Bad News for Airline Employees

tonyw

tonyw

Well-Known Member
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8elMiDKp32s&pos=7

The global airline industry will take at least three years to recover from a travel slump caused by the worst recession in six decades, said Giovanni Bisignani, chief executive of the International Air Transport Association.

The airline industry globally lost $50 billion in the past 10 years, including $11 billion in 2009 alone. Revenues declined by $80 billion last year, Bisignani said.

“These numbers are really shocking,” Bisignani said in an interview in Singapore yesterday. “We’ve had a terrible 10 years. It would take at least three years to recover the level of growth we have lost.”

You know what this means. There will be more execs talking about the need to create new revenue streams and monetizing them in order to develop a more customer focused organization that leverages its assets and increases synergies to maximize shareholder value.

Translation? We don't know what the hell we're doing, so we're going to try to cut employee salaries even more.
 
Wouldn't you say minimizing the cost of labor is a good management quality? I mean, say what you want about 'taking care of the small guy', but in the end it's all about the bottom line, right? :eek:
 
I would love to see the arm-chair executives that poke at management all day play CEO/COO for a month or so.

So easy, a caveman can do it.
 
tonyw said:
You know what this means. There will be more execs talking about the need to create new revenue streams and monetizing them in order to develop a more customer focused organization that leverages its assets and increases synergies to maximize shareholder value.
Click to expand...

Excellent businessese. They can speak a paragraph of intelligent-sounding nonsense, but say absolutely nothing. So true. Probably means more fees, layoffs, and salary cuts. I hope never to have to work in "Corporate America."
 
meritflyer said:
I would love to see the arm-chair executives that poke at management all day play CEO/COO for a month or so.

So easy, a caveman can do it.
Click to expand...

Sure, as long as I get the same signing bonus and compensation plan they do.

Then when I do nothing because "right now, I'm studying the business model, looking for opportunities to maximize return to shareholders and other stakeholders while developing plans to make the company more customer focused and able to respond to changing market conditions" I'll walk with a fat paycheck.

There's management that's good. And there's plenty that's bad. The problem is that bad management takes the easy way out and sheds headcount and cuts pay. Okay, great. Now you've got less employees working for less.

You still haven't solved the main problem, which is that you have a commodity product which you cannot differentiate from your competitors. What are you going to do in order to make your product something that consumers will pay a premium for instead of having to always compete on price?

And don't tell me that nobody's willing to pay for a premium product. You can go to Joe's Deli and get a cup of coffee for a buck, or you can go to Starbuck's and pay $3.50 for a latte. You can go to Walmart and get a dress shirt for $15, or you can go to Nordstrom and pay $75 for it.

There are people out there who are willing to pay extra money for what they perceive to be a higher quality product.

How you get those customers and make them pay you a premium over your competitors (and I'm not talking $10 or $20 on a $400 fare, I'm talking $100 on a $400 fare) is what I think every single airline manager should be thinking of. How do I create a brand that is perceived as a premium brand so that I can charge more for the same thing?

It's a hell of a lot tougher than going back to the unions and looking for concessions, but it's also a hell of a lot better for the company and shareholders in the long run.
 
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