Last weekâ€™s news that American Airlines had filed for bankruptcy should be all the wake-up call anyone needs to begin weaning meetings and events from their over-reliance on the airline industry.
You might think the link between meetings and air travel is too strong to break, but the need to move large numbers of participants by air, comfortably and reliably, and at reasonable cost, has long been our industryâ€™s Achilles heel. We certainly wonâ€™t dial back our dependency overnight, but AAâ€™s announcement shows that the airline business isnâ€™t getting any healthier, and we ignore the trend lines at our peril.
The travails of air travel are an old story. â€śIf the Wright brothers were alive today, Wilbur would have to fire Orville to reduce costs,â€ť Herb Kelleher, co-founder of Southwest Airlines, told USA Today in 1994. Investment oracle Warren Buffett was more direct. â€śIf a farsighted capitalist had been present at Kitty Hawk,â€ť he wrote in a February 2008 shareholder letter, â€śhe would have done his successors a huge favor by shooting Orville down.â€ť
AAâ€™s failure was foretold by Fortune magazine contributor Cyrus Sanati, who recommended bankruptcy as â€śthe best option to prevent American Airlines from making a crash landing.â€ť Referring to AAâ€™s â€śbroken cost structureâ€ť compared to its competitors, he noted that AA staved off bankruptcy in 2003 by cutting wages 16 percent to 23 percent and laying off thousands. But the other legacy carriers came out of bankruptcy almost a decade ago with even lower labor costs, a difference that translates into a $600 million-per-year cost gap for American.
The airlinesâ€™ formula for success, it seems, is to slash wages, claw back pensions, add fees, invest heavily in spit and masking tape, and pretend for as long as possible that everything is holding together. Meeting professionalsâ€™ formula is one step worseâ€”because weâ€™re the ones pretending that their formula can deliver a positive travel experience for our meetings.
The bottom line is that the majority of airlines werenâ€™t viable when fuel was cheap and the economy was growing, and theyâ€™re not going to bounce back now. Here are three fatal flaws the air travel industry canâ€™t solve:
- Canadian demographer David Foot commented many years ago that â€śyou donâ€™t do more with less. You do less with less.â€ť Squeezing staff might look like a great short-term fix, unless youâ€™re the one being squeezed. But it wonâ€™t be safe or pleasant for passengers, or economically sustainable for the airlines.
- Oil prices are on their way up again. A barrel of West Texas crude cost $101.56 earlier this week. If a stronger economy drives up demand, prices will rise and airlines will be hammered even harder.
- Air travel still has no realistic plan to reduce its carbon emissions. As the effects of climate change become even more obvious, and the demand for solutions becomes more insistent, airlines will have little or nothing to offer.
So meeting professionalsâ€™ livelihoods depend on a failing, dysfunctional industry and, some day soon, weâ€™ll have to choose between going down with the ship or finding an alternative. So far, the most promising option seems to be a hub-and-spoke model that allows participants to gather locally or regionally, then use hybrid meeting technology to connect across time zones or continents. There are still some kinks to work out, but large-scale air travel isnâ€™t a perfect solution, either. As an industry, we should thank American Airlines for the wake-up call and step up our search for meeting solutions that work.
Mitchell Beer, CMM, is president of The Conference Publishers Inc., Ottawa, one of the worldâ€™s leading specialists in capturing and repurposing conference content. Beer blogs at http://theconferencepublishers.com/blog and tweets as @mitchellbeer.