An idea scribbled on the back of a cocktail napkin is part of the lore of several of the greatest ideas of mid-20th century America: the Laffer Curve, the automatic fire-hose nozzle, the Space Needle in Seattle. Important concepts, simply presented. Another famous piece of cocktail napkin lore is the original concept for Southwest Airlines — a simple triangle connecting Texas’ three largest cities: Dallas, … Continue reading Herb Kelleher’s ‘Customer-Centric’ Company
Do fear and safety go hand in hand?
Consider air travel. An estimated one in 15 Americans has a crippling fear of flying, and a quarter of the U.S. population reports being nervous about flight.
Of course, aviation is just about the safest mode of travel in the world. The average American is 1,330 times as likely to die in a car wreck as in a plane crash. But all the statistics in the world can’t dislodge the deep anxieties many feel about flight. In Greg Ip’s widely covered new book, Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe, the Wall Street Journal economics columnist explores why that sense of risk heightens the safety of air travel. Continue reading “Risky Business”
Are airlines unfairly conniving to keep capacity low and thus drive up fares? According to Senator Richard Blumenthal, a Connecticut Democrat, they are—and he’s asked the Justice Department to investigate.
Unfortunately for airlines and their passengers, Blumenthal has succumbed to a particular Washington, D.C., affliction: thinking he can run a business better than the people actually running it. If they had their druthers, Elizabeth Warren would moonlight as a banker, Joe Barton as a college sports administrator, Jay Rockefeller as an oil company executive, and Hank Johnson as a geographer.
Based on a New York Times report on an airline industry meeting, Blumenthal is concerned that “many of these [airlines] publicly discussed their strategies to remain ‘disciplined’ in their decisions to manage capacity across their flight routes.” Continue reading “Senator Wants to Play Airline Executive”
On November 8, 2006, Dick DeVos woke up with nothing to do. The day before, he had lost the election for Governor of Michigan. “If you’re not elected, you’ve basically cleared your entire schedule for the foreseeable future,” he chuckles. “You’ve got time on your hands to reflect on, ‘What should I be doing?’”
It wasn’t a feeling DeVos was used to. The former CEO of the multi-billion-dollar direct-selling firm Amway and head of the Orlando Magic NBA team, DeVos had also been involved in civic activities, including serving on the State Board of Education and on numerous non-profit boards. He was a mentor with Kids Hope, a charitable group in his native Grand Rapids. Continue reading “Fly High”
Gretchen Reed loves to fly. She owns not one, not two, but eighteen restored, antique aircraft—many of which are still flown. She’s especially fond of her Aeronca Champion, a classic, two-seat, single-engine, fixed-gear airplane, flown from her own, private airport in northeastern Ohio.
Reed is not only an avid aviatrix. With the gift of her airport and collection to Lake Erie College in Ohio, she has proven herself an avid philanthropist. Continue reading “High-Flying Philanthropy”
Transportation Secretary Ray LaHood’s rescission of a proposal to auction slots at New York City–area airports triggered a heated discussion at the Times’s Freakonomics blog. Stephen Dubner argues, based on a conversation with an airline pilot, that shutting down close-in LaGuardia Airport would improve air traffic flow over New York City and allow more traffic at JFK and Newark airports. Many commenters made the excellent point that it would be difficult for JFK and Newark, which are already near capacity, to handle LaGuardia’s traffic. (If you split up the passenger traffic at LaGuardia between JFK and Newark, that would mean a 24 percent traffic increase at JFK and a 33 percent increase at Newark.) This would inevitably increase the cost of flying to and from (and through) New York. Dubner’s correspondents recommend banning so-called regional jets at New York City airports, a proposal that is well and good but that is much easier done with pricing mechanisms than with arbitrary bans. Continue reading “Want to Fix New York Air Congestion? Try Competition”
In 1977, as a group of policymakers attempted to apply economic theory to the regulation of airlines, future American Airlines (AA) chairman Robert Crandall was not happy. Then an executive at AA, Crandall claimed that the economists’ ideas would ruin the airline industry. Things came to a head when he confronted a Senate lawyer prior to a hearing, reportedly shouting: “You f—king academic eggheads! You don’t know s—t. You can’t deregulate this industry. You’re going to wreck it. You don’t know a g——n thing!”
Thirty years after a bipartisan coalition passed the Airline Deregulation Act (in October 1978), the subject is still hotly debated. Continue reading “Should We Privatize Airports?”
Airline complaint one-upmanship is an old standby of small talk—“You had to wait six hours at the gate? That’s nothing! I was wedged between two linebackers and the in-flight movie was the latest from Larry the Cable Guy.” But is air travel really this bad? Travelers seem to think so. One measure finds that customer satisfaction with airlines is at its lowest point in three years; and the 2008 Airline Quality Rating, an aggregation of consumer complaints to the Department of Transportation, reports that complaints were up 60 percent since 2007.
Airlines seem to give travelers fewer reasons to smile. By mid-2008, many airlines had begun aggressive campaigns to bring in more cash through fees. Several airlines devalued their frequent flier miles, hiked the fees to book a “free” ticket, and started charging for checked baggage. New fees were added so fast that Southwest Airlines began running ads touting the fact that they merely had not added any fees.
And if the fees weren’t enough, fares are rising as airlines follow through on promised capacity cuts, trimming routes and frequencies. With fewer seats, passengers have fewer options and face higher fares to match record jet fuel prices.
But it’s not just the airlines. Continue reading “Why You Hate to Fly”
You might be forgiven for mistaking the pending privatization of Alitalia for the plot of a new romantic comedy–say, My Big Fat Italian Wedding. All the elements are there: the clumsy, unattractive bride to be, the parents desperate to marry her off to any suitor who can come up with a suitable dowry, the relatives anxious to make sure the dowry is large enough, the handful of frustrated suitors and the doddering grandfather who won’t let the bride marry a handsome foreigner.
Last week, Alitalia’s unions failed to come to terms with a bid for the airline by Air France–KLM. The $1.17 billion bid had been approved by Alitalia’s board and the Italian government. After weeks of negotiation and many concessions, Air France–KLM gave up and withdrew its bid. Stirring in trouble was former Italian prime minister Silvio Berlusconi, who decried the notion of “giving our national airline to the French.” Continue reading “My Big Fat Airline Merger”
The National Air and Space Museum seems to occupy a precarious position on the Mall in Washington. Not that it is in any danger of disappearing, but it seems to have less of an intellectual pedigree than its neighbors. Art, science, history, anthropology, and–whoa! cool planes and spacecraft! The Smithsonian’s 19 museums have over 21 million visits every year, and a quarter of them go to the National Air and Space Museum. It’s a favorite for families on vacation and school groups on field trips, and is always much more crowded than the sedate galleries nearby. But its new permanent exhibition illustrates that beautiful aircraft and a popular presentation can go hand-in-hand with intellectual rigor.
“America by Air,” which opened in November, records the story of commercial air travel in the United States, from the earliest postal pilots to the new planes just now entering the market. Continue reading “Up, Up, and Away”