Wednesday, July 27, 2022

The Half Full Airplane

There has been quite a bit of news lately about the airline industry. Pilot shortages are causing significant delays in service, particularly around holidays like we just experienced with the 4th of July. American Airlines recently announced that it will no longer provide service to Dubuque regional, leaving that airport completely without commercial air service. There are multiple contributing factors that have added pressure to the industry. For starters the pandemic likely tops the list. Airlines are for profit enterprises and the way they maximize profit is to have as few empty seats as possible flying the 'friendly skies'. I mean, if they are flying the plane anyway it makes sense to do so with as many paying customers as possible, right? While I am not at all privy to the reasons service for Dubuque is being cancelled, there is no doubt the commercial airlines realized it was no longer profitable. Particularly when pilot shortages exacerbate the ability of a company to offer a full suite of services and flights to all sorts of exotic destinations. 

Major airlines will continue to operate aggressive flight schedules from the likes of Chicago O'Hare to LAX, Atlanta, Miami, and a whole host of cities without impunity. Many of those flights will be full, others not so much. Yet the business strategy remains the same: ensure there is a paying customer for each seat on the plane. After all, the plane will depart for their next destination anyway. Of course every plane that leaves the gate isn't full, and when that happens it cuts into the airlines profitability. It may force delays in the purchase of new airplanes. Perhaps cut back on pilot compensation (which may cause those pilots to go work for another airline). In extreme cases it may impact fleet maintenance. Or, in the case of Dubuque it may just mean the discontinuation of commercial airline service for a metropolitan area of roughly 100,000.

On the other hand, if airlines can keep the planes full, not only can they maximize profitability: they can invest their earnings back into the company. Pay their best pilots more so they can retain them. Buy new jets with better technology, safety features, and comfort. Aggressively maintain the fleet. Add the 'perk' of regional air service that not only raises the brand of the airline with connections to a major hub, but provides a much needed amenity to a broader market.

If you are wondering why I've devoted so much time today on a discussion about the business practices of commercial airlines, it's to make a much more relevant point. You see, today's column is not about the business strategy of commercial airlines. It's about schools. 

The fact is this. Come this fall, school is going to start. It won't matter if we have 750 students or 850 students. We'll have all the grade levels represented. Some of them will have empty seats, others may not. Much like the airline industry, we will be going from point 'A' to point 'B' no matter what. Indeed there are a lot of similarities. But the parallel really does end there. The reality of course is that we are not a 'for profit' enterprise. This means that all of our 'profit' becomes an investment back into our schools. Sure, we can (and have) operated classrooms with a lot of empty seats. While margins were very tight, they were enough to maintain critical operations. But we were forced to discontinue and cut back on some programs. Some maintenance was delayed, positions were cut, and we postponed curriculum adoption by making due with out of date text books. 

Today the story is much different because we have fewer empty seats. As a start, we have been able to  maintain a competitive edge when it comes to hiring and retaining staff. The acquisition of new curriculum is deliberate and planned. Most maintenance issues are scheduled as opposed to being addressed as an emergency situation. Career and technical education programs such as family and consumer science and business have been expanded. New programs like computer science are being implemented. The ubiquitous use of technology by students is done strategically and procured on a reliable and predictable schedule.

Look, we're going to get there one way or another. It just seems to make a lot more sense if we can do so without the aid of duct tape and bailing twine.

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