The airline industry: It’s a business where one-third of the fixed expenses (fuel) can fluctuate wildly at the discretion of world politics and another third can be strong-armed by labor unions, while the revenue stream is forever feast or famine depending on the economy, pandemic fears, the time of year, and a thousand other unpredictables. It’s capital intensive, as airplanes can cost tens of millions of dollars each. Oh, yeah, and there are constant bankruptcies and mergers. Sounds like a great place to make a career, right?


“The airline industry is very volatile,” said Michael Cox ’77. “It’s got more downs than ups, but it’s the lifeblood of commerce around the world.”

It has been for Michael Cox ’77, who has worked in the airline industry in some capacity for more than 25 years. “It’s a very dynamic environment…it’s probably one of the worst industries in the world from a return standpoint because there are so many variables to screw it up,” he said, noting at the same time that there are also tremendous opportunities within the industry.

“The airline industry is very volatile…it’s got more downs than ups, but it’s the lifeblood of commerce around the world,” he said, describing that volatility as appealing to many, including consultants.

Cox is the managing director of the Seabury Group, a consulting firm that caters to the needs primarily of commercial aviation clients, such as Delta, Frontier, Air Canada, China Eastern, Air New Zealand, and Singapore Airlines. Before joining the firm in 1998, he learned the business working for Continental Airlines, where he started as an analyst and made his way up to vice president and treasurer positions. During his time at Continental, the company went through two bankruptcies, so Cox knows whereof he speaks when he consults with airlines in financial distress. “The joke was they didn’t pay us in money, they paid us in experience,” he said. But the experience has paid off, as it led him to a very successful career in consulting.

With all the turmoil in the industry, it’s a great time to be a consultant.

Airlines have taken a major hit during the recession as people are taking fewer pleasure trips and businesses are cutting back on travel expenses. It’s the latter that hurts most, as business class airfare can cost ten times economy class. Though analysts are saying that the economy is starting to turn around, Cox says the forecast is still bleak for airlines. “It’s going to be an ugly environment for airlines for some time to come, at least until the balance of supply and demand returns to equilibrium,” he said.

“The joke is, you know how to make a million dollars in the airline industry? Start with a billion.”
— Michael Cox ’77

Airlines have responded to this crisis through consolidation, capacity cuts, and selling off assets to raise cash capital to stay competitive. “It’s an extremely competitive business,” he said noting that “like a wolf would jump on a wounded rabbit,” airlines all watch each other for signs of distress so that they can drop fares in certain areas to finish off a struggling competitor. Cox sees consolidation as a healthy thing for the industry, comparing it to the Big Three U.S. automakers: the market can only sustain so many big carriers. However, sticky issues can arise with federal regulation of these mergers for antitrust measures.

While the airline industry is currently in a down cycle, there are good things on the horizon, says Cox, who mentioned new technologies that will soon enable flights to go further, eliminating some connection flights and opening new markets.

Cox is a self-described “propeller head.” “I’ve always been fascinated by airplanes.” His passion for his work is hard to miss as he shared some of his career highlights, such as saving an airline from going under in one week, or remaking South African Airways into a profitable business with a new corporate culture. “It became my baby,” he said. “I was very proud of our accomplishments.” It’s that kind of drama that keeps Cox in this career, which constantly stressful and not at all conducive to a quality family life. The job appeals to his desire to fix things. Even after all these years, he’s still thrilled by the opportunity to turn around a company in distress, snatching it back from the brink of bankruptcy.

Mr. Cox received his MBA in finance and accounting from the University of Texas at Austin and his BBA in business management from Texas A&M University. He visited Mays Business School in November to share his experience with students.