A large portion of this podcast is spent reporting on the poor situation in the airline industry. Most of us have heard how bad it is, if not just bring up the Yahoo Aviation and Aerospace Page and surely somewhere on there you’ll find a related story.
In my heart of hearts I really don’t think any of this stuff is purely intentional on an individual scale of the people involved. But following this paragraph I have listed what I think are very strong indicators that point to the heart of the recent airline failures, in this post 9/11 recovery period.
Durable Competitive Advantage
The airlines need to solve their problems on a massive scale but I doubt that they will anytime soon, due to the concept of durable competitive advantage. According to this article, durable competitive advantage is, in its simplest form, the scale of a business in its field vs. its peers. In the case of the airline industry, with it’s post 9/11 cost cutting mentality, as long as airline ABC is putting out crappy service with low employee morale, so will airline XYZ. Interestingly though the article states that the airline industry has the worst durability of any business sector, and if I were an outside investor I would have to agree. But I’m not and so I see this concept as it can be applied here- Look at it from a standpoint within the airline industry and it truely becomes a notion of durability among peers; a temporary durability then, if you will. It’s ‘whatever works to keep the airline afloat’ and the ‘do more with less’ philosophy that have been in place since 9/11. Both seem to have worked out quite well infact, as far as the bottom lines are concerned.
Severe Weather
Now we turn to the massive weather delays on the east coast earlier this year, specifically with regard to what the airlines are willing do long term about it right now. An airline will not spend any money to beef up any department (IE the ramps and ramp support in it’s major hubs) so long as it has durable competitive advantage in its field vs. its peers. Again, if every airline is putting out crappy service what’s the point in spending money to get any better? So a passenger rants that they’ll never fly airline ABC again and they go to airline XYZ. Eventually airline XYZ will piss them off too. In theory, they would go through every airline out there until they’re back at airline ABC again. And this concept has worked fine as far as the bottom line is concerned for all the carriers. That’s why we haven’t seen any real change to the under staffing and therefore it’s contribution to low employee morale, even now that the airlines have returned to profitability.
And So a Front Liner’s Standpoint - Do More with Less
Whether you’re a mechanic, a ramper, a gate agent, or a pilot, when you’ve got a 7 course meal on your plate so to speak from the company with only room enough in your stomach for an orange, what do you think is going to happen? You’ll start eating as much as you can until you get fatigued. Then you’ll call for help for the rest, except no one responds, because there is no one there. They’ve also got too much on their own plates to help you, let alone eat what they have on their plates to eat. Eventually as much as everyone doesn’t like it (morale) they do what they have to in order to make it all work somehow, which usually means somethings going to get swept off everyone’s plates. Eventually morale is lower then it’s ever been before because the front liners feel the company doesn’t care about them anymore, since they’re doing the work of three for the price of two thirds.
——————————————–
Morale (Wikipedia):
Morale, also known as esprit de corps, is a term for the capacity of people to maintain belief in an institution or a goal, or even in oneself and others. The term applies particularly to military personnel and to members of sports teams, but is also applicable in business and in any other organizational context, particularly in times of stress or controversy.
——————————————–
The cycle continues until customers suffer, there’s public outcry and ‘disbelief’ and that’s when the government steps in to force changes. And that’s when the company’s finally put out (huge) sums, but to the PR and recovery campaigns. In fact, you can even see this cycle just about everywhere today as a result of the ‘Wal-Mart Way.’
When it comes to stopping this cycle, the FAA is exactly the same pain in the arse to airline managements as the unions are- On a broad scale they are both fighting against the same thing.
If you were an airline manager, so long as ‘the Joneses’ were putting out the same crappy product as your airline, you’re gonna be fine.
And that’s today’s airline’s durable competitive advantage.
~Capt’n Chris
Filed under: Editorials | 
| 
It’s quickly becoming apparent that Spirit Airlines CEO Ben Baldanza either…
~Capt’n Chris
The jubilation of hearing this is indescribable to me. Most folks have heard 
~Capt’n Chris
