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 The Brancatelli File

joe GORDO'S TWO-SENTENCE
AUTOPSY FOR THE BIG SIX


BY JOE BRANCATELLI

March 13, 2003 -- We need to tip our caps to Gordon Bethune, chief blowhard of Continental Airlines. Thanks to his arrogance, stupidity and cluelessness, Gordo's given us the perfect, two-sentence autopsy of the Big Six airlines.

In an interview with Business Travel News that was published on Monday, Bethune had this to say to David Jonas, the magazine's airline editor:

"If you have to be in San Francisco for a presentation tomorrow, you are going. If I say it's $1,200 or it's $800, you are still going."

Take a second here. Read those two sentences again. Now read them one more time. Amazing, huh?

Bethune's comments perfectly illustrate what is destroying the Big Six. Relying on their unshakable belief that business travelers will pay anything to get somewhere, the men who run the nation's Big Six carriers have lost tens of billions since the business-travel revolution began in the spring of 2000. They've seen their market share and traffic collapse, their market capitalization disappear, their borrowing power disintegrate and two of their number slide into bankruptcy court and toward liquidation. Their own trade association said this week that the industry was at risk of collapse during a long war with Iraq.

But Bethune and his fellow buffoons still think this: "If you have to be in San Francisco for a presentation tomorrow, you are going. If I say it's $1,200 or it's $800, you are still going."

Let's start with the sheer arrogance of Bethune's statement. Why does he think business travelers, who are, first and foremost, businesspeople, will pay him $1,200 for a flight to San Francisco tomorrow when even Bethune seems to feel the price could be $800?

All of you businesspeople out there who think nothing of giving a supplier 50 percent more than their product is worth, raise your hands. Better than that, all you Continental managers out there empowered by Bethune to buy services for Continental at 50 percent above their value, raise your hands. Or let's get route specific. If you really need to get to San Francisco tomorrow and you happen to live near Continental's fortress hub at Cleveland/Hopkins, Continental has a nonstop flight for $1,159 one-way. Any of you readers out there in Cleveland buying? I thought not.

Now, let's get past Bethune's arrogance and consider how stupid Bethune apparently thinks business travelers are. Supposing you do have to get to San Francisco tomorrow from Cleveland. Bethune believes you and your corporate travel manager and your travel agent and your Web browser are so stupid that you don't know that there are more cost-effective alternatives to his $1,159 nonstop. He thinks you won't find the $290 Cleveland-Chicago-San Jose connection on a combination of Continental Express and American Trans Air. He thinks you won't find the $299 one-stop between Cleveland and Oakland on Southwest. And he must be hoping against hope that you don't know anything about the $319 Hopkins-Phoenix-SFO connection on America West.

Hate one-stops and connections? Me, too. But do you earn $860 an hour? That Southwest one-stop only takes an extra hour, so you'd have to be earning $860 that hour to cost-justify the Continental nonstop to your boss or your client. Or maybe you really need to get into SFO rather than Oakland across the Bay. Okay, fine. That America West connection through Phoenix takes about 2 hours and 30 minutes more than the Continental nonstop. To justify the Continental flight to save the time, you'd have to be earning $336 an hour, which happens to be more than 13 grand a week--or almost $700,000 a year. If you're earning $700 grand a year, take the Continental nonstop with the blessing of all of us less-affluent frequent flyers.

Beyond Bethune's arrogance and stupidity, however, is his cluelessness. Like the other fools now ensconced at the top of the Big Six, Bethune clings to the fantasy that there is a vast pool of business travelers who have to be somewhere tomorrow.

But let me ask you a question: When was the last time you had to be anywhere tomorrow? Honestly, when was the last time your phone rang and you heard someone bark: "Be on the next flight out. I need you here tomorrow!"

You and I, but apparently not Bethune, know it almost never happens that way anymore. Faxes, E-mails, file transfers, PDAs, the Web and even video and audio teleconferencing have plugged the "next flight out" gap. And there's an even greater truth: We don't need to be there tomorrow anymore because the airlines have trained us to avoid that necessity at all costs. To avoid the sky-high walk-up fares, corporations and clients and business travelers have all radically adjusted their thinking.

Only the most dire emergencies rate the "be here tomorrow" command. Most often now, our companies and clients, fully aware of the rapacious, walk-up airline pricing system, tend to ask, "When can you be here?" That's business-travel code for, "Find a reasonable fare and get here when you can."

Which brings us back to that Continental flight to San Francisco tomorrow. The moment our clients and companies hear that Bethune wants $1,159 for the next flight out, they ask us to send an E-mail instead and get to San Francisco as soon as reasonably possible. And know what? If you can wait until Monday to get to San Francisco from Cleveland, Continental will sell you a roundtrip fare for just $1,440. And if you can fly out to San Francisco next Friday, you'll be able to book yourself a 7-day, advance-purchase roundtrip on Continental for just $953.50.

Of course, good old Gordo doesn't know any of this. Which is why, with a straight face, he can tell a trade magazine, "If you have to be in San Francisco for a presentation tomorrow, you are going. If I say it's $1,200 or it's $800, you are still going."

That's how Bethune is leading Continental and the rest of the Big Six into their corporate graves. Maybe the undertakers will put his two-sentence autopsy on all their tombstones.

This column originally appeared at JoeSentMe.com

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.