"Airline Issues discussed at International Aviation Womens Association Conference"

Monday, November 1, 2004

Speakers see Fundamental Changes in Airline Business Model Predicted by Some
after Deregulation in 1978
Press Release


San Francisco, California -- United Airlines Chief Counsel Marian Durkin
told delegates to the 16th Annual Conference of the International Aviation
Womens Association (IAWA) that the current financial condition of the U.S.
Airline industry was not a cyclical condition but a "a fundamental customer
driven change."  She was joined in her comments by Dorothy Robyn of the
Brattle Group, moderator for a panel on Airline issues at the conference,
who said some economists had predicted this outcome with deregulation in
1978.  "It just happened later" than they had thought, said Robyn.
 
Durkin and Robyn participated at the IAWA conference on a panel of women
airline executives discussing challenges to airlines in today's economy.
IAWA is a not-for-profit organization.  Members are women of achievement in
the aviation and aerospace industries, including airports, airlines,
manufacturing, finance, insurance, legal and government.  IAWA was formed to
promote the advancement of women in aviation globally.  The Conference was
held October 24-26 at the Mark Hopkins International in San Francisco.  

Durkin said that United, accepting that systemic change was under way, was
taking steps to "build the United of the Future."  The carrier's strategy to
emerge from bankruptcy, she said, was based on expanding its international
route structure, cost cutting to reach "global competitive levels,
developing operational excellence and innovative products and services that
"provide the right product at the right time and the right price."

United, she said, is rolling back costs and making "wise choices."   As part
of the recovery effort, international routes will account for more than 50%
of United revenue and 4 % of capacity, she said.

Although the industry's and United's problems have been compounded most
recently by the SARs epidemic in China, the Iraq war, geopolitical
instability and the Dot.com industry collapse, Durkin said this downtown was
not cyclical.  "We are witnessing systemic changes," she said.  

JetBlue's Vicky Stennes, Vice President for Inflight Experience and
Jacqueline Kaye, Director of Alliances and Partnership for America West
Airlines, focused remarks on how the two low-cost carriers expected to stay
competitive.

Stennes commented on a fare study that indicated that for JetBlue demand
drops after fares reach $100.  She said 1,560 seats could comfortably sell
at $100, but the number dropped to 1,000 seats at $105.  

America West's Kaye said her airline, the second largest low-cost carrier,
is working to position itself as the "premier low cost carrier by offering
first class cabin seats, assigned seating, food purchase on board and a
frequent flyer program with alliances overseas so customers can fly to
international destinations. " We have no intention of crossing the Atlantic
or Pacific but will do so with partnerships," she said.  

Regional airlines were represented on the panel by Deborah McElroy,
President of the Regional Airline Association, who repeated her
association's opposition to Scope Clauses, language in pilot contacts that
set limits on the size and type of aircraft an airline may operate. 

The major carriers and regional airlines, she said, must match aircraft size
to markets.  Scope Clauses are an "old school concept," that need to be
eleminated because they limit competition, especially for small communities
"where the runway has replaced main street" as the generator of economic
growth, McElroy said.

Information about membership in IAWA, including application procedures, is
available at www.iawa.org.  For additional information about the Association
or please contact Joanne Young at jyoung@xxxxxxxxxxxx or Abby Bried at
abried@xxxxxxxxxx

INTERNATIONAL AVIATION WOMENS ASSOCIATION
PO BOX 65823
Washington D.C. 20035


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************