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Are Airlines Really Going Bankrupt Again?

Date Wednesday, July 29, 2009
Name Chris Peet
Company Emirates
Position VP Netwok Operations
Comments There are statistics, statistics and just plain old statistics. You can almost present them in any way you wish in order to portray a story, your story.

I can see the trade union movements around the world hanging onto this report and using it as an argument so as to avoid, and/or, to delay the need for change! Protection of jobs appears to be their main goal rather than, support and drive a successful business that could create wealth and more jobs.

The sad fact is that the world is changing very quickly. Consumers are far more demanding, wanting more for less. The problem for the aviation business is however, its inability to change as fast as market conditions do. Like a dinosaur, most carriers struggle to keep up with the changing world because of a reluctance at the trade union level to do so. The old legacy carriers struggle the most. In my previous life, I recall a shop steward telling me when we discussing a change in work practices that would bring quality and financial improvement; "over my dead body". What's in it for my members? Lets talk about increasing salaries and then we'll talk about change". We have seen what has happened to Alitalia. I look at what is happening with British Airways and I totally despair. Can't people see the writing on the wall? Look at the more recent carriers who are much leaner and are able to develop and grow their businesses. How much additional employment has Ryanair and Easy Jet created??

This article is fine BUT, it does not look at the big picture. How much does it cost to own and operate an airline? What is a reasonable return on investment? How much should airlines make and invest to protect themselves (the airline, its people and its customers) for a rainy day. No, they may not be close to bankruptancy (yet), but why walk this very fine dividing line that separates job security as opposed to massive redundancies when an airline goes to the wall. Now is the time to wake up and smell the coffee.

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