5 Most Beloved U.S. Airlines of All Time

CHARLOTTE, N.C. (TheStreet) -- What I remember most about the day Pan Am folded is that sometime that morning, I started to cry.

It wasn't loud sobbing or anything dramatic. It was about 30 seconds of quiet crying. I don't think anybody even noticed. I was seated in my desk at The Miami Herald, talking to someone about Pam Am's death, which occurred when Delta (DAL) declined to honor a commitment to fund the airline following its bankruptcy.

I went back to work immediately. Dec. 4, 1991, was a busy day at the Herald, given that the new Pan Am, which was to continue to serve the airline's Latin American routes as well as domestic destinations out of a Miami hub, could not take shape if Delta did not support it financially. On that day, Miami lost about 7,500 jobs.

The moment sticks in my mind because I now realize that I had come to love Pan Am and its glorious history during the two years that I got to cover the carrier, the last two years that it existed.

In compiling a list of the most beloved airlines, I consulted with several airline lovers, generally the same ones who helped me to compile the list, The 5 Worst Airlines of All Time, which TheStreet published last month. Once again, the list is biased in favor of airlines I have covered, although I covered Piedmont Airlines retroactively.

The most difficult question I faced this time was whether to include JetBlue (JBLU) . The airline has won affection from many fliers. Aviation consultant Michael Boyd famously said: "Jet Blue doesn't have passengers. It has groupies."
 
Like most airlines on the list, JetBlue is narrowly focused geographically, in places where it has a loyal following.

However, weighing against its inclusion, JetBlue is a relatively new airline and it has at times alienated passengers with operational shortcomings, although it has always apologized profusely and has tended to offer compensation beyond what other airlines might offer. I bet Wall Street hates that.

Possibly, the question of whether JetBlue is beloved could be clearly answered over the next year, as the airline attempts to withstand pressure from Wall Street to do away with some of the things its passengers most love: extra legroom in coach, free Wi-Fi and a free first checked bag.

Perhaps a wise marketer will even devise a "Save Our JetBlue" campaign that makes it clear just how beloved JetBlue is.

In the meantime, Midwest Airlines made it to our list. Arguably, the most symbolic act in its decline,  the elimination of the showcase chocolate chip cookies that were baked on board, mirrors what Wall Street would like to see happen at JetBlue. 

 

Pan Am

Pan American World Airways is beloved for its glorious history, rather than for its slow, painful death. But arguably, the long slow death helped to highlight the glorious past.
 
For several decades, Pam Am was a leading symbol of United States might, flying throughout the world, introducing new jets including the Boeing 747 and flying its name atop a prominent New York skyscraper.

"Pan Am was respected for its pioneering," said Jeff Kriendler, a 25-year veteran of the carrier who co-authored a 2011 book, Pan American World Airways Aviation History Through the Words of Its People.

"Pan Am flew the flag and brought many people to America for the first time," said Kriendler, a Miami resident. "Many people down here remember that the first time they came to America was on Pan Am."

One of the things that saddened me the day Pan Am died was that the Civil Aeronautics Board, which regulated the U.S. airline industry, would not let Pan Am acquire a domestic route system through a merger with another carrier because this was viewed as creating a monopoly.

But after deregulation, other carriers established routes to Europe from various domestic gateways, meaning passengers no longer had to get to JFK to fly to Europe. I think that, more than anything else, is what killed Pan Am.

Unfortunately, in its latter years, Pan Am became known for selling off its valuable assets, for entering into a strategic blunder of a merger and for an infamous crash that resulted from a terrorist bomb stashed in the cargo hold.

As for the 1979 merger with National, "You didn't have to go to UT (University of Texas) to realize that it didn't make business sense to buy a company with a lower cost structure and then raise all the employees to your standard," Frank Lorenzo said in a 2013 interview with TheStreet.

Additionally, the cultural clash between young informal National and old established Pan Am was extreme, and the wisdom of acquiring a Florida-based airline in an effort to build a national route structure was questionable.

I also remember that the night before Delta pulled the plug, Pan Am execs and union leaders sat up all night long, negotiating a deal to operate the new Pan Am. They walked into a New York bankruptcy court the next morning, only to find that the carrier was dead.


Alaska

 

As far as being beloved, Alaska got lucky when Delta decided in 2013 to build a competing hub in Seattle.

There's nothing like an assault by outsiders to make the public, as well as employees, realize just how much they treasure a customer-focused locally based airline.

"Our relationship with Alaska over the last five or six years has been very good, and this has strengthened everybody's willingness to cooperate with each other," said Tom Higginbotham, president of IAM District Lodge 142, which represents about 3,100 Alaska employees. "Their focus is on making Alaska work better than Delta."

Aviation consultant Bob Mann said Alaska is appreciated in Seattle not only for its long history, but also for technology innovations including its use of airport kiosks and automation. Now, he said, Alaska is "an agile David" in the David and Goliath battle with Delta.

Alaska spokeswoman Bobbie Egan recalls that in 2011, during a brief period when a congressional stalemate created a tax holiday, most airlines continued to collect the ticket taxes. Alaska did not. The holiday translated to an approximate 15% discount. Passengers appreciate such gestures, she said.

The best recent example of airline employees being motivated by an outside assault occurred in Delta's own recent history, when US Airways made a misguided 2006 attempt to take over Delta.

Employees responded with a "Keep Delta My Delta campaign." At a hearing of the Senate Commerce Committee, US Airways was cast as a foreign aggressor against a proud Southern company, particularly when Sen. Trent Lott, R-Miss., told US Airways CEO Doug Parker, "I must say you are an aggressive suitor. But the lady from the South -- Atlanta -- doesn't seem to want to be forced into this shotgun wedding."

Soon afterward, Parker backed away from this peculiar effort to re-fight the Civil War -- which is not to imply that Delta is going to back away from its ongoing effort to build a trans-Pacific hub in an obviously suitable location. It is not.

Perhaps Seattle can find room in its heart for two airlines. 

 

Southwest

Southwest (LUV) founder Herb Kelleher built an airline with a sense of humor, esprit de corps among employees and loyalty among passengers.

When he was ready to step aside, gradually, in the first decade of the 2000s, Kelleher found a successor, Gary Kelly, who was up to the task of replacing a legend. For their final acts, the great managers, like Alan Mulally at Ford (F) , groom their successors.

Southwest today is the biggest U.S. airline in terms of domestic passengers, and it has become one of the big four U.S. airlines that together control about 80% of all U.S. airline traffic.

Yet Southwest has maintained at least a portion of its iconoclastic beloved image. Its flight attendants still make humorous inflight announcements. Its employees are among the industry's highest paid and they still work for an airline with a no-layoff policy.

For passengers, perhaps what most distinguishes Southwest -- since its fares are no longer rock-bottom -- is its "Bags Fly Free" policy.

Wall Street analysts continue to recommend that the policy be revised. Most recently, Stifel analyst Joseph DiNardi said last week that Southwest shares would benefit, just as JetBlue shares have, if investors began to believe that Southwest would impose a bag fee.

 "JetBlue generates roughly $8 per passenger in bag and change fees compared to the network carriers who are closer to $11," DeNardi wrote in a report. "Southwest gets about $1. Should Southwest choose to more aggressively pursue ancillary revenues -- which we believe it will eventually -- the upside potential to EPS is significant -- more so than what we see at JetBlue."

Kelly resists, probably because the last thing Southwest wants to become just like the other guys, and possibly to be removed from this list.

 Midwest Airlines

The disappearance of Midwest Airlines is one of the particularly sad results of airline industry consolidation.

Midwest was a Milwaukee-based carrier with a strong community presence and an image as a friendly airline that served fresh-baked chocolate chip cookies on its airplanes, which had leather seats. It offered 21 non-stop destinations while its regional partner served 30 destinations, according to Wikipedia, and it regularly won awards from Conde Nast for exceptional service.

In 2005, AirTran began making approaches to the Midwest board in an effort to buy the carrier. The board said no. AirTran took its effort public, seeking to pressure on the board. In 2007, the board sold out to a private-equity group headed by TPG Capital and including Northwest Airlines, which paid $450 million.

Then rising fuel prices sent the airline industry into a tailspin, and Midwest grounded its fleet of 12 remaining MD-80s. In 2009, Republic acquired what was left of Midwest for $31 million. In 2010, Republic merged the Midwest brand with its other subsidiary, Frontier Airlines, under the Frontier name and Midwest ceased to operate.

"The cookie has crumbled," was the lead in an April 1, 2012, story in the Milwaukee Journal-Sentinel.

"That warm chocolate chip cookie that airline passengers relished -- and that helped Milwaukee's Midwest Airlines claim 'the best care in the air' -- will fade into history at the end of the month, like the airline itself that's been swallowed up by competitors," the newspaper said.

In place of the cookies, Frontier said it would offer bags of Pepperidge Farms Goldfish Crackers or Barnum's Animal Crackers, but only to premium passengers. Giving out free fresh-baked cookies "does not align with either the perception or financial reality of the ultra-low-cost business model," a Frontier spokesman said.

"Midwest Airlines, with its chocolate-chip cookies baked on board, gave a business-class experience at coach prices," said Terry Maxon, airlines reporter for The Dallas Morning News.

"It's easy for first-class passengers to love an airline," Maxon said. "For an airline to be truly lovable, it has to have a coach product that leaves customers happy."


Piedmont Airlines

Piedmont may have been the most beloved airline of all -- or perhaps that is just the view from Charlotte.

Piedmont's legacy was never clearer to me than on Feb. 20, 1998, when I covered a 50th anniversary memorial flight, in which a Piedmont DC-3 retraced the Wilmington, N.C. - Charlotte portion of Piedmont's first flight on Feb. 20, 1948. Piedmont founder Tom Davis was aboard.

A few dozen people, mostly former Piedmont employees, watched the plane land. Many lined up to greet Davis, to hug him, or to have pictures taken with him. Later, several men asked Davis for his autograph.

"You will never find loyalty to a company like you did at Piedmont,'' Colleen Fields, a US Airways ticket agent who went to work for Piedmont in 1981, told The Charlotte Observer. "There was a feeling there no one place else could capture. I have seen grown men with tears in their eyes, just talking about it.''

Looking at commercial aviation in 1998, Davis declared, "In some respects, it's a lot better (today) than 50 years ago. In other respects, it's not quite as good.''

Today, US Air's 1989 merger with Piedmont is often cited as an example of an extreme case of corporate culture clash. In the best-known illustration, US Air ended the Piedmont practice of giving passengers a full can of soda.

For years, until he was removed as airport director in 2013 in a political vendetta because he had historically refused to cede control of airport finances to Charlotte politicians, Jerry Orr helped to maintain the Piedmont legend.

Orr once told TheStreet: "When you buy somebody, you ought to save the good parts and throw away the bad parts, but USAir did the opposite." He added: "They thought the sun rose and set in Pittsburgh," at one time the centerpiece of US Air operations.

One of the most characteristic signs of American (AAL) CEO Doug Parker's instinct for understanding human nature is that he valued the culture of Piedmont, and other predecessors, after America West merged with US Airways in 2005. (Parker has followed the same course since the America West team took over American management in 2013).

In June 2006, at an event to unveil a US Airways aircraft painted in Piedmont colors, Parker stood in a Charlotte hangar and declared "People said 'stop talking about this ... we're going to start a new culture.'

"But what I realize is you can't kill that [old] culture. It's still here, it's vibrant, and frankly, it's one of the best assets of US Airways," he said. "What you should do is embrace it."

Perhaps Piedmont was lucky in that, at a moment when it was eminently successful, it was taken over by another airline so that whatever went wrong afterward could be blamed on the acquirer as the post-deregulation airline industry entered a particularly harsh phase of its history.

 Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

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