Former United executive offers insider’s view on airline industry
January 27, 2011
ASPEN – Gerald Greenwald will tell you a few things about the future of the airline industry in America: It’s unlikely jets will ever use an alternative fuel source; there will be air bags on airplanes; and commercial flights will likely never fly pilot-less.
“They could, though; it’s been done. But what I see is a day, in maybe 15 years, where there are one-pilot planes. And that pilot is walking down the aisle to tell you you’re safe,” said Greenwald, an Aspen resident and the former chairman and CEO of United Airlines.
Greenwald shared his thoughts during Wednesday’s Aspen Business Luncheon at the Hotel Jerome. And while his opening remarks garnered laughs from the crowd – “The airline industry is the only growth industry that I know of that has figured out how to lose money” – his comments generally were grounded in reality.
To begin, Greenwald complimented the American airline industry on its safety record. “Air travel is extremely safe, and we’re only improving on that front,” he said, adding that such advanced safety measures as air bags on individual seat belts are already in the works.
He also offered insight into how the airline industry works. Take, for example, the oft-cited remark that a carrier canceled a flight because it was not full.
“That’s not how it works,” said Greenwald, who was at the helm of United from 1994 until his retirement in July 1999, and remains chairman emeritus. “Chances are the airport told the airline it had to cancel a certain number of flights – for weather or because there are not enough runways.
“And they’re not going to cancel the full flight to Tokyo. They’re going to cancel the one to Aspen.”
He further shared with those in attendance his take on the difference between “legacy” and “bare bones” carriers, and how they can operate at such different price-points. It’s not necessarily lower wages or decreased passenger amenities, he claimed.
Greenwald wrapped up his 30-minute talk on the future of the airline industry in America by addressing an audience member’s question about use of alternative fuels.
According to Greenwald, jet fuel is one of the least expensive out there, akin to kerosene. He sees changes on this front in the fuel efficiency of planes, not in new fuel sources. And if fuel prices were to rise to astronomical rates, would that prompt change? Not likely, he guessed.
“My opinion is that it would affect our pocket books, not the airlines.”