Even before the 9/11 attacks, the airline industry was experiencing significant losses and reduced ticket sales. After the attacks, airline share prices dropped sharply, which exacerbated the airlines' already bumpy financial situation.
By 2006, the airline industry was just beginning to recover when it was hit again by another devastating volley. This time the global economic tsunami that started in late 2007 swept the airline industry putting a sharp halt to airline ticket sales.
With the worldwide recession hitting people’s pocketbooks, less people had the disposable income to fly leisurely. In addition, with the advance in technology and the speed of telecommunications, many companies began to discern the greater economic value of teleconferencing from their desktops over conducting face-to-face meetings. Moreover, the higher oil prices coupled with falling demand rocked the airline industry. In a sense, we had the makings of the perfect economic storm which severely affected the industry’s bottom line with a revenue downturn larger than that of 9/11[ii].
Surpisingly, despite the large financial market and auto bailouts that the federal government provided over the last year, the airline industry has yet to ask for a huge infusion of cash.
2009, the current year, started out as a tumultuous period for aviation accidents- one with a happy ending with everyone miraculously surviving and one with a tragic ending with total loss of life. Both stories garnered significant media coverage resulting in tremendous interest and concern regarding safety of flight from both Congress and the American people. Thus it is critical to start our assessment and market audit analyzing the most talked-about aviation news stories and discussing the qualitative effect it had on both the airline industry and air safety.
#1 Miracle on the Hudson
On Jan 15, 2009, US Airways Flight 1549 was a scheduled flight from New York City to Charlotte, North Carolina. While on climb, the plane struck a flock of Canadian Geese resulting in compressor stalls and a loss of thrust for both engines.
When the crew discovered that the plane would not be able to reach any airfield from its location, CAPT Sullenberger turned the plane southbound and glided it over the Hudson River where it landed near the USS Intrepid aircraft carrier museum.
CAPT Sullenberger and the crew were immediately recognized for their stellar and incredible performance under immense pressure saving the lives of everyone on board. Over the next several months, Sully became a national icon and an American hero for an industry that desperately needed good branding and persona recognition for someone who Americans can trust and admire. Today after writing a book and going on a busy speaking circuit delivering a potent message of professionalism and courage, Sully has returned to what he loves best – taking the stick in the cockpit taking responsibility of everyone’s safety and comfort within his own hands. For many flyers, there may be nothing more reassuring and inspiring than to sit in the plane and hear the voice of CAPT Sully on the PA system.
This low wage and sometimes lower skill labor situation prevalent within regionals is a tragic byproduct of the weakened economy and the overall impact on the airline industry that is struggling to streamline and pare down. As a result, many airlines have been forced to fly with more empty seats or cut back on the number of flights altogether as they watch customer traffic fall sharply from the sidelines. For many less-traveled routes, the major network airlines have shifted from the larger 100 to 150 body airplanes to the 50 to 70 seat regional jets or turboprops flown by their smaller affiliates. While the five U.S. network airlines posted a $4.4 billion operating loss over the past 12 months, the top 20 regional airlines amassed a $785 million profit.[ii] This is a tremendous and well-received silver lining for the current gloomy economic downturn. However, the regional pilots are still significantly underpaid compared to their counterparts who work the same hours for the big networks. Many of these pilots are forced to work a second job in the evenings in order to make ends meet resulting in a notable impact on crew rest and fatigue.
#3 Wayward Pilots Aboard Northwest
Every airline company should measure loyalty and brand satisfaction. Using readily-available social networking sites is relatively fast, easy and cost effective. In addition, ALPA should measure what the American people are saying about safety in flight. Because flyers typically have a considerable amount of downtime waiting for planes to take-off, they often have time in their hands to tweet out their frustrations or satisfactions using their cell phones or PDAs.
The popularity of Twitter and other social media sites lends itself to innovative ways of measuring public sentiment across several geographic regions, relatively quickly and at very low costs. By codifying the language of tweets related to airline travel e.g. "Jetblue is a great company,” analysts are able to determine the opinion flyers have with particular airlines. In a study conducted in Oct 2009, it was determined that after reviewing all pertinent factors, Southwest had the hughest percentage of satisfied customers. [v]Incidentally, Northwest had the lowest percentage of positive tweets.
In addition to increasing customer loyalty, social media sites are increasing the airlines' responsiveness, which will be especially valuable in times of crises. We will likely never be able to prevent fatal airline crashes. When an airline does experience a tragic crash, they could quickly transition to crisis communication mode by providing the public with the latest search and rescue information on Facebook and Twitter. Friends and family members can also communicate with the airline staff and other stakeholders by posting questions directly to the airline or collaboratively to the entire public via use of the wall. The public may understand and accept the reason for the plane to crash. But the public will be more critical in evaluating how well and how quickly the airline is able to disseminate timely and accurate information to those concerned. If an airline is able to effectively utilize all mediums at their fingertips to reach out to friends and family and the American people, then they are mostly likely able to gain the respect and trust that they deserve.
Looking forward in this rocky economic environment, ALPA and stakeholders need to be fully cognizant of the top news stories past and present. How the public views the airline industry and how the airline industry responds to the latest news events and trends could set the right or wrong path for the future of commercial aviation in the United States. These second-tired effects would undoubtedly have a huge impact on the pilot labor market and thus determine which airline safety issues are negotiated and prioritized both in the air and within the halls of Congress.