Post Attack, the Small Airlines Outshine the Big Boys

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As executives at the major airlines scurry around Washington trying to sell Congress on a $24 billion bailout to save their suddenly endangered industry, one of the businessí smaller players — CEO Jonathan Ornstein of Phoenix-based Mesa Airlines — has an idea: Start by saving yourself.

[an error occurred while processing this directive]Ornstein made airline history this week when he announced Mesa would be the first carrier in the U.S. to put its own security guards on its flights. "The airline industry is undergoing a fundamental shift and we have to consider making innovative changes," said Ornstein, who oversees an operation of 126 aircraft with 1,100 daily flights and flies flights for America West Express, US Airways Express and Midwest Express. "The industry should keep in tune with what is important to our customers and right now passengers are less concerned about traditional in-flight amenities and more concerned about safety on the aircraft."

For instance: "Why the hell are airlines still serving food when money could be spent instead on making sure passengers are safe?" as Ornstein put it bluntly in an interview with TIME. Long known as an outspoken and nonconformist airline executive, he commends America West Airlines for temporarily suspending food service in order to concentrate its resources on other issues — namely, the security measures that the industry desperately needs to convince Americans that itís safe to take to the skies again.

Mesa's admirable move raises the question of what the rest of the airline industry is doing to increase the confidence level of the flying public. Most of the effort, it unfortunately seems, is to ask the government or Congress for help and a lot of money. Many airlines refuse to talk about security measures because of concerns that just the people they are worried about would learn more about their operations to root out trouble and snuff it out. But according to aviation experts and security professionals, most airlines are not planning on following Mesa's remarkable move.

Instead, airlines are asking the government to take over areas of concerns like airport security and insisting on rapidly increasing the Federal Aviation Administration's program of armed, on-board air marshals. This is not only not enough, say skeptics, it is also misguided energy.

"Instead of standing around complaining that the federal government should do more, why aren't the best minds in the business thinking about what these huge private companies could do?," asks one industry critic. Why is it, for example, that no other airline has put its own security personnel on planes?

If itís as simple as money, Ornstein and his small-airline colleagues are also embarrassing the major carriers in another area: their paychecks. Given the huge economic hit the industry has taken in the last week, Ornstein and Mesaís president will take huge pay cuts of 50 per cent, and the rest of the carrier's management will see their salaries cut by 20 per cent. Likewise, executives at Atlantic Coast Airlines, AirTran and Frontier Airlines also announced pay cuts for its top officials.

So, class, what kind of executive paycuts do we think are going on at places like American, Continental, Delta, United and US Airways? The correct answer: Nothing.

If enough light is shined on the issue, however, that might change. When Rep. Jim Oberstar suggested to a line up of well-dressed airline executives at a House hearing this afternoon that some limit on executive compensation might be in the cards, heads started bobbing obediently. "We certainly would talk to you about whatever terms you want," said one. Now that's more like it.

In fact, this might be the perfect opportunity for Congress to show real leadership and improve the competitiveness of the airline industry. Let's say Congress approves loans to the airline industry, but caps CEO pay at $150,000 until the loan is paid back. Or applies restrictions to some of the enormous pay packets that pilots at United and Delta just received. The question is, if the US taxpayer is going to bail the airline industry out, what not put some reasonable limitations on what the money can be used for?