Common Sense (or Lack of It) in the Airline Industry

Common Sense (or Lack of It) in the Airline Industry

 

You may wonder why this blog contains another issue about the airline industry. Because, in individual situations, this industry is a microcosm of business.

There is management, satisfied and disgruntled employees, unions, very detailed rules and regulations, and, of course, customers.

 

Every Business Has …

Every business, no matter what industry, has some or all of these constituents. And how each company deals with them often determines the success of the business. Some companies have continuing union battles, just like some airlines.

How do employees behave when there is a battle between their representatives and management?  Other companies have very strict rules that they expect their employees to follow. 

Others hire the very best people they can find and expect them to use their own judgment.

 

Is Individual Judgment Allowed?

Beside the airlines, another industry that is in the news has been the fast food industry.  We have seen news stories regarding employees that follow the rules exactly and other stories where using good judgment has made a difference to both the business and individuals. 

Almost every business makes the basic decision as to how their employees behave and how much judgment they are allowed and/or expected to use.

Over the past few blogs we’ve written about United Airlines and social media flack they received due to not letting two young girls wearing leggings on a United flight.

Then, of course, there is the situation in which a doctor was dragged off an airplane resulting in injuries.

And to finish up with United, about a week after the episode with the doctor, they managed to kill a very large pet rabbit that was flying internationally.  According to the ramp agent, the rabbit was fine when seen on the tarmac changing planes, but dead when it got to the destination. 

Maybe, just maybe, having a sensitive rabbit on the tarmac, in the weather, breathing jet exhaust, may have had something to do with its death.

On one hand, a baggage handler probably should not be expected to know how sensitive the respiratory system of a rabbit is. But maybe a little common sense, from somebody, would have helped.

 

A Special Kind Of Stupid … 

And now we come to the latest event, which I’m sure that United is grateful it didn’t happen to them.  Delta is the airline that has moved to Seattle to challenge Alaska Airlines.  And this event takes lack of common sense to a new level.

A passenger was removed from a Delta flight in Atlanta for going to the bathroom. Yep! That’s correct. The plane was delayed leaving the gate and supposedly was third in line for takeoff when the passenger felt the urgent need to urinate. 

However, when he reached the lavatory, a flight attendant told him that the plane would lose its place in line if he used the bathroom, so he returned to his seat.

After an extended delay, the plane had not moved and the passenger’s need became urgent. Given the level of desperation, the passenger used the bathroom.  And returned to his seat before the plane moved again.

When it did, as a result of using the bathroom and defying a crew member’s order, the plane returned to the gate, all passengers were deplaned and re-planed except for the passenger who used the bathroom.

He was met at the gate by law enforcement who declined to arrest him because he was so cooperative. Several hundred dollars in costs later, he took another airline home.

 

Common Sense Welcome …

Let’s look at some common sense here.  What was the passenger to do? If any of you have ever had desperately to go, what are the alternatives?  Go in his clothes and all over the seat? 

Share the experience with the unsuspecting passengers in his row?  Have the next flight delayed or cancelled because at least one seat had to be cleaned?

Delta said: “Our flight crews are extensively trained to ensure the safety and security of all customers. It is imperative that passengers comply with crew instructions during all phases of flight, especially at the critical points of takeoff and landing.”

 

Federal Regulations State …

Federal regulations state that the fasten seat belt sign must be turned on while the aircraft is in motion on the ground, during landing and takeoff, or when the pilot in command sees fit; all passengers must remain seated with their seat belts fastened when the sign is on; and all passengers must comply with seating orders given to them by the crew.

However, it’s completely unclear how much latitude employees at Delta and other airlines have to make judgment calls when necessary.

 

How About Your Business?

How about your business?  Have you or your employees ever made a mistake and tried to blame it on another employee or maybe even a customer. 

Are there policies in your company that force a customer to prove that an error is not their fault?

Do you have a union shop and insist your employees “follow the rules”?  Or do you rely on them to use their good judgment and common sense?

Even when union or other negotiations become difficult? Have you or your employees ever told someone that the restrooms are “for employees only” even when a “customer” has a difficult situation?

If these issues sound like your organization, as with the situation on Delta, the rules may be overcoming common sense. And hopefully the only person to hear the statement about restrooms, in the future, is that Delta flight attendant!

 

 

Revitalization Partners is a Northwest business advisory and restructuring management firm with a demonstrated track record of achieving the best possible outcomes for our clients.  And now, we’ve written a book to help our readers understand the issues facing their businesses. You can find this compilation of our business thoughts at:
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KSL Capital Fund IV raises $2.68 bln

KSL Capital Partners LLC said Monday that its latest private equity fund closed with about $2.68 billion in commitments. KSL Capital Partners IV LP took less than a year to raise and surpassed the fund’s target of $2.25 billion. KSL IV will focus on investing exclusively in the travel and leisure sector globally, the firm said. PRESS RELEASE DENVER–(BUSINESS WIRE)–KSL Capital Partners, LLC (“KSL”) announces that it has completed the final closing of its latest travel and leisure focused private equity fund, KSL Capital Partners IV, L.P. (“KSL IV” or the “Fund”), with total commitments of $2.677 billion, including the commitment of the General Partner. Fund IV took less than a year to raise, with demand from both existing and new investors significantly surpassing the Fund’s original target amount of $2.25 billion. Investors in KSL IV include a diverse group of state pension funds, corporate pension funds, sovereign wealth funds, endowments, foundations, insurance companies and family offices. “Similar to our prior private equity and credit funds, KSL IV will target investments exclusively in the travel and leisure sector globally,” said Eric Resnick, CEO of KSL Capital Partners. “KSL IV garnered significant interest from our existing investor base and accepted commitments from a select group of new investors. We are grateful for the support shown by all of our limited partners.” KSL was founded by Eric Resnick and firm Chairman Mike Shannon in 2005. Since the firm’s inception, KSL has raised in excess of $7 billion in equity and debt commitments. In addition to the founding partners, KSL’s investment committee members include Coley Brenan, John Ege, Craig Henrich, Peter McDermott, Martin Newburger, Dan Rohan, Bernard Siegel, Steven Siegel, Bryan Traficanti and Richard Weissmann. ABOUT KSL CAPITAL PARTNERS, LLC KSL is a private equity firm specializing in travel and leisure enterprises in five primary sectors: hospitality, recreation, clubs, real estate and travel services. KSL has offices in Denver, Colorado; London, England; and Stamford, Connecticut. In the United States, KSL’s current portfolio includes the Miraval Group, the owner and operator of luxury spa and wellness properties, and the St. Regis Monarch Beach located in Dana Point, California. KSL’s recreation businesses include WellBiz, a health and wellness franchise organization, and Squaw Valley and Alpine Meadows, two of the leading ski resorts in North America. KSL is also the largest shareholder in ClubCorp Holdings, Inc. (NYSE: MYCC), one of the world’s largest owners of private golf and business clubs, and Whistler Blackcomb Holdings Inc. (TSE: WB), the most visited ski area in North America. In the United Kingdom, KSL’s current portfolio includes The Belfry outside Birmingham and Village Urban Resorts, which owns and operates a portfolio of 28 hotels throughout the United Kingdom. For additional information, please see www.kslcapital.com.

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KSL Capital Fund IV raises $2.68 bln

BlackRock, THL Credit invest more into A10 Capital

BlackRock and THL Credit have made a follow-on investment in A10 Capital. Financial terms weren’t announced. A10 Capital, of Boise, Idaho, is a middle-market commercial real estate lender. PRESS RELEASE BOISE, IDAHO (PRWEB) SEPTEMBER 24, 2015 A10 Capital, the nation’s leading middle-market commercial real estate lender, announced today it has received a significant follow-on investment from BlackRock and THL Credit to fuel the future growth of its loan origination platform and on-balance sheet loan portfolio. “We consider this additional investment by BlackRock to be a validation of our business model and leadership position in the industry,” said A10 CEO Jerry Dunn. “Being associated with the BlackRock family will enable A10 to continue to bring innovative solutions to our clients and fresh ideas on how middle-market commercial real estate can be financed.” BlackRock is the world’s largest investment firm, with over $4.72 trillion under management. Funds managed by BlackRock along with THL Credit, a $5.6 billion alternative credit investment manager, made an undisclosed investment in A10 Capital’s platform in support of its fast-growing loan portfolio. A10 will use this second round of funding to further enhance its industry-leading commercial mortgage products and to expand its sales and marketing activities. “We continue to view A10 Capital as a very impressive platform in the commercial real estate lending arena,” said Ron Redmond, managing director at BlackRock. “Their full-service platform is powered by an exceptional team and the use of sophisticated technology. We are very excited to continue to be part of their success and growth.” About A10 Capital Commercial real estate investors rely on A10 Capital as their one-stop balance sheet lender for middle-market commercial mortgages. Our broad menu of bridge, perm, bridge-to-perm, and note purchase loans cover the entire life cycle of commercial properties across the United States. Our full-service lending platform, which incorporates focused origination, speedy underwriting, in-house legal, and servicing for the life of the loan, has made A10 Capital the most active lender in the middle-market commercial mortgage space. With loans ranging from $1 million to more than $20 million per property, A10 has funded nearly 26 million square feet of commercial properties. An innovator in the industry with a scalable funding model, A10 is backed by four significant institutions: $4.7 trillion asset management firm BlackRock, the $19 billion global private equity firm H.I.G. Capital, a Fortune 500 insurance company, and the credit affiliate of Thomas H. Lee Partners. We are based in Boise, ID and Dallas, TX and have regional offices in Annapolis, MD; Darien, CT; Indianapolis, IN; Kansas City, KS; Nashville, TN; Newport Beach, CA; Orlando, FL; Philadelphia, PA; and Princeton, NJ. For more information, please visit us at http://www.a10capital.com. About BlackRock BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At June 30, 2015, BlackRock’s AUM was $4.721 trillion. BlackRock helps clients meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of June 30, 2015, the firm had approximately 12,400 employees in more than 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit BlackRock’s website at http://www.blackrock.com. About THL Credit THL Credit is an alternative credit investment manager for both direct lending and broadly syndicated investments through public and private vehicles, collateralized loan obligations, separately managed accounts and commingled funds THL Credit and its subsidiary maintain a variety of advisory or sub-advisory relationships across its investment platform, including THL Credit, Inc., a publicly traded business development company and THL Credit Senior Loan Fund, a non-diversified, closed-end management investment company. THL Credit has investment teams in Boston, Chicago, Houston, Los Angeles and New York. In addition, THL Credit is the credit affiliate of Thomas H. Lee Partners, one of the largest buyout firms in the U.S. For additional information, please visit THL Credit’s website at http://www.thlcredit.com.

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BlackRock, THL Credit invest more into A10 Capital

Sverica Capital sells MC Sign Company

Sverica Capital Management LLC said Wednesday it sold MC Sign Company to Caltius Capital Management. Financial terms weren’t announced. Mentor, Ohio-based MC provides signage and lighting services to a variety of multi-site industries, including quick serve restaurant, retail, convenience stores, and hospitality. TM Capital advised MC Sign Company and Sverica. PRESS RELEASE NEW YORK–(BUSINESS WIRE)–Sverica Capital Management LLC (“Sverica”), a private equity investment firm, announced today it closed on the sale of MC Sign Company (“MC Sign”) to Caltius Capital Management (“Caltius”). Based in Mentor, OH, MC Sign provides mission critical signage and lighting services to a variety of multi-site industries, including quick serve restaurant, retail, convenience stores, and hospitality. Sverica acquired a majority interest in MC Sign in 2008. Over the course of its investment, Sverica guided the company through robust top line growth, identified & entered high growth adjacent service lines, and completed one add-on acquisition. “We are proud to have been partners with MC Sign and its talented management team,” said Dave Finley, Managing Director at Sverica. MC Sign has grown from a company focused on sign installation and maintenance, to a diversified facilities maintenance organization serving a number of trades including lighting and electrical. Both Sverica and management felt it was an opportune time to explore another financial partner.” “Sverica has been a tremendous partner, said Timothy Eippert, MC Sign’s Chief Executive Officer. Their strategic guidance has been invaluable to our success. The company would not have achieved what it has without Sverica.” “Sverica’s growth-oriented investment model and analytical support has helped MC Sign increase revenue by nearly 65% during their ownership.” TM Capital served as advisor to MC Sign Company and Sverica. About MC Sign Company MC Sign is a leading national sign and lighting company, meeting customers’ needs from new sign design and manufacturing, installation, on-demand service as well as lighting upgrades and retrofits. MC Sign is proactive in its strategic plans by investing time and resources into developing products and services that bring value to its current and potential customers. The company’s experienced project managers and customer services representatives provide cost-effective sign and lighting products and services for some of the largest retail, restaurant, hospitality, and financial companies in the United States and Canada. For more information, visit www.mcsign.com. About Sverica Capital Management Sverica is a leading private equity firm that has raised over $500 million of investment capital across multiple funds. The firm seeks to invest in companies that are or could become leaders in their industries, and works closely with the management of such companies to facilitate their growth. Since 2001, Sverica has maintained a “high touch” operating philosophy of taking an active role in portfolio companies. Sverica devotes significant internal resources to help its management teams develop and execute growth strategies. For more information, visit www.sverica.com. Contacts

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Sverica Capital sells MC Sign Company

BBA Aviation proposes to buy Landmark Aviation for $2.07 billion: Reuters News

(Reuters) — British aircraft services company BBA Aviation Plc (BBA.L) said it proposed to buy U.S. competitor Landmark Aviation [LNDAV.UL] for $2.065 billion, a deal that would make the combined entity the biggest fixed-base operator in the world. The proposed deal would merge BBA Aviation’s Signature Flight Support business, which has the highest number of fixed base operations (FBO) in the United States, with Landmark’s, which has the third highest, in a market that continues to remain highly fragmented. “This is the right time to buy this asset, it’s the right price and we know the business very well,” Chief Executive Simon Pryce said in a media call, terming the acquisition sizeable and relatively low risk. Landmark Aviation, which is owned by private equity firm Carlyle Group LP (CG.O), has been exploring a sale as the corporate jet market is slowly recovering from a downturn sparked by the global financial crisis, helping valuations for companies offering services in the industry. “We remain concerned about the outlook for the business aviation market, and BBA is significantly increasing its exposure to it with this deal,” Liberum analysts said in a note. Pryce, however, shrugged away concerns over tardy growth and said the slow and steady recovery after a few relatively flat years, coupled with a long-term outlook for accelerated growth, looked exciting. Shares in the company fell to a more than two-year low, ranking among the top percentage losers on the FTSE-250 Midcap Index .FTMC on Wednesday. THE DEAL BBA Aviation said it expected the acquisition to add to its earnings in 2017 and the return on invested capital to exceed the weighted average cost of capital in 2018. The acquisition will be funded via new debt facilities and a fully underwritten rights issue of 562,281,811 shares at an issue price of 133 pence per share, raising about 748 million pounds ($1.15 billion), the company said. J.P. Morgan Cazenove, Jefferies International Ltd, Barclays Bank Plc and HSBC Bank Plc are the underwriters for the rights issue. BBA Aviation expects to save $35 million annually in costs by 2017 and sees tax benefits of $240 million. Reuters reported exclusively on Tuesday that BBA Aviation was in talks to acquire Landmark. A peer of Landmark Aviation, Scottsdale, Arizona-based aircraft maintenance services company StandardAero, was sold by Dubai Aerospace Enterprise Ltd to buyout firm Veritas Capital Fund Management LLC in July for $2.1 billion. ($1 = 0.6521 pounds)

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BBA Aviation proposes to buy Landmark Aviation for $2.07 billion: Reuters News