Return to Transcripts main page
CNN Saturday Morning News
Interview With Jim McKenna
Aired August 24, 2002 - 08:20 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: With September 11 approaching, Chicago officials say they want a no fly zone restored over downtown, including the nation's tallest building, which is the Sears Tower. For several months after last year's terror attack, small planes were banned from flying below 3,000 feet over the city's center. The National Pilots Organization, however, says small planes pose no threat and a ban is not needed.
CAROL LIN, CNN ANCHOR: Speaking of airline travel, wait in long lines, don't carry on this, pay extra for that, no food, cramped seats -- need we say more?
CNN's Kathleen Koch looks at the unfriendly skies.
(BEGIN VIDEOTAPE)
KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): So you thought you got a cheap air fare. A paper ticket will cost an extra $10 to $25. A third suitcase to check? Another $40 to $80. Many senior citizen discounts have been eliminated and Continental Airlines hopes to save more than a million dollars a year by giving passengers half beverages and plastic knives only on request.
CAROL HALLETT, AIR TRANSPORT ASSOCIATION: The economic condition of the airline industry is as dire as it has ever been. And as a result, they're looking at every way possible at how they're going to be able to make cuts or changes that will improve the bottom line.
KOCH: The nation's airlines did lose $7.7 billion last year, more than $4 billion through June of this year. But passengers already weary of security delays say this nickel and diming is just too much.
UNIDENTIFIED FEMALE: And if I got here and, you know, suddenly they said oh, it's another $40 to $80, I'd be really upset.
UNIDENTIFIED FEMALE: I think plastic knives and things of that order, half a soda as opposed to a full soda, it's really relatively silly.
UNIDENTIFIED MALE: A lot of the airlines, it seems, are, you know, really balancing their books on the back of their passengers.
KOCH: To further cut costs, airlines are trimming schedules and talking consolidation. Some powerful frequent fliers, members of Congress, are calling for the government to regulate the airlines again. Travelers' organizations point out the no frills trend is driven, in part, by the success of budget carriers.
DAVID STEMPLER, AIRLINE TRAVELERS ASSOCIATION: And everyone has been flocking to the discount carriers, which don't provide much of these amenities such as, you know, meals and movies and other kinds of things. And so the big carriers are trying to cut these services out because passengers aren't willing to pay for them.
KOCH (on camera): With passenger totals already down 10 percent, perhaps the biggest risk is that cuts and charges to bring airline revenues up could instead end up driving passengers away.
Kathleen Koch, CNN, Reagan National Airport.
(END VIDEOTAPE)
CAROL LIN, CNN ANCHOR: So let's talk more about the frustrations of air travel.
Jim McKenna, former editor of "Aviation Week" magazine, joins us from Washington.
Jim, you know, you hear this laundry list of nickel and diming. I mean a half cup soda, how much can that really save the airlines? Because it's really going to get the passengers angry. They just think it's petty.
JIM MCKENNA, FORMER EDITOR, "AVIATION WEEK": Well, good morning, Carol.
You know, that was an excellent report because it really hit the basic problems that the full service airlines have these days. That the opinion out there in the marketplace is that they are balancing their books on the backs of passengers and that they're nickel and diming the passengers.
You have to keep in mind that the problems that the airlines are encountering today began long before September 11. September 11 accelerated the trend downward for the airlines, but customers were very dissatisfied in the summer of 1998, 1999 and 2000. Business travelers were backing off of flying whenever they could. And the basic problem that you had was that the airlines failed to recognize adequately that they weren't providing the service that the customers were expecting.
That's the key advantage that Southwest and carriers like it have.
LIN: Right. But back in '98 and '99, the service issue was really more about take-offs and landings and being timely. You know, now, on top of all the delays and inconveniences and the security checks -- that's why I just, I'm looking for some solutions here, because I don't understand how plastic knives, half cups of soda, 10 bucks here on an extra bag helps the airline, because it certainly doesn't help the passenger.
How much can an airline really save? MCKENNA: Well, it'll save the airlines, you know, a dollar here, a dollar there per passenger, which will help the bottom line long- term but will hurt their reputation in the marketplace. The advantage that Southwest Airlines has and the carries that copy Southwest Airlines is that when you fly those airlines, you get what you pay for. You pay a low fare. You get very minimal service. You get kind of cattle herding boarding. You'll get a soda with a full can, but maybe a bag of peanuts and no meal.
However, when you get to where you're flying to, you'll be satisfied that the money you shelled out was money that was well spent because you got what you wanted.
LIN: So do you see signs that the major carriers, the big carriers are going to try to mimic Southwest's model?
MCKENNA: They can mimic Southwest's model to a certain extent. The fact is that the way Southwest operates airplanes doesn't work for the nation as a whole. Southwest is built on a model in which if you're flying 400 or 500 miles, they're a good deal. If you're flying more than that and you're willing to make a connection, Southwest is a good deal.
If you want to fly from New York to San Francisco or New York to Denver, you know, Southwest is generally not the best option. You need to have greater flexibility in how you connect on flights and most importantly what schedule you have. You know, one of the key factors of Southwest is that in most of the markets, they only operate a few flights a day.
LIN: Right.
MCKENNA: The full service airlines have built their operations on the basis that what customers want is schedule flexibility. So they'll offer six, seven, 10 flights a day between markets.
LIN: Right. You're paying for that convenience.
MCKENNA: Right. And that's, it, you know, it makes the economics tough to support.
LIN: So what can passengers expect then?
MCKENNA: Well, passengers can expect greater penetration by Southwest Airlines and carriers like it. We've seen Southwest offering transcontinental flights. On the full service airlines, unfortunately passengers can expect less service, more nickel and diming, probably less satisfactory passenger service, customer service from the people at the airplanes, people at the airport and people on the airplanes. Because at the same time that the fares and fees are being increased for the passengers, the jobs are being cut for the employees and salaries are being cut for the employees.
LIN: Right.
MCKENNA: So this is not going to be a happy group of people that's greeting you when you get to the airport.
LIN: Right. And, you know, frankly, the airlines don't really care about ordinary Joe and Mary six pack passengers. They're focused on business travelers, the people who have no choice but to travel for work.
MCKENNA: Well, that's certainly the impression that's out there in the marketplace. I have to say, you know, I recently flew from Washington to Detroit on one airline and was amazed at the customer service that was available from this carrier. I was able to book the ticket online, select my seat online, get my boarding pass online. It was an amazingly convenient process.
But that's not the impression that the average traveler has. The average traveler has the impression that I'm flying on this full service airline, how am I going to get nailed this time?
LIN: Right. Right. And, you know, but of course if you've got to get cross country, how are you going to get there anyway?
MCKENNA: Well, more and more you're going to be flying on Southwest to do it.
LIN: Well, there you go. And happy to do so, except when you have to sit backwards. I think, you know, they've got those seats that face the back of the plane.
Thanks so much, Jim McKenna.
Good to see you on this Saturday morning.
MCKENNA: Thank you.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
