Here is an interesting comment from Robert Crandall, former CEO of American Airlines. He is basically saying that the days of high frequency are over. I do not agree. Do you think Crandall is correct in his vision of the future?
September 21, 2001
Aviation's path: bigger planes, fewer flights
by John Schmeltzer
Tribune staff reporter
Published September 20, 2001
As the nation's largest aircraft manufacturer and top airlines grapple with thousands of layoffs, airline executives said their business practices would change dramatically as a result of last week's terrorist attacks.
Airlines will fly fewer but larger planes. That will require fewer pilots and flight attendants. And for aircraft manufacturers like Chicago-based Boeing Co. and the European aircraft consortium Airbus Industrie, it will mean that fewer planes will be needed--and fewer workers.
No longer will the nation's top two airlines fly a combined 35 to 40 flights per day between Chicago and New York, the standard practice of American Airlines and United Airlines before last week.
"In the future it will be 20 to 25 flights per day," said Robert Crandall, former chief executive of AMR Corp., the parent of American Airlines. Crandall is credited with designing the small-jet, high-frequency plan that has dominated air travel for the past decade.
Crandall's comments on Wednesday came as American and Elk Grove Township-based UAL Corp. each said they would lay off 20,000 employees.
The two carriers' announcements were just the latest in their rapidly deteriorating industry. Late Tuesday, Chicago-based Boeing dropped an even bigger surprise: cuts of up to 30,000 jobs in its commercial jet unit by the end of 2002.
Observers say the nation's aviation industry could end up shedding more than 130,000 jobs. That could have painful repercussions for the rest of the economy, because the industry produces 10 percent of the country's gross domestic product.
In addition to American and United, Continental Airlines and US Airways--the nation's fifth- and sixth-largest carriers--have said they are cutting as many as 23,000 workers. Airline officials said layoff announcements could be going out to another 32,000 at Delta Air Lines and Northwest Airlines.
Along with a new economic climate that has spurred the job cuts has come the realization that the old ways of operating might have to change.
Joseph Schwieterman, chairman of the Chaddick Institute for Metropolitan Development at DePaul University, said events of the past week "have forced the industry to look at the proliferation of high-frequency, small-jet operations that were acclimated toward the business traveler" but made little economic sense.
Schwieterman, a member of a Federal Aviation Administration advisory committee, has long argued that the "intense competition for schedule frequency" is absurd.
That may be a concern of the past, however. Because of intensified security at the nation's airports, Crandall said, it wouldn't be physically possible to maintain the frequency that the airlines have been running.
He said that carriers will be forced to make fewer flights with planes like the Boeing 757, which seats 200 or more passengers, rather than Boeing 737s, MD-80s or Fokker 100s, which seat as few as 100 passengers.
Airline officials said as many as 1,000 of the 5,000 single-aisle and dual-aisle planes they have been flying will be idled.
U.S. airlines warn of looming bankruptcies unless the government acts swiftly to provide $17.5 billion in financial aid, but President Bush is proposing a much smaller package.
American and America West said they face imminent bankruptcy without assistance. American said its liabilities from the hijackings may exceed its financial resources."
In another troubling development, Lloyd's of London on Wednesday canceled the industry's war and terrorism insurance coverage, effective Monday. Without the coverage, airlines could be forced to temporarily ground their fleets until they obtain other insurance or government assistance.
Copyright © 2001, Chicago Tribune