Turbulence: Fifty Years on the Leading Edge of the Airline Industry

Praise for Turbulence

With his vast and unique experience, David Banmiller takes the reader on a fascinating journey through the airline industry. Cleverly organized in sections focused on the people who make air travel possible, the infrastructure (aircraft and supporting equipment), and the business itself, his book offers a tour de force of commercial aviation. Guaranteed to learn something new, readers are exposed to a wealth of fact and often entertaining revelations about the legendary captains of the industry, feats of accomplishment, and candid insight, as well as recommendations for the future.

—William J. Fallon, four star admiral, US Navy (retired), former commander, US Pacific Fleet and Central Command

Dave’s detailed, hands-on industry knowledge comes across with such positive enthusiasm; he tells incredible real-life stories from behind the scenes in a way which captivates the reader. His keen communications skills are evident in this easy-to-read yet informative in-depth analysis of the aviation industry constantly in crisis. For those who are fascinated by the dynamics of airline travel and are intrigued by how so many different disciplines come together to make flying what it is today, this is a must read.

—Gordon Bethune, chairman and CEO, Continental Airlines (retired), author of Worst to First

"Turbulence is a wonderful behind-the-scenes look at the evolution, innovation, and resilience of the airline industry over the years. Propelled by his obvious passion and decades of hands-on experience, Dave puts a human touch on the economics of the business while highlighting the colorful personalities that have contributed to the many, many advances in safety, reliability, efficiency, and sustainability. A fun read for anyone interested in the miracle of aviation."

—John Heimlich, vice president and chief economist, Airlines for America

Copyright © 2020 David A. Banmiller

All rights reserved.

No part of this book may be reproduced, or stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without express written permission of the publisher.

Published by Malahide Press, Reno, Nevada

www.davidbanmiller.com

Edited and designed by Girl Friday Productions

www.girlfridayproductions.com

Cover design: Alban Fischer

Project management: Dave Valencia

All photos courtesy of the author, except:

Pg 9, 63, 84, 106, 123, 194: Boeing

Pg 19, 67: American Airlines

Pg 178: Newspapers.com

Pg 202: Michelle Prunty Photography

Pg 204: Villanova University

Pg 256: Giggles and Smiles Photography

ISBN (hardcover): 978-1-7334936-2-8

ISBN (paperback): 978-1-7334936-0-4

ISBN (e-book): 978-1-7334936-1-1

Library of Congress Control Number: 2019917699

To

my wife, Michelle, whose loving guidance and unwavering encouragement made this book possible.

My twin brother, Brian, and his wife, Jennifer, who were always there for me with wisdom, keen advice, spirited editing, and a creative crash pad in Palm Springs.

All my Irish friends who pushed me relentlessly to put my many war stories into words.

A good friend and colleague, the late Robert W. Baker, COO and vice-chairman of American Airlines, whose name is inscribed on their Integrated Operations Center in Fort Worth, Texas, which was dedicated in his memory on July 8, 2014. Bob was one of the most respected executives in the airline industry as well as a true friend and mentor.

Contents

Prologue

Part One: People

Chapter 1: In the Cockpit

Chapter 2: In the Cabin

Chapter 3: At the Airport

Chapter 4: Inside the Corporate Office

Part Two: Infrastructure

Chapter 5: Moving the Iron

Chapter 6: Pricing and Scheduling

Chapter 7: Navigating Rules and Regulations

Chapter 8: Ensuring Security

Chapter 9: Advancing Technology

Part Three: Business

Chapter 10: Managing 747-Sized Egos

Chapter 11: Expanding Horizons

Chapter 12: Weathering the Storm of Bankruptcy

Chapter 13: Charting the Best Course for the Future

Epilogue

Acknowledgments

Appendix A

Appendix B

Notes

Index

About the Author

Prologue

In 2008 I was CEO of Hawaii’s Aloha Airlines. In and out of bankruptcy, the once-proud airline symbolized by a bird-of-paradise was near death. In a peculiar twist of fate, so was I.

I had become known as the Airline Doctor because I had taken more airlines through bankruptcy than any other CEO. When I stepped in to run Aloha in 2004, I showed up in Honolulu in my haole Brooks Brothers suit and traded it in for a Hawaiian shirt. I looked a little like George Clooney in The Descendants (well, maybe George Clooney’s older brother). In mid-February 2008, I had just returned from yet another exhaustive trip to find a strategic buyer for Aloha. We were getting close to a signed deal with United Airlines, and I spent an entire afternoon trying to work out an integration of our airline’s flight attendants with those of United Airlines. That evening on my way to dinner, my head felt like it was exploding. I was rushed to the hospital and diagnosed with a subarachnoid hemorrhage caused by an aneurysm.

When staring down your own mortality in a dark hospital room, you gain a good deal of perspective. I had spent many formative years in the airline industry. It is a business that I love, one that has fascinated me, sustained me, and to some extent defined my life. I lived (and would go on to live) an unusually vivid life in the business. I have a great love of my industry, and respect for the people at every level in every discipline in the airline business. I worked many jobs, from loading cargo to writing tickets (by hand!) to managing airports, and I eventually became a senior executive at several airlines, including Pan Am, Sun Country, AirCal, American, and Aloha. I dealt with Cuban hijackings in the 1970s, the aftermath of the Lockerbie bombing in 1988, the attacks of September 11, 2001, massive technology disruptions, and other defining cultural and historical milestones. I lived through the raunchy era of come fly with me, the unforgettably provocative air strip of Southwest Airlines stewardesses, and Peter Sellers managing to offend every ethnicity across the board in an ill-conceived (but totally hilarious) marketing campaign for TWA. In my early days, there were scary episodes, random acts of treachery, and corporate intrigue. (In short, it was the 1960s and ’70s—definitely a different time!) In my later days, there were exciting moments, titanic successes, and my personal share of failures.

From my hospital bed, I thought about how fascinating the airline industry is, and how it is woven into the fabric of all our lives. I considered how airline travel revolutionized modern living quite dramatically, all within the last half century. When Juan Trippe launched Pan Am’s airmail service to South America in 1929, he declared, In one fell swoop we have shrunken the earth. There’s no denying the positive economic and social impact that air transport has had on the world. I realized I had so much to say, and I wanted to illuminate the competence, efficiency, and loyalty within this industry that have made us strong as a nation and unequal in designing, manufacturing, and flying aircraft. Airlines have linked countries and cities together both economically and culturally. It’s undeniable that the airline industry has made this a smaller, more connected world. Certain crystallized moments in time illuminate not only how connected we all are because of the airline industry but also how dependent we are upon it. No episode demonstrates this reality more than the 9/11 attacks on the United States. In a matter of hours, global commerce came to a standstill as all trips were canceled—people could not travel to conduct business, or to meet friends or family. The impact reverberated around the globe.

Despite the incredible contributions of the airline business, unfortunately it is one of the most maligned, harshly judged industries today. People talk about airlines and airline executives as though all they care about is profits, which is a ridiculously broad and unfair statement. Many people, for example, do not realize that during wartime, Pan Am, at risk to its own airline and its employees, flew soldiers to and from the war in Vietnam. Pan Am was also called upon to evacuate civilians from war zones. When the Vietnam War ended in 1975 with the fall of Saigon, Pan Am jets participated in some of the dramatic rescue flights from the city, including Operation Babylift, where hundreds of orphaned South Vietnamese children were flown to the US.¹

People often talk about how the very nature of air travel has been cheapened—how a mode of transportation that once seemed so exotic and exciting has become a chore we merely endure in order to get from point A to point B. I agree that flying is not the same experience now that it once was, but the reasons for this are complex. In the 1950s and ’60s, it was a big deal to travel by plane. When the average American family went on vacation, they took a road trip. Going to the airport, even if just to pick up a relative, was an adventure for which the whole family dressed up. Smiling stewardesses took Polaroids of passengers as they entered the plane, signifying that this was a special occasion. I remember first-class setups that included white tablecloths, caviar, and dry ice for martinis. There was chilled vichyssoise served from a tureen, prime rib carved seat-side, shrimp and lobster. The meat was cooked to order, as were the eggs at breakfast. Today, you may or may not be served a meal during your flight, and if you are, well . . . let’s just say it’s most likely not going to be vichyssoise and prime rib cooked to order!

Wherever I go, people are fascinated by the things I have done and seen in my colorful career. They always want to know: What lies beneath? How are scheduling, pricing, and seat pitch determined? How do you manage accidents and bomb threats when you are running an airline? Does anyone know why the titans of the industry (Pan Am, TWA, Braniff, and many others) went under? I do, because I was there.

Turbulence felt like the right word to describe the wild ride I will take the reader on in these pages, as I share my experiences in the world of commercial aviation. These are engrossing stories, which through my lens look at the bigger picture of business and economics in times of continual upheaval. I chose to break the industry down into the three sections of the book. The first section is about the people, the second about the infrastructure, and the third about the business. In each section, I will delve deeply into the history of where the industry has been, how it evolved to what it is today, and what the future of the airlines will look like.

In the people section, I will detail what it is like to be an airline employee. What are the perks? How has it evolved over the years? Where are things heading? Whether I was negotiating with the head of a labor union or soliciting a politician to create legislation to improve safety in the cockpit, I was always closely connected to the wants and needs of my fellow airline employees. There is a special camaraderie that exists in this business, because whether you are an executive or a baggage handler, or working in the control tower, you are a part of a whole that cannot operate without all the others. There is a choreographed dance that goes on behind the scenes that most customers may never see, or even know about. In the course of five decades, the people I have come to know in this industry are generally incredibly hard workers with a passion for aviation and a commitment to keeping things running smoothly in the airport, on the runway, and in the air.

In the infrastructure section, I take a look at the incredible flying machines themselves. I will recount the history of commercial airplanes and their engines, as well as the evolution of the business of producing, selling, and leasing planes. I will detail the development of systems operations from rudimentary and analog to present-day operations facilities that are as sophisticated as NASA. From my days in charge of operations, I will detail what it takes to coordinate all disciplines to move the iron. I will examine how security has changed in the wake of terrorist attacks, and I will geek out (only slightly!) as we take a look at the incredible innovations in airplane design, engine efficiency, and customer service. Also in this section, I will highlight the crossroads of politics, government, and aviation. I will delve into how much government control there was in the past, what the present situation is like, and how things might operate more smoothly in the future. What aspects of aviation remain government operated? I will examine these issues and argue that there are some arenas the government still needs to regulate, and others that could become much more efficient if privatized.

In the business section, I will talk about how the industry historically attracted men with big egos and dynamic personalities who engaged in contests with each other for power and domination in the air. Then there were the Wall Street giants who got in the mix of controlling airlines. I’ll describe how deregulation was the disruptor that turned the industry on its ear and created a new playing field where it became less about the titans of the industry competing for power and more about fare wars. The Crandalls, Lorenzos, and Lawrences gave way to new innovators—Kelleher, Neeleman, Branson, and company—who pioneered the new terrain. Low-cost carriers introduced completely different business models that challenged legacy carriers with more burdened infrastructures. I will also discuss how mergers, acquisitions, and bankruptcies shaped the industry.

The airline business, as I mentioned earlier, gets a lot of undeserved flak. There is so much criticism along with misconceptions that truly need to be addressed. In highlighting a bit about the history and machinations behind the scenes, I will debunk myths that plague this business, based on not only my own experience but also facts that simply defy all the negativity that is out there. Some of these myths include:

Flying is expensive.

Air travel is one of the leading causes of global warming.

When the airline industry was deregulated, safety was compromised.

The federal government is always there to help the traveler.

Ticket taxes go to improve the nation’s air traffic control (ATC) system.

Airline food has to be awful.

Airline seats are too close together because of greed.

Airline personnel are grouchy, and service stinks.

Airline CEOs are overcompensated.

When the government bails out airlines, it never gets anything back.

Airlines lose lots of bags.

The Federal Aviation Administration (FAA) is too close to the industry and isn’t a good watchdog.

Flying isn’t safe.

I will infuse some of my philosophies throughout the book—hard lessons learned on the front lines. Whether I was loading bags or running meetings as an executive, I always considered myself a team player. Being right, looking for glory and recognition, and ego gratification can be fleeting and self-destructive. I was very proud of my successes, but you cannot have wisdom unless you have experienced failure. This book serves as a memoir of my unique experiences, and also a conduit for the reader to have a special peek behind the scenes of a turbulent career, in an amazing and indestructible American industry. What started as a seed in my mind as I lay in that hospital bed turned into this book, and I hope you enjoy the ride.

As for my stay at the Queen’s Medical Center in Honolulu, my excellent doctor John Houk wrote me this prescription, which he gave to me when I was discharged:

I recommend you do not take another job as CEO or COO of a bankrupt airline.

Personal doctor prescription in Hawaii on release from Queen’s Medical Center.

Part One

People

Chapter 1

In the Cockpit

Nowhere are the changes in the airline industry over my career more apparent than in the cockpit. When flight was new, aviation was a pilot-centered endeavor. The romantic notion of the lone pilot pulling back on the yoke in his goggles, scarf, and bomber jacket has given way to a new class of buttoned-up crewmen, both men and women who fly mostly by computer.

To be sure, pilots in any era are smart, resourceful, and fearless. After many years supervising cockpit personnel and flying dozens of flights as a jump-seat rider, I have the utmost respect for those who have dedicated their lives to ensuring the safety of their passengers and crew. It’s a unique breed of people who take on the serious responsibility of flying hundreds of people long distances, facing the potential for life-and-death situations in which decisions often have to be made in seconds. When an aircraft rotates and a warning light illuminates, the luxury of debating the accuracy of a default is limited. No captain ever turns to his or her copilot in a crisis to chat about all the variables and asks, So what do you think? They simply act—because they have to.

Still, it’s hard to imagine today’s captain shouting to the passengers before takeoff, Let’s kick the tires and light the fires! For better or worse, the day-to-day experience of being a pilot is simply different now, and the industry needs to reckon with that fact. In this chapter, I will look at some of the issues pilots face today and how the job has changed over the years.

The first issue pilots face today is that the job is less glamorous and attractive than it once was. In the old days, many pilots got into the business because as kids they were enamored of the cockpit—they were able to see the pilots at work and daydream about doing such an important and exciting job themselves someday. As planes got bigger and sleeker, and cockpits much more secure, there was an increasing disconnect between the pilot and his or her passengers. Today when you board a flight, chances are you’re more concerned about legroom and finding an open overhead bin than you are with who is actually flying the plane. We hear from the captain once or twice during the flight, but generally he or she is unseen, and once you depart the plane you go about your business and probably never think of him or her again.

Pilots, while still respected, were once the rulers of their domain. They radiated authority, carrying themselves with an aura of prestige as they walked through the airport. A holdover from the navy, many pilots back in the 1960s wore a crisp suit, striped cuffs, and a brimmed airline hat, an impressive role model for the kids onboard. There was nothing more exciting for first-time passengers than to be presented with a pair of souvenir pilot’s wings.

Kids in those days had reason to be excited. Many had grown up hearing stories about pilots like R. O. D. Sullivan, Leo Terletsky, and Steve Bancroft who flew the last of the great flying boats such as the Boeing 314; the Sikorsky S-38, S-40, and S-42; the Consolidated Commodore; and the Martin M-130. They heard about famous pilots like Bob Ford, who was the first to fly around-the-world flights in a commercial airliner, and Edwin Musick, who flew the first transpacific airmail flight in the China Clipper. These men were called skygods because their careers and their personas truly were larger than life. Captain Mahan, interviewed in 2015 at age one hundred, recalled his time at TWA in the late 1930s and at Pan Am in the early ’40s. At a time well in advance of modern navigation aids or weather forecasting, he remembers flying over the Pacific in a Boeing 314 Clipper no higher than 8,000 feet to keep oxygen for the passengers in the cabin. Sometimes he flew as low as 1,000 feet, he said. Navigating by both the stars and the waves, he would throw a marker flare out the window to triangulate his position.¹

You might have noticed that all these skygods were men. While airlines are increasingly having a hard time attracting men to become pilots, it’s even harder to attract women. Terri Super, the owner of Super T Aviation, says it is difficult for women to break into the boys club of aviation, especially when a lot of flight schools have a macho military style that can feel very off-putting to women. Traditionally, the pilot role has not been filled by many women, so there have not been many role models to follow. Marnie Munns, one of the few female captains in the world interviewed for an article in the Telegraph in 2018 noted, Until a few years ago you could fit all the female captains into a 450-seater, A380.²

Women are finally rising to captain status, though they currently account for a very low percentage of airline captains worldwide. A CNN travel article notes that the International Society for Women estimates there are only 450 female airline captains worldwide.³

In Cosmopolitan, Arielle Pardes profiled an anonymous female pilot who flies for a major commercial airline. She noted, If I hadn’t become a flight attendant, I’m not sure I would’ve imagined this as my career. But I love, love, love my job, and if I’d had a role model who told me, ‘You can do this,’ I’m sure I would’ve gone to flight school even sooner. Now, I try to be that kind of role model for other women through organizations like Women in Aviation and the International Society of Women Airline Pilots, both of which give scholarships for women to go into aviation careers.⁴

Safety and security is undeniably another big factor in the waning popularity of piloting as a career. When I was a CEO, I made it a point, when flying, to head to the cockpit to say hello to and chat with the cockpit crew, often flying in the jump seat