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flyover · September 4th, 2004, 16:27

That's a pretty good book. Haven't read it for many years. I liked "Splash of Color" by Nance. Good view from Braniff's perspective of deregulation.

Deregulation was good for the industry. It brought unprecedented growth and opportunities for anyone that wanted to be in the business. It also opened up air travel to the masses.

The majors have brought about their own demise, IMO. When deregulation hit, there was panic, generally. The majors weren't sure how to compete. Some of them went away quickly, after making very bad decisions. Braniff was a great example, over-expanding with no real plan. Fortunately for the majors the new start-ups were severely underfinanced and poorly run, including safety wise. They died out quickly.

The mistake the majors made at this point was they got cocky or maybe lazy (in the corporate suites) is a better term. With business booming and gas getting cheap (compared to the 70s) they expanded like crazy and more importantly lost control of their costs.

By the time of 9/11 the majors were already in big trouble. Revenue was moving down, costs were going even higher, many had huge debt burdens because of expansion and acquistions, and the new entrant carriers were well financed and savvy. Plus SWA had steadily grown from a minor irritant to a major force. The whole house of cards was ripe to collapse.

There was no excuse though. All of this should have been foreseen by the very highly paid executives. Their failure to position their companies for this is the main ruin of the majors.

Now there is nothing that can "save" these companies as they now exist. They will have to lower costs, shed debt, come to grips with their pension obligations and start over again. The industry that comes out the other side of this will be lean and mean and more customer service oriented, IMO. And it will be safe.

September 4th, 2004, 16:27	#11
flyover Old Skool Join Date: Mar 2004 Location: Georgia Posts: 3,389	Re: Deregulation That's a pretty good book. Haven't read it for many years. I liked "Splash of Color" by Nance. Good view from Braniff's perspective of deregulation. Deregulation was good for the industry. It brought unprecedented growth and opportunities for anyone that wanted to be in the business. It also opened up air travel to the masses. The majors have brought about their own demise, IMO. When deregulation hit, there was panic, generally. The majors weren't sure how to compete. Some of them went away quickly, after making very bad decisions. Braniff was a great example, over-expanding with no real plan. Fortunately for the majors the new start-ups were severely underfinanced and poorly run, including safety wise. They died out quickly. The mistake the majors made at this point was they got cocky or maybe lazy (in the corporate suites) is a better term. With business booming and gas getting cheap (compared to the 70s) they expanded like crazy and more importantly lost control of their costs. By the time of 9/11 the majors were already in big trouble. Revenue was moving down, costs were going even higher, many had huge debt burdens because of expansion and acquistions, and the new entrant carriers were well financed and savvy. Plus SWA had steadily grown from a minor irritant to a major force. The whole house of cards was ripe to collapse. There was no excuse though. All of this should have been foreseen by the very highly paid executives. Their failure to position their companies for this is the main ruin of the majors. Now there is nothing that can "save" these companies as they now exist. They will have to lower costs, shed debt, come to grips with their pension obligations and start over again. The industry that comes out the other side of this will be lean and mean and more customer service oriented, IMO. And it will be safe.