ROUTES 2010: Lesson from recent crisis is not to over-react

One of the most important lessons for all airlines when a downturn occurs is not to over-react, delegates at the Routes Global Aviation Strategy Summit were told.

Relating this wisdom was Andrew Herdman, director general, Association of Asia-Pacific Airlines, who remarked, “The recent recession was like going down a bungee jump, but one where we didn’t seem to know where the bottom was. But the v-shaped rebound was better and more robust than many expected. So during a downturn you shouldn’t over-react, because a recovery is always going to come.

“Asia led the way and is now above pre-recession levels,” Herdman continued. “One key decision the airlines made was not to cut jobs. There was a lot of unpaid leave but that was better than laying off staff and then rehiring which is much more expensive.”

Summing up the recent downturn, Herdman concluded, “You could chalk it up as just another downturn even if it didn’t seem so before. And right now I’m in the bullish camp with regards to state of the global economy.”

Although some panellists believed staff did not realise how serious the downturn was, Alex De Gunten, executive director of the Latin American and Caribbean Air Transport Association (ALTA) was not convinced. “I think staff realised how serious things were, but I’m not sure that the unions did. For example, at Mexicana, some unions thought the grounding of the airline was part of the management’s strategy [to get a better agreement from the unions].”

Bernie Baldwin, editor, Low-Fare & Regional Airlines/
Vancouver, Canada

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