I agree with you that but for AA
, TWA would have been liquidated, and all of its employees would have been lookig for new jobs.
But at the time that Carty announced the takeover, it made a lot of sense. First, the summer of 2000 was terrible at ORD
. All summer, there were severe weather watches and warnings for the Chicago area. It seems that 4 nights out of 7, the airport was setting up cots in the baggage claims of Terminals 1 and 3. Add to the problem that UA
's pilots weren't working overtime, which meant a lot of people being sent over to AA
due to cancelled flights and missed connections.
having a 3rd mid-continent hub at STL
made sense. STL
are seldom hit by severe thunderstorms at the same time.
In addition, if the UA
/US merger had gone through, AA
would have swapped the TW
757s for US's 757s. That would have improved operations a lot.
The purchase made a lot of sense until September 11th.
I agree with you. Certainly, AA
needs to reduce its costs. Every legacy carrier needs to make cuts. But AA
can't match Southwest's fares, unless it completely adopts the Southwest style of operation. AA
management needs to understand that it has to do 2 things.
First, adopt a fare plan that is similar to Delta's. The gripe about the legacy carriers is that they charge way too much for the traveler that must book at the last minute.
Second, also understand that as a premium carrier, AA
can charge a reasonable premium for premium service. That means pillows on the MD
-80s, using planes with built-in and free IFE on long-haul routes, free meals in coach on flights over 1:45 in length, etc.
If a business cheapens its product too much, then the loyal customers will either find a better product or a similar product that costs even less. Marshall Field's learned that buy selling less expensive goods, the well-heeled customers left for Nieman Marcus and Nordstrom's, and the bargain hunters found the same goods for lower prices at Kohl's.