Retired Airline CEO Says Cheap Oil, Low Fares Here For A While

MINNEAPOLIS (WCCO) -- For 11 years he led Northwest Airlines and later Delta, through some of the industry's most turbulent skies.

At the February luncheon for the Economic Club of Minnesota, retired Delta CEO Richard Anderson pointed to the tough times, saying, "unfortunately, you quickly become an expert in bankruptcy law."

On Monday, the recently-retired Anderson says the airline industry is strong and profitable, flying with full planes and offering comparatively low fares. When adjusted for inflation, Anderson points out, airfares today will average $344 for coach round trip, a cost that is down 26.5 percent since 2000.

"I think you're going to continue to see, in a low fuel environment, the continued good value for consumers," Anderson said.

Anderson led Northwest out of the chaos that crippled American carriers in the wake of 9/11 when customers were hesitant to fly. He led a team of airline executives to Washington where they sought help from Congress. Later, Anderson joined Delta Airlines as its CEO and chairman where he helped the Atlanta-based carrier through a period of high oil prices and the nation's 2008 economic collapse.

In more recent years, cheaper fuel and a more transparent ticket pricing for shop-at-home consumers changed everything.

"A low-fuel environment has a lot of benefits across the board," Anderson said.

Now, Anderson is looking to the future from the outside of the industry, but notes that technology holds a great promise to transform the industry even more. Advanced jet engine designs from maker Pratt & Whitney, combined with lighter composite air frames will push environmental concerns over carbon emissions and noise pollution much lower. Already, airlines have cut carbon emissions by about 25 percent and make up just 2 percent of the total carbon picture.

Furthermore, advanced drone technology is likely to come into the picture for cargo carriers such as FedEx and UPS, ushering in an era of cockpits without pilots. However, Anderson says, it is highly unlikely to have applications with commercial passenger jets. He admits that he, like most passengers, would be hesitant to get on a plane without two competent pilots guiding the flight.

"While drones will make huge advances, the U.S. Air Force hires more drone pilots than traditional pilots," Anderson said. "Eventually we'll see drones in the cargo business."

As for MSP's future, Anderson says deep investment and upgrades have made it into one of the nation's major hubs. However, he cautions that keeping it that way will require the region's continued strong economic growth.

"You have to figure out how to grow the economy and add more and more jobs and industry into this economy," he said.

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