The variety of successful strategies in use today were on full display at the ATW Winning Strategies conference in Washington, where some of the sharpest minds in the airline industry shared their wisdom. Adam Pilarski, senior vice president at consulting firm Avitas, opened the conference with a controversial statement, "the myth of overcapacity is an urban legend," noting that historically high load factors should drive up rates. “If airlines aren't making money when they have the highest load factors ever, there's something wrong with their business model.” He implied that airline managers overthink their strategies and fail to follow what he called "Adam's Rule: Revenue greater than costs equals good." The first thing to do is "Don't be stupid," he said, adding a list of "stupid" strategies: No bad airline names. No adversarial relationships with employees have stupid business plans. “Remember you work in a service industry,” he said, and try to avoid what former Continental CEO Gordon Bethune called “sky nazi” attitude criticized money" towards cutting services, mocking airlines' publicized moves to remove olives and pillows. You need to cut costs in sensible, productivity-related ways." Cost control “must fit the business model and must be tied to productivity.” The importance of productivity is reflected in Southwest's average pilot salary, now $53,000 higher than the UAL average, yet United still fails to turn a profit, Pilarski said. Pilarski borrows his rules for success from Southwest. They start with treating human beings decently - employees and customers - as well as "under-promising and over-delivering", loving their jobs, and of course, Adam's Rule. : Revenue > Cost = Good. One reliable cost cutter is maintenance outsourcing, said Colin Karsten of Pratt & Whitney. He said the main factors driving the overall growth of the outsourced maintenance market include: Growing low-cost carriers are reluctant to invest in maintenance. Broad component support is emerging. US carriers' fully burdened labor rate is 50% higher than average US MRO rates. It predicted that “total MRO activity will grow 5.3% annually through 2013.” it doesn't fit with the customer orientation that airlines are expected to maintain, said Maurice Coleman, head of commercial strategy at Aer Lingus. "LCC is an internal target. We prefer low fare airlines." To become an LFA, he said, a carrier must “simplify the customer’s sales proposition.
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