Free Enterprise?

Or perhaps this post should be entitled "Only in America"... Miss Ginger doesn't think this kind of foolishness could happen anywhere else!


So here's her take on the shizz:

Many years ago, an airline named Continental moved from El Paso to Houston, and established its "Golden Jet Service". Over the years, the successful airline bought smaller airlines, like Texas International, and merged with other airlines, like Eastern.  Through the years, management struggles and bankruptcy's made Continental an also-ran with most of America's other airlines, but in 1991 a man named Gordon Bethune took the helm and made customer satisfaction his mantra.  Bethune knew that happy people make happy customers, so he immersed himself in creating a culture of empowerment, respect, and open-minded negotiation that allowed the airline to flourish and develop a relationship and reputation with the citizens of a city that would be come the country's 3rd largest.


Bethune retired sometime before 9/11, and left the carrier and the people who made it in the hands of Jeff Smisek.  Smisek had worked with Bethune over the years, and together they worked with the City of Houston to develop, expand, and redevelop Houston's Intercontinental Airport as the airline's largest hub by expanding service into the merging Latin American market. With Newark at their European gateway and Houston as their Latin American gateway, the airline could funnel millions of people onto profitable, long-haul flights with recently developed "regional" jet service.  What a gold mine!


But then, the economy soured, fuel prices rose, and 9/11 happened.  Continental, like most other airlines, sought government loans to stabilize themselves against the lost revenues.  They cut flights, reduced staff, and eliminated services to remain in business.

Ultimately, they merged with United Airlines to form the world's largest airline.  With Continental's Latin American reach from Houston, United's Asian reach from LAX, and the combined European reach from the carriers' formerly opposing hubs in Newark and New York, the decision seemed brilliant. And they kept Jeff Smisek at the helm,  to ensure that the new airline would have the service culture of Continental while leveraging the worldwide recognition of United.  They even commingled the names and logos in what may have been the last good decision of the process.  It all went downhill from there.


Smisek and his transition team negotiated Chicago as the headquarter city for the combined carrier, snubbing the long-standing relationship Continental held with the city of Houston.  In addition, failure to reach bargaining agreements in a timely manner with the multiple labor unions representing the various groups of workers have left most employee's edgy, dissatisfied, and downright grumpy!  That has certainly been Miss Ginger's observation on the many flights she has taken on the new carrier!

Meanwhile, a little Dallas startup called Southwest Airlines has quietly waited for it's opportunity to explode into the market.  While other airlines have competed to add new routes and the latest jetliners to their offering, Southwest's fleet of stalwart 737's has been hopping from point to point, filled to capacity with khaki-wearing flight attendants serving happy customers with low expectations. Because they have contracted for gates in underutilized, sometimes outdated or out of the way airports, they have been able to keep their fares as low as their profile, and some really smart fuel-hedges made by management in recent years have allowed them to remain the low price leader as other airlines (like United) have realigned themselves in an attempt to compete.


"So, Miss Ginger", you may be asking yourself, "What's so foolish about all this?"  Well, here goes:


Because Southwest has a little cash in their pockets, and since their recent acquisition of Airtran has given them a taste of the international life, the management of Southwest approached the City of Houston about expanding the facilities at Houston's Hobby Airport to allow them to add routes to Mexico and the Caribbean.  Seems like a reasonable request, right?  And just to make it all professional and shit, the folks from Southwest commissioned an independent consultant to study the feasibility and predict the economic advantage to the city.  Voila! If we expand Hobby, according to the study, Houston will benefit through the creation of jobs, expanded tourism (creating still more jobs), and an enhanced value of the airport and the facilities.  Add to the equation that Southwest can pay for the construction through the profits from the routes, and it all makes perfect sense, right?! And just to prove they are good sports, Southwest agreed to build an extra gate, and give it to the city, free of charge, to rent to whomever they wish. 


"But wait!", screams Continental  "the New United". "You can't do that to us! That study is flawed! You owe us the opportunity to commission our own study, 'specially since we practically BUILT Intercontinental for you, and all!"  


So they did, and of course, it painted pictures of gloom and doom. Jobs will be lost as customers are split between the 2 airports.  Lines will form as the TSA and Customs Office split their agents between two facilities. And flights will be cut because of the diminished traffic.


"Say WHAT?!"

So they City Council voted. And of course, they voted to allow Southwest Airlines to give them 6 additional gates at Hobby, free of charge, and guarantee them rent for 5 of them. The City of Houston and Southwest have forged a partnership for the future!


 But here's where it gets STUPID!  That night, that very same night, the New United issues this press release:

United Airlines to cut 1,300 Houston jobs

DAVID KOENIG, AP Airlines Writers, JOSHUA FREED, AP Airlines Writers

O. M. G!!  Miss Ginger thinks this may be the world's 1st case of corporate immaturity!  Southwest can't possibly begin service until 2015, yet United is going to cut jobs NOW?  Read the article, I beg you!  You'll get the full taste of how ridiculous this is!


Personally, methinks the airline industry needs a bit of government regulation to compete in a world economy where many of the largest airlines outside of the US are run by the countries they serve.  In a industry like air transportation, where the infrastructure (airports, run by the local governments) are so inextricable from the enterprise,  one has to wonder if "free enterprise" is really going to work.  If each airline had to build its own airport, think of how the cost of tickets would rise!  If the government didn't manage air control, how would you keep the planes from one airline from hitting those of another? Plus, if any yokel with the cash to buy a used airliner could put it in the sky, just think about the crap that would be falling from the sky!  WE all have to wear hardhats every time we went outside!


So, when you go to vote in the next election, will you vote for Mitt "let them make money at all cost" Romney?  Maybe that explains United's babyfied behavior... the Republicans are right: corporations ARE people!  Pissy, babyfied people who pout if they don't get their way!

http://www.fly2houston.com/iah