hmmmm... and your take is?

Kristie

Mama Bear....
Staff member
what do you all think of this?
______________________________________________________
Former AMR CEO Says Business Fares Will Never Recover
Wednesday, October 15, 2003 06:33 PM ET
Dow Jones Newswires

NEW YORK -- Former AMR Corp. (AMR, news) chief executive Robert Crandall
said he doesn't expect business fares will ever return to their height
during the go-go days of the late 1990s.

Even though the economy and the stock market are now recovering, and even
though airline experts say improvement in business travel is in the works,
Mr. Crandall said he thinks it will be a long time before even the amount
of business travel is so high again.

"Business fares are not going to bounce back to the levels of the late
1990s, not now, not ever," Mr. Crandall said during a speech at a meeting
of the Association of Travel Marketing Executives. "And business volume
won't go back to its peak for a long, long time."

Business travel nose-dived as the economy dropped and more people began
booking cheaper leisure fares for business trips.

Mr. Crandall said another problem for business travelers is the long wait
at airports due to more thorough security checks since Sept. 11, 2001. He
said the best way to cut down the wait is to form a trusted-traveler
program.

Under such a program, travelers who agree to allow the federal government
access to their personal and financial records would be added to a database
and given special identification. Those travelers could breeze through a
separate security line at airports by showing their ID, while other
travelers wait to go through the usual metal detectors and carry-on checks.

"We need to collectively make clear to the government that these security
arrangements are unacceptable," said Mr. Crandall, who is a board member of
the Aviation Safety Alliance, a non-profit organization created to inform
the public about air travel safety. "A trusted-traveler program is the only
thing that makes sense."

Mr. Crandall said some politicians have opposed the trusted-traveler idea
because groups of passengers would be treated differently. For instance,
people who travel often to the Middle East -- no matter what the reason --
might not be allowed to participate in the program. Other people oppose the
idea because of privacy concerns.

Mr. Crandall further said the biggest problem for the network airlines is
labor costs, which are preventing the big airlines from defending their
turf against the growing low-cost carriers.

"If the legacy carriers can get their costs down, they will prevail,"
he
said. "Labor's what you've got to cut. But it isn't a matter of cutting
salaries. It's a matter of productivity."

Mr. Crandall said airline workers should be expected to work more hours
with less vacation. He acknowledged that cutting labor costs is extremely
difficult because of the power of airline unions. He predicted that some
network carriers may eventually managed to whittle those costs down.
____________________________________________________________

here's my take - you won't get me to give my personal much less financial information to any gov't body without a stink... AND there's no way someone can tell me to work longer/harder with less time off - unless I have 8 babies, nuthing but food stamps and no choice but to "take it"....

methinks he's been smokin the weed for too long during his "retirement"...
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Crandall is so smart, I'm suprised why no other airline bothered to snap him up for his obvious airline expertise.

Sure glad he recieved a retention bonus!
 

Derg

New Arizona, Il Duce/Warlord
Staff member
I love it when these guys pop up like prairie dogs.

Next we're going to see Ron Allen talking about the importance of good management-employee relations and his expertise in fostering a good working environment!
 

Phoenix_Son

New Member
[ QUOTE ]
Under such a program, travelers who agree to allow the federal government
access to their personal and financial records would be added to a database
and given special identification. Those travelers could breeze through a
separate security line at airports by showing their ID, while other
travelers wait to go through the usual metal detectors and carry-on checks.

[/ QUOTE ]
That seems sorta naive to me. What about professional criminals, with multiple identities? This could be easily manipulated, couldn't it?
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Absolutely.

Considering that al Quada would mask text messages in the binary code of standard pornographical .gif pictures, has millions of dollars at it's disposal, and a growing arsenal of former eastern bloc muslims, one could probably fake the credentials to bypass security in a sunny afternoon.
 

Minuteman

“Dongola”
Access to personal and financial records just to speed through a security checkpoint?

WTF!

I'm gonna start having incoming checks be made out to my best friend ... his name is "Cash."
 

naunga

New Member
In regard to the "nose-dive" in business travel, he's absolutely right, but it really has nothing to do with security hassels.

It has more to do with paying more fare a "business" fare than a normal joe schmo fare.

For example...

I took a trip to Dallas (LUV that place...ha!...actually DFW) a year or two ago. My fare cost around $800 (from CLE) which was arranged by the corporate travel department with a "discount". It was a two week trip and for the weekend I flew my wife down. Her fare was around $300 from CLE. I sat in coach and so did she. To the best of my knowledge the only difference was that I wouldn't have to pay a change fee if I had to change my plans. She would've to the tune of like $150, but even if she did change her plans and pay that fee it still was $350 cheaper. At some point I think companies started to realize that these "agreements" with airlines were only good for the airline. To go off on a tangent for a bit, I don't understand why we have a travel agency when we have 2 corporate jets that sit idle most of the time from what I understand, but I digress.

So that brings me to business or first class. What's the point? You pay an extra couple HUNDRED dollars just to get a big chair, free booze (that's not really free if you think about it), and a real plate when you get a meal...if you get a meal. I've flown first class 3 times. The first time was on my honeymoon and the ticket agent upgraded us for nothing, the second time was from MYR -> ATL because the flight was really late and we were polite to the gate agent (always be polite to the gate agent), and the third time was Tuesday on the way back from ATL. Now, the third time was on AirTran and it only cost me $35 for an upgrade. To me, it was worth $35. I got a nice big chair (which I needed because I was whipped) an entire can of Coke and a cookie, but I would never pay more than that.

I will say that AirTran has the most affordable business class out there. They only charge about 20% more over coach. That's reasonable, esspecially when you consider how cheap their fares are to begin with.

So you add all that with new technologies like voice over IP, internet video conferencing, and online colaboration and it just doesn't make sense to pay to go see someone face to face.

As far as the security stuff goes, no corporate big wig is going to just let the government riffle through his financial records. The conspircy theorist in me says Ashcroft has found a pretty slick way to find corporate corruption. Besides what does your financial situation have to do with flying on a plane? And what terrorist in their right mind would agree to use the system (as it sounds optional right now)?

There are too many ways that this could be circumvented if you ask me.

Anyhow, my two cents.

Naunga
 

tonyw

Well-Known Member
Yeah, let's have sleepy flight crews working. We just saw what kind of problems fatigue can create with the Staten Island Ferry. So now Crandall wants that kind of thing to happen with airplanes? What a smart guy.

The thing is, these guys do have a brain. I want to know what makes them forget how to use it when they reach the corner office.

As for the business travel versus leisure, there are times where you need that flexibility. When I go out for a trade show, for example, I know that I need to be in city x for y days and I can just plan around that.

But if I'm going out for a meeting with clients, then I may need to be able to stay later. I may need to be able to move my travel from 5:00 PM that day to the next morning. And so I pay the extra money to do that. Keep in mind that if you switch flights on a ticket where that's not allowed, you have to pay $150 and the fare difference. Now, seeing how you're booking it day of, the fare difference can be huge.

And all the talk of voice over IP or net meetings or all that nonsense replacing face to face meetings? Forget it. They've been saying that since the telephone was invented. But there is NOTHING in the world that can replace face to face interaction. Period.

Oh, yeah, one more thing. The whole cutting back on travel thing is just another instance where corporate management has its head up its butt. When times are bad, that is the time that you really need to keep in touch with your customers so that you can keep them. You need to travel to see them, you need to buy ads to remind them that you're there for them, and so on.

But the idiots in the top floor corner offices say, hey, let's cut travel and marketing. So I want to know just when they get their lobotomies. Is that what happens in the executive washrooms?
 

naunga

New Member
[ QUOTE ]
And all the talk of voice over IP or net meetings or all that nonsense replacing face to face meetings? Forget it. They've been saying that since the telephone was invented. But there is NOTHING in the world that can replace face to face interaction. Period.

[/ QUOTE ]
Well all I can tell is that I work for a Fortune 500 and we don't travel hardly at all anymore. If we need to met with someone they either come here or it's a conference call of some sort.

Since sales are up we must be doing something right.

Maybe it comes down to how much leverage you have over your customers. Who knows.

All I can tell you is that it seemed like everyone was going somewhere once a week or so pre-9/11 and now no one (except the execs, and they go in the corp jets) go anywhere.

Sucks for me actually since I like to travel.

That's the view from where I sit.

Naunga
 

tonyw

Well-Known Member
[ QUOTE ]
Well all I can tell is that I work for a Fortune 500 and we don't travel hardly at all anymore. If we need to met with someone they either come here or it's a conference call of some sort.

[/ QUOTE ]

As I recall, you're in IT, correct?

I guarantee you that your sales folks are travelling. If your company's management is smart, that is.
 

naunga

New Member
^^That is correct I work in IT, but our sales folks except for major account managers are field employees who are based at a store and not here at HQ, and since we're pretty much the 800 lbs gorilla of our industry the big customers tend to come to us.

And they probably are traveling...by car (our sales force is allowed to either have a company paid lease or expense their personal vehicle). And they're just dealing with small time contractors etc.

Every company is a little different. I can tell you though that we -- as a company -- have received instructions from top-level management that travel will not be authorized unless absolutely necessary. Sad, but true.

I agree there is a lot to be said for a face to face meeting, but I think you'd agree that a 2 day meeting amounts to a lot more money than a couple of conference calls, and a lot of time travel for "business" becomes a boondoggle, and not really necessary.

Like I said every company is a little different. I certainly don't believe that travel should be the first thing that gets cut, but then again, we've not laid anybody off since the economy went sour. So if the price of keeping my job is I don't get to travel like I used to, then so be it.

Naunga
 

pilot602

If specified, this will replace the title that
[ QUOTE ]
"Labor's what you've got to cut. But it isn't a matter of cutting
salaries. It's a matter of productivity."

[/ QUOTE ]

Uh, I hope he's including multi-million dollar execs and management "teams" in that statement. I mean with the kind of salaries these folks are pulling down they should be able to cure cancer and still have time to run the numbers for a day's operations.










HAHAHAHHAHAHAHAHHAHAH
 

tonyw

Well-Known Member
[ QUOTE ]
And they're just dealing with small time contractors etc.

[/ QUOTE ]

Well, then, sending them on the road isn't worth it. Now if you're talking contracts that start in the tens of thousands of dollars and go up from there, then don't you think a trip out to see the prospect or customer in person is worth it? Dropping a couple of grand to keep a $50K client happy is an investment that's well worth it.
 

naunga

New Member
Just to give you an idea of where I'm coming from.

Our field people are deal with contracts that are worth 10's of thousands of dollars. That's small potatoes compared to the accounts that the people here at HQ are handling which are 10's of millions of dollars. Most of our big customers are nationwide retail chains or companies that we decide to aquire. We also have operations in 11 countries.

I will say that lately there has been a lot of international travel right now, but that has really been related to an aquisition that we recently made, but a lot of that is start to decline because we just implemented VPN access to those locations.

In the end it doesn't really matter, I was coming back from lunch and realized how stupid some of the things that we argue about here are.


Truth of the matter is this. My company found that it doesn't need to spend that much money on travel (we've been here for over 100 years and we're probably not going anywhere). Your company apparently does.

The points of my original post are this:

1. Yes business travel in terms of the companies the same size as mine (other F500's) has declined. I think that this is expected since a company like that tends to have a lot of forward momentum and customers a lot of times come to us and we don't have to drum up business. Even our contractor business tends to come to us and not the other way around. A lot of this is due to new technologies such as video conferencing, online colaboration, etc.

2. For me it doesn't make any sense to have two perfectly good jets parked for the use of the company (not just the execs) and having your people traveling via the airlines. The pilots are salaried and even if they're not flying they're getting paid, and the money still owed on the planes is still being paid. As has been said here before, owning a plane only makes sense when you actually fly the plane.

3. Business / First Class is over priced for what you get (with the exception of AirTran). Business travelers admittedly need more room in the place since they tend to work while in transit, but few companies can justify (including mine) business class at the current costs.

Anyhow, I read through this thread and can't believe that I started getting into a pissing contest over this. Oh well. The ladies here are probably just shaking their heads thinking, too much testosterone.


So, to get back to the world of civility, I think an airline that did nothing but business class flights would do more to stimulate business travel than having the TSA go through your records. Think about it, it AirTran started a spin off, they take a few 717's put all business class seats in them, a bunch of power connections for laptops, etc. it might actually make flying to a meeting productive.

Anyhow, again my two cents.

Naunga
 

H46Bubba

Well-Known Member
I like how the CEO threw that "Pilot Wages" ou there for the public. He needs public opion on his side to lowball the union. I'm sure he's pulling in more dough than it costs to pay those guys on furlough. He needs to blindfolded and left out on the street in Compton or south central L.A. They'll show him a good time day or night!
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Yup, America loves the "Evil Pilots" mantra all the time.

A CEO has a heart attack at his desk, life goes on.

If a pilot has a heart attack at his "desk", bad things happen.
 

tonyw

Well-Known Member
I don't consider anything you said to be inflamatory or insulting. I sure hope you don't feel that anything I said was like that.

It's not a pissing contest. It's two people with equally valid viewpoints exchanging those. One of us will be proven right, one will be proven wrong. Or maybe both of us will be right. Who knows? Only time will tell.
 

naunga

New Member
No I certainly didn't feel that your comments were inflamatory. I just saw that we were both aruging points that had already been made and most likely conceded.

Anyhow, glad to see that there are some mature adults around here who can handle a friendly argument.

Later.

Naunga
 
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