Hard landing is a mix of fun stories, business strategy case studies, and history/biography of the airline industry. 4/5 ⭐ overall.
Part of why the airline industry makes for a great business strategy case study is because compared to other businesses, it is relatively mundane and easy to understand. This reduction of variables allows us to hone in on the few variables that matter:
"Repetitiveness on this scale means that success and doom occur in the margins of the airline business: bad business decisions have a way of becoming catastrophic; good calls look in retrospect like acts of genius."
"the same overweening ambition that drives so many executives to the top also assures their failure; that when executives form emotional attachments in business, whether to people, markets, or machinery, they deprive themselves of their best business judgment; that those who know an industry best are the most likely to take for granted, and ultimately ignore, its most inviolate principles; that although the rebuke may be slow in coming, greed, in the end, is almost always punished; that economics, in short, overpowers ego."
This is the innovators dilemma articulated differently. When the airline industry went through a period of extreme deregulation, the largest, oldest airlines generally faired quite poorly. American and United lost hundreds of millions of dollars - mainly because they failed to adjust their strategy to the new world of deregulation. Meanwhile, smaller, more nimble airlines like Southwest did much better because they were already used to having to innovate to survive.
"The airline business, Ferris knew, was a game of controlling the passenger."
This quote reminds me of Ben Thompson's Aggregation Theory. I was surprised to see the idea articulated so clearly prior to the rise of the internet. If you don't own the relationship with the customer, nothing else matters. At worst, you will be completely disrupted, and at best, you will see the amount of value you are able to extract slowly decline.
"Crandall had a kind of informal brain trust that gathered most mornings by 6 A.M., often long before sunrise in Manhattan, to talk through the major marketing issues facing the airline."
The idea of daily meetings at 6 A.M. in the middle of New York is both inspiring, and kind of wild to think about. This is in contrast to tech, where it is unusual for employees to get started before 9 A.M. Maybe the CEO gets started at 8? Looking at my current CEO's calendar right now, there is never a meeting before 8:30 and rarely after 5:30. I think how long you work is loosely correlated to success at best, but it is striking to hear stories about how badly these airline executives wanted to win.
Another anecdote. No one said the culture was healthy:
"They all worked ungodly hours, seventy or eighty a week, to get the airline started. Burr actively promoted office romances. “The greatest thing that can happen to you is to fall in love at work,” he told them. Some employees thought that Burr, a married father of four, wanted people to conduct extramarital affairs at work in order to loosen their connections to the distraction of home life."
"Whoever has the most flights from a city gets a disproportionate share of the passengers."
^ I'm not sure this is true - but I love the idea of trying to distill complex systems into simple heuristics that can inform business strategy.
"Southwest didn’t have a hub and didn’t want one. It didn’t want to add new cities except slowly and deliberately. It mainly wanted to fly full airplanes from point A to point B at a low cost with as many flights as possible per day—preferably by the hour."
I didn't realize how much of an underdog Southwest was before reading this book, and also how much of a marvel they were when it came to doing things differently but effectively. It's illuminating to see the key parts of their strategy articulated so clearly here.
"Adding too many employees too quickly would dilute the underdog spirit by which Southwest was still flourishing."
The idea that "underdog spirit" is both very real and vital to maintain is something I had never thought about. Super applicable to startups as they fail and then become incumbents. Feels like Amazon has managed to do this very well.
"Gathered around the big screen, the United pilots witnessed an act of male genius. “Some of your golf games are getting too good,” Ferris scolded them. “I’ll see you get 15 days off [a month] and that you are the best paid in the business. But the rest of the time your heart and your body and your soul are mine.” With Ferris’s charismatic coaxing, the United pilots overwhelmingly assented."
I think building social capital and being charismatic is generally underrated in business - especially in the technology industry, where a higher percentage of people tend to be slightly socially awkward. The idea that Dick Ferris was able to get a better employment agreement with pilots because he was a pilot and could better relate to them should seem somewhat ridiculous if we think rationally. But humans are emotional creatures, so this stuff turns out to matter a lot.
I underestimated how many absurd stories and fun facts this book would contain. Reading it has made me more interesting at parties (lol). I think this is especially true if you grew up in the millennial / GenZ generation. I still get excited about going to the airport and getting to hop on an airplane - but it is never an industry I romanticized.
It's interesting to think that there is always a new industry that is romanticized for each generation. After airlines, I think it was probably finance (see Wolf of Wallstreet). Now, it is the technology industry. I can't help but wonder what will be next.
"The glut worsening, their fares scrupulously identical, the airlines began competing on service and amenities to a level unseen before or since. American installed a 64-key Wurlitzer piano in its jumbo jet lounges, with Frank Sinatra, Jr., at the keyboard on the inaugural flight."
Excuse me... WHAT? These stories are pretty close to unbelievable. When I read things like this - I can't help but wonder: what are we living through right now that seems normal but will seem completely ridiculous in the future?
“Since most businessmen, and very few women, travel this way, you’ll find it easier to see, and be seen.” United in 1970 was still flying a men-only flight between Chicago and New York, complete with free cigars and golf balls.
I love this one as well. It's not actually that surprising or ridiculous, but to think that this took place in my parents' generation is kind of mind-blowing to think about.
"In 1965 Braniff Airways introduced a ritual called the “air strip,” in which stewardesses peeled away layers of their designer uniforms during the course of a flight, down to their blouses and skirts. (“Does your wife know you’re flying with us?” Braniff’s ads asked.)"
"Does your wife know you're flying with us?" <-- this gets me every time 😂.
"For a time in 1973 Southwest was the largest Chivas Regal distributor in Texas. Southwest had discovered another lesson in airline marketing: giving the expense-account customer something for free that he could take home instead of to the office—in short, a kickback—won his undying loyalty."
^Love this as a fun fact to pull out at parties. It seems like all booms (finance, tech, crypto) seem to have a story like this. There is just so much money flowing in and out of the industry that weird side effects tend to emerge.
The blinds came crashing down. The marketing staffers looked on in horror as blood ran down the forehead of their enraged boss. “Bob! Your head!” “The hell with my head!” he shouted back. “What are we going to do about these sons of bitches?”
More color about the desire to win that all of these execs had in spades. I find stories like these inspiring.
"So a spectacle ensued in which corporate representatives lined up along the Connecticut Avenue entrance to the CAB like rock fans waiting to buy concert tickets. Three days before President Carter had even signed the bill they began showing up, with thermos bottles, walkie-talkies, sleeping bags, folding chairs."
I love this one because it paints a picture for how out of hand the regulation and lobbying in the airline industry had gotten over the years. Pretty incredible how far it has come in a relatively short period.
"When do people feel good about their company and themselves? When they're winning. I'll tell you where low morale comes from. It comes from losing. How would you like to be working right now for Continental, or Pan Am, or TWA, or—God forbid—Eastern? Now there's low morale. Why? Because they are losing."
LOVE this as framing for how to attract and retain great talent. Sometimes you might have to ask employees to do things they don't want to do or make sacrifices. But as long as it results in excellent business performance - you will retain excellent talent. Conversely, it doesn't matter how great the culture is or how well you treat your employees if your business is sucking shit. The best people want to win - and badly. They will leave if they don't think they can help the company win.
“As Chairman Bob likes to say,” Plaskett noted, warming up the audience, “it’s the nearest thing to legalized warfare.”
Airline executives operated under the metaphor the business is war. But as my roommate Yash pointed out, this is not always a good metaphor for building a business. War is zero sum, business is not. That doesn't mean that this metaphor is terrible, just that there are limits to its application within business strategy.
This book gave excellent context as to how the flight industry was perceived at the time. Starting with this quote:
"Frank Borman turned down high-ranking job offers from the White House and elsewhere to become one of 43 vice presidents at Eastern Air Lines, in hopes of one day becoming its president."
"The world’s busiest airport in 1930 was in the oil boomtown of Tulsa, Oklahoma"
^The times have changed....
"Within a few years American was bringing in planes at the rate of nearly one per week and hiring as many as 1,000 new employees a month."
1,000 employees a month is a pretty insane number. Facebook is probably the only company in tech that comes close to this. They recently announced that they are trying to hire 10k people by the end of the year. Considering the amount of leverage that technology provides - that is also pretty insane!
“Yes, I have a suggestion for you,” Crandall answered. “Raise your goddamn fares twenty percent. I’ll raise mine the next morning. You’ll make more money and I will too.” “Robert, we can’t talk about pricing.” “Oh, bullshit, Howard. We can talk about any goddamn thing we want to talk about.”
Not much to say here, but interesting to actually hear a direct transcript of a CEO trying to initiate price fixing.
"The traumas had been numerous. The pilots’ union was maintaining its pathetic strike against Continental, as if a strike would reverse the rulings of the bankruptcy court."
This book exposed me to how much of role unions played in the success of various airlines. I haven't studied unions enough to have a general opinion of them, but this story struck me as a bit ridiculous. The pilots at Continental were striking as the company went bankrupt. As someone that takes pride in taking ownership of my work at a company, I think I would be embarrassed to be in such a situation 🤷♂️.
How Planes Work
"Airplanes do not take off or remain in the air through the pressure of the oncoming air against the bottom of the wing, as commonly thought. This pressure contributes to aircraft flight but hardly accounts for it. In addition to being pushed from below, an airplane’s wings are pulled from above, as if on a marionette’s string. This happens because the top of a wing is contoured and the bottom is flat.
As the wing slices through the atmosphere, the air slipping along the top must travel a greater distance than the air passing on the bottom. The air on top therefore moves faster. This condition causes lift through the combination of two immutable properties of physics, each taken for granted in everyday living. The first principle is that as air moves faster, it exerts less pressure downward—just as tornadoes and other windy storms coincide with regions of low air pressure on the weather map.
The second principle is that air always moves from areas of high pressure to low pressure, as the cigarette smoke in the still air of an automobile rushes through a window crack toward the fast-moving, low-pressure area outside the window. Thus, as air cascades along the bottom of a wing, it is also being sucked, as if from a vacuum cleaner, toward the top of the wing.
The faster the wing travels laterally, the greater the pressure differential above and below. The greater the differential, the greater the lift generated. Safety lay in speed."