North Texas
(2002-09-03)
Survival of the Fittest
George Price, Communications Director, Association of Professional Flight Attendants: ...during the crash sequence itself. And that's something I cannot shake. And I also see one crew member. Her face comes into my mind during the day when I least expect it. And I've met her parents, and I told them that. I never met her. Her face comes to me at the most incredible times during my day. And her parents were moved by the story. I think also a little disturbed. I think they looked at me like I probably need to seek out some help. And I probably do.
Zeeble: He's not the only one. Price says thousands of attendants have now filled out the survey, many acknowledging it helped them realize how deeply affected they were. American Airlines' chief executive, Don Carty, has been facing nightmares of a different kind. He addressed the nation's airport executives in Dallas last May.
Don Carty, Chairman and Chief Executive Officer, AMR Corp. (parent of American Airlines): The past 12 months have been the most difficult and painful period in our industry's long and storied and history. Since that time, our crisis has become profoundly more serious.
Zeeble: The economic recession before 9/11 had damaged American. The terrorist attacks were like a deep stab wound to an already ailing patient. Within weeks of 9/11, American received nearly a billion dollars from Congress as part of a $15 billion bailout to the industry. It cut its flights by 20%, laid off 20,000 workers, and launched a rapid series of changes. Routes and schedules were cut and revamped; on many flights, food and publications disappeared. E-ticketing began to supplant paper tickets. And alongside lightly staffed check-in counters, machines at airports started dispensing seat assignments, baggage claims, and itineraries. Dallas business traveler Mary Holtgren has liked the convenience.
Mary Holtgren, business traveler: Actually, I think it's wonderful. It's well-designed, very user-friendly, and speeds things up. Anything you'd need a ticket agent to do, you can accomplish through their kiosk.
Zeeble: On August 13th, American announced even deeper cuts, including 7,000 more layoffs. Tom Klein, a travel industry consultant with Sabre, says the airlines' most significant change is the rolling hub, which American has experimented with at O'Hare in Chicago and will bring to DFW Airport in November. Instead of bunching flights together at peak times so travelers can make fast connections, American is spacing out flights more evenly during the day. The system is more efficient for the airline, Klein says, but gambles with customers.
Tom Klein, Group President, Airline Solutions: As customers make a decision on what airline to buy a trip on, they look at price, schedule, loyalty. The schedule changes in this model. It can potentially take longer from point A to point B. The impact of that, the airline can simulate but can't be sure.
Zeeble: Don Carty says the rolling hub has worked well for American at O'Hare. But Bret Cunningham, a Dallas-based manager for Starbucks who flies American several times a week, says the new scheduling might be too costly for him.
Bret Cunningham, manager, Starbucks: It's definitely a risk. If I can fly directly out of Dallas/Fort Worth roundtrip on Frontier Airlines or another airline, and can make the timing work for my business, I'd absolutely switch to Frontier.
Zeeble: Former American Airlines chairman Robert Crandall says the loss of frequent business flyers to discount carriers is a grave concern. As he told airport executives in Dallas, American's premium business customers built the airline and kept it flying.
Robert Crandall, former chairman, AMR Corp.: In effect, we scheduled the airline system for the business traveler and sold the extra seats to leisure travelers. After 9/11, business travel fell off sharply, and it may take years for them to return.
Zeeble: And if they don't, it may take years for Americans' furloughed employees to return to the airline. Bob Reehm, with the carrier 14 years, is among some 1,200 flight attendants let go in the weeks after 9/11. He's been assigned by American to a temporary security job.
Bob Rheem, former American Airlines flight attendant: It was a dream of mine to be a flight attendant - to work for an airline and work for American. I really want to be back flying. I want to be there, I want to be there, I want to be back flying, and I'm not. It's very frustrating.
Zeeble: Rheem, along with the more recently-furloughed flight attendants, will remain on a call-back list for several years. Some couldn't wait, so they quit. American's CEO Don Carty - in one of his weekly phone messages to the company - offered little encouragement to his remaining employees.
Carty: Demand will be very soft, and the economy will remain uncertain for some time to come. In many respects, the nature of the changes yet to come will be just as fundamental as the changes we experienced after deregulation, because our world truly has changed. Make no mistake about it - change at American will continue.
Zeeble: One gate agent - a 10-year American employee who didn't want her name or natural voice heard, is worried about vulnerable colleagues with little seniority - say 2 to 3 years. And she has another concern - that American is skimping on service and quality.
Anonymous American Airlines gate agent: It used to be a more classy carrier. It seems more like of a - not as classy, more like Southwest, I guess. Some services we used to offer - we also had ticket prices higher. We can't have low prices and offer the same services.
Zeeble: Don Carty says profitable discount carriers like Southwest Airlines have been hounding the bigger airlines like American for years, long before 9/11. He believes things are only going to get worse.
Carty: Consumers are telling the airlines that they really, really like us. But they can't or won't pay extra for the convenience and amenities we offer. They'll fly the industry Wal-Marts-of-the-air instead.
Zeeble: At the same time, Carty says he will not "Wal-Mart" American. So in addition to the changes he expects will save the carrier more than a billion dollars over the next year, he also wants a modification in labor negotiations. Airline executives have been lobbying Congress to allow binding arbitration in their contract talks. They believe this change would force unions to moderate their demands and save the carriers money. Captain John Darrah, president of the Allied Pilots Association, which represents American's pilots, resents the tactic.
John Darrah, union president, Allied Pilots Association: I take that as a slap in the face to labor - that after the events of September 11th, after what we all did, what everybody did when called by management to help return this airline to the air. There's a lot of fighting between labor and management already. We can't continue down this road. We're not the enemy; they're not the enemy. The enemy is the terrorist groups out there. If we want to have this fight, let's have it, but now's not the time.
Zeeble: Pilots say now is the time for management, with their help, to convince other airlines and the public that ticket prices need to rise. Tickets were deeply discounted right after 9/11 to encourage people to fly again, and American has tried (but mostly failed) to make higher prices stick. Darrah thinks the public has been spoiled by cheap fares and no longer understands the real value of flying.
Darrah: I overheard this conversation. One man found an airfare from Hartford to Orlando for $178 round trip. Yet to go into Disney World for a day is $102. Some perspective of public - we start to take air travel for granted.
Zeeble: Without higher prices, most airlines say they'll be hard-pressed to make money again. American executives say the carrier has the resources to survive, but it's not clear in what form. As the airline changes schedules, drops routes, planes, employees, and other services, American is looking more like a hybrid between a full-service airline and discount carriers it doesn't want to become. The company believes all full-service airlines must follow its lead in order to save the industry. It's unclear how many will, as the carriers struggle to redefine their corporate culture and identity. I'm Bill Zeeble with KERA 90.1 in Dallas.
To contact Bill Zeeble, please email bzeeble@kera.org. © Copyright 2009, KERA
