American Airlines SNAFU

The idea that American is going to cut its way to profitability is ridiculous. A survey by the International Air Transport Assn. (the industry’s trade group) shows that people are trying to avoid flying because the experience is so poor and many of the airlines’ best customers have gone, when they can, to flying privately. The problem with American Airlines, as with the U.S. industry—and in fact many businesses—is not that its costs are too high but that its revenues are too low. Making the flying experience worse by fighting with the people who deliver that service doesn’t seem like a sensible prescription for success.

What could a “Professor of Organizational Behavior at Stanford University’s Graduate School of Business, where he has taught since 1979. He is the author or co-author of 13 books” possibly know about how to make money in the airline business? Airlines, as with all modern successful businesses, operate off a money-making belief structure that does not recognize customers or employees. That’s why when possible businesses have outsourced manufacturing to Asia, have licensed their brand names to third parties, and have turned to pure financial transactions for making money.

The most successful modern business model is all about no people. Sound a bit “robotic”? Ya think that model has long-term survival power?

via American Airlines Is on the Wrong Flight Path – Businessweek.