[Congressional Record Volume 144, Number 43 (Monday, April 20, 1998)]
[Senate]
[Pages S3275-S3276]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TRIBUTE TO BOB CRANDALL

  Mr. DASCHLE. Madam President, last week an American giant announced 
his plans to retire. Obviously, that description has more than one 
connotation. Bob Crandall is a giant in his industry and a remarkable 
pioneer. Few, if any, leaders in aviation can match his impressive 
record of achievement.
  The American airlines he joined is vastly different than the one he 
will soon leave. In a time of great economic turbulence in aviation 
industry, Mr. Crandall navigated his company and the industry itself to 
new heights and vastly new horizons. As a result, we are all 
beneficiaries.
  We know this man as an innovator. A person who understood that 
competition was not only good, it was essential. As a frequent flyer, I 
and millions of other Americans have benefited from the program he 
conceived to bring down costs and encourage loyal customers.
  We know him, too, as a financial manager of incomparable depth. 
American has been a consistent leader in profits and fiscal management. 
His stockholders have benefited from an array of innovations including 
code-sharing and the hub and spoke system in routing that has now been 
adopted

[[Page S3276]]

by virtually every airline in the business.
  My wife, Linda, and I have known Bob for some time now. We have no 
doubt that this man of many interests and so much energy is far from 
retiring. There will be new challenges and most likely, more 
pioneering.
  Whatever future he may now be planning, we wish him well. We 
congratulate and thank him for what he has been and how much he has 
done.
  Bob Crandall is an American original.
  I ask unanimous consent that an editorial from the New York Times of 
April 16th regarding Mr. Crandall's retirement be printed in the 
Record.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Apr. 16, 1998]

                     An Aviation Innovator Departs

       Robert Crandall of American Airlines, who is expected to 
     retire next month, always believed he knew exactly what was 
     right for the airline industry and never hesitated to 
     challenge anyone who disagreed. But he also recognized, to 
     the great benefit of his shareholders, when to junk nostrums 
     that circumstances proved false.
       Mr. Crandall knew that deregulation would be disastrous for 
     his industry. But after the Carter Administration withdrew 
     the regulatory safety blanket, he brilliantly constructed a 
     complex hub-and-spoke system that brought passengers the 
     steeply lower fares and vastly better flight schedules 
     economists had predicted. Mr. Crandall also knew that 
     sophisticated mathematics could maximize profit by tailoring 
     different prices to different types of passengers. But when 
     that approach grew too complicated, he adopted a simplified 
     system and challenged his competitors to go along with his 
     good idea. When they refused, setting off a destructive price 
     war, he quickly let it drop and returned to a complex fare 
     schedule.
       Mr. Crandall demonstrated that competition was good for 
     consumers. But when upstart airlines grabbed his customers, 
     he devised frequent-flier miles, an ingenious strategy that 
     tied travelers to large airlines like American even when 
     rivals were offering lower fares. Mr. Crandall knew that code 
     sharing--the practice by which two airlines would sell 
     tickets on each other's connecting flights under the name of 
     a single carrier--was misleading because it fooled customers 
     into believing they had booked a seamless flight. Yet when 
     Mr. Crandall looked around and saw his competitors pairing 
     up, he pounced, proposing a vast code-sharing arrangement 
     with British Airways. If approved, it will lock in American's 
     dominant position at London's coveted Heathrow Airport.
       With his background in finance, Mr. Crandall taught his 
     colleagues about the vulnerability of an industry saddled 
     with mammoth fixed costs--an unoccupied seat represents 
     unrecoverable revenue but no reduction in costs--to pilot 
     strikes and other business holdups. When he announced his 
     retirement yesterday, his airline also boasted of record high 
     profits and a management team ready to take over that would 
     be the envy of other airlines. It was a precisely timed 
     departure from a smart, combative leader and a nimble learner 
     who left his mark on a turbulent sector of the American 
     economy.

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