Adam Pilarski's "Why We Can't Make Money in Aviation" analysis

¶ … Money in Aviation: An Examination of Support

The history of American flight is generally one of pride and wonder. Historical figures associated with the first airplanes are generally revered by history books and society as a whole. These are figures like the Wright brothers, Amelia Earhart, Charles Lindbergh and others who most agree made a positive impact on human life and symbolize a leap of mankind towards advanced technology and increasing modern times. Modernity. Technology. These are all things that airplanes and flight represent to Americans and they're widely viewed as things which have improved life on this planet for the better. This begs the question as to why the airline industry still remains one of the most volatile, low (or no) profits business around. The book, Why We Can't Make Money in Aviation, by Adam M. Pilarski, seeks to both scrutinize and illuminate the general failure of the airline industry to reach stable and consistent profitability. While some might say the text is heavy handed, it actually represents as a whole, a fair and comprehensive overview of the airline industry, its attributes and shortcomings.

The Ten Plagues

Pilarski opens the text of the book in a smart and succinct manner. Pilarski calls attention to the most catastrophic event to happen to the airline industry in its entire history: the terrorist attacks of 9/11. While Pilarski does give those events the acknowledgement for being as detrimental to the industry as they were (in fact, he even offers up a fact that most Americans aren't aware of: that government had a bailout plan for the airlines, in fear that the entire industry would go under and cease to exist), he does eliminate any and all illusions about the incident. One of the most effective elements of the text is that Pilarski does not waste any time specifying what he refers to as the ten plagues: these are all events that happened more or less in succession that have had essentially a crippling impact on the auto industry. Pilarski begins to state each plague immediately. The first plague Polarski highlights is the recession, a plague which is definitely not to be underestimated by any means. The recession was definitely global and the impact was pervasive: companies downsized, unemployment was up, house sales plummeted, foreclosures sky-rocketed, and consumer confidence in the economy was at an all time low. Because of the recession, "Traffic was down by midyear of 2001 and average passenger ticket prices were already falling" (2007, p. 2).

However, the combined fear of flying and increased security measures proved to be a truly detrimental combination: "A fear of flying set in after the 9/11 tragedy which further reduced profitability as passengers avoided air travel and traffic numbers dropped. Then security measures implemented to keep flying safe caused an increase in the actual time of completing a journey and in the unpleasantness of the experience" (Pilarski, 2007, p.2). The phenomenon is akin to bicycle helmet laws: once the laws go up regarding bicycle helmets: "The most significant result of a helmet law is to discourage cycling. That's because many would rather quit biking than have to wear a helmet, and because a law promotes the idea that cycling is an incredibly dangerous activity. Reductions in cycling by 33% to 50% are typical in places where helmet laws have been passed" (Bluejay). With airlines, once security measures became more intricate and involved, and thus, more unpleasant to the experience as a whole, it gave the entire act of flying the appearance of being unsafe, reinforcing the fears of 9/11.

The Damage of SARS

As the excerpt above was taken from a new program in 2003, it's worth noting that one of the ten plagues also occurred on the heels of decreased consumer confidence, which was SARS (Pilarski, 2007). As Pilarski illuminates, Asia has always been a beacon for the airline industry: during the worst of SARS, traffic in a Hong Kong airport dropped 90% (Pilarski, 2007). SARS was indeed a deadly disease, and one that is not to be underestimated: "…experts believe one doctor treating patients in China caught SARS, then traveled to Hong Kong. There, he infected 12 other guests of the Metropole Hotel where he was staying. That set off a deadly global chain reaction" (ABC News, 2003). As the public was well aware, much of that deadly chain reaction was connected with the fact that many of the guests in the hotel became infected, and then got on airplanes to other countries where they infected more people.

One of the pervasive aspects of fatal, easily communicable diseases is that even once they're contained and it's safe for people to travel to countries that were previously thought to be danger zones, the collective consciousness is still contaminated. People still view the air travel as unsafe; while SARS may be decreed not an immediate threat by the CDC, the public opinion has still been adequately poisoned and compromised.

Pilarski aptly points out that even after SARS, the collective tensions mounted as a result of terrorist attacks in Spain, London and Bali and then the increased price of oil became a crippling issue for the industry. "Fuel is one of the largest cost elements for airlines and when already faced with tremendous losses, the industry could not bear significant increases in oil prices" (Pilarski, 2007, p.3). But two of the plagues that the airlines faced were self-imposed. The first was that they continued to practice flawed ticketing methods (Pilarski, 2007). This was a time when the industry desperately needed to showcase the best of management techniques; instead, because their pricing methods were so skewed, they succeeded in just crippling themselves even further. Another self-imposed plague that could have been avoided was that the airlines engaged in adversarial treatment with their employees. While this is a common manifestation of stress in any given industry, as it's typical for management to take stress out on their employees, this was simply another damaging move that was going to hurt airline companies more in the long run.

One of the successful aspects of the book is that it doesn't just examine all of these phenomena and their negative contributions to shackling the airline industry. The book examines also how investing airline stock has always been considered risky as the stock is considered volatile and unsteady. Pilarski attempts to determine whether this will likely always be the case and whether airline companies will always need a strong governmental crutch. Pilarski does present various hopeful notes for the industry at large and does elucidate how long-term recovery would need to be possible, and the changes that would need to be made for that to occur. Above all, some of the wisest parts of the book do remind one that in the scheme of things, the airline industry is still a new field (at least when compared to others) and it's still going to take time before all the helped given to airline companies translates into widespread stability.