04 July 2011

Herb Still At It

Southwest's Herb Kelleher is still out there giving advice and chain smoking.

In an AP piece published in the Seattle Times amongst other newspapers, he gives his view on a lot of things.

The article has one of his best expressions - one I love.

"It was a contrarian decision - it followed my old adage that if it's common it's not wisdom, and if it's wisdom it's not common." Let's hope that someone gets this message.

One nice quote was the following one:

Q. Consolidation makes sense for the industry. What about consumers? Should they be worried about consolidation?

A. There's been a tremendous amount of consolidation that's gone on in the airline industry since I started out. There are far fewer carriers in terms of carriers that failed and carriers that were acquired. There's no more Pan Am, there's no more Eastern, there's no more Braniff, there's no more Western. Every time that that has happened, people have voiced concerns about diminishing competition adversely affecting fare levels, and it's never happened because the airline industry is still enormously competitive compared to other industries. When your principal capital asset can be moved 1,500 miles in three hours, strike anywhere within that length of time, you have an industry that's enormously competitive.

I do worry about competition in the space. I worry that consolidation brings overt market control by the supply side. But he doesnt... time will tell.


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