W. Bruce Allen - Faculty Research in Knowledge@Wharton

America's Aging Infrastructure: What to Fix, and Who Will Pay?

Wed, 10 Nov 2010 14:15:08 EST

In the U.S., infrastructure is usually silent and forgotten -- until the power goes off, the ATM stops working or a neighborhood is consumed by fire. In September, a 54-year-old gas pipeline exploded in San Bruno, Calif., killing eight people and damaging more than 50 homes. Seven weeks earlier, an oil pipeline rupture in Michigan spilled more than a million gallons of crude. According to experts, the country's infrastructure is a huge market that holds tremendous business opportunities, but the bulk of entrepreneurs and investors still wait on the sidelines because the projects are costly, complicated and often risky.

By Acquiring AirTran, Will Southwest Continue to Spread the LUV?

Wed, 13 Oct 2010 14:48:17 EST

Southwest's recently announced acquisition of rival AirTran is nothing new for the industry, but represents a departure for the Dallas-based discount carrier. Plagued by higher fuel prices and capacity issues, airlines in the U.S. have in recent years turned to consolidation as a way to cut costs and remain competitive. For Southwest, however, it means changing a long-running strategy of point-to-point service to second-tier airports. As the airline expands, experts say, the challenge will be remaining profitable and retaining its reputation for low-cost, customer friendly service.

Will Customers Be the Excess Baggage of Airline Consolidation?

Wed, 28 Apr 2010 14:56:07 EST

After losing $60 billion in the last decade -- and billions more recently when a cloud of volcanic ash grounded flights across Europe -- airlines are looking to consolidate as a way to return to profitability amid continued struggles with high fuel prices, competition from low-cost carriers, and a limited customer pool that shriveled even more during the recession. But experts are skeptical about the "bigger is better" strategy. Many observers say the carriers have proved downright flighty at following through on making changes that improve operations and put the customer first.

For Airlines and Others, Even the Best Fuel-price Bets Can Lead to Turbulence

Wed, 12 Nov 2008 15:45:28 EST

No one can accurately forecast what the price of oil will be in three days, much less three months, a fact that has played havoc this year with the finances of airlines and other industries that need a steady supply of fuel. For such firms, locking in prices when they seem to be at their lowest represents a high-stakes gamble.

The Domino Effect: Will Airlines Follow One Another in the Consolidation Game?

Wed, 20 Feb 2008 15:18:03 EST

Delta Airlines is reportedly about to merge with Northwest Airlines in a deal that's likely to set off a major round of consolidation in the airline industry. Wharton experts say that other major airlines are likely to fall in line with their own consolidation plans. Or so the speculation goes. But this scenario has been talked about before. Is the latest consolidation dance for real? And what are the implications of such mergers for consumers, low-cost carriers and the economics of the airline industry overall?

Feel Free to Move About the Airport: Turbulence Continues to Roil the Airline Industry

Wed, 25 Jul 2007 14:40:29 EST

Wharton professor Serguei Netessine, who recently had to spend the night in an airport hotel after being kicked off an overbooked evening flight, is one of thousands of airline passengers this summer who have been stranded on runways or sleeping in airports. While airline service is no longer the white-glove experience it once was, it has recently gone beyond bad food and snappish flight attendants. "Previously, airlines worried about dissatisfied customers. Now I don't think they worry about it because the customer service at all airlines is so horrible," says Netessine. Knowledge@Wharton looks at the current state of the airline industry.

A Combined US Airways-Delta Air Lines Might Fly, but Consumers Could Face Unfriendly Skies

Wed, 29 Nov 2006 18:29:57 EST

Although far from a done deal, US Airways' hostile bid to acquire bankrupt Delta Air Lines would result in a strong combined company and would be a feather in the cap of the chief executive of US Airways. But it would also be a mixed blessing for passengers, resulting in more flight choices but most likely higher fares as well, according to faculty members at Wharton and industry analysts, who also note that the overture could lead to further consolidation in the industry.

Around the World on $48 (or So): How High Can Discount Airlines Fly?

Wed, 05 Oct 2005 16:04:41 EST

As two more major U.S. airlines, Delta and Northwest, file for bankruptcy protection, it's the discount carriers that appear to be winning the battle for America's skies. But it's not only in the U.S. that discounters are giving the more established carriers a run for their money. Discounters are taking off in Mexico, India, China, Europe and points in between. What kind of competition do these discounters face, from the majors and from each other? And what obstacles, especially in countries like China, are governments and regulators putting in their way?

Few Survivors Predicted: Why Most Airlines Are Caught in a Tailspin

Wed, 09 Feb 2005 16:50:03 EST

Delta Airlines cuts fares in a price war that Merrill Lynch estimates will sap $2.5 billion in revenues from the six largest airlines. US Airways and United file for bankruptcy, and almost every other airline --Southwest is one of the exceptions -- reports significant losses. The cost of oil remains stubbornly high, adding significantly to cost pressures. The question is: How do you fix an industry littered with walking zombies? One answer, say Wharton faculty, is to let some of the sickest carriers die -- and stay dead.

To Grow Faster, India Must Unshackle Industries from Government Controls

Wed, 30 Mar 2005 10:15:44 EST

The Indian economy could be growing at double-digit rates, but for that to happen, local politicians and bureaucrats must work to cut away red tape and privatize inefficient government-run firms, according to experts who spoke recently at the Wharton India Economic Forum in Philadelphia.

Fare Wars: The 'Friendly Skies' Are More Cutthroat Than Ever

Wed, 16 Jun 2004 15:47:10 EST

The always-cyclical airline industry is passing through a particularly rocky time. Established carriers – hit hard by recession, terrorism, SARS, war and now skyrocketing fuel costs – face tough competition from a new generation of low-cost airlines whose business model doesn’t rely on the hub-and-spoke system and whose service has earned them accolades the big carriers can only dream about. But even the low-cost upstarts face an uncertain future as they expand into larger cities. Wharton faculty and other experts consider the airline industry’s future flight path.

What's Ahead for 2004

Tue, 20 Jan 2004 11:08:42 EST

After a slow and confusing economic recovery, 2004 will be a year of solid improvement building on positive news, including the capture of Saddam Hussein, at the close of 2003. New technology and changing public policy, as the

United States

faces another presidential election, will also shape the business world in the coming year, predict Wharton faculty, who were interviewed by Knowledge@Wharton on five key sectors: the economy, the banking industry, airlines, telecommunications and health care.

Air France/KLM Merger: Perilous Flight Ahead

Wed, 22 Oct 2003 14:17:53 EST

Betting that bigger is better, Air France and KLM Royal Dutch Airlines announced their intention to merge into Europe�s largest air carrier last week. Although the new airline would be the sixth-biggest in the world (after five U.S. carriers), the merger is fraught with peril for both shareholders and travelers, say Wharton professors and others. If done right, it could create an efficient organization with lower costs, but without the power to charge monopoly fares. If managers or regulators slip, however, the result could be both higher fares and higher costs.

The Business Implications of SARS

Wed, 23 Apr 2003 00:00:00 EST

As of April 23, at least 251 people worldwide had died of severe acute respiratory syndrome (SARS). That is far, far fewer than the number who die from the flu, accidental falls or car crashes each month in the United States. Yet since SARS first came to public attention in March, the mysterious illness has disrupted global business and vacation travel plans, prompted downward revisions to economic forecasts and jeopardized the health of thousands of small businesses in Asia. Knowledge@Wharton interviewed Wharton faculty, U.S. companies and business people in Asia for their views on how this new strain of pneumonia is affecting the global community.

War, Disease and the Economy Are Battering the Airlines. What Lies Ahead?

Wed, 09 Apr 2003 00:00:00 EST

The airline industry can�t catch a break. First it was pummeled by a weak economy, then clubbed over the head by travelers� fears after September 11. Just as the airlines started to adapt to a recessionary market, the SARS disease crisis and the Iraqi war hit. Airlines have gone from merely trying to figure out how to survive a world of lowered demand to figuring out how to survive unexpected crises approaching from all sides. Wharton professors and other experts predict what travelers can expect in the near future.

A Sweet Song? Delta Aims at the Low-Fare Market

Wed, 12 Feb 2003 00:00:00 EST

On April 15, 2003, a lime-green plane will depart New York City for Florida. On it ride the hopes of America�s third-largest carrier, as Delta�s new subsidiary, Song, takes wing. With a new staff and new attitude, Delta is hoping to break into the burgeoning low-fare air travel market to an extent that United, American and Continental haven�t been able to achieve. So far, pre-flight reviews are mixed.

Saving United Airlines: A Labor-Intensive Proposition

Wed, 18 Dec 2002 00:00:00 EST

Is United Airlines destined to go the way of other extinct species, like the dodo bird, the passenger pigeon and Eastern Airlines? Or is it destined to rise, phoenix-like, from the ashes of Chapter 11 of the U.S. Bankruptcy Code? Experts on the airline industry at Wharton and elsewhere say there are two indicators that can provide clues about how United�s future may shape up: the behavior of its labor unions and the health of the U.S. economy.

Should Amtrak Be Saved?

Wed, 27 Mar 2002 00:00:00 EST

The future of train travel in the U.S. seems to be on the verge of derailment. The near-term and long-term prospects of Amtrak, the cash-strapped passenger rail system that lost $1 billion last year, are now the subject of contentious debate in several Congressional committees. George Warrington, Amtrak�s president, recently resigned. Should Amtrak privatize its operations � or at least some of them? Should federal aid for the system continue or be increased? Are high-speed trains a possible solution? Experts at Wharton and elsewhere offer some insights.

How Swissair Landed in Trouble

Wed, 24 Oct 2001 00:00:00 EST

The problems of Swissair clearly multiplied after the September 11 terrorist attack and subsequent plunge in ticket sales. But industry experts say the company�s woes run deeper, involving management missteps that could occur at any corporation as well as troubles rooted in the economics, politics and culture of Europe.

What�s Hot: How Swissair Landed in Trouble

Wed, 24 Oct 2001 00:00:00 EST

Are Government Bailouts Bad Business?

Wed, 10 Oct 2001 00:00:00 EST

Even the most cold-hearted free-marketer would concede the airlines got a tough break in the two-day grounding after the terrorist attacks. No manager could have been expected to anticipate events on the scale of Sept. 11, or to set aside enough money to cover the revenue shortfalls that followed. So a government bailout is a reasonable response, right? Not necessarily, say those who have studied past examples of government bailouts.

Fear of Flying: Passengers and Airlines Can Expect Turbulent Times

Wed, 26 Sep 2001 00:00:00 EST

Government aid to beleaguered U.S. airlines will help stem the industry�s tide of red ink, already in evidence even before the Sept. 11 disaster. But airlines also must work harder than ever to stimulate demand and emphasize airline security, say Wharton faculty and aviation experts. An economic rebound would help.

The British Railway System: Hell on Wheels

Thu, 22 Feb 2001 15:57:33 EST

Imagine riding a train between two major cities that leaves two hours late and goes 20 mph the whole way except when it stops entirely due to a broken piece of track that had been flagged for repairs three times during the last 10 months. That sums up the current state of the British rail system, and there�s not much relief in sight. The meltdown offers a stark case study of how not to privatize a transportation system.

United Airlines-U.S. Airways Merger: Turbulence Ahead?

Wed, 05 Jul 2000 14:32:15 EST

The proposed merger of United Airlines, the nation�s biggest carrier, with U.S. Airways, the sixth largest, would create a jumbo-jet of a company. It would handle 27% of U.S. airline passengers with a fleet of some 1,000 planes, serve 170 cities worldwide and fly in and out of eight major U.S. hubs. What are the chances that the government will approve such a deal? How about the pilots? And what can consumers expect with regard to cost, convenience and comfort? Knowledge@Wharton analyzes the flight path of this proposed merger.