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Thread: Airline Dealmaker Frank Lorenzo Says Doug Parker Got It Right.

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    Registered User NoOtPilot's Avatar
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    Airline Dealmaker Frank Lorenzo Says Doug Parker Got It Right.


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    Frank Lorenzo was not the most popular person in the history of the airline industry. He was perhaps the most unpopular.

    But in hindsight, Lorenzo shaped the industry as very few people have done. He was the first to use bankruptcy to restructure an airline; now bankruptcies represent a common industry strategy. Combining assets from Eastern and Continental. He also redesigned airline fares...

    Lorenzo was also a leader in growing through mergers. In 1972, he took over a small, insignificant, cash-squeezed western airline. In 14 years, he built the world's largest airline company. Similarly, in 2001, Doug Parker took over as CEO of America West, a small, insignificant, cash-squeezed western airline. When US Airways ( LCC) merge with American Airlines, ( AAMRQ.PK), Parker would become CEO of the world's largest airline.

    "Those guys have put together a wonderful story of growth," Lorenzo said. "Assuming they can get the deal put together, it's a heck of a story. You have at US Airways a very entrepreneurial team, which is nice to see, because often at the bigger companies you don't find as much of an entrepreneurial spirit." Others have done deals, of course, but few have been so focused for so long on deal-making, and none have started with so little and then built airline companies so large as the ones Lorenzo and Parker built.

    Lorenzo thinks the US Airways/American merger will work, but not immediately. "Merger is a tough game," he said. "You have to take a long-term perspective. Over the short term, as United ( UAL) has found out, it's not a party. It's very tough. There's so much technology that has to be brought together, in addition to labor groups.

    "You didn't have to go to UT (University of Texas) to realize that it didn't make business sense to buy a company with a lower cost structure and then raise all the employees to your standard," Lorenzo said.

    Lorenzo battled labor, using bankruptcy to force concessions. But in 1989, when he tried to force concessions at Eastern, the union struck and was followed out by flight attendants and pilots, forcing the carrier into bankruptcy court, Eastern failed in 1991.
    Last edited by NoOtPilot; 12-27-2018 at 12:46 PM.

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    Registered User ardvark's Avatar
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    Dejavu

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    My pops, former continental, never went back to flying after Lorenzo. Got into department of water and power. He’s made tons more money and a way better retirement now But he still has strong words about Lorenzo and a scab list on his tool box.

    For you young whipper snappers that don’t know the history of airlines there is a must read book out there called “hard landing”. In the first 50 pages two people commit suicide. I normally cringe at books about aviation but this one was a page turner.

    https://www.barnesandnoble.com/p/har.../2660857598167

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    A striking parallel between
    Frank Lorenzo’s antagonistic methods of dealing with employees and Doug Parker similar tactics.

    They will never understand that an airline’s success depends on motivated workers providing quality service.
    Last edited by NoOtPilot; 12-27-2018 at 05:44 PM.

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    Unfortunately all airline ceo's work from Frank's airline management book in one form or another but dougie uses every method of Frank's manual, and he to will walk away with millions even if he is disgraced when he leaves. Behind dougie as he leaves will be a demoralized airline full of dysfunctional managers and employees who are just numb and go through the motions.

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    Quote Originally Posted by ardvark View Post
    Unfortunately all airline ceo's work from Frank's airline management book in one form or another but dougie uses every method of Frank's manual, and he to will walk away with millions even if he is disgraced when he leaves. Behind dougie as he leaves will be a demoralized airline full of dysfunctional managers and employees who are just numb and go through the motions.
    He is following Frank Lorenzo’s book,
    step by step.

    “and he to will walk away with millions...”

    You will be surprised, but he already did. And you will see it soon... and I mean very soon. Like I said, he is following Lorenzo’s book, step by step.

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    Did Frank Lorenzo hold onto his stock to show his faith in the company he was building? Hardly. He cashed out at the top.
    ~A.Bernstein~


    “and he to will walk away with millions...”
    ...he already did.

    Doug Parker
    E7F6A491-FECC-4608-B525-41B45518B7C3.jpg

    267124C7-F410-4305-99DC-34C05E2DEB72.jpg
    Last edited by NoOtPilot; 12-28-2018 at 03:35 AM.

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