Category: Airline Industry

Corporations – thought of the day

I think it’s time I made clear something I’ve honestly believed for a long time.

I think capitalism is a really good system. I think “freedom” is the only moral political system. I think the Austrian Economists at are right.

But I think capitalism and corporatism are different.

As one of my favorite intellectuals I’ve never met (Peter Klein) would probably agree, it’s all about entrepreneurship.

I think the anti-capitalism interpretations of Naomi Klein’s work, and the anti-capitalist interpretations of the whole “occupy Wall Street” movement, are flawed.

And finally – and this is the point of this post – I believe that all corporations exist for only four reasons:

1. To provide a mechanism for fascinating and productive individuals who are too scared to start their own business to be “successful”

2. To provide a mechanism for economically, socially, or future-trendy savvy people to be successful through investment and non-participatory involvement

3. To allow people like me, who are fascinated by the way organisations work, to make them better. Just for our own personal satisfaction.

4. To either make individuals happier by the products and services they provide – or to fail

This is what I believe. It’s also why I think Alan Joyce is cool.

Confessions of an aeroholic

“Airlines are notoriously cyclical because revenue is very sensitive to changes in demand. Profits are greatest when strong demand results in full planes (‘‘load’’) and high prices (‘‘yield’’), but they can disappear quickly when demand falls because costs are relatively fixed and flights can’t easily be cancelled.”

via Confessions of an aeroholic.

I’m currently working on the very edges of the airline industry (via IT outsourcing).  I can relate to the ‘aeroholic’ tag.  It’s a very compelling industry and while I don’t invest money in it I certainly invest time in it.

So, somebody important let me under his umbrella this morning.  I spoke briefly to him and it got me thinking about Boston Consulting Group (from where he had worked as an adviser to Qantas for 10 years).

I think the airline industry’s highs and lows have been managed through sophisticated financial devices (fuel hedging, for example, or deferred losses).  This is by necessity, but I think this process might have had it’s own unintended consequences.

I’m currently focusing on what those unintended consequences might have been… because that is where I will be able to have the greatest impact.  There are some non-optimal behaviors and outcomes I have noticed.  I think if I understand them in terms of the necessities above things will make sense …

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