The big three

Kevin Mitchell, chairman of the Business Travel Coalition, says he has three simple suggestions for major airlines to continue flying high. They are: “Costs must be significantly lowered, asset productivity levels must be vastly improved, and airlines must discover true customer-centered strategies.” So what major airlines have done it? None, he says. The days of high business airfares are gone forever, according to Mr Mitchell. With the aggressive moves of discount airlines such as Southwest moving into formerly major airline hubs such as Philadelphia, Mr Mitchell says the majors can’t survive without radically changing how they do business. He says even studies that show a rise in business travel could be misinterpreted by the major airlines into thinking business travelers are not cost-conscious. That business travelers are price insensitive is “flat out wrong,” says Mr Mitchell, whose group lobbies for business travelers. “The business traveler is now permanently price sensitive,” he said. A key reason he cites for the change is that most corporations are exposed to the forces of a global marketplace where many competitors are outsourcing all types of work into countries with lost costs. “There is now unrelenting pressure by most corporations in most industries to become low-cost producers,” he said. That move will force major structural change if the major airlines hope to survive, he added.