Are You Listening AC Unions ?

[Kip Powick]

Low-cost pioneer warns against arrogance:

Don Burr, the founder of one of the USA's first low-cost carriers, warns that today's discounters "need to be ever vigilant about questioning the reasons for their success" or else they may face the same fate as their struggling major rivals, he said in an interview with The Atlanta Journal Constitution. "We were just too damn successful, and I didn't reinvent it on a timely basis," Burr said of his time at the helm of People Express, which he started 23 years ago and at one point grew into the nation's fifth-largest carrier before being acquired by Continental.

He foresees numerous new low-cost airlines starting up in the next few years, predicting that will increase competition and further cut prices on both domestic and international flights. He also sees more internal strife for the big guys, which have wrung painful cost-cutting deals out of workers.

Burr says the problem isn't that pilots are paid too much. "It's really about work," he says, noting that at some legacy carriers each new contract reduced the amount of work required of employees. "One of the jobs of unions is to get more members, and one way to get more members is to do less work. If two people do the work of one, then you have two members in the union instead of one. We have a relatively unproductive infrastructure in legacy carriers, relative to a People Express or a JetBlue. When somebody comes along and produces a product at half the production cost of someone else's product, there's a problem." As for Burr, he's up to a new project these days, working with ex-American chief Robert Crandall to set up a low-cost, on-demand "air taxi service" with a fleet of small jets.