have been developed to handle the distribution of ancillary fee information as well 

as airfares.

 1

 Speech delivered by Robert Crandall to International Air Transport Association, 

Istanbul, Turkey, December 7, 2010. Full speech is attached as an addendum.

2

 See Airline Tariff Publishing Company comments submitted September 23, 2010
3

BTC and CTA call for price transparency across all channels where airline tickets are 

sold. The airlines, in their joint response to ITSA’s reply comments, claim that they 

support “transparency of fees” and “robust disclosure of optional fee information.” 

However, most airlines continue to refuse to file ancillary fees for use by travel 

agents who serve almost 60 percent of the flying public and who can best facilitate 

full price comparisons across airlines. 

The airlines claim, “Disclosure will be further enhanced through other aspects of the 

NPRM, such as requirements that e‐ticket receipts list ancillary fees and that 

website home pages provide a link directly to complete information on such fees.”3

The former of these solutions would only serve to help disclose the costs after the 

money has been paid and long after any opportunity to compare costs. The latter 

offers no ability to compare across airlines and ignores the travel agency channels 

where almost 60 percent of travel is booked.

Furthermore, airline actions have indicated that the withholding of information 

about ancillary fees is a part of their marketing strategy.

4 The airlines are profiting 

on consumer confusion, created by the withholding of fee information from their 

ticket agents.

Contrary to any airline claims that they, “...do not want any of their customers to be 

surprised by charges for optional services,”5 their actions of refusing to clearly 

outline these fees while at the same time varying the fees based on frequent flier 

program levels, changing them based on distance, markets or flights, eliminating 

them for some based on what credit card is used for ticket purchase, and so on, only 

serves to create more confusion and overall price deception.

Calling an airfare a different name doesn’t make it different

The airlines also claim that they are not hiding their fees when they refuse to share

their ancillary fees (once offered as a part of overall airfares) across all of their 

ticket agents as has long been required by Section 41712. For years, DOT has 

required the full cost of airline travel to be available to the public, including through 

all ticket agents.  The airlines must be required to meet the intent of the statute and 

DOT’s full fare advertising regulations, rather than being allowed to dismantle an 

airfare and then narrow the definition of what needs to be disclosed. 

It is clear that what Section 41712 requires of ticket agents is that they not present 

consumers with information that is inconsistent with what the principal has set as 

the terms of sale. That would clearly be deceptive on the agent’s part. Agents must, 

 3

 Joint Response of American Airlines, Continental Airlines, Delta Air Lines, United Air 

Lines, and US Airways to reply comments of Interactive Travel Services Association, 

November 17, 2010

4

 ibid. p. 4

5

 ibid. p. 5
4

by law, sell on the terms set by the principal. Failure to do so not only breaches the 

agreement with the principal, but it violates the “no deception” mandate of Section 

41712. Thus, it can be inferred that without access to the ancillary fee data, the 

agent is put at risk by the withholding airline of violating the law. In the process, the 

consumer is harmed by incomplete or erroneous information about the true cost of 

travel just at the critical time the passenger is making travel decisions.

The principle of agency mandatory consistency with the airline’s terms of sale is set 

out in official DOT policy statements in 14 CFR Part 399.80.  The key examples are:

“ (c) Misrepresentations as to the quality or kind of service, 

type or size of aircraft, time of departure or arrival, points served, 

route to be flown, stops to be made, or total trip‐time from

point of departure to destination.

....

(f) Misrepresentations as to fares and charges for air 

transportation or services in connection therewith.

(g) Misrepresentation that special discounts or reductions 

are available, when such discounts or reductions are not specific 

in the lawful tariffs of the air carrier which is to perform 

the transportation.

(h) Advertising or otherwise offering for sale or selling air 

transportation or services in connection therewith at less

than the rates, fares and charges specified in the currently 

effective tariffs of the air carrier or air carriers who are

engaged to perform such air transportation or services, 

or offering or giving rebates or other concessions thereon,

or assisting, suffering or permitting persons to obtain such 

air transportation or services at less than such lawful rates, 

fares and charges. 

[Clearly out of date but indicative of the required alignment 

of what airlines are selling and what agents tell the public]

(i) Misrepresentations that special priorities for reservations 

are available when such special considerations are

not in fact granted to members of the public generally.”

And the granddaddy of them all:

“§ 399.84 Price advertising.

The Board considers any advertising or solicitation 

by a direct air carrier, indirect air carrier, or an agent of either,

for passenger air transportation, a tour (i.e., a combination of air 

transportation and ground accommodations), or a tour 

component (e.g., a hotel stay) that states a price for such

air transportation, tour, or tour component to be an 
5

unfair or deceptive practice, unless the price stated is the

entire price to be paid by the customer to the air carrier, 

or agent, for such air transportation, tour, or tour component.”

BTC and CTA submit that these are the underpinnings of principle on which the 

argument rests that airlines should be required to share the data.  Otherwise, the 

agents, and their consumers, are at risk of relying on inaccurate or incomplete 

information to their detriment.  In short, we are not proposing anything shockingly 

new.  We are merely arguing that DOT should apply its own long‐standing principles 

to a new marketplace situation.

Hidden fees for consumers are hidden costs for corporate managed travel programs

While a leisure traveler’s major issue is the ability to compare all‐in airfares, 

business travelers and corporations that fund business travel activities have to deal 

with a more complex series of management and accounting problems created by the 

refusal of airlines to file their ancillary fees. As ancillary fees grow and become a 

significant portion of the overall air travel cost, corporations need to have some way 

to manage, control and account for these costs. 

Not only is there an unknown universe of ancillary fees but also, these charges vary 

at the airline’s whim depending on the corporate traveler’s frequent flier level, the 

flier’s credit card usage and where and when the ancillary fees are encountered and 

paid. Furthermore, the airlines provide no way to measure the impact of their 

ancillary fees on travel policy, expense reports and per diem limits and may leave 

the door open to fraud and abuse. To make comparisons, control and tracking even 

more difficult, the airlines do not use a standardized system to report ancillary fees.

Note: This lack of any kind of airline reporting standards and methods affects other 

actors in the airline‐ticketing world such as corporate credit card companies who 

need to be able to collect data in a standard format for reporting needs and 

corporate travelers who are faced with back‐office travel expense reporting 

requirements.

Worse, when corporate travel managers meet with airline representatives to 

negotiate new contracts, they will not have the complete and accurate data 

necessary to bargain knowledgeably. Corporate travel managers during 

negotiations will be in a similar position to consumers who find themselves 

blindsided with hidden fees at an airline ticket counter. Hidden fees meet hidden 

costs!

A DOT rule that mandates disclosure of ancillary fees as broadly as airfares are 

disclosed would create standard identifiers for ancillary fees and allow those 

serving the corporate market to track fees through the entire spectrum of planning, 

controlling, accounting, reimbursing and negotiating for these new costs.
6

Airline vs. GDS bargaining

The airlines claim that ITSA, contrary to its stated goal of promoting consumer 

welfare, is simply engaged in “preserving the bargaining power of its GDS members 

by taking away any leverage that carriers might have in negotiating lower booking 

fees in exchange for direct access to optional fee information.”

However, there is nothing in the DOT NPRM that places new limits on the airlines’ 

bargaining power vis‐à‐vis the GDSs. What the NPRM proposes is designed to 

protect consumers by broadened disclosure, and not to pick winners and losers in 

airline‐GDS bargaining. Airlines and GDSs have other bargaining tools that they can 

and do use — withholding access to vital consumer pricing information is not an 

appropriate bargaining chip. Withholding pricing information and obscuring the 

final cost of a product is not considered an allowable marketing tactic in any 

economic sector, and certainly not in the airline sector. Further, airlines do not have 

to participate in GDSs. This rulemaking has no bearing on that.

Historically (most recently with the Internet upheaval), distribution models have 

changed without resorting to deceptive practices of withholding the full cost of air 

transportation from ticket agents and consumers.  Differences about displaying 

Web‐only fares were settled through bargaining.  The proposed DOT rulemaking 

does not limit airlines from instituting new distribution models or bargaining with 

GDSs.  In fact, both new systems are being developed and another round of 

bargaining is underway.

A DOT rulemaking that mandates filing of ancillary fees together with airfares would 

go a long way to ensuring that the old world of screen bias does not begin again. 

Allowing airlines to pick and choose what prices for what services they want to 

reveal to passengers based on some unknown criteria is fraught with danger for 

consumers. Consider the very foreseeable world of $1.00 airfares with hundreds of 

dollars in “ancillary” prices that consumers would face in their attempts to piece 

together actual costs for comparison shopping. A computer screen showing all 

airfares to every destination to be $1 plus fees would not be of any use to 

consumers. Indeed, some airlines have already marketed flights this way.

DOT’s support of airfare and ancillary fee transparency can only be looked at as a 

competitive threat by an industry if it intends to use hidden fees and non‐

transparent pricing in an unfair and deceptive manner to improve its bottom line. 

Otherwise, as in any other business sector, consumers must be informed, prior to 

purchase, of the total price of a purchase including the base price and all the extras.

The airlines again repeat in their joint response to the ITSA reply comments that 

they “fully support disclosure of optional fee information to consumers.” However, 

their vision of fee disclosure is limited to their websites and to an airline‐by‐airline 
7

approach that does not allow consumers to easily or efficiently compare prices 

across airlines or across all ticket sales channels. Plus, it doesn’t address the issue 

that many airlines will only choose to display these fees when the traveler is well 

into the purchase process, altering the fees dynamically around the many variables 

discussed earlier.

The complex world of airline tickets

The airlines are making the airline ticket purchasing decisions more and more 

complex.  They are arguing for the ability to creatively market, package and 

merchandise their products.  But why should the airlines be the only market 

participant enabled to market, package and merchandise their products? There is no 

reason that their ticket agents should not also be allowed to find new ways to re‐

bundle what the airlines have unbundled.

Airlines claim that many online travel agents (OTAs) already have pages or websites 

dedicated to ancillary fees. However, these pages are non‐interactive (bookable) and 

are incomplete with respect to all airline fees. The fees on such pages are either 

gathered manually or by “scraping” airline sites, an action that many airlines 

disapprove of and that almost ensures that the information will not always be 

complete or up‐to‐date since fees change often.

If the airlines had the true interest of consumers in mind, these fees would be 

disclosed by the airlines just as the rest of their fares are and become part of the 

ticketing process and used for price comparisons. Further, if disclosed in the 

manner that BTC and CTA favor, agents would be able to offer the same 

customization of fees (based on frequent flyer or other passenger status) as the 

airlines propose to offer on their own websites.

The airlines claim that high GDS booking fees are harming consumers and airline 

competition.  This has nothing to do with the DOT NPRM. Negotiations between the 

airlines and the GDSs are not controlled by DOT and should not be, other than a 

basic requirement that any consumer purchasing a ticket from the airlines or from 

one of the airlines’ ticket agents should have the same information upon which to 

base their purchase decision.

The proposed disclosure rule will in fact enhance airline competition. It will ensure 

that all airlines — large and small — have accurate and complete information about 

their total fares and fees displayed on neutral websites. All airlines will have a more 

equal opportunity to sell through the agency channel, not just the major airlines that 

filed the comments to which we are responding here.   
8

Airlines vs. GDS and other distribution models

The final pages of the airlines’ joint response to ITSA’s comments focuses on 

structural “flaws,” that the airlines claim exist within the system.  Whether or not 

these arguments are true or false, the current airline‐ticketing world is made up of 

airlines selling tickets and travel agents selling tickets.  The distribution methods 

have evolved into a world where the airlines work through ATPCO to disclose their 

airfares, and then the GDSs distribute these airfares to brick‐and‐mortar, online and 

corporate travel agents. 

DOT’s current rules require that all ticket agents and the airlines sell from the same 

set of rules.  Unfortunately, that is not happening today, as the airlines withhold 

ancillary fees from their ticket agents.

All of the airline whining about the distribution system does not change the fact that 

today’s market is made up of travel agents, GDSs and airlines.  This is the world that 

consumers face every day.  That is the world that any DOT regulation must confront.

Contrary to their statement that the GDS systems have not changed with the 

technological times, changes within the GDS systems have been dramatic. The online 

airline ticket world has evolved in yet a different direction where ITA Software, not 

the GDSs, is the dominant gatekeeper for every new online travel agent that has 

been created since 2001. Just like GDS shopping systems, ITA Software also relies on 

airlines filing fare and rule information to provide comparison shopping.

Current GDS contracts have not prevented the airlines from aggressively developing 

new computer technologies that may in the future allow the airlines to bypass the 

GDS distribution system.  When these new systems begin operating, there will 

probably be a period when both the legacy GDS programs and alternative booking 

systems are being tested, or, perhaps, another new still‐undiscovered system will be 

operated side by side. 

Anyone involved with the airline travel world would find any suggestion that the 

marketing of airline tickets has not been evolving over the past decade ridiculous. 

The growth in Internet programs and websites that deal with travel has been among 

the most dramatic on the planet. This new technology underscores the need for DOT 

to require that fees be broadly disclosed to all distribution channels.

Plus, the disclosure of the airlines’ ancillary fee data as required by the rule we favor

will more than likely stimulate a new group of software developers who will work 

aggressively to develop new airline/consumer interfaces that will make the airfare 

and ancillary fee sales even easier, more profitable and more transparent. Nothing 

in the rule BTC and CTA favor should be construed to limit in any way the airlines’ 

freedom to also provide fee and fare information to other distribution systems 

through which they choose to distribute their services. 
9

The special role of DOT in protecting airline consumers

The airline industry operates in a unique structure where its actions are not readily 

contestable by consumers through the normal judicial channels. Consumers have no 

redress through the court systems, only through the Department of Transportation.

Federal preemption denies consumers from taking the airlines to small claims court 

and State courts, even for small issues such as refunds of taxes and mishandled 

luggage.  The continued lack of clear passenger rights and airline responsibilities in 

the airline contracts of carriage make federal court action impossible. Both BTC and 

CTA strongly support the current rulemaking in its efforts to include customer 

service plans and expand passenger‐rights coverage in airline contracts of carriage.

As the consumers’ only form of redress, the Department of Transportation bears a 

unique and higher burden of requiring airlines to have understandable rules and 

regulations and clear and transparent airfares and ancillary fees that provides a 

strong underpinning for competition and comparison shopping across the airline 

market. 

The bottom line

The airlines’ desire for better terms from their distribution partners or a new 

distribution system entirely does not change the need for full disclosure and all‐in 

airline ticket price transparency. The airlines cannot be allowed to continue to hide 

the total cost of travel from the almost 60 percent of consumers who choose to 

purchase tickets through travel agents. 

The consumer point of view, whether from the business side or the leisure side, is 

that airlines should be required to disclose their ancillary fees at the same time and 

in the same manner as they disclose airfares and make them available across all 

ticket sales channels in which the airline chooses to sell its services. This is the only 

way that travelers can determine the full cost of travel so that individuals and 

corporations can compare the full, all‐in cost of travel in order to make decisions 

among different alternative travel options.

The airlines can run their businesses any way they choose with as many extra fees 

as they feel are necessary, packaging those in a limitless variety of manners, but 

they must be required to tell consumers the full cost of travel wherever and through 

whatever channel they choose to sell airline tickets. 

That is not too much to ask.
10

Addendum A

THE CUSTOMER IS THE FOCUS OF EVERYTHING

REMARKS OF ROBERT L. CRANDALL

IATA COMMERCIAL STRATEGY SYMPOSIUM, ISTANBUL, TURKEY, DECEMBER 7, 2010

NOT LONG AGO, I WAS ASKED TO PREPARE, ALONG WITH VARIOUS OTHER PEOPLE, A 

SHORT PAPER REFLECTING ON MAJOR CHANGES THAT HAVE IMPACTED OUR 

INDUSTRY DURING THE LAST 25 YEARS ‐‐ A TIME THAT COINCIDES, VERY ROUGHLY, 

WITH THE PERIOD DURING WHICH DEREGULATION BECAME THE DOMINANT THEME 

OF GOVERNMENT INVOLVEMENT IN THE BUSINESS. 

IT WAS AN INTERESTING ASSIGNMENT, FOR TODAY'S INDUSTRY BEARS LITTLE 

RESEMBLANCE TO THAT OF 25 YEARS AGO. 

BACK IN THE EARLY 1980'S, CARRIERS WERE IN THE EARLY STAGES OF ADJUSTING TO 

THE U.S. DEREGULATION ACT OF 1978. START UP CARRIERS WERE EMERGING AND 

VANISHING ALMOST DAILY, LEGACY CARRIERS WERE STRUGGLING TO DEFINE 

THEMSELVES AND UNDERSTAND THEIR MANY NEW COMPETITORS, HUBS WERE 

EXPANDING AND NEW HUBS WERE EMERGING, THE DISTRIBUTION SYSTEM WAS 

MORPHING FROM MANUAL TO ELECTRONIC, AND FREQUENT FLYER PLANS WERE JUST 

GETTING UNDERWAY. PASSENGERS COULD AND DID ARRIVE ONLY MINUTES BEFORE 

FLIGHT TIME, AND CHECKED BAGS, MEALS ON BOARD AND OTHER AMENITIES WERE 

INCLUDED IN TICKET PRICES. 

TODAY, MANY OF THAT INDUSTRY'S PARTICIPANTS ARE ONLY MEMORIES. WHILE THE 

HUB AND SPOKE SYSTEM STILL FUNCTIONS TO CONNECT SMALLER POINTS TO 

NETWORK SYSTEMS, PASSENGERS ARE NOW MORE LIKELY TO WAIT FOR PLANES THAN 

VICE VERSA AND THE PERCENTAGE OF PASSENGERS WHO USE NETWORK CARRIERS 

HAS FALLEN DRAMATICALLY AS LCC'S HAVE INCREASED THEIR MARKET SHARE BY LEAPS 

AND BOUNDS. IN RESPONSE, NETWORK CARRIERS HAVE DRIVEN COSTS LOWER THAN 

THEY EVER IMAGINED POSSIBLE AND ARE WORKING HARD EVERY DAY TO FURTHER 

CLOSE THE COST GAP BETWEEN THEMSELVES AND THEIR COMPETITORS.  

 STRUCTURALLY, THE INDUSTRY HAS MORPHED INTO A COMPLETELY NEW SHAPE. 

MERGERS THEN THOUGHT UNTHINKABLE HAVE BEEN CONSUMMATED, ALLIANCES 

BETWEEN PREVIOUSLY VIGOROUS COMPETITORS NOW DOMINATE MOST 

INTERNATIONAL ROUTES AND THE INDUSTRY'S ONCE INTEGRATED PRODUCT HAS BEEN 

FRAGMENTED INTO MANY SEPARATELY PRICED BITS AND PIECES. SECURITY NOW 

SLOWS PASSAGE THROUGH THE SYSTEM ‐ ALWAYS TO A WALK AND SOMETIMES TO A 

CRAWL‐AND TECHNOLOGY HAS ENABLED AIRLINES TO SHIFT MILLIONS OF MAN HOURS 

OF PROCESS ORIENTED WORK FROM EMPLOYEES TO CUSTOMERS. 
11

THE LIST GOES ON AND ON ‐ BUT BECAUSE ALMOST EVERYONE HERE IS INTIMATELY 

FAMILIAR WITH THESE EVENTS, I WILL NOT BORE YOU FURTHER WITH A RECITATION 

OF WHAT WE ALL KNOW.  I MENTION THEM ONLY BECAUSE THE WAYS IN WHICH THE 

INDUSTRY HAS CHANGED HAVE HAD A VERY PROFOUND IMPACT ON THE TRAVEL 

EXPERIENCES OF PASSENGERS EVERYWHERE  ‐ WHICH IS THE FOCUS OF THIS SESSION 

OF YOUR CONFERENCE. 

BECAUSE TODAY’S CUSTOMER EXPERIENCE IS SO DIFFERENT FROM YESTERDAY’S,  I 

WOULD LIKE TO BEGIN OUR CONVERSATION TODAY WITH A QUESTION ROOTED IN THE 

MAGNITUDE OF THE CHANGES THAT HAVE ALREADY OCCURRED AND THE CONTINUING 

EVOLUTION OF BOTH STRUCTURE AND PROCESS THAT UNDOUBTEDLY LIES AHEAD ‐‐

SOME OF WHICH YOU WILL BE DISCUSSING IN THE COURSE OF THIS CONFERENCE. THAT 

QUESTION IS WHETHER IT IS CONTRADICTORY TO TALK ABOUT THE CUSTOMER AS THE 

FOCUS OF EVERYTHING AT A COMMERCIAL CONFERENCE BEING HELD AT A TIME WHEN 

THE INDUSTRY'S ATTENTION IS CLOSELY FOCUSED ON RESTORING PROFITABILITY 

FOLLOWING A PERIOD OF APPALLING LOSSES. GLANCING THROUGH THE AGENDA, I DO 

SEE SOME INTERESTING TITLES INCLUDING A DISCUSSION ABOUT WHAT THE 

CUSTOMER REALLY WANTS AND ANOTHER ABOUT WHETHER YOU WOULD DO 

BUSINESS WITH YOU ‐ WHICH SHOULD BE REALLY INTERESTING. BUT FOR THE MOST 

PART, THE AGENDA IS WEIGHTED WITH PRESENTATIONS AND DISCUSSIONS THAT 

FOCUS ON HOW BEST TO RUN THE BUSINESS ‐ NOT HOW TO BEST PLEASE THE 

CUSTOMER. 

NOW BEFORE YOU ALL THINK I HAVE TURNED DAFFY IN MY OLD AGE, LET ME ASSURE 

YOU THAT I AM ALL IN FAVOR OF MAKING MONEY RATHER THAN LOSING IT. I THINK 

CONTINUOUS LEARNING IS AN ESSENTIAL ASPECT OF GOOD MANAGEMENT AND I 

APPLAUD ANY COMPANY THAT IS FOCUSED ON PROMPTLY IDENTIFYING AND 

ADOPTING BEST PRACTICES AND THAT SEEKS INNOVATIVE APPROACHES TO TOUGH 

PROBLEMS. AND THERE IS NO DOUBT THE INDUSTRY'S CUSTOMERS ‐ ALTHOUGH THEY 

MAY BE LOATH TO ADMIT IT ‐ ARE FAR BETTER OFF WHEN THE INDUSTRY IS 

PROFITABLE THAN WHEN IT'S NOT, FOR THERE IS NO OTHER WAY TO FINANCE THE 

HEAVY INVESTMENTS IN AIRCRAFT, AIRPORTS AND SUPPORTING INFRASTRUCTURE 

NEEDED TO PROVIDE THE SERVICE OUR CUSTOMERS WANT AND NEED. THUS, THE 

INDUSTRY'S APPARENT FINANCIAL RESURGENCE IS WELCOME NEWS FOR BOTH 

AIRLINES AND THEIR CUSTOMERS, AND WE SHOULD All HOPE THAT PROFITABILITY 

WILL BE LESS ELUSIVE IN THE FUTURE THAN IT HAS BEEN IN THE RECENT PAST. 

AT THE SAME TIME, I THINK THE INDUSTRY HAS DONE LESS THAN IT SHOULD AND CAN 

DO TO MAKE TRAVELING MORE ENJOYABLE.  TO MAXIMIZE LONG TERM PROFITABILITY, 

ENHANCE THE INDUSTRY'S CONTRIBUTION TO REINVIGORATING THE WORLD'S 

ECONOMIES AND BETTER SERVE INVESTORS, EVERY CARRIER SHOULD BE SPENDING 

MORE TIME THINKING ABOUT WHAT CAN BE DONE TO IMPROVE THE CUSTOMER 

EXPERIENCE. UNLESS THE INDUSTRY DEVOTES TIME, ENERGY AND RESOURCES TO DO 
12

SO,  ITS PRACTITIONERS ARE  LIKELY ‐ LIKE PINOCCHIO ‐ TO GROW LONG NOSES AS THEY 

SING THE PRAISES OF CUSTOMER SERVICE BUT DO LITTLE TO MAKE IT HAPPEN. 

MAKING THINGS BETTER FOR CUSTOMERS WILL INVOLVE LOTS OF HARD THINKING 

ABOUT THE MOST APPROPRIATE TRADE OFFS BETWEEN LOWER COSTS AND BETTER 

SERVICE AND WILL REQUIRE EVERYONE TO THINK WAY OUTSIDE THE BOX OF 

HISTORICAL SERVICE IDEOLOGIES. MOREOVER, IT WILL BE IMPORTANT TO BE SURE 

THAT THE GOAL IS NOT COMPROMISED BY THE GROWING LEVEL OF INDUSTRY 

CONCENTRATION. 

NO ONE CAN PREDICT WHAT THE LONG TERM IMPACT OF MERGERS AND ALLIANCES 

IS LIKELY TO BE ‐ BUT WE ALL KNOW THAT THE GOAL OF CONSOLIDATION IS TO 

REDUCE COMPETITION AND THEREBY FACILITATE REDUCING CAPACITY, RAISING 

PRICES AND CUTTING COSTS. GIVEN THAT REALITY, IT’S GOING TO TAKE 

SUBSTANTIAL EFFORT TO BE SURE THAT IMPROVED SERVICE IS ALSO ON THE RADAR 

SCREEN AND AVOID BEING SEDUCED BY THE NOTION THAT IMPROVED RESULTS ARE

SIMPLY THE RESULT OF SUDDENLY IMPROVED PERFORMANCE. IN A FORTHCOMING 

BOOK ‐ ENTITLED THE NEW CAPITALIST MANIFESTO ‐ UMAIR HAQUE IS 

EXTRAORDINARILY CRITICAL OF INCREASING CONCENTRATION IN A NUMBER OF 

INDUSTRIES. HE CHARACTERIZES THE RESULT AS A "POISONED MARKET STRUCTURE" 

WHICH HE SAYS IS GOOD FOR BEAN COUNTERS BUT TERRIBLE FOR INNOVATION, 

QUALITY STANDARDS AND CUSTOMER SERVICE ‐‐ AND WHICH HE DECRIES AS THE 

REAL WORLD MANIFESTATIONS OF A LACK OF COMPETITIVENESS. 

AND IT IS NOT AS IF THERE ARE NO TEMPLATES AGAINST WHICH TO JUDGE POSSIBLE 

OUTCOMES. THE BANKS AROUND THE WORLD WHICH HAVE SUCCESSFULLY SHIFTED 

THEIR LIABILITIES TO TAXPAYERS GOT AS LARGE AS THEY ARE THROUGH A LONG 

PROCESS OF ACQUISITION AND CONSOLIDATION. THE GIANT CABLE COMPANIES THAT 

ENJOY BOTH LOCAL MONOPOLIES AND STEADILY  RISING LEVELS OF PROTEST ABOUT 

BOTH COST AND CONTENT GOT THAT WAY THROUGH A PROCESS OF ACQUISITION AND 

CONSOLIDATION, AS DID THE U. S. AUTOMOBILE  COMPANIES THAT IGNORED REALITY 

FOR SO MANY YEARS. 

UNHAPPILY, WE HAVE LEARNED THAT PERFECT COMPETITION ‐ WHICH 

TEXTBOOKS DESCRIBE AS A WORLD OF MANY SELLERS AND MANY BUYERS‐ SIMPLY 

DOESN'T WORK VERY WELL IN COMMERCIAL AVIATION. THERE ARE TWO BROAD 

SOLUTIONS ‐ ONE IS REGULATION AND THE OTHER IS CONSOLIDATION. SO FAR, 

GOVERNMENTS HAVE CLEARLY COME DOWN ON THE SIDE OF CONSOLIDATION ‐ BUT 

THERE IS NO GUARANTEE, IN MY VIEW, THAT THEIR VIEW IS PERMANENT. THUS, 

UNLESS THE INDUSTRY DOES ALL IT CAN TO IMPROVE CUSTOMER SATISFACTION 

LEVELS, I WOULD NOT BE SURPRISED TO SEE REGULATION REASSERT ITSELF IN THE 

YEARS AHEAD. 
13

TO AVOID THAT OUTCOME, I THINK AIRLINES SHOULD BE BENDING THEIR BEST EFFORTS 

TO THINKING ABOUT WHAT CAN BE DONE TO BENEFIT CUSTOMERS ‐‐ AND IN THE 

PROCESS, HELP THEMSELVES. TO DO SO, EVERY CARRIER MUST ANSWER THE 

QUESTIONS THOSE TWO PANELS WILL BE ASKING ‐ WHAT DO CUSTOMERS WANT, AND 

WOULD YOU WILLING TO DO BUSINESS WITH YOURSELVES. 

WITHOUT THE BENEFIT OF KNOWING WHAT LATER PRESENTERS WILL POSIT, LET ME 

LAY OUT MY OWN THOUGHTS ON WHAT MOST AIRLINE CUSTOMERS WANT MOST. 

NOTE THAT I SAID, MOST CUSTOMERS ‐ NOT ALL ‐ AND FURTHER SAID WHAT THEY 

WANT MOST ‐ NOT WHAT THEY JUST WANT. IF I STARTED A LIST OF EVERYTHING 

PASSENGERS WANT I WOULD TAKE UP THE REST OF THE DAY ‐ AND LIST LOTS OF 

THINGS THAT ONLY SOME WANT AND MANY THAT HAVE BEEN PROVED 

UNAFFORDABLE. SO I WILL STICK TO WHAT I THINK ARE THE TOP THREE. 

FIRST AND FOREMOST, THEY WANT LOW PRICES. OVER THE YEARS THAT HAVE ELAPSED 

SINCE DEREGULATION BECAME THE NAME OF THE GAME, THERE HAVE BEEN 

THOUSANDS OF MARKET TESTS WHICH HAVE CLEARLY ESTABLISHED THAT LOW PRICES 

ARE TOPS ON THE CUSTOMER WISH LIST. THEY LOVE TO TRAVEL ‐ THEY WANT TO 

TRAVEL ‐‐ THEY WILL TRAVEL. BUT MORE OF THEM WILL DO SO, MORE OFTEN, IF THE 

PRICE IS RIGHT. THUS, IT’S IMPORTANT FOR EVERY PROVIDER TO CONTINUOUSLY SEEK 

WAYS TO BE MORE EFFICIENT. 

TO YOUR COLLECTIVE CREDIT, THE INDUSTRY HAS DONE JUST THAT IN AN 

INFINITE VARIETY OF WAYS. IN RECENT YEARS, A HOST OF ANCILLARY CHARGES 

HAVE ADDED HUNDREDS OF MILLIONS OF DOLLARS TO INDUSTRY REVENUES 

AND SHARP SERVICE REDUCTIONS HAVE CONTRIBUTED TO THE INDUSTRY'S 

ABILITY TO OFFER LOWER FARES. 

OF COURSE, THERE WILL NEVER BE UNIVERSAL AGREEMENT ABOUT WHICH 

CHANGES APPROPRIATELY REFLECT EITHER FAIR COST ALLOCATIONS OR 

SENSIBLE SERVICE ALTERNATIVES THAT ENHANCE THE SYSTEM'S EFFICIENCY 

AND WHICH MERELY TAKE ADVANTAGE OF CIRCUMSTANCE TO UNFAIRLY 

PENALIZE CUSTOMERS. 

IN MANY CASES, THE CHANGES THAT HAVE OCCURRED ‐ WHILE NOT 

UNIVERSALLY APPLAUDED ‐‐ CLEARLY REFLECT PASSENGER PREFERENCES. I 

THINK MOST CUSTOMERS AGREE THAT THERE IS NO REASON FOR ALL 

PASSENGERS TO CONTRIBUTE TO THE COST OF MOVING BAGS IF ONLY A 

SUBSET OF PASSENGERS NEED AND USE THAT SERVICE. AND DESPITE AN 

AWKWARD PERIOD OF ADJUSTMENT WHEN ON BOARD SERVICE CHANGES 

WERE INTRODUCED, MOST CUSTOMERS SEEM TO HAVE ACCEPTED THE FACT 

THAT THE COST OF SERVING MEALS ON RELATIVELY SHORT FLIGHTS IS 

DISPROPORTIONATE TO THE BENEFIT AND PREFER THAT THE FUNDS 

PREVIOUSLY DEVOTED TO MEAL SERVICE BE USED INSTEAD TO ENHANCE THE 
14

INDUSTRY'S ABILITY TO OFFER LOWER FARES. FOR THE MOST PART, THE PUBLIC 

HAS ACCEPTED THE NOTION OF A LA CARTE PRICING WITH CONSIDERABLE 

EQUANIMITY, BELIEVING ‐ AS I DO ‐‐ THAT MOST OF THE CHANGES THAT HAVE 

TAKEN PLACE ARE APPROPRIATELY COST RELATED, AND THUS ENHANCE THE 

ECONOMIC EFFICIENCY OF THE SYSTEM. 

WHILE THERE IS NO BRIGHT LINE REPRESENTING THE DIFFERENCE BETWEEN 

APPROPRIATE CHANGE AND CHANGE INTRODUCED BECAUSE THE INDUSTRY HAS THE 

POWER TO DO SO AND CUSTOMERS LACK THE ABILITY TO EFFECTIVELY PROTEST, I 

THINK EVERY CARRIER SHOULD EVALUATE FURTHER CHANGES TO THE SCHEDULE OF 

ANCILLARY FEES AND CUSTOMER SERVICES VERY CAREFULLY TO AVOID STRAYING 

FROM ONE TO THE OTHER. 

MOREOVER, I THINK THE INDUSTRY'S LEADERS SHOULD BE CAREFUL NOT TO BECOME 

IDEOLOGICAL WHEN PRESENTED WITH CUSTOMER INITIATIVES. FOR EXAMPLE, THE 

INDUSTRY OBJECTED VIGOROUSLY AND VOCIFEROUSLY TO RECENT CHANGES 

REQUIRING THAT PASSENGERS NOT BE INVOLUNTARILY CONFINED FOR MORE THAN 

THREE HOURS ON AIRCRAFT EXPERIENCING LONG TAXIWAY DELAYS. IN MY VIEW, IT 

WOULD HAVE SERVED ITS OWN INTERESTS FAR BETTER BY ACKNOWLEDGING THE NEED 

TO DEVELOP IMPROVED PROCEDURES FOR ALLOWING WHATEVER MINORITY OF 

PASSENGERS WISH TO DEPLANE TO DO SO. I THINK EXPERIENCE WILL SHOW THAT THE 

NEW RULES WILL NOT DRIVE THE FEARED SPATE OF CANCELLATIONS AND THAT THERE 

IS NO REASON ‐ OTHER THAN INTRANSIGENCE ‐ TO KEEP PEOPLE ON AIRPLANES FOR 

EXTENDED PERIODS WHEN THEY WOULD PREFER TO DEPLANE. 

MORE RECENTLY, THE INDUSTRY HAS OBJECTED TO CONSUMER EFFORTS TO DISPLAY A 

COMPLETE LIST OF ANCILLARY CHARGES IN EVERY DISTRIBUTION CHANNEL IN WHICH A 

CARRIER PARTICIPATES.  AGAIN, I THINK THE INDUSTRY COURTS UNNECESSARY 

CUSTOMER DISCONTENT AND RISKS ITS GOOD NAME AND REPUTATION BY OPPOSING A 

REQUEST ENTIRELY CONSISTENT WITH NORMAL RETAIL PRACTICE. IN MY OPINION, 

EVERYONE NEEDS TO RECOGNIZE THAT ADOPTING  OPERATIONALLY ATTRACTIVE 

POLICIES  THAT ARE INCONSISTENT WITH CUSTOMER WELFARE AND SATISFACTION 

ARE, IN THE LONG RUN, UNLIKELY TO BE REWARDING.

I ALSO THINK THE INDUSTRY'S LEADERS NEED TO GIVE CAREFUL THOUGHT TO THE 

INTERESTING QUESTION OF WHY SOME OF THE NEWER CARRIERS ‐ ALL OF WHOM 

QUALIFY AS LCC'S ‐ CONSISTENTLY EARN BETTER CUSTOMER REVIEWS THAN THEIR 

LONGER ESTABLISHED BRETHREN. IN THE U. S. SOUTHWEST ‐ A START UP ONLY A 

GENERATION AGO ‐ FOLLOWS DIFFERENT PRACTICES WITH RESPECT TO CHECKED BAGS, 

TICKET CHANGE FEES AND TICKET PRICE REFUNDABILITY THAN MOST OTHER AIRLINES ‐

AND DOUBTLESS BENEFITS FROM DOING SO. JET BLUE ‐ ANOTHER LOW COST CARRIER 

WITH AN EVEN SHORTER HISTORY ‐ LIKEWISE EARNS HIGH MARKS FROM CUSTOMERS 

AND PROVIDES ON BOARD SERVICES THAT HAVE NOT BEEN WIDELY COPIED. SINCE I NO 

LONGER HAVE DAY TO DAY ACCESS TO THE DETAILED COST STUDIES CONDUCTED MORE 
15

OR LESS CONTINUOUSLY BY MOST OF YOU, I ASSUME THAT THE REASONS OTHERS 

HAVE NOT FOLLOWED THEIR LEAD IS THAT THE NUMBERS SAY THOSE STRATEGIES ARE 

LOSERS. 

I HAVE NO PROBLEM WITH THAT CONCLUSION, SO LONG AS THE STUDIES THAT HAVE 

LED YOU THERE ARE FREE OF IDEOLOGICAL BIAS. BUT I THINK ANY AIRLINE THAT CEDES 

SERVICE SUPERIORITY TO ANOTHER DOES SO AT ITS PERIL, AND WOULD URGE 

EVERYONE TO TAKE A LONG RATHER THAN A SHORT TERM VIEW OF THE IMPACT YOUR 

SERVICE REPUTATION WILL HAVE ON BOTH LONG TERM CUSTOMER LOYALTY AND 

PROFITABILITY. 

IN ADDITION TO LOW FARES, AIRLINE CUSTOMERS WANT THE SYSTEM TO MINIMIZE 

TRAVEL TIME AND DISRUPTION ‐ THEY EXPECT BOTH CONVENIENT ACCESSIBILITY AND 

ON TIME PERFORMANCE. IN BOTH AREAS, GOVERNMENTS HAVE MUCH TO DO WITH 

THE QUALITY OF THE AIRLINE PRODUCT, AND AIRLINES HAVE DONE TOO LITTLE ‐IN MY 

JUDGMENT ‐ TO INFLUENCE GOVERNMENT PERFORMANCE. 

LET'S START WITH SECURITY. IT GOES WITHOUT SAYING THAT WE ALL WANT TO FLY 

SAFELY, AND SAFETY HAS LONG BEEN THE AVIATION INDUSTRY'S STRONG SUIT. THE 

STEADILY DECREASING NUMBER OF FATALITIES IS SO GOOD THAT VERY FEW PEOPLE 

GIVE MUCH SERIOUS THOUGHT THESE DAYS TO THE POSSIBILITY THAT THEIR FLIGHT 

WILL NOT ARRIVE SAFELY AT ITS DESTINATION. 

UNHAPPILY, TERRORISM HAS REPLACED THE ERRORS AND MISTAKES OF EARLIER 

DECADES AS THE PRIMARY THREAT TO AVIATION SAFETY, AND WE HAVEN'T YET 

GOTTEN AS GOOD AT DEALING WITH IT AS WE NEED TO. IN RECENT WEEKS, THERE HAS 

BEEN A GREAT FLAP ‐ PARTICULARLY IN THE U.S. ‐ ABOUT THE USE OF THE SO CALLED 

FULL BODY SCANNERS NOW APPEARING AT AIRPORTS. AS THE DEBATE HAS RAGED, I 

HAVE BEEN STRUCK BY THE FACT THAT AS PASSENGERS AND GOVERNMENT DEBATED, 

THE INDUSTRY HAS REMAINED LARGELY SILENT. 

WHILE ITS EASY TO UNDERSTAND WHY THE INDUSTRY WOULD PREFER NOT TO BEAR 

THE BURDEN OF DECIDING WHO FLIES AND WHO DOESN'T, IT'S HARDER TO 

UNDERSTAND WHY IT HAS NOT WEIGHED IN WITH MORE ACTIVE SUPPORT FOR 

ALTERNATIVES TO THE EXTRAORDINARILY INVASIVE APPROACH NOW BEING USED. I 

THINK MOST PEOPLE WHO HAVE THOUGHT THE MATTER THROUGH WOULD AGREE 

THAT IT MAKES LITTLE SENSE TO USE SLOW AND EXPENSIVE FULL BODY SCANNERS FOR 

PRIMARY SECURITY CLEARANCE IN THE MAJOR AIRPORTS WHILE LEAVING SMALLER 

AIRPORTS WITHOUT ANY OF THIS EQUIPMENT. AND I THINK MOST WHO COULD BE 

CALLED EXPERTS WOULD AGREE THAT FULL BODY SCANNING IS FAR BETTER SUITED TO 

SECONDARY RATHER THAN PRIMARY SCREENING AND THAT ALTERNATIVE 

APPROACHES ‐ TRUSTED TRAVELER PROGRAMS AND MORE CAREFULLY TRAINED 

SECURITY OBSERVERS AMONG THEM ‐ WOULD LIKELY YIELD AS GOOD OR SUPERIOR 
16

RESULTS WHILE RESPECTING THE SENSIBILITIES OF MANY OBVIOUSLY NON 

THREATENING TRAVELERS. 

WE NEED MORE THOUGHTFUL POLICIES ‐ AND SINCE THE INDUSTRY HAS BOTH THE 

EXPERTISE AND THE FINANCIAL RESOURCES NEEDED TO PARTICIPATE IN WHAT IS 

CLEARLY A POLITICAL DEBATE, I THINK IT SHOULD DO FAR MORE THAN IT HAS TO VOICE 

THE CONCERNS AND PREFERENCES OF ITS CUSTOMERS. 

THE INDUSTRY HAS ALSO BEEN REMISS, IN MY VIEW, IN FAILING TO GIVE ITS FULL 

SUPPORT TO THE EXPENSIVE, DIFFICULT AND POLITICAL TASK OF DEVELOPING AND 

IMPLEMENTING IMPROVED AIR TRAFFIC CONTROL SYSTEMS. 

THE IMPACT OF AIRCRAFT DELAYS IS IMMENSE. QUITE RECENTLY, 

RESEARCHERS FROM THE NATIONAL CENTER FOR AVIATION OPERATIONS RESEARCH, 

WHICH IS A CONSORTIUM OF FIVE LEADING     U. S. UNIVERSITIES, RELEASED A VERY 

DETAILED ANALYSIS OF THE IMPACT OF U. S. FLIGHT DELAYS.  ACCORDING TO THE 

STUDY, COSTS IN THE U. S. ALONE TOTALED $33 BILLION DOLLARS IN 2008. (THE 

WORLDWIDE NUMBERS ARE DOUBTLESS FAR HIGHER, BUT I HAVEN'T BEEN ABLE TO 

FIND A SOURCE FOR WORLDWIDE DATA AS YET). 

IT IS IMPORTANT, I THINK TO FOCUS ON THE FACT THAT OF THE $33 BILLION, ABOUT 

$17 BILLION REPRESENTS COSTS TO PASSENGERS THEMSELVES. THE OTHER $16 

BILLION REPRESENTS DIRECT COSTS TO AIRLINES AND THE LOST REVENUES 

ASSOCIATED WITH PEOPLE WHO DO NOT FLY (BOTH OF WHICH MUST BE RECOUPED 

THROUGH HIGHER FARES) AS WELL AS ABOUT $4 BILLION BORNE BY OTHER 

BUSINESSES AND INDIVIDUALS WHICH REDUCE THE NATIONS GDP. 

ONE OF THE PRIMARY PROBLEMS INHIBITING THE DEPLOYMENT OF THE SO CALLED 

NEXT GEN SYSTEM IN THE UNITED STATES IS THE RELUCTANCE OF THE AVIATION 

COMMUNITY ‐‐‐AIRLINES, AIR TAXIS, FRACTIONAL PROVIDERS, BUSINESS AIRCRAFT AND 

OTHERS ‐ TO COMMIT TO EQUIPPING AIRPLANES UNTIL THE FAA HAS ENOUGH OF THE 

NEW SYSTEM IN PLACE TO ALLOW THEM TO CALCULATE A RELIABLE RETURN ON 

INVESTMENT. WHILE IT'S HARD TO FAULT ANYONE FOR CAREFUL FINANCIAL 

MANAGEMENT, I THINK THIS IS AN EXAMPLE OF A PHENOMENON WHICH OFTEN 

HOLDS UP MAJOR PUBLIC WORKS PROJECTS ‐ THE INABILITY OF THE PUBLIC AND 

PRIVATE PARTIES INVOLVED TO AGREE ON A COMMON SET OF GROUND RULES FOR 

CALCULATING THE WHOLE SOCIETY'S RETURN ON A PARTICULAR INVESTMENT. WHILE 

ANY GIVEN AIRLINE MIGHT WELL ARGUE ‐ WITH SOME JUSTIFICATION ‐ THAT IT IS 

UNWILLING TO EQUIP ITS FLEET BECAUSE IT CANNOT RELY ON THE TIMETABLE OF 

INSTALLATION AND EFFECTIVENESS PROVIDED BY THE FAA (OR IN OTHER VENUES, OF 

OTHER AIR NAVIGATION SERVICE PROVIDERS (ANSP) ‐ THE SUM OF THE CALCULATIONS 

OF INDIVIDUAL AIRLINES AND AVIATION PARTICIPANTS DOES NOT ADEQUATELY 

WEIGHT THE COSTS TO CUSTOMERS AND THE PUBLIC IN GENERAL. THUS, THE AIRLINES 

‐ BY FOCUSING ONLY ON THE EXPLICIT OPERATIONAL ADVANTAGES THEY ARE WILLING 
17

TO ASSUME ‐ DISCOUNT THE INCONVENIENCE THEY IMPOSE ON THEIR CUSTOMERS 

AND ON THE ECONOMIES TO WHICH THEY CONTRIBUTE. 

I THINK IT WOULD BE VERY MUCH IN THE INDUSTRY'S INTEREST TO HAVE BOTH 

INDIVIDUAL CARRIERS AND AIRLINE TRADE ASSOCIATIONS TAKE A MORE AGGRESSIVE 

ROLE IN ENCOURAGING BOTH GOVERNMENT AND PRIVATE SECTOR INVESTMENTS IN 

NEW TECHNOLOGIES THAT WILL REDUCE EN ROUTE DELAYS AND INCREASE THE 

CAPACITY OF EXISTING RUNWAYS. CONTINUING TO DELAY THESE INVESTMENTS 

ENCOURAGES SYSTEM PROVIDERS TO CONTINUALLY UPDATE AND REASSESS SYSTEM 

GOALS, THEREBY FURTHER DELAYING ‐ AND RAISING THE PRICE OF ‐ NEW CAPABILITIES 

THAT ARE CLEARLY NEEDED SOONER RATHER THAN LATER. 

IN MY VIEW, THIS KIND OF SHORT TERM THINKING IS MYOPIC. THE INDUSTRY WILL 

DO FAR BETTER INVESTING IN THE EQUIPMENT NEEDED TO GET CUSTOMERS WHERE 

THEY ARE GOING ON TIME THAN BY SHORTCHANGING THE INVESTMENTS REQUIRED 

AND IMPOSING CONTINUING DELAYS AND DISCOMFORT ON ITS CUSTOMERS. ITS 

TIME TO PUT NEXT GEN IN HIGH GEAR‐ AND BY DOING SO, LAY THE GROUNDWORK 

FOR REDUCING DELAYS, INCREASING CAPACITY AND SATISFYING CUSTOMERS. 

THE LAST OF THE BIG THREE ON MY LIST OF WHAT CUSTOMERS WANT IS WARM 

FRIENDLY SERVICE FROM COURTEOUS, WELL TRAINED PEOPLE. RESEARCH TELLS US 

THAT PEOPLE DEALING WITH SERVICE INDUSTRIES HAVE PSYCHOLOGICAL NEEDS 

FOCUSED ON SECURITY, SELF‐ESTEEM, JUSTICE AND TRUST. 

WE ALL KNOW THAT WHILE TRAVELING, MANY PEOPLE ARE UNEASY. THEY ARE AWAY 

FROM HOME, IN AN UNFAMILIAR SETTING, IN CROWDED AND NOISY CONDITIONS, 

OFTEN USING A SERVICE WITH WHICH THEY ARE UNFAMILIAR AND IN CIRCUMSTANCES 

WHERE A MISTAKE OR A MISHAP CAN INVOLVE SERIOUS CONSEQUENCES SUCH AS A 

MISSED FLIGHT, A LOST TICKET, A LOST BAG OR A LONG DELAY. IN THESE CONDITIONS ‐

TO A MUCH GREATER EXTENT THAN IN OTHER SERVICE INDUSTRIES ‐ THEY NEED THE 

FRIENDLY SMILE, THE HELPFUL ADVICE AND THE CALMING REASSURANCE THAT 

PROPERLY TRAINED, EMPATHETIC EMPLOYEES CAN PROVIDE. UNFORTUNATELY, AS WE 

ALL KNOW, WHAT THEY GET IS SOMETIMES FAR DIFFERENT. 

OUR INDUSTRY SUFFERS FROM THE DISADVANTAGE OF CONTINUOUS IRREGULARITY. I 

HAVE OFTEN REFLECTED ON THE FACT THAT FOR A TYPICAL AGENT OR FLIGHT 

ATTENDANT ‐ AND MANY OTHER EMPLOYEES AS WELL ‐‐ THERE'S NEVER A DAY WHEN 

SOMETHING DOESN'T GO WRONG. WHETHER IT'S AN OUT OF SERVICE AIRCRAFT, A 

WEATHER SYSTEM, A COMPUTER SYSTEM FAILURE, AN OUT OF CONTROL PASSENGER 

OR SOME OTHER PROBLEM, SOMETHING GOES WRONG EVERY DAY. AS A 

CONSEQUENCE, THINGS THAT SEEM LIKE A CRISIS TO THE CUSTOMER OFTEN STRIKE 

AIRLINE EMPLOYEES AS ROUTINE.  THE IRREGULARITY OF AIRLINE LIFE IS INHERENT IN 

THE WORK ‐ AND IT'S ONE REASON SO MANY PEOPLE FIND THE INDUSTRY AN 

INTERESTING AND REWARDING PLACE TO WORK. AT THE SAME TIME, IT CAN BE BOTH 
18

FRUSTRATING AND TAXING, AND EVERY AIRLINE INEVITABLY ENDS UP WITH SOME 

FOLKS THAT JUST CAN'T MANAGE THE STRESS. 

ON THE OTHER HAND, THE INDUSTRY ENJOYS THE GREAT BENEFIT OF ATTRACTING 

PEOPLE WHO LIKE TO SERVE OTHERS AND WHO THEREFORE HAVE HIGH 

EXPECTATIONS OF THEMSELVES AND THEIR COMPANIES. THUS, WHEN AN AIRLINE 

FAILS TO DO WHAT ITS EMPLOYEES THINK IS RIGHT AND FAIR, IT OFTEN ENCOUNTERS 

RESISTANCE OR RESENTMENT ON THE PART OF ITS PEOPLE ‐ WHICH LIES AT THE ROOT 

OF MANY OF THE LABOR CONFLICTS THAT HAVE LONG BEDEVILED OUR BUSINESS. 

MOST AIRLINE EMPLOYEES ARE NOT VERY GOOD ACCOUNTANTS ‐ AND MANY HAVE 

DIFFICULTY UNDERSTANDING WHY THEIR WORLD CANNOT BE THE SAME AS THE ONE 

THEY INHABITED 25 YEARS AGO. 

RESOLVING THAT DILEMMA ‐ FINDING A WAY TO RAISE THE SATISFACTION LEVEL OF 

EMPLOYEES WITHOUT VIOLATING THE ECONOMIC IMPERATIVES WITHIN WHICH THE 

INDUSTRY OPERATES ‐ IS KEY TO MOTIVATING AIRLINE PEOPLE TO PROVIDE THE KIND 

OF INTERFACE  CUSTOMERS WANT AND EXPECT. 

FOR THAT PROBLEM, THERE IS NO EASY ANSWER. GENERATIONS OF 

AIRLINE MANAGEMENT HAVE STRUGGLED WITH THE PROBLEM, AND I AM QUITE SURE 

MORE STRUGGLES LIE AHEAD. EDUCATION, EXPLANATION, LOGIC, INSPIRATION, 

PATIENCE, AND EMPATHY WILL ALL PLAY A ROLE IN SUCCESSFUL STRATEGIES ‐ AS WILL 

A LARGE HELPING OF GOOD LUCK AND SOME HELP FROM THE UNIONS THAT 

REPRESENT MOST AIRLINE EMPLOYEES.  LIKE IT OR NOT, HOWEVER, FINDING AND 

MOTIVATING FIRST RATE PEOPLE IS AND WILL REMAIN AN IMPORTANT ELEMENT OF 

PROVIDING THE PERSONAL SERVICE WHICH I THINK IS ONE OF THE THINGS AIRLINE 

CUSTOMERS REGARD AS AN ESSENTIAL COMPONENT OF AN ENJOYABLE TRIP. 

AS WE ALL KNOW, COMMERCIAL AVIATION HAS BEEN THROUGH A VERY 

ROUGH PATCH RECENTLY, AND I KNOW WE ARE ALL ENCOURAGED BY THE FINANCIAL 

RENAISSANCE NOW SEEMINGLY UNDERWAY. I HOPE IT CONTINUES, AND I BELIEVE 

THAT BEING SURE IT DOES WILL DEPEND VERY HEAVILY ON THE INDUSTRY'S ABILITY TO 

RETAIN THE SUPPORT AND GOOD WILL OF ITS CUSTOMERS. TO DO SO, I THINK THE 

INDUSTRY WILL NEED TO TREAD CAREFULLY AS IT BALANCES THE INTERESTS OF 

EMPLOYEES, INVESTORS AND CUSTOMERS.

IN THE YEARS AHEAD THE INDUSTRY WILL DEAL WITH A 

PLETHORA OF PRACTICAL PROBLEMS: HOW TO MANAGE THE EVOLVING 

RELATIONSHIP BETWEEN LOCAL AND LONG HAUL PROVIDERS, HOW TO BEST USE THE 

EVER EXPANDING CAPABILITIES OF TECHNOLOGY, HOW TO BETTER HARNESS ANALYTIC 

METHODS TO REFINE AND IMPROVE IT'S BUSINESS DECISIONS, HOW TO 

ACCOMMODATE EVER STERNER DEMANDS FOR ENERGY CONSERVATION AND LOWER 

EMISSIONS, HOW TO ATTRACT AND TRAIN GOOD PEOPLE AND HOW TO MANAGE THE 

EVER GROWING DEMAND FOR ITS SERVICES. 
19

AS THEY GRAPPLE WITH THESE PROBLEMS, I HOPE THE INDUSTRY’S LEADERS WILL 

REMEMBER THAT THE CUSTOMER REALLY IS THE FOCUS OF EVERYTHING THEY DO, AND 

WILL ADD LIKELY CUSTOMER SATISFACTION TO THE VARIOUS METRICS AGAINST WHICH 

THEY TEST NEW INITIATIVES.   THERE IS A SIGN THAT HANGS IN MANY BUSINESS 

OFFICES AROUND THE WORLD, WHICH READS “NOTHING HAPPENS UNTIL SOMEBODY 

SELLS.” IN THIS BUSINESS, THE SIGN MIGHT WELL READ “NOTHING HAPPENS UNTIL 

SOMEONE BUYS A TICKET” – WHICH IS LIKELY TO HAPPEN FAR MORE OFTEN IF 

PASSENGERS CAN LOOK FORWARD TO ENJOYING THE TRIP.