As Larry Kellner winds down his tenure at Continental Airlines he is sharing some reflections on the industry he's departing and suggesting changes to its framework.
I had the chance to sit down with Kellner and Continental's CEO-elect Jeff Smisek in September for an Airline Business interview.
Here is Kellner in his own words, examining the industry's regulatory structure and the future of global alliances. He's leaving Continental as the carrier is launching a transtatlantic joint venture with its new Star Alliance partner and seeks antitrust immunity to develop a transpacific joint venture.
"I think they key issue is that the regulatory structure doesn't work. It doesn't work for employee and labor relations. It is not like this has been a hugely profitable industry for the last 25 years, and so I think you need to step back from a policy standpoint and say how do we put a structure in place that will allow for success and a piece of that is as simple as air traffic control. We've got an industry that's been studying advances in air traffic control for more than 15 years and yet we haven't really made a lot of progress, because we tend to do our best when there's a crisis.....I think we need to figure out a structure that allows for more efficient flow of aircraft, better labor relations and better passenger service."
Still, Kellner believes the core of the business today is much more stronger than it was ten years ago, and sees global alliances gaining dominance in lieu of an easement in foreign ownership restrictions.
"There is a lot of history around why countries want to control their own airline...I think the answer to that is global alliances. I don't see a big willingness to relax foreign ownership restrcitions from where we stand today. But I would have also said two years ago I didn't see serious discussions on open skies with Japan."
"There is a lot of debate in this industry, but one thing I've learned is that policy can actually move fairly quickly once there is a paradigm shift, so I wouldn't rule out some changes."