Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos

Like bees, airlines pollinate the world’s financial system with capital. They create, mobilize, and transport wealth in proportions vastly exceeding the fares paid by the passengers.

haul routes—at least not enough to account for their 70 percent discounts. The majors were offering low fares against People Express because they had computers that enabled them to offer rock-bottom prices to discretionary passengers and still keep as many seats as necessary in store for higher-paying passengers. That was the cross-subsidy that was

But Southwest quickly realized that by exposing itself to even the rudiments of yield management, it could take its low fares so much lower that they practically disappeared—while the flights themselves remained profitable. Suddenly a passenger could fly anywhere on Southwest Airlines for $19. After American had beaten People Express at its game, S

In the brief time he had served as the president of Continental Airlines, Tom Plaskett learned that aircraft suppliers made a point of keeping a little something in reserve in any negotiation with Lorenzo, even past the point of the handshakes, because Lorenzo would try to re-trade the deal. They called it the “Frank factor.” Phil Bakes would call

As for Kelleher’s own office, the architect had received specific instructions: no windows. Once word had spread that he had a windowless office, Kelleher explained, how could anyone dare jockey for an office with a better view? To further control new-office politics, his executive assistant, Colleen Barrett, now a corporate officer, banned departm

The story of their entwined careers reveals many of the larger laws of the business world: that the same overweening ambition that drives so many executives to the top also assures their failure; that when executives form emotional attachments in business, whether to people, markets, or machinery, they deprive themselves of their best business judg

Airlines are managed as information systems and operated as networks. They embody, and can help us understand, some of the vexing paradoxes of modern economic life—why the value pricing revolution has given consumers unparalleled economic power, for instance, while at the same time causing the living standards of so many to decline. The airlines al

Kelleher was a hero-worshiper and a reader of history and literature who could reel off couplets from Wordsworth, aphorisms from Clausewitz, and exchanges from Nixon’s 1950 debates with Helen Gahagan Douglas.

Freddie Laker had been out of business nearly two years when an American lawyer living in London came to Branson in 1984 with a plan to resurrect Laker’s operating authority between Gatwick and Newark. Branson quickly bought into the idea, sticking the Virgin label on it, too. The two days he had spent trying to get through by telephone to People E