The U.S. airline industry now has four big carriers operating under bankruptcy court protection -- United, US Airways, Hawaiian and ATA. To make matters worse, Delta is on the brink and, as of this writing, could go either way. If it is forced to file, we would have, for the first time, two of the three largest majors operating in bankruptcy.

None of this is good news. Whenever you have an industry with two, or even one, of its Big Three in bankruptcy, youve got a problem.

To readers of this newspaper, the airline industrys problems are a daily fact of life and need not be explained in detail, but the airline industry does have one problem that doesnt get talked about much: Its slow.

You would think that a dynamic industry that is built around jet planes would know something about speed, but it doesnt always show.

Compare the cruise industrys deployment of its assets before and after 9/11 and you see some fairly fancy footwork. Our airlines, by contrast, seem slow to adjust, slow to innovate, slow to react to changing market conditions, and, most of all, slow to heal.

Compared with the PC, software or wireless phone industries, the pace of change in the airline business is downright glacial.

Some of this is structural. Partly because of the high fixed cost of aircraft and facilities, it always has been exceedingly difficult for airlines to shrink quickly in an economic downturn. Sometimes, it is simply not possible for an airline to shed costs fast enough to stay ahead of the curve.

But some of this is not structural. United has been in bankruptcy for two years. What can you learn about yourself in two years of bankruptcy that you cant learn in one?

Hawaiian has been operating under the supervision of a court-appointed trustee for over 17 months. Einstein figured out the theory of relativity in less time.

Delta may be close to bankruptcy because it is $12 billion in debt, but it has been $12 billion in debt for the last six quarters.

All of these airlines claim to be making progress, and we dont doubt them, but we suspect the rest of the travel industry, and the worlds airline passengers, would like to see them pick up the pace.


An interesting bit of news emerged from the AAA Travel conference in Florida last week: The organizations new contracts with its preferred suppliers contain provisions dealing with financial stability. Suppliers are on notice that AAA will monitor their finances and retain the right to cancel a preferred arrangement if they dont measure up.

There are not many intermediaries in the travel business with the clout to impose such standards on suppliers. But any that have such clout should use it, wisely and often.

JDS Travel News JDS Viewpoints JDS Africa/MI