Tuesday, September 15, 2009
The International Aviation Law Institute (IALI) conducted the third in its series of "Conversations with Aviation Leaders" yesterday as part of the Intitute's oral history project on airline deregulation. IALI's distinguished guest for yesterday's conversation was Robert "Bob" Crandall, former President and Chairman of American Airlines. Crandall led American Airlines through the turbulent period following deregulation to become one of the largest and most successful carriers in U.S. history. While initially opposed to airline deregulation, Crandall nevertheless found ways to help American thrive in the new competitive landscape by harnessing yield management to better price seats in relation to their value, developing the frequent flier program, and launching the computer reservation system Sabre. Though he retired from American in 1998, Crandall remains a strong voice in the airline industry. His speech calling for reregulation of the airline industry at the Wings Club in Washington, D.C. last year drew considerable attention and prompted Michael Levine, one the intellectual architects of deregulation, to answer Crandall's charges that deregulation amounts to a policy failure. (Both speeches were reprinted in Vol. 8, Issue 1 of IALI's biannual publication, Issues in Aviation Law and Policy.)
Crandall's interlocutor for the event was former U.S. Ambassador and current IALI Advisory Board Member J.D. Bindenagel. Bindenagel, who participated in the negotiations for the U.S./Germany open skies treaty, covered a broad range of topics during his three-hour conversation with Crandall. Everything from the political and social circumstances leading up to deregulation to business strategies in a competitive market and the current state of the U.S. domestic and international airline industry was covered. In addition to offering his own experiences of some of the key events leading up to and following deregulation, Crandall spoke candidly about what he sees as the failure of the U.S. to establish a coherent transportation policy which includes aviation. During the course of the discussion, Crandall also criticized the open skies policy, airline alliances, and the suggestion that there should be increased foreign investment in U.S. carriers.
The full three-hour interview will be accessible online for free through IALI's website in the next 10 to 14 days. Meanwhile, blog readers are encouraged to access and watch the Institute's two previous conversations with former Civil Aeronautics Board Chairman Alfed Kahn and Professor Michael Levine of NYU's School of Law. Both were instrumental in laying the intellectual ground for airline deregulation and have defended the shift in U.S. regulatory policy--albeit with some caveats--to this day. Both interviews can be accessed here.