 On
October 15, 2003, Robert Crandall, former CEO of AMR
Corp, received the ATME Atlas Lifetime Achievement Award
from the Association of Travel Marketing Executives in New York at the
Yale Club. In his address to the group, Crandall made several key points.
He stated that airlines must realize that while business travel is improving,
fares will never return to the levels reached in the late 1990's. While
volume may slowly recover, the steep fares should be seen as a thing of
the past. The overall problem should be addressed through the creation
of a more rational price structure for both business and leisure fares.
 He
also advocated the creation of a "Trusted Traveler" program,
in which travelers would agree to sacrifice certain privacy rights by
giving federal officials access to personal data and meeting certain requirements.
In exchange, they would receive a card that used fingerprint/photo or
other secure automated identification systems. With this in hand, the
trusted traveler would breeze through security while all others had to
pass through today's tight and time-consuming screening procedures.
 In
addition, Crandall said that cutting costs was imperative if the majors
or "legacy carriers" are to survive in competition with new
airlines that have lower labor costs. But he noted that it would not be
sufficient for the large airlines to simply mimic Southwest or JetBlue.
The challenge is instead to make the most of certain advantages that size
can offer, while driving costs down to comparable levels.
He also stressed the necessity of providing good service -- and service
with a smile -- even while amenities are scarcer and employees are under
mounting pressure. "Labor is the cost you've got to cut, but it isn't
a matter of cutting salaries," he said. Instead, productivity gains
will be the key to success. That may mean longer working hours and shorter
vacations. Despite the power of airline unions, he felt that major carriers
will be able to reduce costs and survive.
Other points:
• "I'm not a fan of alliances," Crandall said. "They
discourage competition."
• He is not impressed with the creation of nominally separate entities
within major airlines, such as Delta's Song. He notes that major airlines
should focus on their own product, service and image rather than split
their attention by launching another carrier.
• He believes that while some say the hub and spoke system is a failed
model, this is not the case. However, he adds that hubs will be much less
important in the future.
• While he thinks the one-time government bailout of the major airlines
was an appropriate move, he doesn't foresee this happening ever again.
 Crandall
noted the huge changes that have rocked the airline industry over the
past quarter-century; he didn't need to state that he himself was often
the key protagonist behind those changes. He concluded by saying that
"the furious pace of change is likely to continue and even accelerate.
The years ahead will be fascinating and exciting," he said, adding
that he was grateful for the challenges, stimulation and fun that the
travel business had offered him throughout his career.
 A
special award was given honoring Discover Network,
for their ten years of exclusive sponsorship of the ATME ATLAS Award program.
Michael Canady, Group Manager, Travel at Discover accepted
the award.
Gary Sain, ATME's Chairman and EVP of YPB&R, Joel
Chusid, CMO, China Eastern Airlines and Michael Canady, Discover Network presented the award to Bob Crandall.
Henry Harteveldt, Principal at Forrester Research led
a lively audience question and answer session after Crandall spoke.
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