The Airline Mess

June 10 was shaping up to be Bob Crandall's kind of day. The CEO of American Airlines had learned that Continental and shareholders of America West had sued his company for predatory pricing. And he was about to face a Senate committee looking into accusations that American was out to drive weaker competitors into the ground. While other chief executives might have adopted a conciliatory stance, Crandall faced down the lawmakers and his accusers with guns blazing.

"America West's management has failed," he snapped. And Northwest's owners are "wheeler-dealers who loaded the balance sheet with debt." Crandall told them the market must be allowed to "finish the painful process of eliminating surplus capacity." Then he offered his own stark vision of the airline industry: "This business is intensely, vigorously, bitterly, savagely competitive."