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Airline veteran William Swelbar joins Vijay Mehrotra and Mike Watson for a tour through nearly 50 years of airline economics(from 1978 deregulation to today's premiumization era).
William Swelbar's path is one of a kind: flight attendant at North Central in 1979, local union president in Detroit within a few years, and part of a 1982 employee coalition that had all but raised the $400 million it needed in a bid to buy Republic Airlines.
The conversation digs into the analytics behind the industry: why hub-and-spoke networks turn 10 routes into 230 sellable city pairs, how Pan Am's $99 cabin became an early pricing wake-up call, why "capacity is a bad drug," and how Delta and United decommoditized flying through cabin segmentation, basic economy, and credit card revenue - while the end of labor arbitrage killed the low-cost carrier era.
Timestamps
0:00 - Preview
0:44 - Vijay's Caddy Master Turned Airline Veteran
5:10 - What deregulation actually changed
8:00 - The overnight flood of new entrants
9:30 - Pan Am's $99 cabin and ~120 bankruptcies
11:43 - The fall of TWA and Pan Am; American's innovations
14:23 - Network design: Hub-and-spoke vs. point-to-point
16:32 - Southwest and the Southwest Effect
19:40 - High-speed rail: too late for the US?
22:15 - Capacity is a "bad drug"
25:15 - How Delta and United segmented the cabins & won during COVID
29:05 - Airfares never covered the cost of flying
30:45 - Basic economy as a weapon against Spirit and Frontier
33:50 - The end of the value airline sector
36:55 - Wrap-up
Follow the show
Apple: https://podcasts.apple.com/in/podcast/the-decision-intelligence-lab/id1811085064
Spotify: https://open.spotify.com/show/0lFoAVKqJHTYSZNpeN61ou?si=0ae973aab0174b3b
Connect with guest
William Swelbar: https://swelbar.substack.com/
Connect with hosts
- Prof. Vijay Mehrotra (University of San Francisco): https://www.linkedin.com/in/vijay-mehrotra-ba9498/
- Prof. Michael Watson (Northwestern University): https://www.linkedin.com/in/michael-watson-07600a1
About the podcast
The Decision Intelligence Lab podcast delivers real-world insights for data professionals, business leaders, and anyone seeking to leverage data & AI for smarter decision-making & successful business outcomes.
For business inquiries, email at decisionintelligencepodcast@gmail.com
