Vieira Asks Another Airline CEO for Impossible 'Guarantee'
First she wanted no more cancelled flights. Now Meredith Vieiraâ€™s asking for a â€śguaranteeâ€ť against higher airfares.
Unfortunately, despite her $10-million annual salary, according to the April 13 Parade Magazine, NBC â€śTodayâ€ť host Vieira has difficulty reporting on business practices in a free market. In an interview with Delta Air Lines (NYSE:DAL) CEO Richard Anderson, she asked for a â€śguaranteeâ€ť that fares would not increase and services would not be reduced after a merger between Delta and Northwest Airlines (NYSE:NWA).
â€śI was just going to ask if you could guarantee your consumers that you would not reduce their service or raise their fares?â€ť Vieira asked.
Anderson had to give Vieira a rudimentary explanation of market pressures dictating those variables and the fact that it isnâ€™t as simple as issuing an executive decree that nothing will change.
â€śWell, this, this is an end-to-end combination,â€ť Anderson replied. â€śAnd our goal is to take two networks that really have very little overlap and connect those networks together and create actually the first airline in the United States thatâ€™s truly global.â€ť
Anderson also put one of the biggest pressures the airlines face â€“ the rising cost of fuel â€“ in perspective.
â€śWith respect to airfares, regardless of this combination, the skyrocketing cost of fuel has got to be covered in the ticket prices of airlines,â€ť Anderson said. â€śJust like when you go to the gas pump, ExxonMobil doesnâ€™t subsidize the cost of the fuel in your car, and your local utility company charges full price for your heating oil.â€ť
But as Anderson explained, the competitive market ultimately dictates the fares.
â€śAirline tickets, just like other, other services and goods in our economy, have got to reflect the full cost of the commodities to produce the product,â€ť Anderson said. â€śWith that said, we still have an incredibly competitive U.S. and global airline business in the United States. Discount carriers have grown 60 percent the last seven years. Thereâ€™s free entry, thereâ€™s free exit. And pricing in the airline industry will always be based upon competitive market forces.â€ť