Aloha to another broken business model

The closing of Aloha Airlines is a tragedy for the nearly 2000 employees involved. They were given less than 48 hours notice that they would be out of work.

Here is the spin from Aloha management:

Airline president and chief executive officer David Banmiller said "..unfair competition has succeeded in driving us out of business, bringing to an end a 61-year-old company with a proud legacy of serving millions of travelers in the true spirit of Aloha."

Hawaiian blogger Rosa Say takes a more realistic view of the situation and I agree with her no-nonsense viewpoint:

"Broken business models, inferior customer service, and management which does little to nothing about both of those things is what causes businesses to fail. Tough competition and rising costs may accelerate your demise, but you can’t blame those two things for everything."

Rosa’s personal experience flying Aloha Airlines is a large part of her feelings. She reported that service levels on ‘Aloha’ Airlines were horrible.

Times are tough and there are always competitors who can outspend you, but there is no excuse for providing crappy service and blaming the demise of your company on "unfair competition".

Read Rosa’s article Working Beyond Their Means for an excellent presentation of the whole story.

This entry was posted in Basic Business Concepts, Possibly Helpful Advice, Shooting yourself in the foot and tagged , , . Bookmark the permalink.

0 Responses to Aloha to another broken business model

  1. Rosa Say says:

    Aloha David, thank you for spending the time to visit with me at Managing with Aloha Coaching.

    It saddens me to hear these stories of businesses failing, for you know I am a champion of the well-run workplace, and of the managers who make them happen. I much rather report on the ones that have pulled themselves up by their bootstraps! However I felt compelled to write on this one, for if nothing else comes of it, we need to learn the lesson it gives so this unfortunate state of affairs does not happen to others.

    We all first think of those 1,900 employees involved, but the ripple effects are profound. Yesterday I also learned that Aloha has 400,000 tickets sold for flights now canceled – that is a huge amount of passengers left grounded to book other transportation (and Hawaii is not a place you can drive to…)

    I am on the prowl for happier news to share next time!

  2. Jim says:

    Maybe Aloha airlines can come back as Aloha sailboats and provide a more entertaining way to island hop. Airlines are notoriously volatile and it’s a tough industry, although some, like Southwest and JetBlue, profit nicely.

  3. Henry Cate says:

    “..unfair competition has succeeded in driving us out of business…”

    Often seems to mean that other companies did a better job in the market of meeting our customers needs. And we don’t like that.

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