06/09/2003 - Updated 09:38 AM ET David Grossman Business Travel The irony and the ecstasy: 100 years of aviation The Wright brothers almost went broke building the first airplane to take a man aloft in 1903. A century later, captains of the aviation industry can relate. "We are celebrating 100 years of flight today," Lufthansa chairman and CEO Jurgen Weber told a meeting of the International Air Transport Association in Washington. "And the industry has never made money." The contrast between early 20th-century hopes and early 21st-century realities produced a number of painful ironies when aviation industry leaders gathered last week in Washington for their most important conference of the year. For one, the meeting occurred the same week as Air France's last Concorde flight. With British Airways' retirement of its remaining Concordes later this year, supersonic travel - the new technology that was supposed to replace the jets we have flown for the last 45 years - will turn out to have been a great idea whose time came and went. The demise of the Concordes, which were too expensive and fraught with other impracticalities, leave the industry stuck in the age of subsonic travel. That did not limit executives' optimism. Northwest Airlines' chief executive officer Richard Anderson vowed a return to the days when business travelers could show up at the airport 25 minutes before departure and jump on a flight with no reservation and a full-fare ticket for a different flight. But before conference attendees could listen to Anderson muse about the "good old days," they had to submit to a biometric scan that matched badges, faces and hand prints before being admitted to the room to hear him speak. It was a glimpse into the reality of the next phase of airport security - and a far cry from the hassle-free days of the past. Most troubling for the airlines, though, is the industry's dismal economic performance. September 11th, the economic downturn, the Iraq war and the SARS epidemic have created the worst prolonged crisis the airline industry has ever seen. Airline traffic demand has fallen by more than 20% compared to peak levels achieved just three years ago. Indeed, aviation's centennial celebration comes as the industry is in its worst economic shape ever. Airlines have lost $25 billion in the last two years and laid off more than 400,000 employees. "If the Wright brothers were still alive, Orville would have to fire Wilbur," joked Herb Kelleher, chairman of Southwest Airlines. With all the bad news, it may come as a surprise to learn that a major topic at the conference was the expansion of the country's airports and air traffic control system. IATA is projecting an annual growth rate for the airline industry of 4.5% per year for the next 15 years, which will double the current number of passengers to over 3 billion per year. Secretary of Transportation Norman Y. Mineta called for an expansion of capacity of both airports and airspace. He warned that the terrible delays that occurred during the summer of 2000 due to overcrowded skies and airports will return once the airline industry becomes healthy again. In fact, even as the high-end market has taken a tremendous beating, demand for bargain travel remains strong. "People still want to fly, but they have become far more price conscious than ever before," said Jeffrey Shane, under secretary of transportation for policy. As a result, low-cost carriers increased their market share in the U.S. by 50% last year, accounting for almost 20% of the market. To compete, legacy carriers are charging passengers for meals or eliminating them altogether, squeezing more seats into cabins, or taking other drastic cost-cutting measures to return to profitability. It's another example of the ironic relationship between the airlines and technology: that an industry founded on technological innovation is now driven almost entirely by cost efficiency, austerity and frugality. It remains to be seen if many business travelers will ever return to the skies. Businesses may have found alternatives to air travel such as Web, video and teleconferences or simply driving to meetings. And I wonder how the airlines expect their customers to keep flying in bad times when so many of them do not practice what they preach. Many carriers implemented policies curtailing their own employees' business travel after September 11th. Employees weren't allowed to fly to industry meetings and other "nonessential" business trips - even though they don't have to worry about air fare. If airlines are going to cut staff travel, should they be surprised when their business customers do the same? The SARS epidemic has been the coup de grace for the airline crisis. The airlines focused much of their time at the IATA conference discussing how to launch a public relations campaign to combat a crisis like SARS, which they believe has been blown out of proportion given the number of actual cases reported. But last year the same IATA conference was held in Shanghai. I wonder what would have happened if the SARS virus had surfaced then. Would airline executives have set the example by flying straight into the face of SARS? Or would they have moved the meeting to a safer place? Here's a clue to the answer: In October, another industry conference is scheduled to be held in Singapore. One of my colleagues told me that the organizers are thinking of moving it to Hawaii if the SARS epidemic is still a factor. Something tells me that I ought to just go ahead and book my flight to Hawaii now. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.natalielaughlin.com/ TnT Webdirectory: http://search.co.tt *********************************************************