A short history of the decline of the rail industry is highlighted in order to help form policy objectives for the airline industry. The first lesson that the airlines can learn is to realize that bad public policy can be just as harmful to the development of the airline industry as it has been to the rail industry. Airlines, it is noted, must be more active and effective in the political arena than they are now or have been. The second lesson is that economic regulation for rail industry did not lead to the financial security of that industry. Regulations by the CAB has not provided an economic climate which will permit the airlines to develop sufficient earnings to be financially secure. The third lesson is that airline management must recognize that it is in the business of managing and marketing a mature business. The fourth lesson is that diversification can be very dangerous. Any diversification which reduces the financial strength of the airline itself, or which results in diverting management attention from the airline is dangerous. The fifth lesson is that it is just as important to have a fine balance sheet as it is to have a good market share. The sixth lesson is that the airline must come to grips with their runaway labor costs. The seventh lesson is that the airlines should not permit themselves to be compartmentalized into the various segments of the business either voluntarily by management action or by law. Lastly, mergers often look more promising then they will turn out in fact.

  • Supplemental Notes:
    • A speech presented by Mr. Lewis, Chairman of the United States Railway Association, at the Society of Automotive Engineers Air Transportation Meeting, Washington, D.C., 1977.
  • Corporate Authors:

    United States Railway Association

    2100 2nd Street, SW
    Washington, DC  United States  20595
  • Authors:
    • Lewis, A D
  • Publication Date: 1977

Media Info

  • Pagination: 19 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00173862
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 14 1978 12:00AM