Bethune slams A380
 

Ex-Continental boss slams A380

By Kathie O'Donnell, MarketWatch
Last Update: 2:45 PM ET May 12, 2005

WASHINGTON (MarketWatch) -- Former Continental Airlines boss Gordon Bethune took aim Thursday at the 600-seat Airbus A380, saying the biggest passenger jet ever built has more to do with "engineers' testosterone" than giving passengers what they want.

"What's in it for you to wait in line with 600 other people to get on an airplane?," said Bethune, who retired as Continental's (CAL: news, chart, profile) chairman and chief executive officer at the end of last year.

Bethune, speaking at the Investment Company Institute 2005 general membership meeting in Washington, is also a former Boeing Co. executive and a pilot. See full story.

"What's in it for you to wait for your bag with 600 people? What's in it for you to wait in customs and immigration lines with 600 people?," he asked.

What airline customers really want, Bethune said, are good deals.

"The No. 1 driver for customers [is price]", he said, because they can go online to comparison shop on Web sites like Expedia.com or Travelocity.com.

After price, the next priority is scheduling, he added, noting that flights leaving at midnight aren't that appealing.

Cheap flights abound in the U.S. right now. Fierce competition has pitted established, older airlines like Continental or American Airlines (AMR: news, chart, profile) in a fight for passengers against smaller, upstarts like JetBlue Airways (JBLU: news, chart, profile) that are offering cross-country flights at low prices.

It's not just the low-cost carriers that are aggressive with their pricing. Bankrupt airlines like United Airlines (UALAQ: news, chart, profile) and US Airways (UAIRQ: news, chart, profile) have slashed costs and are no less relentless with their fares.

Some analysts consider Chapter 11 protection to have given United an advantage as it carries out its restructuring in court.

Just this week, United succeeded in getting court permission to hand over billions in retirement-plan obligations to the Pension Benefit Guaranty Corp. in a move that will save the airline hundreds of millions of dollars a year.

"So if United has a price advantage because their costs are lower, everybody's got to get to the market cost," he said.

JetBlue, for example, has a fleet of young jets and no traditional pension plans. Instead it has 401ks and new Airbus and Embraer (ERJ: news, chart, profile) aircraft.

The airlines aren't alone in their recent pension crisis. They have been preceded by the steel industry and now analysts wonder what will come of the auto sector's plans, prompting larger concerns about the soundness of America's retirement systems. See full story.

"No-one can make a promise to you that 30 years from now they are going to pay you a guaranteed amount because they don't know how to keep that promise. And I think the reality of the situation is coming home to America," Bethune said.