Although the airline industry is brimming with opportunities to infatuate and enrich the lives of travelers, for the most part it has left this tantalizing opportunity unexplored. Let’s take a peek at recent happenings at American Airlines to see the fallacy of focusing solely on slashing costs instead.
Via the Bloomberg BusinessWeek Management Blog:
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.
[Image via A.G. Photographe.]
