Arnie WeissmannForget about the price of jet fuel, the impact of terrorism and the state of the economy. Likewise, management performance, labor relations and distribution. The root of the airlines problems, a former travel industry exec suggests, may be bigger and more fundamental than any of the factors that analysts usually look at when they ponder why aviation is so troubled.

The exec, who was never employed in aviation, was reacting to a recent column I wrote (Missing Link, June 6) that assessed what impact the reduction and elimination of travel agent base commissions may have had on the legacy airlines current problems. I concluded that any number of factors may have had a bigger impact.

But the exec suggests that Im still looking at trees when the problem may be with the forest. His is a very troubled forest, and one in which airplanes are only one type of tree.

I believe there are other fundamental issues that are at work in the American passenger transportation industry that extend beyond the airline industry, he wrote in an e-mail. Consider the state of U.S. passenger railroads; the fate of the private, intercity bus lines; and, of course, the demise of the U.S.-flagged passenger ships, and you are prompted to wonder why American business finds it difficult to make a business from transporting people.

That is an acute observation. Subsidies, whether direct or created by a favorable regulatory environment, are not uncommon in passenger transportation, from commuter buses to national railroads.

Even some airlines receive subsidies. Developing nations argue, convincingly, that if they didnt support national carriers, no airline would serve their country. And theres an example closer to home: U.S. carriers received a multibillion-dollar bailout after 9/11.

Though airlines can be profitable without subsidies, its still true that from the time of the Wright Brothers, the aviation sector is, cumulatively, running in the red.

If transporting passengers for business or leisure isnt a viable business in the long term, that has some sobering implications for the rest of the travel industry. And although trains, buses and ferries have their place, the industry is always going to be most concerned with air transportation.

One could argue that as long as there is no legislation limiting the size of male egos, new airlines will start as fast as they collapse, but there may be lessons to be learned from other travel segments.

Cruise lines may offer some guidance. Though cruise ships transport people, thats not why people board them. Theyre entertainment vessels. People pay a fair amount to travel on them, even though passengers often leave the ship right where they boarded it.

This isnt lost on the profitable (and entertaining) airlines, like Virgin Atlantic and JetBlue.

New entrant Eos is modeling itself after another profitable sector of the industry: It claims its the airline equivalent of a boutique hotel. Thats an interesting claim, because hotel rooms and air seats can both be seen as commodities. Eos founders may have seen that and wondered, if so, why have room rates risen significantly faster than air fares over the past two decades?

Hoteliers have figured out that, when their product is positioned correctly, people will pay for style and amenities. I dont know whether this holds true for air passengers, but  in the long run, airlines have little to lose by experimenting with radically different models. Whether the problem is fundamentally with forests or trees, they cant just continue to stay lost in the woods.


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