The Big “What If”

There are many fans in the airline world who freely speculate on what would have happened if someone or something were different when it comes to their favorite airline.  I see this a great deal in the Braniff International world.

There are schools who believe that Braniff’s CEO Harding L. Lawrence ran that company into the ground singlehandedly.  Some believe that deregulation did the company in, some think it was American Airlines who struck at Braniff and some think that if Braniff had continued to be managed by its CEO Chuck Beard, it would be here today.

The big “What If” isn’t just with Braniff.  It’s with virtually every beloved airline that has disappeared.  What if the unions at Eastern had not gone nuclear with Frank Borman?  What if Pan Am hadn’t suffered an image problem from the Lockerbie 747 crash?

I want to talk about deregulation.  What if deregulation hadn’t happened?

Well, the truth is that that was never an option.  We think it might have been but it really wasn’t.  Regulation of the airline industry was inhibiting economic growth.  If it was not deregulated, you would have seen the United States a highly regulated environment playing against a highly deregulated environment that would exist in the rest of the world.  Want to know how ugly that would get?

Alitalia, Air India, Aerolineas Argentinas are 3 great examples of what the US airline industry would look like as a protected, regulated industry operating against deregulated airlines.

This country nor its airlines are in control of the changes that occur naturally throughout the world.  There is no altering the dynamic forces of change to fit the needs of an airline.

The truth is that deregulation hurt all US airlines.  Not a single US airline was prepared for deregulation.  Most airlines were led by people who had no concept of how to cope with deregulation.

Successful airline industry titans either left as the writing showed up on the wall or were violently ripped from their companies as they held on too long.   In Braniff International, Harding Lawrence bet heavily on deregulation being reversed and lost badly.  Continental’s Bob Six lost his entire airline because his company was poorly equipped in leadership for deregulation.  American Airlines’ Albert Casey made an orderly departure but only because he did have a leader equipped to deal with deregulation:  Robert Crandall.

Lest you believe that only legacy airlines were affected by this, let’s take a look at airlines such as the original LCC carriers.  People Express died being started and run by people who still thought that marketshare was king.  Air Florida:  Same thing.

There is just one major airline who survived deregulation and thrived ever since:  Southwest Airlines

Arguably the best prepared airline for deregulation since it started in a threatening and competitive environment and had to fight for its existence for the first 20 years of its life.  It started in an deregulated, intra-state environment and learned how to fight before moving out of state.

What if the leaders of legacy airlines were right and deregulation didn’t happen?  It’s a question premised on the idea that deregulation might not have happened.  That’s a false premise.  It did happen, it would have happened no matter what and timing was the only issue at hand and even that was somewhat predetermined to happen within 10 years or so of when it did happen.

 

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