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United Airlines Threatening Bankruptcy. Posted on 08/15/2002.

The morning news tells us that United management claims it will seek bankruptcy protection in the fall unless it can get its labor unions to make concessions. This cements what was speculated on in my last post. There's been some good discussion in the comments area there.

Two more notions on the whole Mess That Is Big Air.

One is that a potential solution might require airlines to act as friendlier neighbors. It seems a given that a single airline cannot serve the entire United States, much less the world, in a cost-efficient fashion. The system just gets too complex and bogs down under its own weight. So, perhaps instead of trying to be all things to all people, airlines focused on certain regions and routes, and worked with each other to provide smooth handoffs when a passenger was leaving their "network" and moving into another. (Is this how mobile phone providers do it?)

The other is related to Valdis' comment from the last post, pointing out that hubs are a double-edged sword, ensuring greater efficiency when working appropriately, but becoming a critical point-of-failure when something goes wrong.

As it happens, I'm reading Nexus, a book addressing the same subject matter as Linked, except written by an observer (a journalist), not a participant. In chapter 8, the author, Mark Buchanan, discusses airlines-as-networks, and the need to factor in costs and consequences into a network's operations. The summer of 2000 was the worst in history for air traffic delays, because the airline network was operating at a capacity that became impossible to handle, and it looked like this problem was only going to get worse.

A side effect of the September 11th tragedy is that air traffic has diminished markedly. From my personal experience, this has lead to a much higher "on-time" ratio for the airlines; in fact, I can't think of a flight I've been on that has been significantly delayed. The current amount of air traffic is about what airlines can comfortably handle.

Though they clearly have many other things on their mind, the airlines would be advised to utilize this decrease in demand as a chance to step-back and seriously consider the topology of their network. Eventually, air traffic will return to its pre-9/11 levels, and if nothing is changed before then, we'll simply return to a world of massive delays.

Buchanan points out that this shift has already begun to occur, and that the rise of the regional airlines, utilizing secondary airports, is an effect of the hubs being overtaxed. This shift is still very much in process, and its likely endpoint is to move the airline network model away from a hub-and-spoke model, where a few nodes have many links, and most others very few, to a more egalitarian model, where no node has many links, but they all have more than a few.

2 comments so far. Add a comment.

Previous entry: "Getting My Head Around The Airlines Mess."
Next entry: "Can't Get Enough of That Airline Industry Stuff."


Peter, who in the name of holy living fuck cares what happens to big airlines. Whenever times are bad for air travel, everyone in the country is supposed to feel sorry for them or something. WHY?? This is not a free market way of looking at things.

Know this: there wouldn't BE big airlines if they didn't make money, and when times are good, they make a frickin boatload (or should I say 777load) of money. So cry me a river, AA & UAL.

Moreover, the airline agita seems much like the whining US car companies did in the 80s about losing market share to Japanese companies. Holy shit, maybe the market is changing! Who knows, maybe some of them will go out of business!!

Any gaps that form will not only be filled, they will likely be filled by smaller, smarter, nimbler players. So I say, it's like the forest fires at Yellowstone. Let it burn.

And for the record, Southwest operates in 30 states, most of which are not in the southwest.
Posted by Michael Dukakis @ 08/17/2002 10:33 PM PST [link to this comment]

in the UK (and maybe the rest of the world) this book is called: Small World: Uncovering Nature's Hidden Networks
Posted by matt @ 08/22/2002 07:58 AM PST [link to this comment]

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