Breaking with the “state-will-provide” culture and overhauling costs (1993)

The first fork in the turnaround story

The 1993 “major surgery” was, in the participants’ own reading, accurate in blaming the losses on both external factors and internal culture. Citing the unequal aviation treaties while refusing to locate the cause there alone was an honest posture. But an organization that had deferred reform through the boom years finds it hard, in the midst of crisis, to cut its own high-cost body to the bone. Single-year measures on bonuses and depreciation may stanch the bleeding, yet they could not reach into the structure of the route network or of labor relations — and there lies the limit of this reform.

Rewriting from the roots the culture ingrained in the semi-governmental era would, in the end, have to wait for the 2010 bankruptcy and a rehabilitation plan led by a manager brought in from outside. That the surgery billed in 1993 as a “break with the state-will-provide mindset” failed to reach the core of that culture undeniably helped set up the far larger surgery seventeen years later. In hindsight, this period was the first fork in the turnaround story — and an omen of how much what went uncut would later cost.