Airline Business Quotes

Pick a leader who will make their citizens proud. One who will stir the hearts of the people, so that the sons and daughters of a given nation strive to emulate their leader's greatness. Only then will a nation be truly great, when a leader inspires and produces citizens worthy of becoming future leaders, honorable decision makers and peacemakers. And in these times, a great leader must be extremely brave. Their leadership must be steered only by their conscience, not a bribe.

Pick a leader who will keep jobs in your country by offering companies incentives to hire only within their borders, not one who allows corporations to outsource jobs for cheaper labor when there is a national employment crisis. Choose a leader who will invest in building bridges, not walls. Books, not weapons. Morality, not corruption. Intellectualism and wisdom, not ignorance. Stability, not fear and terror. Peace, not chaos. Love, not hate. Convergence, not segregation. Tolerance, not discrimination. Fairness, not hypocrisy. Substance, not superficiality. Character, not immaturity. Transparency, not secrecy. Justice, not lawlessness. Environmental improvement and preservation, not destruction. Truth, not lies.

Pick a leader who will not only bail out banks and airlines, but also families from losing their homes -- or jobs due to their companies moving to other countries. Pick a leader who will fund schools, not limit spending on education and allow libraries to close. Pick a leader who chooses diplomacy over war. An honest broker in foreign relations. A leader with integrity, one who says what they mean, keeps their word and does not lie to their people. Pick a leader who is strong and confident, yet humble. Intelligent, but not sly. A leader who encourages diversity, not racism. One who understands the needs of the farmer, the teacher, the doctor, and the environmentalist -- not only the banker, the oil tycoon, the weapons developer, or the insurance and pharmaceutical lobbyist.

If you travel on an airline and they get you there safely, you don’t tell anyone. That’s what’s supposed to happen. What makes it remarkable is if it’s horrible beyond belief or if the service is so unexpected (they were an hour early! they comped my ticket because I was cute! they served flaming crêpes suzette in first class!) that you need to share it.

Well … things are beginning to stack up a little,” said Gordo. It was the same old sod-hut drawl. He sounded like the airline pilot who, having just slipped two seemingly certain mid-air collisions and finding himself in the midst of a radar fuse-out and control-tower dysarthria, says over the intercom: “Well, ladies and gentlemen, we’ll be busy up here in the cockpit making our final approach into Pittsburgh, and so we want to take this opportunity to thank you for flying American and we hope we’ll see you again real soon.” It was second-generation Yeager, now coming from earth orbit. Cooper was having a good time. He knew everybody was in a sweat down below. But this was what he and the boys had wanted all along, wasn’t it?

A great example of Guiding Structure is the “Sterile Cockpit Rule” that the Federal Aviation Administration (FAA) instituted in 1981. Most airline accidents happen below ten thousand feet, where distractions can be deadly. Above ten thousand feet, pilots can talk about anything they want, but below ten thousand feet, the only discussion permitted is about information directly related to the flight in progress. By eliminating distractions, the Sterile Cockpit Rule reduces errors and accidents.

What we are trying to do at Virgin is not to have one enormous company in one sector under one banner, but to have two hundred or even three hundred separate companies. Each company can stand on its own feet and, in that way, although we've got a brand that links them, if we were to have another tragedy such as that of 11 September - which hurt the airline industry - it would not bring the whole group crashing down.

Here, all we need are Ratan Tata’s own words at a gathering in Dehradun in November 2010: ‘We approached three prime ministers. But an individual thwarted our efforts … I happened to be on a flight once and another industrialist who was sitting next to me said: “I don’t understand. You people are stupid. You know the minister wants Rs 15 crore. So why don’t you pay it?” I just said: “You can’t understand it. I just want to go to bed at night, knowing that I haven’t got the airline by paying for it.

A journey of a thousand miles doesn't begin with one step. It begins by going online and purchasing a first or business class airline ticket.

In a fascinating digression, Buffett noted that “the fact that you are being obsoleted does not mean you should go into the successor business.” As an example, he explained that if you were a person of vision in the passenger train business in 1930, you might have seen the coming of the airplane. But the answer was not to get into the airline business, which is a terrible business. The answer was to get out of the passenger business altogether.

You know what—gyms make the largest chunk of their profit from clients who pay their monthly dues on auto-pay but never bother to show up and use the gym. The DVD-rental companies make a good chunk of their profits from late fees; the credit-card companies make a fortune on sundry fines and penalties; the airlines’ margins are highest on ticket changes and cancellations… So, the key to running a successful business in America is to sign up a customer and pray he’ll somehow screw up…

The closest most people have ever come to understanding what an investment banker does may have been on October 24, 1995, when they heard the outrageous special interest story of the day. The wire services released the story first. It was quickly picked up and parroted by almost every major media outlet in the country as a classic example of Wall Street excess. A fifty-eight-year-old frustrated managing director from Trust Company of the West, on an airplane trip from Buenos Aires to New York City, downed an excessive number of cocktails, got out of his seat in the first-class cabin of a United Airlines flight, dropped his pants, and took a crap on the service cart. There you have it. That’s what bankers do: consume, process, and disseminate.

After we had pondered our responsibilities and financial liabilities, one day it dawned on me that I was a businessman and would probably be one for a long time. It was also clear that in order to survive at this game, we had to get serious. I also knew that I would never be happy playing by the normal rules of business; I wanted to distance myself as far as possible from those pasty-faced corpses in suits I saw in airline magazine ads. If I had to be a businessman, I was going to do it on my own terms. One

Thirty years ago, travel agents made our airline and rail reservations, salesclerks helped us find what we were looking for in stores, and professional typists or secretaries helped busy people with their correspondence. Now we do most of those things ourselves. The information age has off-loaded a great deal of the work previously done by people we could call information specialists onto all of the rest of us. We are doing the jobs of ten different people while still trying to keep up with our lives, our children and parents, our friends, our careers, our hobbies, and our favorite TV shows. It’s no wonder that sometimes one memory gets confounded with another, leading us to show up in the right place but on the wrong day, or to forget something as simple as where we last put our glasses or the remote.

It’s my personal opinion that airlines can do two things to make air travel better for everyone. The first is to have the people taking boarding tickets recognize the person who seems the most unreasonably determined to be sitting on the plane, hold up their arm, and joyfully announce over the loudspeaker: “YOU, SIR! You are our winner for most unaccountably and frantically eager to get on a plane that will not leave until every single person is seated anyway. Well done, you! Can you tell us how you feel now that you’ve won?” At best he’ll realize he’s being a bit douchey, laugh it off, and might calm the hell down from now on. At worst he’ll start yelling and then everyone else gets a good show. Then give him a small medal and a mild tranquilizer. Plus a mild tranquilizer for the person who has to sit next to him. And, if you’re handing them out, I’ll take one too. In fact, mild tranquilizers for everyone! (I apologize for the gender stereotyping, but in fairness it usually is a he. And he’s usually in a business suit. And he often has triple-diamond status. And he’s occasionally my husband.) Frankly,

Where languages are seen as productive tools, rather than social symbols, the policies are very different. A Japanese-owned multinational company has decreed that English will be the sole language of the enterprise, wherever the company’s branches are located around the world.13 In other words, they recognized that English is the lingua franca of international commerce, as it is the language of international airline pilots communicating with airports around the world. Their decision was not based on the qualities of the English or Japanese languages, or their symbolic value, but on hard facts about the economics of doing business around the world.

My husband, Eric, has a joke he likes to say: “Ask Jessica to sing about Jesus or America, and she’ll be there. Super Bowl, backyard cookout, whatever you got, she’s coming to sing ‘God Bless America.’ ” And he’s right. Growing up in Texas, I sang that song over and over. From Memorial Day parades to Veteran’s Day pancake breakfasts—I was your girl. When I sang it at the East Room of the White House, I finally found out I had been flubbing the lyrics all those years. I was there to kick off the USO holiday tour for troops fighting in Afghanistan. It was the first time they let celebrities in after 9/11, because, well, they were busy. It was surreal to hear President Bush speak, thanking the chairman of the Joint Chiefs of Staff for his service, the transportation secretary for keeping the airlines safe. And then he added, “I want to thank Rob Schneider and Jessica Simpson as well.” They asked me to sing “God Bless America,” and I gave it my all. President Bush was in the front row, right next to Laura, and I watched him quietly sing along, his mouth moving along with mine. Something went wrong after we got to the mountains, though. I said, “to the rivers,” just like I always did, and, well, he knew it was “the prairies.” I was so embarrassed that I apologized to him and Mrs. Bush after. “I swear all this time I thought it was rivers!” I said. “That’s okay, Jessica,” he said. “God blessed the rivers, too.

by letting them return items long after the normal thirty-day grace period. Rental-car companies and hotels have learned to combat sticker shock by warning customers in advance of all the taxes and fees that will be added to the bill. But some businesses remain stubbornly oblivious to the peak-end rule. Why do so many shopping expeditions end with a long line at the checkout counter, and so many airline flights end with a half-hour wait at baggage claim? Why do so many online newspaper articles end with a correction informing the reader of some trivial mistake made in an earlier version? In the print era, running corrections was the only way to set the record straight once the paper had come off the presses, but today any error

Creating value is not enough—you also need to capture some of the value you create. This means that even very big businesses can be bad businesses. For example, U.S. airline companies serve millions of passengers and create hundreds of billions of dollars of value each year. But in 2012, when the average airfare each way was $ 178, the airlines made only 37 cents per passenger trip. Compare them to Google, which creates less value but captures far more. Google brought in $ 50 billion in 2012 (versus $ 160 billion for the airlines), but it kept 21% of those revenues as profits—more than 100 times the airline industry’s profit margin that year. Google makes so much money that it’s now worth three times more than every U.S. airline combined.

The perils of aviation in the period are neatly encapsulated in the experience of Harold C. Brinsmead, the head of Australia’s Civil Aviation Department in the first days of commercial aviation. In 1931, Brinsmead was on a flight to London, partly for business and partly to demonstrate the safety and reliability of modern air passenger services, when his plane crashed on takeoff in Indonesia. No one was seriously hurt, but the plane was a write-off. Not wanting to wait for a replacement aircraft to be flown in, Brinsmead boarded a flight with the new Dutch airline, KLM. That flight crashed while taking off in Bangkok. On this occasion, five people were killed and Brinsmead suffered serious injuries from which he never recovered. He died two years later. Meanwhile, the surviving passengers carried on to London in a replacement plane. That plane crashed on the return trip. Daly

Homer-Dixon says increasing complexity makes societies more resilient only up to a point. Connections between villages might mean one comes to the other’s aid in an attack. But as the villages become more tightly coupled, both may suffer when one is attacked. A loose network absorbs shock; a tightly coupled one transmits it. That is happening in the Covid-19 pandemic. Countries go into lockdown; people stop shopping, traveling, and producing; and the effects ricochet through a tightly coupled global economy. The global supply chains of money, materials, people, energy, and component parts that underpin industries falter and break. Airlines go under as they are not set up to weather even a temporary disappearance of travelers. Malaria worsens in Africa as insecticide and antimalarial bed net deliveries falter. Microcredit that underpins small businesses throughout the developing world defaults because payment collectors are locked down, causing ramifications throughout an economy.

If you ever hear the words conventional and wisdom conjoined, reject them. Because if it is conventional, it isn’t wisdom. And if it’s wisdom, it isn’t conventional. —Herb Kelleher How has Southwest been able to attain uncommon results in the worst industry in capitalism? The company has succeeded by being unconventional. Herb likes to tell the story of how a Washington think tank told the company that it would not be able to survive without six of the “keys to success” that other carriers have used. Southwest followed none of those keys to success. At every point of Southwest’s history, the company has successfully challenged industry norms. Southwest differed from the competition because of its low-cost fares. In the 1970s, before deregulation, flying was expensive, because the government controlled the prices. Rollin King and Herb Kelleher’s idea was to provide lower fares and enable a greater number of Americans to fly. Southwest would not be competing with other airlines but with other forms of transportation.

I heard a story about a critical, negative barber who never had a pleasant thing to say. A salesman came in for a haircut and mentioned that he was about to make a trip to Rome, Italy. “What airline are you taking and at what hotel will you be staying?” asked the barber. When the salesman told him, the barber criticized the airline for being undependable and the hotel for having horrible service. “You’d be better off to stay home,” he advised. “But I expect to close a big deal. Then I’m going to see the Pope,” said the salesman. “You’ll be disappointed trying to do business in Italy,” said the barber, “and don’t count on seeing the Pope. He only grants audiences to very important people.” Two months later the salesman returned to the barber shop. “And how was your trip?” asked the barber. “Wonderful!” replied the salesman. “The flight was perfect, the service at the hotel was excellent; I made a big sale, and I got to see the Pope.” “You got to see the Pope? What happened?” The salesman replied, “I bent down and kissed his ring.” “No kidding! What did he say?” “Well, he placed his hand on my head and then he said to me, ‘My son, where did you ever get such a lousy haircut?’” There’s

The mythical ‘butterfly effect’ does exist, but we don’t spend enough time butterfly hunting. Here are some recent butterfly effect discoveries, from my own experience: A website adds a single extra option to its checkout procedure – and increases sales by $300m per year. An airline changes the way in which flights are presented – and sells £8m more of premium seating per year. A software company makes a seemingly inconsequential change to call-centre procedure – and retains business worth several million pounds. A publisher adds four trivial words to a call-centre script – and doubles the rate of conversion to sales. A fast-food outlet increases sales of a product by putting the price . . . up. All these disproportionate successes were, to an economist, entirely illogical. All of them worked. And all of them, apart from the first, were produced by a division of my advertising agency, Ogilvy, which I founded to look for counter-intuitive solutions to problems. We discovered that problems almost always have a plethora of seemingly irrational solutions waiting to be discovered, but that nobody is looking for them; everyone is too preoccupied with logic to look anywhere else. We also found, rather annoyingly, that the success of this approach did not always guarantee repeat business; it is difficult for a company, or indeed a government, to request a budget for the pursuit of such magical solutions, because a business case has to look logical.

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Variations on a tired, old theme Here’s another example of addict manipulation that plagues parents. The phone rings. It’s the addict. He says he has a job. You’re thrilled. But you’re also apprehensive. Because you know he hasn’t simply called to tell you good news. That kind of thing just doesn’t happen. Then comes the zinger you knew would be coming. The request. He says everybody at this company wears business suits and ties, none of which he has. He says if you can’t wire him $1800 right away, he won’t be able to take the job. The implications are clear. Suddenly, you’ve become the deciding factor as to whether or not the addict will be able to take the job. Have a future. Have a life. You’ve got that old, familiar sick feeling in the pit of your stomach. This is not the child you gladly would have financed in any way possible to get him started in life. This is the child who has been strung out on drugs for years and has shown absolutely no interest in such things as having a conventional job. He has also, if you remember correctly, come to you quite a few times with variations on this same tired, old story. One variation called for a car so he could get to work. (Why is it that addicts are always being offered jobs in the middle of nowhere that can’t be reached by public transportation?) Another variation called for the money to purchase a round-trip airline ticket to interview for a job three thousand miles away. Being presented with what amounts to a no-choice request, the question is: Are you going to contribute in what you know is probably another scam, or are you going to say sorry and hang up? To step out of the role of banker/victim/rescuer, you have to quit the job of banker/victim/rescuer. You have to change the coda. You have to forget all the stipulations there are to being a parent. You have to harden your heart and tell yourself parenthood no longer applies to you—not while your child is addicted. Not an easy thing to do. P.S. You know in your heart there is no job starting on Monday. But even if there is, it’s hardly your responsibility if the addict goes well dressed, badly dressed, or undressed. Facing the unfaceable: The situation may never change In summary, you had a child and that child became an addict. Your love for the child didn’t vanish. But you’ve had to wean yourself away from the person your child has become through his or her drugs and/ or alcohol abuse. Your journey with the addicted child has led you through various stages of pain, grief, and despair and into new phases of strength, acceptance, and healing. There’s a good chance that you might not be as healthy-minded as you are today had it not been for the tribulations with the addict. But you’ll never know. The one thing you do know is that you wouldn’t volunteer to go through it again, even with all the awareness you’ve gained. You would never have sacrificed your child just so that you could become a better, stronger person. But this is the way it has turned out. You’re doing okay with it, almost twenty-four hours a day. It’s just the odd few minutes that are hard to get through, like the ones in the middle of the night when you awaken to find that the grief hasn’t really gone away—it’s just under smart, new management. Or when you’re walking along a street or in a mall and you see someone who reminds you of your addicted child, but isn’t a substance abuser, and you feel that void in your heart. You ache for what might have been with your child, the happy life, the fulfilled career. And you ache for the events that never took place—the high school graduation, the engagement party, the wedding, the grandkids. These are the celebrations of life that you’ll probably never get to enjoy. Although you never know. DON’T LET    YOUR KIDS  KILL  YOU  A Guide for Parents of Drug and Alcohol Addicted Children PART 2

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We afford automatic respect to superstar business moguls, politicians, and actors and to anyone flying around in a private jet, as if their accomplishments must reflect unique qualities not shared by those forced to eat commercial-airline food.

Much leadership literature—even from “Christian” publishers—dwells on executives or “stars” in big businesses, professional sports, and the military. Frequent are the celebrations of leadership in Disney, Apple, Southwest Airlines, or Shell. While there are things to be learned, caution is also appropriate. These kinds of books reinforce the interests and perspectives of the status quo.

It’s tempting to think that when you call the bank or another financial service provider and you are put on hold for twenty-five minutes, it’s simply because it’s a peak time of day and many other account holders are calling at the same moment. Tempting, but wrong. In reality, the wait time likely has nothing to do with timing and everything to do with your CLV, or customer lifetime value. This is a calculation of how much your business is worth to whoever you are calling, and the higher the number, the better the service. At a bank or credit card company, it might be determined by your balance. Frequency of travel and spending levels help set your CLV at airlines and hotels. More and more, as soon as you call any consumer-facing company, according to Palmatier, the company’s first step is to identify your phone number and then determine your CLV. “If it’s high,” he explained, “they might take your call more quickly, or direct it to one of their best-performing or most highly trained representatives. We call this heterogeneity in customer service, and it’s driven by the profit motive.

BAG: What do you suppose would happen to an American airline, not necessarily American Airlines, but all the airlines use officialese . . . What do you suppose would happen to that airline if you and I were hired to rewrite all their spiels in good, plain, humane English? Would that be a business drag on that company, or would it be good for them? DFW: I think the really interesting question is why hasn’t this been done before? It would be a fascinating experiment. Here’s my guess. It would be a great marketing device. It would be a way to look different from other airlines. It would sound more human. Right? I mean, we always get these corporations: “We care about you. Therefore, we proactively try to facilitate your growing business needs.” Well, that second clause communicates the opposite of “We care about you” because that second clause isn’t a human-to-human contact.

My wife has a sweet tooth but is also very health conscious. Over more than two decades, she has followed a simple yet powerful way of avoiding the enticement of desserts. Our fridge just doesn’t have any. In my view, the best way to avoid investing in bad businesses is to ignore them and their stock prices. We never discuss what we consider bad companies or industries in our team meetings. Never. It doesn’t matter if an airline has declared spectacular results recently or if every analyst recommends buying airline shares. We are indifferent to a public sector bank that has hired a new CEO from the private sector and has pushed its stock price to an all-time high. We ignore an infrastructure business that has been awarded a new multibillion-dollar contract and a gold loan business that has announced 30 percent ROE in its latest quarterly result and is touted by the bulls to be the next billion-dollar opportunity. No one on our team is allowed to utter the famous last words of many investors: “This time, it’s different.” If we never discuss a business, how will we ever buy it? No sweets in the fridge: no snacking possible.

Companies that adapt to the new digital landscape will serve customers better, and will survive. Those that don’t will die. It may not be overnight, but it’s inevitable. It’s as simple as that. It doesn’t matter what business you’re in. Banks. Airlines. Automakers. Insurance companies. Real estate. Retailers. Health care.

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Paradoxical as it may seem, the riches of nations can be measured by the violence of the crises which they experience,’ opined the nineteenth-century French economist Clément Juglar.13 Once creative destruction is taken into account, Juglar’s observation doesn’t appear so puzzling. Some economists take a ‘pit-stop’ view of recessions, seeing them as periods when efficiency measures are most likely to be undertaken.14 Business failures, which soar during economic downturns, are seen as essential to the economy’s evolution over time. As the saying attributed to the former astronaut and airline boss Frank Borman goes, ‘capitalism without bankruptcy is like Christianity without hell.’ If that is the case, then monetary policy should not interrupt a recession’s cleansing effect.fn4 Put another way, if financial stability is destabilizing (as Hyman Minsky maintained), too much economic stability induces sclerosis.

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Belonging is important for a person’s health, just as it is important to your business’s health.

If we are not attracting, maintaining, or developing the new generation of workers we are also NOT attracting, not retaining and not growing the new generation of customers.

The flow of the user experience is to give the end user something of value, build trust in the relationship and then engage in commerce once we’re comfortable with each other. The industrial ethic had the opposite approach. Its approach was to say, ‘Here’s this item and this is the price. So let’s transact. You buy something and if you buy it often enough I might reward you for your loyalty later on’. Airline frequency flyer programs operate in this way.

They read in an airline magazine that they can manage their whole supply chain in the cloud for $499 per year, and suddenly that’s the main company initiative.

After January 1, 1959, the Castro Revolution changed the way business was done in Cuba. Abruptly, supplies for Cubana were no longer available, most routes were altered or suspended, and many of the pilots deserted their jobs or were exiled. In May of 1960, the new Castro administration merged all of the existing Cuban airlines and nationalized them under a drastically restructured Cubana management. At the time, many of Cubana’s experienced personnel took advantage of their foreign connections, and left for employment with other airlines. During the Bay of Pigs Invasion in April of 1961, two of the remaining Cubana DC-3’s were destroyed in the selective bombing of Cuba’s airports. Actually the only civil aviation airport that was proven to be bombed was the Antonio Maceo Airport in Santiago de Cuba. During the following years, the number of hijackings increased and some aircraft were abandoned at American airports, as the flight crews sought asylum in the United States. This corporate instability, as well as political unrest, resulted in a drastic reduction of passengers willing to fly with Cubana. Of course, this resulted in a severe reduction in revenue, making the airline less competitive. The Castro régime reacted by blaming the CIA for many of Cubana’s problems. However, slowly, except to the United States, most of the scheduled flights were restored. Not being able to replace their aging fleet with American manufactured aircraft, they turned to the Soviet Union. Currently Cubana’s fleet includes Ukrainian designed and built Antonov An-148’s and An-158’s. The Cubana fleet also has Soviet designed and built Illyushin II-96’s and Tupolev TU-204’s built in Kazan, Russia. Despite daunting difficulties, primarily due to the United States’ imposed embargo and the lack of sufficient assistance from Canada, efforts to expand and improve operations during the 1990’s proved successful. “AeroCaribbean” originally named “Empresa Aero” was established in 1982 to serve as Cuba’s domestic airline. It also supported Cubana’s operations and undertook its maintenance. Today Cubana’s scheduled service includes many Caribbean, European, South and Central American destinations. In North America, the airline flies to Mexico and Canada. With Cuban tourism increasing, Cubana has positioned itself to be relatively competitive. However much depends on Cuba’s future relations with the United States. The embargo imposed in February of 1962 continues and is the longest on record. However, Cubana has continued to expand, helping to make Cuba one of the most important tourist destinations in Latin America. A little known fact is that although Cubana, as expected, is wholly owned by the Cuban government, the other Cuban airlines are technically not. Instead, they are held, operated and maintained by the Cuban military, having been created by Raúl Castro during his tenure as the Minister of the Revolutionary Armed Forces.

Many of the best and most conspicuous examples of strategic principles come from companies that were founded on them, companies such as eBay, Dell, Vanguard, Southwest Airlines, and Wal-Mart (“Low prices, every day”). The founders of those companies espoused a clear guiding principle that summarized the essence of what would become a full-blown business strategy.

More than a hundred new airlines went into business around this time, although the casualty rate was extremely high: in 1994 alone, fifty-seven new airlines opened for business, of which thirty-seven closed within two years.

As Herb Kelleher of Southwest Airlines succinctly put it, 'Strategy, overdone; doing stuff, underdone'.

The Coeur d’Alene Airport was a sleepy little airfield with three paved runways laid out in a standard triangle configuration. Two small FBOs (fixed base operators) on the field rented airplanes and offered instruction. I felt a little discouraged upon seeing the dilapidated condition of the buildings at both of these businesses. It appeared they were both operating on a shoestring budget—just as Martha and I were at the time. The airport had no air terminal or commercial airline service. I was nevertheless hoping I would at least see a little airplane taxiing, taking off, or landing that day, but there was no activity whatsoever. It was exciting, though, for me to just see a number of single-engine private aircraft tied down on the tarmac as I imagined myself climbing into one, taxiing out, and taking off.

guiding users through a process quickly and easily is good for business, because the fewer people who get frustrated or confused, the more sales or sign-ups are completed. The problem, though, is that making interactions feel smooth and simple sounds nice, but it starts to fail as soon as you’re asking users for messy, complicated information. And as you’ll see in this chapter, all kinds of everyday questions can be messy and complicated—often in ways designers haven’t predicted. NAMING THE PROBLEM Sara Ann Marie Wachter-Boettcher. That’s how my birth certificate reads: five names, one hyphen, and a whole lot of consonant clusters (thanks, Mom and Dad!). I was used to it being misspelled. I was used to it being pronounced all sorts of ways. I was even used to everyone who looks at my driver’s license commenting that it takes up two whole lines. But I didn’t expect my name to cause me so many problems online. As it turns out, tons of services haven’t thought much about the wide range of names out there. So, on Twitter I forgo spaces to fit my professional name in: SaraWachterBoettcher. On online bill pay, they’ve truncated it for me: Sara Wachter-Boettch. In my airline’s online check-in system, hyphens straight up don’t exist. The list goes on. It’s irritating. It takes some extra time (do I enter a space between my last names, or just squish them together?). I see more error messages than I’d like. But it’s still a minor inconvenience, compared to what other people experience.

We went to look at Southwest Airlines in the U.S. It was like the road to Damascus. This was the way to make Ryanair work. I met with Herb Kelleher. I passed out about midnight, and when I woke up again at about 3 a.m., Kelleher was still there, the *********, pouring himself another bourbon. I thought I’d pick his brains and come away with the Holy Grail.

Herb met client Rollin King, an entrepreneur who had been running a third-level charter airline doing short-haul routes out of Twin Beaches since 1964. By 1967, King had observed and studied the success of Pacific Southwest Airlines, which was the first large discount airline operating within California. Rollin King met with Herb Kelleher soon after at a bar, where King sketched the triangle diagram of the three-city route on the back of a cocktail napkin. After some thought, Kelleher was on board with a $10,000 investment and to provide legal services.

Combinatorial complexity is well understood and can be tackled in an engineering fashion. For example, the airline schedule is usually built using a technique called linear programming. In the case of dynamics, changes through time create the complexity, like the anthill we discussed in the first chapter. In this case, engineering techniques may struggle. Dynamic complexity is the topic addressed by systems thinking.

Shaking his head, he continues, “It’s harder than ever to convince the business to do the right thing. They’re like kids in a candy store. They read in an airline magazine that they can manage their whole supply chain in the cloud for $499 per year, and suddenly that’s the main company initiative. When we tell them it’s not actually that easy, and show them what it takes to do it right, they disappear. Where did they go? They’re talking to their Cousin Vinnie or some outsourcing sales guy who promises they can do it in a tenth of the time and cost.” I laugh. “A couple of years ago, someone in Marketing asked my group to support a database reporting tool that one of their summer interns wrote. It was actually pretty brilliant, given that she only had a couple of months to work on it, and then it started being used in daily operations. How in the hell do you support and secure something that’s written in Microsoft Access? When the auditors found out that we couldn’t secure access to all the data, we spent weeks cobbling together something that satisfied them. “It’s like the free puppy,” I continue. “It’s not the upfront capital that kills you, it’s the operations and maintenance on the back end.

Southwest—unlike most other airlines, which fly multiple aircraft models—flies only Boeing 737s. As a result, every Southwest pilot, flight attendant, and ground-crew member can work any flight. Plus, all of Southwest’s parts fit all of its planes. All that means lower costs and a business that’s easier to run. They made it easy on themselves.

In the Macintosh, OS/2 and DOS operating systems, the failure of an application often halted, or crashed, the entire system, wiping out data and forcing a user to restart the machine. If many applications were running at once—a feature planned for NT—the failure of one halted the others. Cutler hoped to put an end to unwanted crashes by making an operating system that was “bullet proof” This would give PCs more value by making them reliable enough to run what businesses call “mission-critical” services, such as maintaining airline reservations or bank automatic teller machines.

Mr. Gunt, Mr. Neal here is a street survivor. We at the airline are honoring the homeless this year, and it was our airline's privilege and delight to offer him the one remaining business-class seat as a token of our faith in the triumph of the human spirit over adversity. With the full authority of the EU air-system code behind me, I order you back to 67E.

For example, in the airline business people talk about the ‘olive factor’ – if you forget to put the olive in the martini, the customer thinks you will forget to put the wheels down when you land the plane, and this is not regarded as a good idea.

Freddy left the business and went to work as a pilot with Trans World Airlines. At age twenty-three, he married a stewardess, and the couple had two children, Fred and Mary. Freddy seemed far happier than he had been under his father; Donald, however, couldn’t help but pick on Freddy’s run-of-the-mill ambitions, asking him, “What’s the difference between what you do and driving a bus?

Let’s have that talk. It would be nice to have someone to talk to about this. About where it’s going, which I think I’m pretty clear about. Can you do that without telling Paul all my personal business?” “Sure,” Vanni said with a smile. “Men don’t care about these things anyway. Where should we start?” “Why don’t we start with you telling me about your first experiences with this,” Shelby suggested. “Well,” Vanni said, looking into her lap for a second. “First of all—I wasn’t shy in high school. Or in college. Or while I worked with the airline….” Shelby giggled. “Oh God, this is going to be delicious! I can’t wait!” *

Although she has a tendency to be overly impressed by those with academic qualifications, Diana admires people who perform rather than pontificate. Richard Branson, the head of Virgin airlines, Baron Jacob Rothschild, the millionaire banker who restored Spencer House, and her cousin Viscount David Linley who runs a successful furniture and catering business, are high on her list. “She likes the fact that David has been able to break out of the royal mould and do something positive,” says a friend. “She envies too his good fortune in being able to walk down a street without a detective.” For years her low intellectual self-esteem manifested itself in instinctive deference towards the judgments of her husband and senior courtiers. Now that she is clearer herself about her direction, she is prepared to argue about policy in a way that would have been unthinkable several years ago. The results are tangible. Foreign Office diplomats, notoriously hidebound in their perceptions, are beginning to realize her true worth. They were impressed by the way she handled her first solo visit to Pakistan and subsequently discussed trips to Egypt and Iran, the Islamic republic where the Union Jack was routinely burned until a few years ago. This is, as she would say, a “very grown-up” part of her royal life.

Follow-up Call (Script) Seller: “Hello Mr. Prospect, my name is Tom Freese, and I’m the regional manager for KnowledgeWare in Kansas City. I wanted to contact you about the CASE application development seminar we are hosting at IBM’s Regional Headquarters on August 26. Do you remember receiving the invitation we sent you? (Pause for a response) “Frankly, we are expecting a record turnout—over one hundred people, including development managers from Sprint, Hallmark Cards, Pepsi Co., Yellow Freight, Kansas Power & Light, the Federal Reserve Bank, Northwest Mutual Life, American Family Life, St. Luke’s Hospital, Anheuser-Busch, MasterCard, American Express, Worldspan, and United Airlines, just to name a few. “I wanted to follow up because we haven’t yet received an RSVP from your company, and I wanted to make sure you didn’t get left out.” Granted, this was a highly positioned approach, but it was also 100 percent accurate. I wanted prospects to know that IBM was endorsing this event. I also wanted to let them know that I expected “everyone else” to participate. I accomplished this by rattling off an impressive list of marquee company names that we were “expected” to attend. Most importantly, I wanted to make sure that they didn’t get left out.

Third, the idea that venture capitalists get into deals on the strength of their brands can be exaggerated. A deal seen by a partner at Sequoia will also be seen by rivals at other firms: in a fragmented cottage industry, there is no lack of competition. Often, winning the deal depends on skill as much as brand: it’s about understanding the business model well enough to impress the entrepreneur; it’s about judging what valuation might be reasonable. One careful tally concluded that new or emerging venture partnerships capture around half the gains in the top deals, and there are myriad examples of famous VCs having a chance to invest and then flubbing it.[6] Andreessen Horowitz passed on Uber. Its brand could not save it. Peter Thiel was an early investor in Stripe. He lacked the conviction to invest as much as Sequoia. As to the idea that branded venture partnerships have the “privilege” of participating in supposedly less risky late-stage investment rounds, this depends from deal to deal. A unicorn’s momentum usually translates into an extremely high price for its shares. In the cases of Uber and especially WeWork, some late-stage investors lost millions. Fourth, the anti-skill thesis underplays venture capitalists’ contributions to portfolio companies. Admittedly, these contributions can be difficult to pin down. Starting with Arthur Rock, who chaired the board of Intel for thirty-three years, most venture capitalists have avoided the limelight. They are the coaches, not the athletes. But this book has excavated multiple cases in which VC coaching made all the difference. Don Valentine rescued Atari and then Cisco from chaos. Peter Barris of NEA saw how UUNET could become the new GE Information Services. John Doerr persuaded the Googlers to work with Eric Schmidt. Ben Horowitz steered Nicira and Okta through their formative moments. To be sure, stories of venture capitalists guiding portfolio companies may exaggerate VCs’ importance: in at least some of these cases, the founders might have solved their own problems without advice from their investors. But quantitative research suggests that venture capitalists do make a positive impact: studies repeatedly find that startups backed by high-quality VCs are more likely to succeed than others.[7] A quirky contribution to this literature looks at what happens when airline routes make it easier for a venture capitalist to visit a startup. When the trip becomes simpler, the startup performs better.[8]

Privatisation of government-owned enterprises is crucial to the project [neoliberalism]. One of the appealing features of tax cuts for neoliberal governments is that reduced revenue provides them with an excuse to sell state assets to meet the sudden budget shortfalls. The sale of state assets creates more lucrative business opportunities for the corporations that can afford to buy such things as power stations, water treatment plants, telecommunications providers, government banks and airlines. It's something of a windfall for a business to acquire an asset that will always deliver a return so long as citizens still need things like water or power supplied to their homes, a bus to catch from one place to another, or a telephone connection. And - unlike a state-owned asset - a private corporation never has to adjust its services due to democratic prompting from the electorate. Why do power prices keep going up across Australia? Because most of the power supply is now owned and operated by private corporations. They're free to price gouge on the supply of an essential service, because they can't be voted out of office. p.58-9

Privatisation of government-owned enterprises is crucial to the project [neoliberalism]. One of the appealing features of tax cuts for neoliberal governments is that reduced revenue provides them with an excuse to sell state assets to meet the sudden budget shortfalls. The sale of state assets creates more lucrative business opportunities for the corporations that can afford to buy such things as power stations, water treatment plants, telecommunications providers, government banks and airlines. It's something of a windfall for a business to acquire an asset that will always deliver a return so long as citizens still need things like water or power supplied to their homes, a bus to catch from one place to another, or a telephone connection. And - unlike a state-owned asset - a private corporation never has to adjust its services due to democratic prompting from the electorate. Why do power prices keep going up across Australia? Because most of the power supply is now owned and operated by private corporations. They're free to price gouge on the supply of an essential service, because they can't be voted out of office.

A more contemporary example is COVID-19. It’s too soon know the full extent of its impact, but a number of businesses, including retailers, airlines, hotels, universities, and commercial real estate properties, which may have previously considered themselves “unsinkable,” will be “sunk” by a tiny virus. To avoid a similar fate in the future, every business must understand that resilience is often as important as efficiency and profits, and that long-term viability isn’t always defined by financial success—sometimes it is defined by the ability to survive.

As with the “You can prove anything with statistics” claim, I usually find that the people making these other irrational claims don’t even quite mean what they say, and their own choices will betray their stated beliefs. If you ask someone to enter a betting pool to guess the outcome of the number of heads in 12 coin tosses, even the person who claims odds can’t be assigned will prefer the numbers around or near six heads. The person who claims to accept no risk at all will still fly to Moscow using Aeroflot (an airline with a safety record worse than any U.S. carrier) to pick up a $1 million prize. In response to the skeptics of statistical models he met in his own profession, Paul Meehl proposed a variation on the game of Russian roulette.15 In his modified version there are two revolvers: one with one bullet and five empty chambers and one with five bullets and one empty chamber. Meehl then asks us to imagine that he is a “sadistic decision-theorist” running experiments in a detention camp. Meehl asks, “Which revolver would you choose under these circumstances? Whatever may be the detailed, rigorous, logical reconstruction of your reasoning processes, can you honestly say that you would let me pick the gun or that you would flip a coin to decide between them? Meehl summarized the responses: “I have asked quite a few persons this question, and I have not yet encountered anybody who alleged that he would just as soon play his single game of Russian roulette with the five-shell weapon.” Clearly, those who answered Meehl’s question didn’t really think probabilities were meaningless. As we shall see before the end of this chapter, Meehl’s hypothetical game is less “hypothetical” than you might think.

Compared to a conventional debt instrument, what makes securitization so attractive is the fact that the airline often retains the junior tranches. These become an asset on its balance sheet. Any discount associated with the low credit rating of these layers is more than offset by the discount on the purchase of the aircraft, thereby creating an immediate profit and cash inflow on delivery of the aircraft. Such are the wonders of modern financial alchemy. Under good, even normal, business conditions, the airline makes lease payments to the securitization vehicle. But in a recession or a bankruptcy filing, when payments are suspended, the owners of the senior strata are able to seize the collateral. The junior participants in the securitization have no rights, and any such assets on the airline’s balance sheet must be written down to zero, further increasing the airline’s losses. By this clever piece of financial engineering, the airline gets shiny new planes for an extremely low cost of funds–recently as low as 6 per cent–while equity shareholders carry nearly all of the business risk. That an industry which has rarely earned an acceptable return on capital should have access to such cheap capital is quite astonishing.

Limited (NACIL) was formed by merging Air India and Indian Airlines. In 2010, NACIL was renamed Air India. This merger precipitated the fall of India’s national carrier.

The events of September 11, 2001 presented an unprecedented ethical challenge to the business leaders of the airline industry. From Jim Parker’s own lecture (Parker. 2010) and his book Do the Right Thing (Parker, 2008) as well as other publicly available material, we can highlight the ethical business decisions of Jim Parker, Chief Executive Officer (CEO) of Southwest Airlines at that time, and the highly positive business impact these decisions had on Southwest Airlines.

Horizontal expertise paints on a far-reaching canvas. Say that you are an expert known worldwide for helping CEOs manage change in disruptive environments. Your expertise doesn’t come from understanding a vertical industry, like mining or media or consumer electronics or transportation. You just need to be sufficiently sharp to learn enough about a given industry to know how to apply your expertise in a given setting. In effect, you can work with any viable CEO candidate who wants to learn — regardless of the industry — as long as the primary challenges are defined horizontally, such as navigating deep change in the middle of disruption. Today you’re working with C-level executives at Samsung after their phones are banned on all airline flights, but next month you might be working with an executive in the hospitality industry facing a hotel worker strike. Or health insurance executives navigating an uncertain landscape that can never really see farther than two years. Each of these engagements is interesting because you have to apply your expertise to a new setting. But as much as you are learning, you’re taking two steps back for every three steps forward because much of what you learn with each new engagement is just the bare necessity in order to even be relevant. It’s interesting but challenging. Thrilling but exhausting. Engaging but distracting. There are cases, of course, where new clients regard your broad expertise as a significant selling point. They like that you can apply consumer insights to a professional B2B setting, or that you can help apply change management to consumer engagement. The first advantage of horizontal expertise, then, is how the application of expertise to many verticals always keeps the expert engaged and learning.

Operating a state-of-the art fleet was Air India’s forte. The airline had acquired Boeing 747s, which were named after Indian emperors (Shahjahan, Ashoka, Rajaraja and Vikramaditya). The Constellations were named after princesses, the Super Constellations after the queens and the Boeing 707s after Himalayan peaks.

Dividend payments for domestic airlines, except for IndiGo, is a mirage.

100 Air China: 22" × 16" × 8" (max: Economy, 11 pounds/Business, 2 pieces of luggage, 17 pounds each) 101 American Airlines: 22" × 14" × 9" (max: undisclosed) 102 Delta Air Lines: 22" × 14" × 9" (max: 15 pounds when flying out of Singapore Changi Airport, 22 pounds when flying out of Beijing Capital Airport and Shanghai Pudong Airport) 103 EasyJet: 22" × 17.7" × 9.8" (max: undisclosed) 104 Emirates: 22" × 15" × 8" (max: 15 pounds) 105 Quantas: 22" × 14.2" × 9" (max: 15 pounds) 106 Ryanair: 21.7" × 15.7" × 7.9" (max: 22 pounds) 107 Southwest Airlines: 24" × 16" × 10" (max: 15.4 pounds) 108 Turkish Airlines: 21.7" × 15.7" × 9" (max: 17.6 pounds) 109 United Airlines: 22" × 14" × 9" (max: undisclosed)

John Myers, who spent thirty-seven years at GE, ran its pension fund for years, and sat on the GE Capital board, explained to me the keys to the success of GE Capital: GE’s AAA credit rating, allowing it to borrow money very cheaply. “Banks weren’t even rated AAA at that time,” he said. “We borrowed money cheaper than anyone could.” GE could also use GE Capital to reduce the taxes GE would otherwise pay on earnings from its very profitable industrial businesses. Here’s how that worked: If, say, an airline bought a new jet, it would have an asset that would depreciate over time, and the airline could use the depreciation to reduce its taxable income. But, at that time anyway, most airlines didn’t make much money, if any, so the value of the depreciation deductions was of little use to them. But to GE, the depreciation—the tax deductions—would be very valuable as a way to reduce GE’s pretax income and therefore to pay less in taxes. With that logic, GE Capital would buy the jets, lease them to the airlines at commercially attractive rates, and then use the depreciation on the jets to reduce the pretax income at GE.

Rules, no matter how enveloping, will never deliver an exceptional customer experience. Colleen Barrett, who in her forty-seven-year career at Southwest served as head of marketing, customer service, people, and operations, describes the airline’s approach to rules: “The rules are guidelines. I can’t sit in Dallas, Texas, and write a rule for every single scenario you’re going to run into. You’re out there. You’re dealing with the public. You can tell in any given situation when a rule should be bent or broken. You can tell because it’s simply the right thing to do in the situation you are facing.” 17 Backing up this freedom is a concerted effort to ensure every team member has the information needed to think and act like an owner. At Southwest, training programs cover industry economics, financial ratios, profitability drivers, and more. By investing in the judgment of its people, Southwest creates a business that is smarter, more innovative, and more profitable.

Let’s consider what Kelleher and O’Leary did to the airline industry. In essence, they said, “Who needs all these operating costs? We—and our customers!—certainly don’t.” By leaving no stone unturned to take ever-increasing swathes of operating cost out of their businesses and by lowering their prices, they brought hordes of new passengers to air travel.

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The Go story provides a useful reminder that some of the most instructive analogs—First Direct, in Go’s case—don’t have to come from your own industry. And analogs from outside your industry are less likely to have been noticed and copied by your competitors. Everyone in the airline industry already knew about Southwest and Ryanair. But First Direct’s low-cost but friendly service model was something quite different, an inspiration for Barbara Cassani and her team and a key ingredient in Go’s ability to attract and retain its early customers.

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