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Off On OCT 1 - A Good Thing


Off On OCT 1 - A Good Thing

Old 09-26-2012, 09:47 AM
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Default Off On OCT 1 - A Good Thing

Our illustrious IT company with wings is at it again. This article was the first I heard of the next major system change. Ticket and gate agents are going from command prompts to a windows style user interface. Any bets on how this is going to go?

Legacy airlines United and American fail to learn from old mistakes - The Business Journals

Legacy Airlines Don't Learn From Old Errors

You know that famous quote by Einstein about insanity? The one where the greatest mind of modern times explained that insanity is doing the same thing over and over and expecting a different result?
For business travelers everywhere who are enduring the ongoing meltdown of two of the four remaining legacy airlines, I can only respond thusly: Albert Einstein to the white courtesy phone. Dr. Einstein, please pick up the nearest white courtesy telephone.

Seven months after a disastrous computer switch sent it tumbling to the bottom of the government ratings in every operational category, United Airlines (NYSE: UAL) has scheduled another computer transition for this coming Monday, October 1. And just as it did in March, the world's largest airline has cloaked the transition in secrecy and given passengers no opportunity to plan for potential glitches.

Meanwhile, over at bankrupt American Airlines (OTC: AAMRQ), the carrier is now three weeks into a chaotic situation in which half of its approximately 1,800 daily flights are running late and hundreds more have been canceled. At the heart of the dispute is the third-largest legacy carrier's contentious relations with its pilots, the same corrosive labor situation that caused similar disruptions at American at least twice before.

Like I said, "Paging Dr. Einstein…"

"It's hard to know who to fly anymore," says Tom Reynolds, a 100,000-mile-a-year San Francisco frequent flyer. "I switched to American when United went into the tank, and now American is in the tank. The travel gods must hate me."

Him, me, you, and pretty much every frequent flyer. It's not that there aren't alternatives out there, of course. Delta Air Lines (NYSE: DAL) is running just fine. US Airways (NYSE: LCC), the other remaining legacy carrier, has improved its daily operations. Alaska Airlines (NYSE: ALK), Southwest Airlines (NYSE: LUV), JetBlue Airways (Nasdaq: JBLU), and Virgin America all have loyal followings too.

But with industry-wide load factors north of 80 percent on an average day, the nation's shrunken airline system simply doesn't have enough free seats to replace two gigantic players. Taken together, United and American represent about a third of the capacity flown by U.S. airlines. When United and American are hobbled, everyone suffers, which is what makes the insanity of United and American so dangerous.

Let's start with United. The company's tin ear and head-in-the-sand arrogance caused it to drift all spring and summer. In July, for example, just 64 percent of its flights operated on time, and it ran last among major carriers in baggage handling. United and its commuter carrier now account for more than half of all of the complaints filed by passengers against the airline industry. United has improved in September, however, aided partially by a "padded" schedule that added time to flight schedules.

But the computer change next week—United's ticket and gate agents will finally get a GUI (graphic user interface) to replace its 1980s-style, command-driven computer system—has operational risks.

United hasn't informed customers the change is imminent. It hasn't told its passengers to prepare for possible delays at the airport as the airline's overworked and dispirited customer-service agents get the hang of a second computer regimen in seven months. And United hasn't done the one thing that always works when you're dealing with business travelers: Proactively contact them, explain the situation bluntly, and ask for patience.

Which, of course, is exactly the same no notice/no information/no communication/no humility course it pursued back in March.

Like I said: Paging Dr. Einstein to the white courtesy phone…
The situation at American is, if anything, more worrisome. Since its bankruptcy filing late last year, the carrier had mounted an impressive turnaround. It was running a cleaner, more timely, and more reliable system than it had in years. It was leading the industry in PRASM (a key indicator of revenue growth) and turning an operational profit. And it was clearly the big winner in the battle for unhappy United passengers, who switched to American in droves, aided by a controversial status-match program.

But while American recently reached concessionary new labor accords with its other working groups, the airline and its in-house pilots union never got on the same page. American won bankruptcy court approval to abrogate the pilots' contract earlier this month, and the aviators immediately responded with an uptick in sick calls and a massive increase of "write ups," industry jargon for when pilots flag maintenance issues with the aircraft they are about to fly.

The American pilots union has been quick to distance itself from the situation. It insists that there is no organized effort to slow down American. And it has done so vehemently because two previous pilots slowdowns—during contract hassles in 1990 and 1999—ended badly for the union. But pilots don't need their union to tell them how to mangle an airline's operations. With wide-ranging discretion to question the airworthiness of any aircraft he or she is about to command, a pilot can unilaterally cause a flight to be delayed or canceled. Given the advanced age of many American aircraft, many pilots, acting independently, have found an effective way to protest the abrogation of their contract.

As with the organized pilots actions in the 1990s, the result has been chaos for passengers. According to FlightStats.com, just 51 percent of American's 1,854 flights ran on time on Monday. The numbers for other days in September read like a midwinter blizzard: 49 percent, 39 percent, 52 percent, etc. By contrast, Delta Air Lines has run nearly 90 percent on time in September. American's cancellation rate is even worse: In an industry where dumping 2 percent of your flights on any given day is calamitous, American has been forced to scrub as much as 5 percent of its schedule.

The Einsteinian insanity of it all is that American didn't react more judiciously after it won the right to unilaterally impose its own work rules and salary levels. American didn't proactively cancel flights and prune its October schedule until after the pilots began resisting. It didn't have more mechanics at the ready until after pilots began writing up the mechanical issues that might have been ignored had labor peace prevailed.

But American may not be in a permanent Einstein insanity loop. If nothing else, it has learned one lesson this month. Unlike United, American has moved swiftly to mollify customers and apologize for its failings.

American last week contacted all of its elite (read: most profitable) passengers via email. It unreservedly apologized and offered real, tangible fixes: refunds without penalty if they canceled trips and reaccommodation on other carriers if American couldn't get them to their destination within an hour of their original schedules. Then American went public with an offer to all customers: no-strings-attached refunds or flights on other carriers if American can't get you there within two hours.

"I'm honestly impressed," Sue Millerton, a Chicago-based frequent flyer wrote after receiving American's email, signed by the president of the carrier's loyalty program. "I think they learned something from United's mess. It'll certainly keep me flying American for a while."

How 'bout that, fellow travelers? An airline learned a lesson. Next thing you know they'll be explaining Einstein's general theory of relativity during the in-flight safety videos.
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Old 09-26-2012, 10:47 AM
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Love that article!

Make sure that the CEOs have a Harvard degree and are paid millions. Oh yeah, make sure that they are also paid retaining bonuses. We wouldn't want to lose them. They are irreplaceable.

While we're at it, let's start up a Low Cost Airline. That would be a great idea. And let's bust up the union. They're a bunch of greedy monkeys.

Everyone knows that the super smart don't have any common sense. Just find a good old boy who understands that if you make the employees generally happy, they will make the customers happy, who will in turn make the investors happy... It's as simple as that
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Old 09-26-2012, 01:10 PM
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Originally Posted by NIGHTFLY View Post
Love that article!
Just find a good old boy who understands that if you make the employees generally happy, they will make the customers happy, who will in turn make the investors happy... It's as simple as that
Thats what Richard Branson always said. He left school early with no qualifications and didn't go to college. He did pretty well for himself.

Employees are your biggest asset and your biggest liability. If they are not happy it's going to cost you!!
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Old 09-26-2012, 05:21 PM
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I'm off..unless I get rolled!FUPM
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