CEOs: 100th Yr. Of Flight To Be Dramatic One

For the nation's largest commercial airlines, the centennial of modern human flight—replete with both danger and opportunity—must be the year they pull out of a continuing tailspin or some will go the way of Eastern, Pan Am and TWA.

"2003 could well be one of the most important years in aviation history," said Delta Air Lines chief Leo Mullin.

Mullin, along with fellow CEOs Don Carty of American Airlines and Richard Anderson of Northwest Airlines, recently told Business Travel News the industry first must navigate through a Middle East conflict, should it occur, by receiving some form of assistance from the federal government.

"The government realizes that a conflict in Iraq, while perhaps necessary, would impose significant economic hardship on our industry at a time when some cannot afford any more hardship," Carty said. "We would hope the government would be responsive."

Mullin suggested government action could come in the form of "a cessation of certain taxes," while Anderson said lawmakers may opt to release some of the nation's strategic petroleum reserve "to keep oil prices at some sort of equilibrium." All three, however, cautioned the impact of potential war with Iraq is nearly impossible to gauge and would be determined by the duration and scope of the conflict. A reduction in service, particularly across the Atlantic, would be a likely first response by certain airlines.

U.S. carriers have plenty to fret over here on home soil, not the least of which is general economic recovery, financial losses industrywide and the outcome of United Airlines' bankruptcy, which Mullin termed, "a shocking development."

"Clearly, we will see a restructuring of contractual relationships between UAL and its employees, and UAL is too big an airline not to influence the entire industry with respect to labor costs," Carty said. "At American, there is not one employee who does not realize that United is our biggest competitor and we must remain competitive. That may lead to tough decisions, but this is not some regional competitor nor some small leisure airline, it is United Airlines."

Along with labor costs, airfare designs, distribution models and alliance affiliations also are likely to undergo some degree of restructuring in 2003. Specifically, both Mullin and Anderson look to their proposed trilateral alliance with Continental Airlines for a level of incremental revenue generation and competitive protection .