Bill Franke is a name that should make airline passengers shudder and yet it’s hardly known. He ran America West and hired Doug Parker to be his cost-cutting CFO.
Franke is responsible for turning Spirit Airlines into an ultra low cost carrier. He divested there and bought Frontier Airlines, turning it into a Spirit clone. And now he’s merging the two.
Parker, of course, is the Franke protege’ who went on to run America West, take over US Airways and then American Airlines.
Outside the U.S. Franke is responsible for giving the world low cost airlines Volaris, Tiger Airways, JetSmart (which is partnering with Parker’s American), and Wizz Air.
It’s this last airline, Wizz Air, that is now creating controversy in the U.S. since it wants to fly to the U.S. and U.S. airline pilots don’t want the low cost competition out of fear it will compete down their wages here.
The Air Line Pilots Association says they’re anti-union and wraps their objections in safety. The pilots union at American calls out their “anti-union record” and “safety culture,” and is at least forthright in admitting their concern is self-interest (“the impact its foreign carrier permit would have on competition”). Unions were against Norwegian and other low cost carriers from Europe flying transatlantic as well.
Being ‘anti-union’ isn’t a legal reason to reject their application, though it may gain sympathy from the current administration and drive them to delay it and look for other reasons.
There’s little doubt that Franke has driven down airfares. On net I’m glad to see ultra low cost carriers force legacy airlines to compete, and dislike those legacy carriers and their unions looking to the government to protect them from competition at the expense of passengers who would have fewer choices and pay higher fares.
There’s also little doubt, however, that the result of this (and the spreading out of Franke proteges to other airlines) has led to worse customer experiences at other carriers. Need I mention that Wizz Air’s CEO wants to make business class illegal ‘for the environment’? The denser the seating the better, because you spread carbon emissions across more people.
“U.S. airline pilots don’t want the low cost competition out of fear it will compete down their wages here.”
I, as a passenger, don’t want pilot wages going down, either.
I want the guys at the controls making $200-400k per year so that they’re not learning to code or studying for an MBA when they should be aviating.
Every wonder why incidents always seem to involve regional subsidiaries and not mainline crews, even abroad?
Instead of target than fighting business class, he should look into some of the double decker lie-flat seating proposals, perhaps by removing overheads. If he could fill a plane with those, he could have the low cost lie-flat market, potentially killing business class in conventional airlines. The only people left would be the ones pretending to work three glasses of wine into the flight.
I have really liked flying Wizz Air in Europe. In addition to appreciating the airline’s routes (it is great for flying to Budapest), I have greatly appreciated the option, when booking a ticket, of paying a token amount extra to get a lot of extra credit with the airline if the flight is delayed.
I can see the jokes now. “Take a Wizz on the Atlantic route.” What genius thought that name up?
Competition!
Nobody likes competition when they can’t compete.
There are metrics to competition other than price. But, when competition focuses on price, the product becomes a commodity and — as Gary has indicated — customer experience suffers. We can either pay a ticket price that is consistent with good customer service (and other services) or we can pay a ticket price that is consistent with poor customer service (and no other services). And, when market forces push ticket prices down, we complain about poor customer service? We are the problem.
To affirm this entitled attitude, to another article, one person — likely a millennial — actually complained / asked, “Why do only the people in first class get the champagne? Why don’t the people in basic economy ever get it?” It is this type of person whom we must thank for the state of affairs.
The problem with LCC transatlantic is it doesn’t work. Ever. There has never been a successful LCC transatlantic carrier that has stood the test of time. What happens is they come in and kill yields on everyone and then after a year or two they vanish leaving the depressed yields in their wake.
To be viable, commercial aviation needs to make money. As much crap as airlines get their margin in the TA market is sub 3%. The governments of the countries they operate to and from are marking 5x that off the passengers. Without consistent long term profit potential you will have continued erosions in quality and infrastructure. Basically, we reap what we sow.
The low cost long haul model has been a graveyard for numerous airlines from Laker to Wow to Norwegian. The business model works fine in the summer months when the masses are traveling, but the other nine months of the year it’s mostly corporate travelers and they don’t want to fly on a ULCC. Legacy airlines don’t have much to worry about.
Well, everyone has a strategy. The most effective way to get rid of competition is to make it illegal or so costly that it’s not worthwhile. Why is the US full of chain hotels that charge exorbitant rates? What happened to your neighborhood butcher in your town? Odds are, it’s not that the small players didn’t offer better value or even that they were too expensive, but rather the big chains changed the regulatory landscape.
Outlaw the upstarts, ban the legacies – that’s the corporatist world at work.
Parker is basically the supervillain of the airline world. I imagine him starting airlines while petting his cat, and laughing evilly!
@Breathe Free: I want the guys at the controls making $200-400k per year so that they’re not required to supplement their pilot income by driving an Uber or working at McDonald’s flipping burgers when they should be aviating.
Aaaaand… breathe. Wizz is not after passenger service (at least for now, if ever). They are operating a Hungarian registered cargo plane which currently does BUD to China, and they want to add cargo flights to the US. The US pilots are fighting it for all the reasons mentioned above, but only so that IF Wizz would ever decide to add passenger flights, the pilots union have put a stake in the ground.
https://www.cityam.com/going-west-wizz-air-applies-us-cargo-licence/
It is also a fact that in December of 2021, a Danish pension fund withdrew their (very small, relatively speaking) investment in Wizz on grounds of unfair labor practices. https://www.reuters.com/business/wizz-air-investor-akademikerpension-ditches-stake-over-labour-rights-2022-02-07/
It’s amazing how powerful unions are. They monopolize airport gates and slots. They pocket billions of dollars in direct cash subsidies and lucrative tax breaks. They actively limit competition. They get the government to pay for the majority of their infrastructure. The outrageous power of unions must end!
Oh, wait, that’s not what unions have done. Never mind.
@ KEN I suppose you think that if they drop to making $150k – $350k that they would need to go to work at McD for extra income? Crazy – or just a joke.
I wonder what was so controversial in my post that it was not placed?
ULCCs are all about obfuscation and poor service. For a “typical” bundle of services they aren’t substantially cheaper than regular carriers and come with substantial execution risk. I exclude Spirit and Frontier from searches. Southwest raised prices after it acquired AirTran and its prices equal or exceed legacy prices on many routes on nonstop flights. Transatlantic LLCs likewise aren’t substantially less expensive for the average customer.
Ever read “The millionaire next store?
Those that valve money, time and profit will recalculate if they cannot generate income by sitting in First Class they wouldn’t.. I know that is how I think.
IMO. Total waste of money unless I couldn’t make the trip in any other way.
If you have “points” to burn . , “go for it”!