Chapter four dove into looking at the aviation industry after the occurrence of Deregulation. At the very beginning of the chapter, I found it interesting to see the summary of the different main approaches to competing in the industry that aviation leaders were using at the time (i.e. Kelleher and Muse demonstrating with women, Lorenzo using peanut fares, and Crandall and Ferris competing in the computer aspect). Competition was obviously a concern to the industry prior to Deregulation, but the chapter also talks about the turbulent and changing industry immediately after Deregulation and how it essentially opened the flood gate for competition. It was also interesting to see how airlines handled this change and the stance they took in the immediate aftermath.
In chapter four, I found it interesting how many of the airlines had their own ways to try to entice people to fly with them after deregulation. For example, Southwest used advertising with women with hot pants, Lorenzo had his peanut fares, and American Airlines were competing from their computers that were used to make reservations. One of the greatest things about deregulation was how many different start-up airlines came about in the 1970s. Granted the majority of them went bankrupt, or if they were lucky mereged, but it is still to see the excitement from everyone back then thinking they could possibly make their own airlines.
In chapter five, Frank Lorenzo was a complete businessman. Unions were coming around and he believed that they were taking all of the airline’s money. Each new pilot would be enrolled in the Air Line Pilots Association (ALPA). Starting wages for these pilots was a salary of $45,000 a year. Rather than Lorenzo put up with that, he created a whole new subsidary of Texas Air called Texas Air corporation. In essence, he created a new airline within his airline itself. By doing this, Lorenzo was able to cut wages from $45,000 to $30,000 per year. Eventually, this was turned in to New York Air.
Chapter five talked a lot about Frank Lorenzo and his history in aviation. I think his tactics and leadership in aviation really changed the way the industry was viewed. The information in the book portrays Lorenzo as a terribly impersonable type of person in regards to dealing with people and those he worked closely with (i.e. Don Burr). Despite his rather abrupt and blatant people skills, I think he was (for the most part) intelligent in his approaches and decisions at Texas International. He had to be doing something right to turn $44,700 into $35,000,000. Though much of his actions and tactics were controversial, I think a lot was learned in the aviation industry from Lorenzo.
In chapter five, Frank Lorenzo was a complete business man. Unions were coming around and he believed that they were taking all of the airline’s money. Each new pilot would be enrolled in the Air Line Pilots Association (ALPA). Starting wages for these pilots was a salary of $45,000 a year. Rather than Lorenzo put up with that, he created a whole new subsidary of Texas Air called Texas Air corporation. In essence, he created a new airline within his airline itself. By doing this, Lorenzo was able to cut wages from $45,000 to $30,000 per year. Eventually, this was turned in to New York Air.
