This is a rare weekend post where I’m going to link to some articles and ask what you think.
First, one of my aviation geek chat groups passed along this New York Times article entitled “A C.E.O.’s Moral Stand.” In a nutshell, the writer lauds American Airlines Chairman and CEO Gerard Arpey for announcing his departure on the same day his carrier decided to file for Chapter 11 bankruptcy protection. His reasoning was “a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path.” Arpey leaves the company after 30 years without receiving any cash severance or no long-term incentives, although he still gets his lifetime travel and Admirals Club benefits.
But it’s not like he’s being tossed out into the street. He has landed quite nicely as a partner at private equity firm Emerald Creek Group founded by former Continental Airlines CEO Larry Kellner, reports the New York Times. So here’s question number one for you to ponder: did Arpey really take a moral stand?
My non-airline friends are always asking me why airlines continue to lose money as they charge fares and fees up the ying yang. No matter how I try to explain it (passengers’ stubborn refusal to pay higher fares, rising labor costs and fluctuating fuels costs, to name a few), I can never get them to understand that most carriers operate on a shoestring. So I have to thank Joshua Freed of the Associated Press for his story on why it is so hard for airlines to make money. After reading his article, do you understand airline costs — and why it’s hard to make money?