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26 case three The US Airline Industry in 2004 Robert M. Grant Here’s a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact – though the picture would have improved since then – the money that had been made since the dawn of aviation by all of this country’s airline companies was zero. Absolutely zero. Sizing all this up, I like to think that if I’d been at Kitty Hawk in 1903 when Orville Wright took off, I would have been farsighted enough, and public-spirited enough – I owed this to future capitalists – to shoot him down.

25 LAURA ASHLEY HOLDINGS PLC: THE BATTLE FOR SURVIVAL NOTES 1. This section draws upon “Laura Ashley: History,” Laura Ashley Holdings plc; and J. L. Heath, Laura Ashley Holdings PLC (A) and (B), European Case Clearing House, 1991. 2. “Giving Laura Ashley a Yank,” Business Week, May 27, 1997, p. 147. 26 case three The US Airline Industry in 2004 Robert M. Grant Here’s a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact – though the picture would have improved since then – the money that had been made since the dawn of aviation by all of this country’s airline companies was zero.

Conversely, US Airways has the highest operating costs of the majors. Its high costs were partly a result of external factors – short routes, smaller planes, and routes concentrated on the eastern seaboard with its frequent adverse weather conditions – but mainly the consequence of managerial factors such as highly restrictive labor agreements, poor employee relations, and deficiencies in operational management. Both companies’ cost positions are the result of history – US Airways is a product of a regulated environment where unions were allowed to gain great power and where rigidities and inefficiencies became institutionalized.