Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 12, 1993 TAG: 9304120280
SECTION: EDITORIAL PAGE: A-6 EDITION: METRO
SOURCE: K. VOLODZKO
DATELINE: LENGTH: Medium
PEROT'S VIEWS ON AIR INDUSTRY WON'T FLY
RECENTLY I had the opportunity to attend the Ross Perot rally hosted by United We Stand here in Roanoke. Although I wholeheartedly support his views on many issues, ranging from political reform and government waste to social decay and civic responsibility, his opinions on one or two specific issues appear to be biased by his own business interests and associations in his home state of Texas.Perot's remarks concerning the plight of the airline industry in this country were disturbingly reminiscent of similar remarks made in recent months by the chief executive officer of American Airlines, Robert Crandall. Specifically, that foreign investment in our airlines is a bad thing and that the British Airways' investment in USAir is particularly bad.
Those of us making our livelihood in the airline business, who do not happen to reside in Texas or who are employed by an airline company other than American Airlines, do not share his view of what is ailing this industry or what treatment should be administered.
American, United and Delta, the "big three" airlines, enjoy a virtual dominance over the airline industry in the United States. Understandably, the prospect of new and strong competition challenging their oligopoly and upsetting the status quo is a source of great anxiety to their management, especially in the wake of some less-than-stellar marketing decisions that their managements have recently made. The "big three" have conducted a massive fleet-expansion strategy that has resulted in substantial overcapacity in the airline industry in recent years. This overcapacity has done significantly more to damage industry health and the "big three's" profitability than their claims that foreign investment is the culprit. Delta's recent acquisition of Pan Am's foreign routes has also proved to be somewhat less than a stunning success.
In contrast, USAir, in an effort to strengthen its competitive position vis-a-vis the "big three," has been repeatedly thwarted by government in its attempts to gain access to new foreign markets. This has been primarily the result of the lobbying efforts conducted and the influence wielded by the "big three" airlines within Washington.
Now USAir has crafted an imaginative and effective solution to the obstacles it has been confronted with in the form of its alliance with British Airways. Other carriers such as Northwest Airlines have already developed similar strategies. The alliance between USAir and British Airways will invigorate USAir, increase competition and substantially benefit the traveling public.
Perot seems to consider only the "big three" when discussing the needs of the airline industry. Quite the contrary. USAir, as well as other carriers such as Northwest and TWA, also happen to make up this industry. Unlike the "big three," the rest of the industry is seeking solutions that may be unique to their own individual circumstances. The employees of USAir also happen to be U.S. citizens, and the 47,000 jobs at stake happen to be American jobs. Perot may also be interested to know that, unlike American Airlines, USAir does not operate aircraft manufactured by Airbus Industry.
Perot, a man whom I greatly admire, needs to take a broader and better-informed view of this particular issue. The new alliances being forged by U.S. airlines are part of a large and inevitable process of globilization that's changing for the better the entire world marketplace. This process will ultimately benefit the airline industry and the American public, notwithstanding the objections of Perot or Crandall.
K. Volodzko of Roanoke is a captain with USAir.