Flying High
You know an airline is skidding off the runway when its only boast for the financial quarter is that it reduced its cash losses to a neat $1 million a day. That's the news from U.S. Airways, which has posted a second-quarter loss of $248 million. Its last profitable quarter came a full two years ago.
And U.S. Airways isn't even the worst financial news out of today's friendly skies (has a successful advertising slogan ever fallen so far, so fast?). United's quarterly losses totaled $341 million.
One refreshing detail accompanied the bad news. U.S. Airways has admitted that slow air traffic was only partially responsible for its declining profits; budget carriers along the East Coast are leaching away its business. Finally, at least one major carrier has chosen to acknowledge that smart upstarts like JetBlue, which offer super cheap fares and a TV in every seat, are attractive to customers.
Yet in recent weeks, the major carriers' most courageous attempt at innovation was a fare increase. They may as well institute a "Bring a Terrorist to Work" day. It would be just about as good for business.
Don't think so? How about having pilots lead a champagne toast on every flight: "Here's to the oldest plane in the fleet!" Or maybe they could just try to squeeze more seats into the planes. Try an industry-wide public awareness campaign, in cooperation with the Food and Drug Administration, to convince passengers to slim down. Throw in a free, government "recommended" weigh-in at every gate. They'll buy tickets in droves.
Sometimes, it seems a wave of bankruptcies may be the only hope for substantive, effective changes in airlines' business strategies. But if the first step toward recovery is admitting you have a problem, today may be the turning point.