As the international aviation community awaits U.S. government action on the report of the National Commission to Ensure a Strong Competitive Airline Industry (1993), Charles Darwin would be justifiably proud. The obvious survival-of-the-fittest struggle that many U.S. airlines have faced since deregulation and the evolutionary posture of a growing group of profitable carriers, led by Southwest Airlines, seem to be a fulfillment of his theories

Clark, Ronald E

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Embry-Riddle Aeronautical University

Journal of Aviation/Aerospace Education & Research Volume 4 Number 2 JAAER Winter 1994 Article 4 Winter 1994 Darwin Would Be Justifiably Proud Ronald E. Clark Follow this and additional works at: https://commons.erau.edu/jaaer Scholarly Commons Citation Clark, R. E. (1994). Darwin Would Be Justifiably Proud. Journal of Aviation/Aerospace Education & Research, 4(2). Retrieved from https://commons.erau.edu/jaaer/vol4/iss2/4 This Forum is brought to you for free and open access by the Journals at Scholarly Commons. It has been accepted for inclusion in Journal of Aviation/Aerospace Education & Research by an authorized administrator of Scholarly Commons. For more information, please contact commons@erau.edu. FORUMDARWIN WOULD BE JUSTIFIABLY PROUDRonald E. ClarkAs the international aviation community awaits U.S. government action on the report of the NationalCommission to Ensure a Strong Competitive Airline Industry (1993), Charles Darwin would be justifiablyproud. The obvious survival-of-the-fittest struggle that many U.S. airlines have faced since deregulation andthe evolutionary posture of a growing group of profitable carriers, led by Southwest Airlines, seem to be afulfillment of his theories.With the meteoric rise ofFederal Express to billion-dollar-revenue status, a model of competitivenessemerged. United Parcel Service, as if using the bookwritten by Japan in the 19708 and 1980s, implemented acopycat corporate strategy that has carried it to aposition of near-parity with once-dominant FedEx. Thislesson, which is not an innovative corporate model byany means, is beginning to be learned by the U.S. airlineindustry.What might be called the Southwest Airlines modelof profitability is being copied to some extent by manyemerging carriers, such as Morris, Reno, and Kiwi. Ifcurrent rumors are true, American, United, USAir andother major U.S. carriers are examining the feasibility ofa point-to-point domestic strategy and may soon unveilplans similar to those of Southwest. If restructuringhappens, it will be refreshing to see ego-abatementoccur, replacing the cutthroat fare wars that weredestined, if not designed, to clear the marketplace of theDarwinian spoils. To adopt the Southwest model is, inthe long run, a more viable alternative.There seems to be a political moratorium on the useof the word "reregulation." Whether this silence comesfrom the "history, please be proud of us" mentality of thederegulation founders, or from current political thinkingin Congress and the Clinton!pena camp, is unknown.What is known and well documented is that U.S. airlinederegulation has not worked as originally intended. AsPaul Dempsey accurately perceives, the 3% market sharesuccess of Southwest Airlines is certainly not to be takenPage 6as an indication of the overall success of deregulation(Dempsey et aI., 1993).Two points are worthy of mention. First, theSouthwest model of U.S. airline profitability should bebroadly adhered to as an enduring philosophy ofdomestic operations by the industry; that is, not as atoken gesture, but as a restructuring effort, from theground floor up. Second, the Department of Trans-portation or some new entity should have oversight ofthose areas the market is unable or unwilling toself-regulate. Rather than blame the culprits, whoeverthey are, we need to repair and recover instead. The illsof the past 15 years of U.S. airline deregulation arecommon knowledge. Each of these faults has viablesolutions short of the reregulation methods of the1938-1978 era. It is clear, as international airline CEOshave recently indicated, that ego control by U.S. airlineCEOs has fallen short of the mark. Holmes (1993)believes that the majors are still fascinated with playingthe game of monkey see, monkey do. Today, the top"monkey" is in trouble with its board of directors, is notviewed as the "fittest," and may not survive.Just what is this Southwest model? Morton Beyer'Sstudy What is Really Wrong With America'sAir Carriers orThe Secret ofSouthwest Airlines (1993) tells much of thestory. Here are a few of the key elements of SouthwestCEO Herb Kelleher's trend-setting model:1. Market-bottom prices based only on profitabilitymargin, not on yield management.2. Industry-leading safety concerns.JAAER, Winter 19941Clark: Darwin Would Be Justifiably ProudPublished by Scholarly Commons, 19943. Employee/customer focus leadership manage-ment style.4. Single type aircraft operations.5. All aircraft models configured alike (type ratingssimilar).6. "No frills" nutritional service.7. Keen, insightful marketing.8. Opportunistic, bulk purchasing (aircraft paintscheme).9. Fifteen-minute gate turnaround.10. Young aircraft fleet.11. Slow, conservative company growth.12. Low people-to-aircraft ratio.13. Internal computer reservation system (deal directwith Southwest).14. Credit card ticketing machines.15. Minimal gate personnel.16. All flights are point-to-point (hub/spoke systemcostly).17. Daytime operations only (minimal night opera-tions).18. Shamu the killer whalelLone Star State aircraftpaint scheme.19. Employee profit-sharing.20. Pro-personnel policies mean happy employees.21. Nepotism encouraged.22. No first class-one class for all23. Ensure quarterly/annual profitability.There are viable alternatives for major U.S. aircarriers to maintain profitability. Instead of searchingwilly-nilly for costly alternatives such as increased luxury,the carriers must look at adopting a model such asSouthwest's that has proven highly successful.Airline deregulation prophets have not been heededthus far. The loudest of these is Paul Dempsey, who hasbeen shouting "repent!" to all who would listen. Dempseyheads a group of aviation experts called Americans forSound Aviation Policy (ASAP) that is dedicated to fixingDarwin Would Be Justifiably Proudwhat the National Commission chose and still chooses toignore (Dempseyet al., 1993).Alan Bender (1993) has stirred up controversy withan insightful article in the editorial pages of AviationWeek & Space Technology. Bender stated that the majorsare inefficient and he predicted that electronictechnology would increasingly ground business travelers,causing a drop in the market. The article resulted in anangry, if misguided, backlash based on job security.In addition, consider Southwest's recent expansioninto the East Coast market (Ott, 1993). If this news wasnot enough of a warning to the ego-managed majors,Southwest's purchase of the Boeing 737-700 should havesent shivers through the boardrooms of major airlines(Proetor, 1993). Rumors of the Big Three leaving thedomestic American market to seek continued success andsurvival overseas is not so remote a thought now. It ispainful to imagine that reluctance to adapt might causemajor airlines to become as extinct as the dinosaurs ofJurassic Park. Darwin might be proud, but alsoremorseful.Southwest Airlines is not perfect, and is subject tothe same laws of industrial evolution that affect its morenearsighted competitors. Articles critical of SouthwestAirlines' pricing inflation have begun to appear in thetrade media, applauding deja vu-like the appearance ofthe new regional airlines. Such competition will onlykeep the Kelleher crew alert and lean. In the meantime,the bell is tolling for the rest of the industry. Themessage is unmistakable: Profitability is the bottom line.Kelleher, like W. Edwards Deming who took theideas of total quality management to a more receptiveJapan, may find that U.S. airlines today will react in amore timely manner than did U.S. businesses of theprevious 30 years.The ads say, "Which way do we head? Southwest!"Similarly, it might be said, What is to be our ultimatefocus? Profitability!cRonald E. Clark holds a Doctorate in Education from Nova University. He is an assistant professor and vice chair ofthe Aeronautical Science Department of Embry-Riddle Aeronautical University's College of Continuing Education.He is also on the the board of advisors and secretary of Americans for Sound Aviation Policy.JAAER, Winter 1994 Page 72Journal of Aviation/Aerospace Education & Research, Vol. 4, No. 2 [1994], Art. 4https://commons.erau.edu/jaaer/vol4/iss2/4Darwin Would Be Justifiably ProudREFERENCESBender, A (1993, June 14). Majors' inefficiency may benefit upstarts. Aviation Week & Space Technology, p. 97.Beyer, M. (1993). What is really wrong with America's air carriers or The secret of Southwest Airlines. McLean, VA:Morton Beyer Associates.Dempsey, P.; Clark, R.; Gesell, L.; Autry, A; Beyer, M.; Gewirtz, S.; Goetz, A; Hamilton, J. S.; Harris, T.; Hyse, R.;Madole, D.; Meyer, C.; Nance, J.; O'Mara, T.; Pevsner, D.; Shea, W.; Szyliowicz, J.; & Thomas~ W. E. (1993).Americans for Sound Aviation Policy: A memorandum to Congress. Denver, CO: University of Denver College ofLaw.Holmes, A (1993, June). An essay: Monkey see, monkey do. Air Line Pilot, pp. 26-28.National Commission to Ensure a Strong Competitive Airline Industry. (1993). Change, challenge and competition:A report to the president and Congress. Washington, DC: U.S. Government Printing Office.Ott, J. (1993, July 19). Southwest enters East Coast market. Aviation Week & Space Technology, pp. 26-27.Proctor, P. (1993, November 22). Southwest commits to Boeing 737-X. Aviation Week & Space Technology, p. 39.0PageS JAAER, Winter 19943Clark: Darwin Would Be Justifiably ProudPublished by Scholarly Commons, 1994

Darwin Would Be Justifiably Proud

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Darwin Would Be Justifiably Proud

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