Bob Crandall, American Airlines’ former chief executive, rocked the airline community when he claimed high fuel prices are not to blame for the current industry malaise and called for limited reregulation of the airline business.
His comments were made during a speech at the Wings Club in New York. Why reregulate airlines? Because they don’t seem capable of setting their own pricing and do not follow cohesive pricing procedures. They are all selling seats “too cheaply.”
Evidently if the government was involved, the airlines would be more rational in their pricing decisions.
According to Travel Weekly, Crandall pronounced these words of wisdom.
Crandall threw fuel costs out of the discussion. He said high fuel prices are not the true culprit although they do aggravate other problems.
… mergers won’t produce economies of scale for already-large companies and won’t lower fuel costs.
Crandall suggested requiring airlines to price tickets based on the sum of fares for each leg flown, which would foster more nonstops that are more efficient and “turn conventional wisdom about hubs on its head.”
He urged that the Railway Labor Act be amended to forbid strikes against airlines and require binding arbitration for labor disputes.
The government’s lack of a national transportation plan has led to a decline of airlines, railroads and highways. He is “appalled” that no one in Washington has given any thought to developing high-speed rail both for city-to-airport transportation and as an alternative to air on routes of 300 miles or less.
He also said the air traffic control system needs to be fixed, but that “we seem to have lost our political will to resolve conflicts.”
“Until we regain that will, our antiquated ATC system will continue to inhibit [the success of U.S. aviation],” Crandall said.
We agree with him on everything — except the need for reregulation.
