Wednesday, 18 May 2011

The value of cushioning

Some airlines have earned the privilege to do things wrong. Their thoughtfully created risk cushions allows them to experiment with new routes and fail on some, buy additional equipment when others downsize, and have courage to innovate when others cannot. They manage to keep the right balance between profit, quality of service, and safety, and remain resilient to economic crises, strikes, or unpredictable acts of nature. On the other side, the cushionless ‘cicada airlines’ are hit hard by unforeseen events even of moderate scale which force them to switch to a survival mode, merge, or disappear. Having an appropriately sized cushion at all times appears to be a well worth investment.