Remarks Before Senate Committee on Commerce, Science, and
Thursday morning, AMR's top guy, Don Carty, told the Senate
Committee on Commerce, Science, and Transportation that, while he's
confident in the team he's leading, he also wanted to convey the
urgency of the problems the US airline industry faces.
We'll have full coverage of his talk in the Monday edition of
ANN; but here are some worthwhile highlights:
The hub and spoke system is not dead. It is, forthermore, the
best model for providing low-cost, high-volume air travel.
An alternate model, like that of Southwest
Airlines, has made re-examination of the premium airlines'
practices mandatory. Though Southwest is in just 20% of the market,
Carty says, its price model impacts 75% of the tickets sold.
The Internet has made airline pricing "transparent," Carty
said, a fancy way of saying that the online world has reduced
mass-market air travel to a commodity. [It's another way of saying,
perhaps, that the mileage-program perqs and corporate travel
departments aren't doing the trick, any more, now that individuals
can find out for themselves just how much those programs add to the
ticket prices --ed.]
[This goes to show what a smart fellow Carty really is -- we've
been saying these things all along! --ed]