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United Paper Shuffle 82

We've reviewed Wall Street Meat, by Andy Kessler. Andy's recently released Running Money. Andy sent this piece on to us, and it's one that I think will be appreciated.

"You can't wear jeans," the woman at the United Airlines counter told me.

"What was that?" I asked.

"I'm sorry, we have rules and codes of conduct to adhere to. I can't let you sit in First Class wearing jeans."

"Really?" I had a cheap suit in my bag, but the last thing I wanted to do was dash into some phone booth and change into super executive so I could fly to Chicago.

"We can't have some sort of riff-raff in our premium sections."

"Well, I'm headed to a--"

"This is United Airlines, global leaders in air travel and destinations."

"I'm interv--"

"Just a second. Your record is flashing red. This is very odd. Are you some sort of VIP?"

"I like to think so, but I don't think too many beyond my mother would agree."

"Well someone at United Airlines thinks so. Your record has been flagged and the ticket comped. I don't think I've ever seen one like this. Family members get comped, but something is going on here with your record. Here you go, seat 2B. Or is that 'not to be,' tee-hee. Enjoy your flight."

She then whispered, "Next time, please don't wear jeans -- we have standards here."

"OK, got it," I whispered back.

"And welcome to the Friendly Skies," she shot back.

Actually, I was headed to a job interview at United Airlines outside of Chicago. I was a 26-year-old techie, and could not have cared less about United. But they were nice enough to provide a round trip first class ticket to Chicago, where my girlfriend Nancy happened to live, and I was tired of paying up for the 771-mile trip.

On board, I sat next to a pilot who told me he was jealous that I got to wear jeans in First Class. I saved the "I'm interviewing" line just in case he started harassing me, but he couldn't have been a nicer guy.

Chicago, Illinois: Spring 1985

"Hello, welcome to United Airlines. Thanks for coming out all this way. I'm sure you have a very busy schedule, I appreciate your time."

"Not a problem, I have been looking forward to this visit to Chicago."

"Great. Oh, I should introduce myself. I'm Norm Poole. I haven't been here that long, six months or so. I was hired with the task of updating United's computer systems. It's pretty antiquated stuff around here. You're from Bell Labs, right?"

"Yes -- Holmdel."

"Great. I saw that on your resume, that's why you're here. Actually, my son is also with the Labs, out here at Indian Hill."

"I doubt I know him, it's a big place."

"OK then, let's head back to my office. It's a bit of a hike. They don't care too much for us tech types." Norm and I proceeded to walk what seemed like a quarter mile through United's building.

"You know that United is building a new terminal at O'Hare?"

"I think I read something about that."

"Yeah, it is loosely based on the Great Crystal Palace of Victorian England fame, 1850-something."

"In what way?" I asked.

"As far as I can tell, lots of glass."

"I like watching the planes take off and land."

"Most people do, calms the nerves. Actually, the Crystal Palace was part of the Great Exhibition that showed off all the accomplishments of England and its colonies. So the powers that be around here want the new terminal to be as high tech as possible, to show off their constant path towards progress, a â Now is the Time' sort of thing."

"Isn't that the tag line of the GE Carousel of Progress at Disneyland?"

"Probably. Wasn't it the World's Fair? No matter. We'll show off our advanced thinking."

"How is that?" I asked

."Lots of computer monitors, maybe even in color. Plus, we have to figure out some scheme to move data around without wires. The architect has already placed all the glass and forgot we might need wires. Wires are pretty ugly, so my group has to fix the design flaws with some wireless technology."

We wound our way through the building talking about computers and networking. I realize later that the interview had already started, but I was too busy talking in the sights.

"So, you know a lot about the UNIX operating system?" Norm asked.

"Sure, I use it, and I can program in C." I answered.

"Great. That's what we use around here."

We kept cutting through these large rooms with giant tables in the middle of them.

"Personally, I prefer VAXes. UNIX machines are always crashing."

"OK, Andy. This is an airline. There is an unwritten rule to not use that word."

"Which word?"

"The C-word."

"Oh, I get it, sorry. I find that UNIX machines are ... are prone to unscheduled service disruptions."

"There you go. You'll fit in here well."

As we walked through more of these rooms, I kept noticing what looked like airline tickets stacked in foot-high piles all over these massive tables. Workers (almost exclusively women, but of all ages), were gabbing away while flipping through these piles of tickets. It seemed like United Airlines Global Headquarters had dozens of these rooms, with stacks and stacks and stacks of these tickets.

"Can I ask you something?" I asked.

"Sure. Fire away." Norm answered.

"What's with those giant tables and all those women?"

Norm started to chuckle. "Oh that? Ticket sorting. It's sort of the dirty little secret of the airline business. We can get people on and off planes, and fly them to where they need to go, but then we have to sort all their damn tickets."

"Don't you just throw them out after the flight takes off?" There were no depths to my personal naivete.

"We wish. Every single ticket is flown back to headquarters to be processed. First we have to strip out our competitors tickets, which we accept for payment, and then settle with them."

"Aren't they a different color or something?"

"That would make it too easy, but not a bad idea. Once their tickets are gone, we have to sort our own tickets and match them against the flight manifests to make sure everyone actually paid, measure yield and load and all those other things that schedulers like to know about."

"Wow, sounds like a really boring job."

"I'm sure it is. Most of these people are high-school grads, and maybe a few dropouts. You don't have to be a rocket scientist to sort tickets, but you've got to be literate."

"But this is 1985. Shouldn't this stuff be automated somehow?"

"You're kidding right? There is a room full of Ph.Ds who sit around and figure out just how to code those stupid tickets, so when we get them back, we know where they came from. Each ticket is touched something like fifteen times from the time we collect it at the airport until we are done with our sorting and accounting."

"But isn't it expensive?"

"Probably 20 bucks per ticket. I've only been here for six months, but as far as I can tell, the airline industry is not that concerned about costs. First, they -- er, we -- can just raise prices. You pay the $20, not us. Second, if we took one olive out of each salad we serve on every flight, we could save a half a million bucks a year. Sorting tickets is a necessary evil."

"Still ... "

"I know, I know. I agree. If I were in charge, that is the first thing I would attack. Get rid of the stupid tickets. But my priority, my mandate, is to make the Crystal Palace at O'Hare seem high tech."

We walked through four or five more of these rooms, and I started thinking hitting rocks with a sledgehammer all day was more interesting than running an airline.

"OK, we're finally here."

Not me.

* * *

It wasn't hard to solve United's paper shuffle. In fact, the technology had been around for over a decade -- the same stuff that saved Wall Street.

It was the modern computer that helped create the modern stock market. In fact, they grew up together: Wall Street provided the capital for the computer industry to create faster machines to handle Wall Street's growing computing needs. Wall Street used to be a collection of people, but as computers insinuated their way into every crack and crevice, it changed the business of raising and managing risk capital.

In 1949, punch cards, introduced by Herman Hollerith as a record-keeping unit to speed up the 1890 census, were finally used to record trades. Can you hear IBM salivating? In 1950, electronic computers started doing the sorting of trades; in 1961 magnetic tape stored data; in 1964 computers were used to clear certain trades by matching records. IBM computers were indispensable to Wall Street, and Wall Street bid their stock up to provide IBM as much capital as it needed to grow.

As volume and profits grew, more Wall Street partnerships were created to get in on the game. By the 1960s, electronic message switchboards replaced those pneumatic tubes of 1918 so order entry and execution confirmation could happen in something close to real time. Of course, this was to the advantage of the traders -- to be able to get the most current feel for the market; customers were still out of that loop. But the back office was neglected, stock certificates still had to be collected and distributed. Wall Street hit a wall in 1968, and for many it was fatal. Electronics facilitated trading but did nothing to help clearing and making sure buyers got certificates from the sellers.

As volume increased, by some 30% a year in both 1967 and 1968, the people-intensive clearing process took forever. Certificates piled up to the ceiling tiles at brokerage firms, either awaiting payment or as errors and bad trades yet to be reconciled. Hiring more people barely helped. Firms would work 24 hours a day, 7 days a week and still fall behind. Customers simply stopped paying since they stopped getting their certificates. The NYSE began closing one day a week to catch up. They mandated a Central Certificate Service that created electronic certificates for a few stocks so settlement and clearing could happen without handling physical certificates. It was too little, too late. 160 NYSE member firms went belly up in 1969 and 1970, their credit squeezed as it took so long to process the volume of trades, victims of their own success. It was a big problem for those not tech savvy.

* * *

Small companies, who couldn't afford the NYSE or didn't have the size or pristine balance sheets needed to be listed, could have their stocks traded off-exchange, or OTC, over-the-counter. Until 1961, it was a pretty sleazy business: trading was thin, quotes were by appointment, spreads were at the whim of one or two traders. In 1961, the SEC empowered the National Association of Security Dealers or NASD to automate the trading of these OTC stocks. Pretty impressive for 1961. (Of course, it took until 1971 for the first NASDAQ stock to trade, as lots of new technology clearly needed to be invented.)

But capital raising on Wall Street was typically for blue chips only. It merely required a handful of phone calls. "We are raising $200 million for a new line of yellow cheese for Kraft, how many shares can I write you down for?" Tech deals were almost impossible to sell that way. It's not so much that investors wanted equal access, it's that the only way high tech could be sold was to explain it face to face.

One neat company was waltzed around that made these strange devices named I2102s, which were one kilobit of static memory made with a planar process; these static memory units were rapidly replacing core memory in IBM computers.This company also had a new "micro" processor used in some Japanese calculators. Yup, in 1971, Intel had a lot of explaining to do.

The phone didn't cut it, and so they had to visit institutional investors in their offices across the country to sell their Initial Public Offering. The IPO road show was thus invented by C.E. Unterberg Towbin to raise money for futuristic and hard-to-explain technology companies. Now all companies have to go through this grueling ritual. But Wall Street was all too happy to take these new companies out -- IPOs paid 7% fees, and still do.

In May 1973, a new entity took over the clearing process: The Depository Trust Company, or DTC, with the help of IBM using cheaper Intel memory, quickly created a system of electronic record transfer of ownership, replacing the sorting tables. 16 million shares were trading every day, 4,729 different companies had their shares registered with the DTC, and the back-office paper crunch soon ended. With an automated back office, liquidity went up and the risk of investing on Wall Street went down. This is a subtle and critical point, but lower risk on Wall Street meant more risk capital could be deployed in the economy and Silicon Valley started heading down the runway for takeoff.

* * *

For 25 more years, most traditional investors missed the big move in technology stocks, until they all rushed in on the same day in January, 1999. Hedge funds were too busy playing with currencies, especially a lucrative yen-carry trade that blew up in October 1998. Julian Robertson's Tiger Fund had only one saving grace in 1999 -- a huge position in US Air. It was a value stock, and Julian Robertson had bought it right. By May of 2000, United Airlines had made a $60 cash bid for US Scare-lines. Tiger was sitting pretty, despite a tough year of withdrawals: $20 billion in assets dropped to about $6 billion. But with the airline merger, Tiger showed a gain for 1999. But, Julian Robertson joined a long line of old dogs chasing fire hydrants. Once deregulated, airlines were protected by the complexity of their back office. Anyone could refuel and fly a plane, but it took a special organization to sort the paper tickets. In fact, like United, you could buy other airlines and sort their tickets too, saving zillions.

But when technology ended the paper trail and e-tickets came of age, it wasn't the existing airlines that benefited. New players like Southwest and JetBlue could enter the business cheaply. A couple of million bucks in servers and broadband was all the back office they needed. Tthe sorting tables were a thing of the past. It was like taking candy from a baby for these new guys to take market share from unionized United or US Air with their Vietnam-era pilots and aging battle-ax flight attendants.

Withdrawals were relentless, so Julian Robertson closed Tiger in March of 2000, holding onto a few shares he thought would do well, like US Air. Oopsy - US Airline filed for bankruptcy in August of 2002, its stock a children's shoe size of 2 or 3 compared to the mature $60 United offered and withdrew. He should have paid attention to those folks in Silicon Valley.

JFK: Winter 2003

The Van Wyck was backed up, as usual. I hated the trip out of Manhattan to JFK, except I was headed back to SFO. I was running late, it was raining, I was lucky to even get a cab at all, and now I'm crawling down what should never have been named an Expressway. Most cabbies know how to cut through the borough by taking Woodhaven Boulevard. My grandmother used to live somewhere along it, near Cross Bay Boulevard, but I would lose at Queens Monopoly.

We finally hit JFK, and I threw $50 to the driver and ran out to check in. I think I had just enough time to get frisked by airport security, buy a NY Post, and get on the plane. I just hope there was no line at check in. I always got stuck behind some family headed to Moomba via Dallas and Frankfurt.

But just inside the door, instead of a line, there were five kiosks. Nice touch screen displays lined up in a row with United's logo blinking away. This I had never seen before. It prompted for my United Mileage Plus card, which I kept handy for upgrades to First Class. I swiped away and my reservation instantly popped up.

"Do you need any help?"

"Excuse me?"

A nice middle-aged woman with a Queens accent smiled. "I just wanted to know if you needed any help with these machines."

"No, I've got it figured out." I had read somewhere that with these kiosks, United dropped the cost of ticket handling from $20 to under $1.

"Well, don't figure it out too well. Some of us need the work." She smiled again, but I could tell she would just have soon picked up a nearby fire extinguisher and smashed all five kiosks in a heartbeat.

"I understand." I nodded. It had been not quite twenty years since was a stowaway in United First Class under the pretext of an interview, saw the groaning tables in Chicago.

"Well, welcome to the Friendly Skies."

She smiled again and didn't give me any grief about wearing jeans.

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United Paper Shuffle

Comments Filter:
  • by AtariAmarok ( 451306 ) on Monday January 17, 2005 @10:35AM (#11384997)
    did I just stumble into the Arthur Hailey [amazon.com] fanfic section? Where's the cross-eyed stewardess?
  • Let's see someone continue the story, with Frank Drebin as the protagonist. Next post...?
    • ...A bus fell on OJ Simpson. Frank didn't notice. He was soaking in the glory of the gorgeous redhead who had just walked into his life. She had legs like alpine skiing slopes, and a bust that put Tetons back in the Grand Tetons.

      And then a cruise ship fell on OJ Simpson. Frank startled, turned around, and shot it a few times. Random sailors fell. The redhead smiled the kind of smile that would have melted even the cold, metal heart of Joseph Stalin.

      The Moon fell on OJ Simpson, followed by several alien motherships, but Frank was already on his way to a restaurant with the redhead.
      • Sequel coming soon:

        The Naked Gun 44 1/4: Nordberg Gets The Chair
      • After this, OJ was nearly squashed by Jupiter (by Jupiter!). He started to get mad. He started to call all his old legal team: Johnny Cochrane, Jackie Chiles, Flea Bailey, and most importantly, Robert Cardassian. Seems Ol' Spoonhead had an inside line on a wormhole that could be used to get read of OJ's steller nemeses....
  • But when technology ended the paper trail and e-tickets came of age, it wasn't the existing airlines that benefited. New players like Southwest and JetBlue could enter the business cheaply. A couple of million bucks in servers and broadband was all the back office they needed.

    Well... If you could just direct a cool couple of million of US$ my way...

    I mean, I could use these servers and broadband connections for... uh... "stuff". You know *cough* *cough* pr0n leeching... *cough* *cough*
  • Okay, um, WTF? (Score:3, Informative)

    by Speare ( 84249 ) on Monday January 17, 2005 @10:45AM (#11385068) Homepage Journal
    I went to the Barnes and Noble link. This is the paragraph that should have been cribbed for the main writeup, to tell people what in the hell this is about.
    • Following on the success of Wall Street Meat, his self-published book on the lives of Wall Street stock analysts, Andy Kessler recounts his years as an extraordinarily successful hedge fund manager. To run a successful hedge fund you must have an investing edge--that special insight that allows you to reap greater returns for your clients and yourself.
    Then, I clicked on the "read more" to see the rest of the text. Did I just click the wrong thing, and end up on some slash fiction [wikipedia.org] site? Why would any slashdot regular want to read through this sort of navel-gazing junk?
    • Navel-gazing junk??!

      That's the only genuinely interesting story I've read on /. all week. Possibly all month.

      Jeez, you people bitch when Michael posts ludicrous hoaxes that Snopes have already debunked, Taco posts something dull about Apple just for the chance to slate it, and there's an article dedicated to the fact that, er, nothing interesting is happening in hard drives. (See this weekend).

      But we get an interesting, refreshing and original read - you still bitch.

      As you yanks would say.... "Go figu

  • After reading Tardiveau's review, I can hardly guess why the book would be considered "spellbinding." So far to me it just sounds like a crybaby account of how people on Wall Street are greedy and unrelenting in their quest for closing a big deal. Wow--talk about a blinding flash of the obvious--in my opinion, someone's gotta do their job. There's no doubt that there are most likely interesting sections, but I highly doubt it is any more "spellbinding" than Glengarry Glen Ross, Barbarians at the Gate or
    • I don't know if I'd describe Andy's books as "spellbinding", that's typical book review hyperbole. But I thought they were well written, entertaining and highly relevant since Kessler was a Wall Street technology analyst during a very important time in the history of the computer industry. I thought that both Wall Stree Meat and Running Money were worth reading.
    • Sounds pretty cool if you take some sections out of context though:

      "What's with those giant tables and all those women?"

      She then whispered, "Next time, please don't wear jeans"
  • UAL ticketing (Score:4, Interesting)

    by Scott7477 ( 785439 ) on Monday January 17, 2005 @10:48AM (#11385095) Homepage Journal
    This is why the mainline airlines are in trouble: not gas prices, not terrorism, not passenger counts. It is the unionized work force determined to keep its headcounts and exorbitant salaries from the dotcom boom in spite of the obvious shrinkage in the demand for high-priced walk up fares. The single biggest expense for these airlines is labor. Airline pilots are some of the highest paid people in the world.

    Don't get me wrong, I support the right of unions to negotiate but when they keep their head in the sand as the airline unions are now doing I have little sympathy. Face it people, you will have to take pay cuts just like everyone else in America where your business model has changed.
    • Pilots are paid a lot because of their job is, umm, slightly more important than the guy who does the final coffee maker check. They have the final say on whether the plane is fit to fly and it's their responsibility to keep their passengers not happy, but alive. There's no nodding off for a few minutes while the boss is in a meeting.

      With great responsibility comes a great paycheck.

    • Airline pilots are some of the highest paid people in the world.

      Right, and all they have is a couple thousand people's lives in their hands every week. It's not like they are deciding on the new slogan for Charmin, which is clearly worth 2 or 3 times as much given the stress and level of learning involved.

    • Re:UAL ticketing (Score:3, Interesting)

      by BobKagy ( 25820 )
      Just because an airline is unionized doesn't mean it is doing poorly. Southwest is heavily unionized and doing quite well. Southwest comes to agreement with union [reviewjournal.com]
    • Airline pilots are the highest paid people in the world? Bullhockey. CEO's, and their armies of yes men are paid many times what even the most senior tradesman is paid.

      The Airline industry is in a race to the bottom because they are trying to kill each other off, to that one can emerge as a monopoly. They selectively compete, and where they can find an oppertunity to stuff the customer they do.

      • Here is an analyis of major airlines' pilot pay from here http://www.fool.com/community/pod/2000/000522. htm [fool.com]:

        Note those are hourly rates. Now I am not saying that pilots' pay should be reduced to something like that of the average programmer because pilots are holding peoples' lives in their hands; but their union-negotiated rates of pay are high because their contracts were signed at the height of the dot com boom when everyone was willing to pay top dollar to fly to Redmond or Austin on a moment's notic
        • If you read the rest of the article you would see that the union is a smidgeon of the pay difference. The main difference (PER YOUR ARTICLE) is the size of the plane. A pilot at ExecuJet is flying a 20 passenger lear jet. A pilot at United is flying a 500 passenger 777.

          Oh, and the United pilot has 12 years of experience, specialized training on said airplane, a pile of certifications, and flies about 1200 hours per year.

          The Dot.com had nothing to do with the compesation packages of pilots. The deals wer

    • The aircraft burns between 10 and 50 times as much in fuel as it costs for the pilot to fly it. Fuel accounts for 12% to 14% of the total expenses for an airline.
    • Re:UAL ticketing (Score:5, Insightful)

      by jbwolfe ( 241413 ) on Monday January 17, 2005 @12:57PM (#11386330) Homepage

      Where did you get your PhD in Transportation? You must know a lot about the
      logistics of airline operations to conclude that labor costs are the problem.
      Where do you feel the cuts should be made?

      <begin sarcasm>Maybe the airline could conduct your flight from A to B with
      fewer people- perhaps one pilot, one or two flight attendants, rampers
      mechanics... passengers want lowest price, not safety, right? Pilots are the
      problem- they all make $250K to $300K a year and only work 75 to 80 hours a
      month. Sounds pretty clear cut to the public. The business oriented big media
      would never slant or misrepresent the facts. I get all my info from them and it
      shapes my flawless perception of reality.<end sarcasm>

      On the other hand, maybe I could go here [alpa.org]
      for a different perspective. Maybe I could read the Learn More ...
      link to find out more about the pilot profession.

      Here's my perspective (if your interested). I've been a pilot since 1988 (~17
      years, 8 Navy, 9 commercial). I work at the second largest airline in the world
      and now make exactly what I would be making if I had stayed in the Navy. Does
      this make me overpaid? Management would like me (and most importantly, you) to
      think this is the case. It's labor's fault. I've got a wife, two kids, we're
      healthy, happy (but really tired of bad news), and I wouldn't want to do
      anything else. Thanks to labor, folks like you have a forty hour week, overtime,
      a safe working environment and countless other perks. Why do people rag on
      working class while the VP's and up have no consequences in failure.

      Do you really think its all labors fault?

      • I was a little aggressive in my initial post; as of course the rise in fuel prices has caused problems. In my mind, there are four main cost segments in the airline business: fuel, employees, advertising, and equipment. I believe that the major airlines have similar costs for their planes and gates, fuel and advertising. During the dotcom boom, I believe that the airline unions negotiated for significant pay increases due to the incredible amount of demand for flights created by the boom. You can negotia
      • I work at the second largest airline in the world and now make exactly what I would be making if I had stayed in the Navy. Does this make me overpaid?

        Once again, people seem to confuse skill, aptitude, etc with wages. Wages are driven by supply and demand. Demand for pilots is about to get very out of whack with supply. At first the pilots will hold the line and try to get back to a better time of high wages, but then someone will cut the line and offer up his services at 10% less than the party line, and

        • Actually demand for pilots is projected to outstrip the pool of qualified pilots by 2008.

          Granted, most of the jobs will be in cargo transport, and regional carriers (the big boys are moving to larger aircraft, that are more automated - i.e. don't need a flight engineer - so jobs in these companies will be more difficult to get).

          So, given that, pilots will still have a bit of an edge when it comes to negotiating salaries. Its not like you can stick any pilot into an airliner and expect him to operate it s
        • Horse hockey. The "market" is terribly skewed and distorted by those doing the driving, and there isn't a reasonable mechanism to replace drivers.

          Every now and then, there's an "Aha!" moment in this respect. My first was during the Savings and Loan Bailout. At about that time, a co-worker was griping about the "wealth redistribution" system of the US government with taxes, etc. The savings and loan bailout showed how more of my money was going to people who make more than me than went to people who make le
          • Horse hockey. The "market" is terribly skewed and distorted by those doing the driving, and there isn't a reasonable mechanism to replace drivers.

            Then the market wil respond with stable or high wages, as I have said.

            • Maybe so, but I think you missed my point.

              It's like a ship, and the officers have become kind of like a club, saying, "We're cool, and we deserve high pay, and those crewmen aren't cool and deserve as little as we can give them." That in itself isn't so bad as the fact that the officers really aren't competent, and they've been sort of covering for each other for years.

              Plus the ship is heading for dangerous waters. I supposed that's what you mean by, "the market will respond." For justice for the officers
      • Professionals get overtime? That's news to me.
    • OK, he is wrong about pilot pay - they are paid reasonably considering the responsibility they have and the fact that only a small segment of the overall population have the right combination of physical, mental, and emotional skills required to be a professional pilot.

      However, he is spot on in identifying the problem with the (US) airlines. Ask anyone who flies International flights regularly, and who has flown both US and foreign carriers. On a typical UAL or AA overseas flight, most of the flight atte
      • Actually pilot pay is somewhat skewed. Starting salaries for regional jet carriers are around 18K - 24K. Its only until you get the large jets does your pay increase. Finally, only those with the most senority who fly the longest international routes tend to be the highest paid and have the most down time. The regional pilot works like a dog.

        The metric to keep in mind is CASM - Cost per Available Seat Mile.

      • "On most of the foreign carriers, you see much more of a cross section in terms of age, and the service is generally much better."

        Haven't flown much overseas, have we?

        Service is highly variable between airlines and between flights. Overall, the US is no better and no worse than the world average.

        As for UAL and AA (I've flown with both), the staff look to be about average age for that line of work. Or do you expect airlines to sack their staff when they hit 30?
    • Krogers in unionized and is still doing quite well against Wall*mart. Those who prefer to pay for an honest days wage, rather than use slavery, know where to shop.

      If the airlines can't make money without working people to death, they need smarter managaement.

    • With so many airlines folding, its simple supply and demand. Pilot pay is going to drop and drop hard and fast. Union agreements have kept most airline employees from engaging reality for many years, but at long last they are facing reality like the rest of us. It really doesn't matter how rarefied and skilled a position is, if there are twenty people lining up to fill it, wages are going down.
  • by Anonymous Coward on Monday January 17, 2005 @10:49AM (#11385104)
    ... executive summaries are a good thing.
    • Executive Summary:

      Ailines used to blow $20 per ticket just sorting and shuffling them around. Now with computers costs are less than $1 per ticket. It was a lot like what happened on Wall Street for processing stock transactions.

      95% red pie, 5% green slice]

  • Good read. (Score:3, Insightful)

    by PoprocksCk ( 756380 ) <poprocks@gmail.org> on Monday January 17, 2005 @10:51AM (#11385115) Homepage Journal
    That was one of the most interesting things I've read in a while.

    Are people's jobs being sacrificed for greater technology? I suppose the airline sorters should have seen it coming, but it's still worth thinking about, and it's a question that's asked all too often: could a computer replace your job to save the company some money?

    But it's still interesting to hear it in different ways, and I think this article epitomizes that. Nice!
    • could a computer replace your job to save the company some money?

      Well, yeah, that's the entire point of computers. Destroy the boring, repetitive jobs, create more opportunities for jobs that are interesting and require some skill and creativity.
      • create more opportunities for jobs that are interesting and require some skill and creativity.

        You got it right except that part. That is actually not the point of computers (aka automation).
        • Woops, a little quick on the submit button...

          Anyway, the point is indeed getting rid of menial labor but not because of the fact that it is boring and repetitive. The reason is to cut labor costs (and associated time/costs that gets streamlined in the process, not just the actual boring task itself). That's pretty much it.
          • Yes, but the real world effect of computers is that they create new jobs in workflow design, application design, programming, etc, which are more stimulating and creative than the menial jobs they eliminated.
    • >Are people's jobs being sacrificed for greater technology?

      Yes. Welcome to the 1980s.
    • Re:Good read. (Score:3, Insightful)

      by j-turkey ( 187775 )

      Are people's jobs being sacrificed for greater technology?

      Yep, but that doesn't mean that new jobs aren't being created in the process. Someone's gotta develop and make the kiosks, someone's gotta write the software, someone's gotta maintain the software, someone's gotta install the kiosks, and someone's gotta maintain them.

      Does it net out the same? Probably not, but seriously, is it a bad thing to iron out inefficencies? If so, maybe our federal government's inefficencies are actually a good thin

  • by WormholeFiend ( 674934 ) on Monday January 17, 2005 @10:51AM (#11385120)
    Every time the plane banked too sharply on take-off or landing, I prayed for a crash, or a mid-air collision -- anything.

    No more haircuts. Nothing matters, not even bad breath.

    Life insurance pays off triple if you die on a business trip.
  • by EvilTwinSkippy ( 112490 ) <[yoda] [at] [etoyoc.com]> on Monday January 17, 2005 @10:59AM (#11385182) Homepage Journal
    He took us on a nice long journey. Segued into the stock market, and lampooned labor intensive paper handling.

    Logistics are logistics. The problems he cited were poor logistical planning. They ran the entire Roman Empire on beads, wax, and animal skin. The supply system for the US Pacific fleet in WWII ran on paper cards and morse code.

    The trick is to scale your solution properly. NASDAQ's original advantage was not being digital, it was being a smaller operation at a time when NYSE's growth outstripped it's ability to cope. JetBlue's advantage was not being digital, it was about being a smaller operation in a cuthroat market.

    Computers are a tool, they are not a solution. A poorely design logistical system is a poorely designed logistical system, no matter if it's on paper or on a Mainframe.

    • by Anonymous Coward
      Um, the Romans ran their empire on beads, wax, and animal skins because they had NO OTHER CHOICE. Add in the manifest corruption of the system (oh, and the thousands of bead counters... err ticket handlers) and you got something analogous the airline industry back when.

      And your solution to the airline's ticketing problem using 1950s technology would have been what? "A well designed logistical system". Do you come from marketing?

      The author did a fairly admirable job of pointing out how a tool (computers) c
    • NASDAQ's original advantage was not being digital, it was being a smaller operation at a time when NYSE's growth outstripped it's ability to cope.

      No. NASDAQ was the first exchange without a trading floor. Everything was remote. Now, few exchanges have a trading floor. The NYSE is viewed as an anachronism for keeping theirs. The reason they keep it is because the NYSE is partially owned by the floor traders.

      JetBlue's advantage was not being digital, it was about being a smaller operation in a cuthroa

    • A poorely design logistical system is a poorely designed logistical system, no matter if it's on paper or on a Mainframe.

      Yeah, but if you have a poorly designed logistical system on a mainframe you can simply wait a few months and slap in a CPU that's twice as fast.

      A lot like Microsoft Windows.

  • by Anonymous Coward on Monday January 17, 2005 @11:25AM (#11385382)

    "So, you know a lot about the UNIX operating system?" Norm asked.

    "Sure, I use it, and I can program in C." I answered.

    "Great. That's what we use around here."

    Yes, computer job interviews really were like that at one time.

  • Is this an excerpt of something? A new project perhaps? A selection from "Running Money"? A little more background would be nice.
  • Didn't United start up their discount company "Ted" as a possible way of killing their existing contracts with the unions? Ted would allow United to fall into near-bankruptcy, giving them a chance to shift everything over to "Ted". Same management, same union works, much less favorable contracts for the unions.

    It might not really be as simple as all that, but that's what the conspiracy theorist in me assumed from the day they announced Ted. (It doesn't help that I have friends who work at United and tel
    • by ostiguy ( 63618 )
      I am fairly certain Ted was united unions and united costs and new graphics and advertising costs.

      This is why you haven't heard about Ted lately - you cannot make a high cost operation into a low cost airline simply by keep saying that you have a low cost airline

    • Qantas is doing much the same thing in Australia with a cheap airline called, I think, Jetstar (or something). It's just a way to reduce costs by screwing your workforce while retaining those disproportionate executive salaries.

      They're also going to offshore their maintenance. I think I'll never fly with Qantas again, as I doubt if they'll be the safest ailine in the world for much longer.
  • When my sister was working for a now defunked European carrier family members could purchase up to two flights annually at really steep discounts.

    One of the rules though was: No jeans when flying on staff tickets. In addition when you wanted to fly business -, or first class (even on paid flights, not only for upgrades) you where required to wear a tie.

    While I heard others gripe about this rule, I figured it's their airline and if they don't want people flying on staff tickets dressed up in shower curtai

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