Back in the days when United States flag carriers dominated commercial aviation,
American Airlines was airline royalty. AA had prime international and domestic routes, a marvelous brand reputation, and regulated airfares to keep the whole game aloft and profitable. Jimmy Carter pulled the plug on airline regulation in the late 1970s, and American Airlines commenced a slow, nearly four-decade descent into financial ruin. Its chief executive officer for many years,
Bob Crandall, ranted and raved against deregulation, unions, and fuel costs. He was a shrewd exec, but history just would not be denied.
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American Airlines' London townhouse
(photo: Reuters) |
When American Airlines declared bankruptcy, a symbol of our nation's commercial aviation success lost its luster.
As a result of its financial difficulties, American has been compelled to sell its London townhouse, according to a story in today's online edition of the LA Times. It kept the residence through the decades for its most senior executives, so they could appropriately enjoy the British capital. They lived in a world where "commercial" was something, well, one just does not do. In this case, "commercial" might refer to staying at high-end hotel suites or flying in first class seating. That just wasn't good enough for the AA execs. They were the mandarins of the airways. Now, in bankruptcy and considering a merger with (gasp) US Airways, the execs will have to rough it in "commercial."
When people wonder how the United States lost its global business clout, theories abound. The most recent pinata is "education," even though American Airlines' corporate leadership was presumably among our country's so-called highly educated "business elite." How much more "education" did they need? A more targeted explanation is management hubris, which the American corporate hierarchy has in abundance. The airline's London townhouse is an apt symbol of that arrogance, a proud industry's decline, and its fall.
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