Air Travel to Be Cheaper, but Harder; Former Airline Officials See shrinkage.(BUSINESS)
Byline: Tim Lemke, THE WASHINGTON TIMES
The restructuring of major airlines - brought on by the September 11 attacks and a sluggish economy - will lead to lower ticket prices but greater hassles for air travelers, a former airline CEO said yesterday.
In-flight luxuries, such as meals and entertainment may become a thing of the past as some airlines redesign their business plans to compete against discounters, such as Southwest and JetBlue, said former American Airlines CEO Robert Crandall on NBC's "Meet the Press."
"Over time, I think the public will find that air travel is less accessible, less ubiquitous and less service-oriented - perhaps more efficient and more price-oriented - but less convenient," Mr. Crandall said.
On the same program, another former executive said major airlines' use of airport hubs will probably change. Most major airlines use major bases, such as Chicago's O'Hare International or New York's John F.Kennedy International airport, to offer the most flights. More price-conscious airlines, including Southwest and JetBlue, do not have their own major hubs, and use what is known as a "point-to-point" model.
Under the hub system, "you may have 18 shots a day to go from Syracuse to Duluth," said Michael Levine, a Yale law professor and former executive with Northwest and Continental airlines. "There's no way you can do that in the kind of point-to-point discount airline system that people talk about when they talk about Southwest."
Mr. Crandall, who helped pioneer the so-called hub system while at American, said it no longer offers the same revenue-producing power it once did, and should be eliminated.
"If the objective is to optimize the utilization of equipment and assets and make everything as optimally efficient as possible, and if the facts are that you do not need or cannot support the enormous frequency of flights, which we had before, then ... stretching out the hubs a bit, making people wait a bit more, using the equipment a bit more intensively, makes a lot of sense."
But, he added, "one of the outcomes is going to be that service will be considerably less convenient. …