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June 11, 2008

Crandall: Airline deregulation a failure

Crandall_1Former American Airlines CEO Bob Crandall said that deregulation has failed and called for some aspects of the airline industry to be re-regulated, according to a report in Aviation Daily.

For the whole speech, keep reading.

- Trebor Banstetter

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Comments

Frank

That's a surprising comment coming from Uncle Bob; he was one of the greatest proponents of airline deregulation.

DeReg may have worked, but too many thought owning an airline was a way to riches and tore the industry to pieces in the process of trying to get rich quick; again, human nature, AKA greed, got in the way of what could have been a good thing.

Air transport is important to our national security as is our interstate highway system. In the event of some manner of national emergency, people and material will have to be moved to where needed and both of these primary systems have been allowed to go to hell in a handbasket.

I've often wondered if Mr. Crandall would consider coming back to AA to straighten out the mess the board of directors and Arpey/minions have made of the company if he were paid as well as our present joke of a CEO to do so? Unfortunately, those with the most to lose by employing Mr. Crandall would be the ones who'd have to offer him a job.

Bob Crandall may have been a SOB, but he was our SOB.

jeff burns

i can remember back when we asked uncle bob where he would like us to park all the jets.no we ask him (Mr.Crandall)is aa going bk and if so what will they do with all of us? I could only hope that Mr.Crandall would plug himself back into the airline industry and preferably aa,and put end to the sickening dance of corperate rhetoric and unjustifiable compensation,which is supoeably based on performance....ha! what performance a 328 million dollar loss? as long as there is (revenue) not necessarily profit,that is all they need to continue this gossly neglegant extraction of amr dollars for themselves,which is not their money.Mr Crandall has some brilliant ideas weather or not they would prove profitable is yet to be seen,but never the less the only sensable ones i have heard in recent years.Mr.Crandall,wont you come join us once agais? you have the right ideas and would most likely have the support of the mass majority of the many work groups....sincerely..

peter diaz

i have said in the past that jimmie carter the dum redneck destroyed the airline industry. and to make things worse we have another dum redneck from texas running this country. haven,t you damm republicans learned your lesson?

John S

The problem isn't the competitive marketplace, the problem is that airlines are not pricing their product in a way that fully reflects costs. There's a long industry history of this and it has very little to do with deregulation.

capt. spackle

Uncle Bob was and still is a great financial leader. The posting by Mr. Diaz about dumb rednecks and republicans, I think that you need to do a little more research on political parties, Jimmy Carter was a democrat. So please, spare us the republican smear tactics. Do us all a favor, research your information and do spell check before you post.

Frank

The problem isn't the competitive marketplace, the problem is that airlines are not pricing their product in a way that fully reflects costs. There's a long industry history of this and it has very little to do with deregulation.
_____________________

In the days of regulation, prices and routes were set by the feds, said pricing was to cover the cost of the product plus a bit of a profit.

If the same regulation were to be reinstated today, Southwest and American (or any other major airlines) would have similar ticket prices and not the differences you see today.

As Crandall said, a certain amount of regulation is necessary for this idiotic industry to survive its failings, but not so much that stupidity is rewarded as it was years ago.

Albert

Mr. Crandall, come join us once again please...........

AA FSC.

SocraticGadfly

Great comments by Crandall overall, except on the labor issue. There is WAY too much distrust by ground labor, especially, of CEOs of legacy companies to ever sign off on binding arbitration, unless Crandall would agree to terms that airline CEOs could never get one penny of bonuses, ever.

Glenn Perkins

As usual this is a very coherent and comprehensive augument presented by Mr. Crandall. I am a former AA employee who always enjoyed Mr. Crandall's thoughful presentations.

I have always thought point-to-point routes are far more efficient than the hub and spoke concept. And, it has always been my belief that government regulation is required to regulate capacity on high volume routes where premium on market share is more valuable that profit.

I could not agree more with Mr. Crandall's assessment of the issue and what's needed to resolve the issue. I am happy to see that he has now come to this position. I would hope our governement elicits his envolvement in creating a national transportation plan.

Jamie

It's too bad we can't have Bob Crandall as the US Transportation Secretary. The last two have been nothing but hacks for the oil and highway lobbies. If anyone can kick our transportation system into the 21st century it's Bob Crandall.

Robert Crandall

Just to clarify:

I was an energetic opponent of deregulation

Robert Crandall

Just to clarify:

I was an energetic opponent of deregulation

Kaleberg

It's good to see old truths crawling out from under the rocks where they've been hiding. Transportation has always been in the realm of the government. Roman roads were military roads, the government built them and paid for them. Chinese emperors built their grand canals. Henry V, of all kings, regulated post chaise horse and carriage hire, setting prices and standards.

Granted, this is no longer the age of kings and emperors, but we've seen our republic build railroads, highways and canals. Even within a regulated framework there are places for private competition, but first we, as a nation, have to decide what transportation system we want. I have no doubt that having done so, we can build it.

Jeff S.

I say "ditto" to the whole of what you said, Mr. Crandall. I have but one concern; that being for airline labor. I have heard only that binding arbitration severely disadvantages employees in maintaining a liveable and respectable wage; do you see that as an accurate notion?

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