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Two Out of Three Ain't Bad on the Road
May 14, 2015 -- Today we shall consider Meat Loaf, airline chief executives and the concept of two out of three ain't bad.
When it comes to airlines and the self-important SkyGods who run them, I'm always looking for a ruby in a mountain of rocks and hope to find that Coupe de Ville at the bottom of a Cracker Jack box. But a life on the road has taught me that there are no rubies, Coupe de Villes get dreadful mileage and Meat Loaf, even though he's six years older than me, will always have more hair.
Still, I will take two out of three any week on the road. And today I can report that this week we actually did get two out of three when it comes to airline chief executives.
AN AIRLINE BOSS LEARNS FROM HIS MISTAKES
When the reverse takeover of American Airlines by US Airways was announced 27 months ago, I suggested we just yada yada the whole thing. After all, we knew it would turn out badly, especially since the chief executive left standing, US Air's Doug Parker, had an awful track record.
Parker had engineered America West's takeover of US Airways in 2005 and proceeded to make one of the nation's worst airlines even worse. He mangled the combination of the passenger service systems (PSS), the industry's euphemism for everything from the reservations computers and Web site to airport kiosks and frequent flyer programs. He all but destroyed US Airways' international service. He tried to charge customers for coffee and soft drinks. He let tens of thousands of US Air's most loyal frequent flyers walk away. He never added a premium economy service and all but ignored in-flight WiFi. US Airways was profitable, but running on fumes when Parker, who'd unsuccessfully tried to merge with Delta and United, maneuvered his way into the American Airlines deal.
But even the most skeptical observer must admit that the merger of US Airways and American has gone comparatively well so far. And even the most cynical frequent flyer--I think that's me, but your mileage may vary--must conclude something amazing has happened: An airline chief executive is learning from his mistakes.
Parker's tenure at the top of the combined American-US Airways has been fairly successful. He's negotiated new contracts with most of his labor unions. Like every other carrier, he's presided over a period of record profitability. Operations are improved at US Airways and even seem to be up a notch or two at American, which had been in a long, steep decline. He and his team have slow-played the crucial underpinnings of the carriers' combination and wisely merged AAdvantage and Dividend Miles separately and before the upcoming PSS switchover.
And this week came the most obvious evidence that Parker has learned something: He's eschewed an overnight switch of US Airways' systems onto American's platform and chosen to do the integration over a 90-day period. It's a not-so-tacit admission that cheap and fast is not the way to do it when your entire airline is at stake.
As American explained this week, the so-called "drain down" process begins in July with the announcement of a combined schedule. Anyone already booked on US Airways 90 days or more in advance will receive a message explaining that the carrier's name has altered and the flight number is new, but nothing else changes. Travelers holding US Airways tickets or booking within the 90-day window will see no change at all. And travelers looking to book 90 days or more in advance will see only American-branded flights.
Will it work? Maybe. But it sure as hell should be easier than the we'll-change-everything-overnight strategy pursued by Parker when he took over US Airways in 2007. And it can't be worse than the overnight transformation that went so horribly, appallingly wrong when United combined PSS operations with Continental in 2012.
AN AIRLINE BOSS PAYING FOR HIS MISTAKES
Parker first came to aviation prominence when he took over a crippled America West in 2001 from the carrier's then-boss, the penny-pinching, my-money-is-all-that-matters Bill Franke.
A buccaneer of the worst sort, Franke moved on and was the financial wizard who made Spirit Airlines a customer-service punchline. Franke did it with the help of Ben Baldanza, one of the people who had, in an earlier life, helped turn US Air into a bad joke. After making a packet at Spirit by treating travelers like cattle and cash registers, Franke departed in 2013 and bought Frontier Airlines. At Frontier, he inherited the chief executive, David Siegel. In an earlier life, Siegel had been the most despised and incompetent CEO in US Airways history.
But even Franke has standards. Or, perhaps, no patience with people who cost him money. On Monday, the Transportation Department's monthly Air Travel Consumer Report revealed that Frontier had the nation's worst on-time record. Frontier also recorded the most passenger complaints--at a rate 34 times higher than Southwest Airlines, the nation's least-bitched-about carrier. On Wednesday, the J.D. Power annual airline satisfaction survey reported that Frontier is the nation's most reviled carrier. It scored just 659 out of 1,000 points compared to industry-leader JetBlue Airways' 801 points. Siegel was gone before Wednesday was over, stepping down, the airline claims, for personal reasons.
Did Siegel get chopped for being incompetent or simply being so bad that Franke feared he'd get hit in the wallet? Does it matter? Siegel got what he deserved. He got punished for his mistakes--and that's as rare as an airline executive learning from his mistakes.
LIKE I SAID, TWO OUT OF THREE AIN'T BAD...
On the other hand, I wouldn't be all that sanguine about Frontier's future. Franke's chosen replacement for Siegel is a guy named Barry Biffle, Ben Baldanza's former right-hand man at Spirit. Biffle also served with Baldanza at US Airways. They were known as the Killer Bs because they were so busy destroying the airline.
And speaking of killing airlines, guess which carrier finished next-to-last in the J.D. Power survey? United, of course, which scored just 665 points.
When awful results like these came out in the past, United chief executive Jeff Smisek would brush them away, claim that the airline was improving and insist that surveys of consumer sentiment always lagged market realities. Now Smisek doesn't even bother defending his record. Low oil prices and high demand have pushed United back into the black and his board of directors last year gave him a 39 percent increase in total compensation.
You think he cares what you think of him or his airline?
Like I said, two out of three ain't bad...
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