Full Disclosure

Last week I celebrated two seemingly opposed events on the same day: winning the lottery and finalizing a divorce. The lottery win was of the airline type where I was able to retire with my retirement benefits intact and the divorce represents that, with the retirement funds safely in my account, all ties with my employer have been severed. So now I am able to come out of the shadows and finally divulge my airline affiliation which, until now, has been described as simply a legacy carrier. And maybe a bit of prognostication, too.

My airline lottery began with Air One, a post-deregulation carrier based in Saint Louis, in the spring of 1983. Eighteen months later the airline filed for Chapter 11 bankruptcy. In February of ’85 I entered the lottery again as a new-hire with American Airlines. Many told me at the time that I was now home free. Based on my earlier experience (and that of my peers) I was loathe to take anything for granted and was heard to say that I’d let them know in about 27 years.

Well, here I am: a winner. Many of my contemporaries suffered through bankruptcies and mergers where their retirements were either decimated or lost entirely. Did they make a bad decision regarding their choice of employer? Generally not. Many once-solid companies found it impossible to survive in a deregulated airline industry where many newcomers were given a legislative leg-up. PanAm, Braniff, Eastern, and others are gone and most in that lottery lost out as a result. No, give me no credit. Sometimes it’s better to be lucky than good.

I retired on September 1, but had to wait two months before the appropriate funds were transferred. I chose the option of taking a lump sum payment thus making it possible to cut any and all ties with the airline. Absent an annuity (or pension), should they experience a similar fate as many before them, my financial future is secure. 

I do not come here to praise American nor to bury it. Simply put, I can now offer my slant on what its future holds. Over the past several years, some airlines have combined forces (United/Continental and Delta/Northwest) while American chose to refrain from matchmaking. Regardless, we still have “the big three” and each is a member of one of three airline alliances: Star, SkyTeam, and OneWorld.

It is clear to me that American views a rosier future within OneWorld than independently growing by adding aircraft to the fleet and employees to the payroll. Management has come out and said as much when, in describing a new partnership with British Air, they state that the cooperation is “metal neutral”. In other words, AA doesn’t much care upon which airline the passenger books a flight. It seems that they consider the money gained from an American-ticketed passenger on a BA flight as pure profit and this does not bode well for AA employees looking to advance up the seniority list through growth. Likewise, other airlines within an alliance will rely on their partners to provide service to cities they, themselves, don’t serve rather than investing in aircraft and personnel.

I don’t believe that the other two airlines (UAL and Delta) feel much different and see a time in the not-too-distant future where we will have three major airlines called, you guessed it, OneWorld, SkyTeam, and Star. And you, the paying passenger will have little control over which airline you fly when booking an alliance flight. Additionally, within the alliance, member airlines can whipsaw employees against each other in an attempt to further ratchet down compensation and benefits. It will also be harder for a specific airline group to seek redress through the courts because international law will now be involved.

I think one can also expect a move to raise the limit on foreign ownership of US carriers and, eventually, the elimination of the prohibition on cabotage. Cabotage allows a foreign airline to transport US passengers within this country. (Yes, Lufthansa can fly from LAX to JFK to Frankfort, but they can’t drop any LAX passengers off at JFK.) If this final piece falls into place, the United States airline industry will have officially succumbed to the forces of globalization and I don’t think anyone is naive enough to think that, as a result, air travel will enjoy a return to the days of ease and pleasure.

So there you have it: my view of the future of the airline industry.  No longer a participant, I remain an interested observer from the nose-bleed seats. I hope I’m wrong and I hope that our elected officials will strive to maintain our air transportation system independent of foreign and corporate influence. But that hope hasn’t borne much fruit in other industries, has it?