Thoughts on “An Open Letter To The Airline Industry Leadership”

I received an email from the author of the blog, “Think for a Moment,” suggesting that I take a look at the letter to airline CEOs that he (she?) had written. I’m always happy to read people’s takes on the industry, because often I think those who are surrounded by the industry don’t really step back to see what people on the outside, customers, are thinking and feeling often enough.

So I read through the letter, and it was full of a lot of the same stuff that we often hear about the industry. Flying should be fun, but it’s not. Airlines need to treat passengers better. Like I said, it’s the usual stuff. But he does go into specifics, so thought I would address each one to try to get a good discussion going.

Communicate with Your Customers
How many times have we heard the complaint about airlines not keeping customers informed when things go wrong? It’s happened enough that the airlines even put a rule in their customer commitments that they would communicate every 15 minutes during delays. But we all know it still doesn’t happen as frequently as it should on a broad scale.

Is there any way to fix this? I’d think the only way to truly fix it is to make sure that the front line has a portion of their compensation based on it. Would the unions ever allow something like this into a contract? I highly doubt it, but it makes sense. Put some performance-based compensation in there and you fix it quickly.

I’m not saying that you rate a captain on her landings and then pay based on that. And I don’t like the idea of paying based on punctuality, because that encourages pilots to fly in unsafe conditions just to make some extra money. I do, however, like paying for basics like communicating delays to passengers. It shouldn’t be that hard, but oftentimes there isn’t a huge motivation for it to happen.

Stop Nickel and Diming Customers
This is one that has been shouted from the rooftops, but I have to disagree. There’s nothing inherently wrong with nickel-and-diming if that’s the strategy you want to pursue. That doesn’t mean it’s right for every airline (hint: it’s not), but it’s right for some. Historically, you’ve received a meal and a drink for free, so now everyone assumes it should be that way for eternity. If an airline wants to pursue an all-in type of strategy, that’s fine (and more should be looking at this). But who is to say that an a la carte strategy is bad?

There are plenty of people out there who don’t want a meal, and as US Airways has found, when you charge for drinks, people don’t want them either. So why shouldn’t people pay for what they want to have? Why should someone who doesn’t need to check a bag have to pay for a fare that includes two checked bags?

Of course, I absolutely hate that I can’t just decide this up front on most airlines. I may know at the time of booking what I want to have, and I should be able to include that in my original purchase. But I should also be able to add on at the airport and on the plane if I want to. Choice is good.

So where would I draw the line here? It drives me nuts to see airlines charge for something that you can’t really avoid. Look at Allegiant, for example. They charge an $11.50 booking fee per person for any booking you make unless it’s made at the airport ticket counter. That’s a frustrating fee that should just be rolled into the base fare because it’s so difficult to avoid it.

The worst is probably when you aren’t capable of making a booking online for a certain type of itinerary, but the airline will still charge you a fee to use the call center. Those types of fees are maddening and should not be charged. But everything else is fair game for those airlines who choose to purse this strategy. I just wish more airlines opted not to go a la carte so that passengers would have more choice. For now, Southwest gets the brunt of the benefit.

Create a Good Customer Experience
Obviously this one needs some more explanation, because it’s a big topic. So let’s take some snippets.

And you know what would have guaranteed my loyalty and undying love? If one of these carriers had demonstrated the foresight to put into a database that I am six feet, five inches tall and well over 200 pounds. To what end, you may ask? To ensure that I always get priority for (1) the emergency aisle or (2) an aisle seat or (3) at a minimum, to ensure that you don’t put some behemoth next to me.

I find it funny to see this comment come right after the nickel-and-diming one, because they’re actually tied together. Many airlines are now charging for the best seats on the plane. JetBlue will give you more legroom for a few bucks, and the legacy carriers sell their best seats on the plane as well. So the invention of nickel-and-diming actually lets the tall person self-select into the better seats by paying more. And that’s how it should be. If you just want to buy a rock bottom fare, you shouldn’t be entitled to the exit row if someone else is willing to pay for it.

do not want to overhear one more time about hours being cut, schedules being changed, routes being altered. Aren’t there other hours in the day to discuss and share these thoughts other than during work on the plane and in ear shot of passengers?

This one is a pet peeve of mine as well, and I’d say it points back to the idea of pay for performance that I discussed earlier. How do you know if a flight attendant is complaining loudly in the cabin? Look for complaints from passengers. Put a survey out to every single person on every plane and ask for feedback. Now that airlines often have in-seat video and many are installing wi-fi, this would be an easy thing to do electronically. Then employees can receive a portion of their pay based upon customer feedback. I know . . . the unions will never go for this.

Show Heart

Again, this needs further explanation. The author is referring to the airline’s rigid fare rules. He was traveling last minute for a funeral, and the fare was, in his opinion, too high. This of course is not something that a reservations agent can change. They don’t have the authority, and it is a difficult situation. So what could an airline do? These types of situations are not something that can be resolved with a blanket corporate policy. These are things that have to be handled on individual cases, but nobody is ever empowered to handle them.

So how do you get around it? Well, it’s hard. Airlines are afraid to give more power to the front line employees because they don’t trust them with that power. It’s sad but true, and it’s a reflection of the state of the airlines today. Maybe the airlines could create a central customer resolution desk. But the problem with that is there are thousands and thousands of people traveling to funerals, hospitals, etc every single day. There’s no way to handle the flood of requests that would inevitably follow.

I don’t see this as something that can change without a complete alteration of employee relations. And that’s something that isn’t going to happen very easily, but it would be great to see.

Create a Real Customer Loyalty Program
The author suggests a frequent flier program that offers the following:

  • Discounted fares as a frequent flyer
  • Lowest fare matching
  • Automated upgrade to Economy Plus (United’s “better than Coach but clearly not Business” class) that has more leg room
  • Noting that I should always have an aisle

I hate to break it to him, but this already exists, for the most part. Elite members of United’s program do get automatic access to Economy Plus, and they have aisle seats that are set aside for them to reserve. They also get exclusive discounts that United sends out to only the frequent fliers. Every legacy carrier has this. The one thing they don’t get? Automatic low fare matching. And why should they? They shouldn’t. If you’re building up all of these benefits to flying one airline, then you should be willing to pay more for it.

Summary
What I see in this message is that a lot of people want a lot of stuff without paying for it. Yes, the customer service issues need to be addressed. I have no disagreement, but the best way I see that it can be addressed is via a method that no union contract will support (I’m guessing). So that relies upon an improvement in labor/management relations to build trust. That’ s not easy either. Most of the other complaints, however, seem to forget that people pay very little to fly. I mean, the author was complaining about a $399 roundtrip ticket on AirTran. I do not know what route he was flying, but paying $399 to fly roundtrip somewhere is not that high if you think about it. You’d pay that for two nights at a mid-level hotel.

So I can see airlines looking to significantly improve service only if they can profit from it. Southwest is trying to show that it can do it by avoiding fees. Other airlines (including Southwest) will add things like onboard internet because they can make money on it. If people start voting for those airlines that provide better amenities and service, then ultimately the other airlines will opt to compete. But if people continue to choose the lowest price around, then airlines are never going to make improvements.


20 Responses to Thoughts on “An Open Letter To The Airline Industry Leadership”

  1. Hunter says:

    I love the idea of performance based pay that includes customer service. When I worked at SkyWest 1/4th of the quarterly performance reward bonus was based on customer satisfaction surveys. Granted it was an overall rating for all employees, and not individual scores, but it still worked. We could track the ratings online all through the quarter to see if we would pay out on that portion of the bonus.

  2. I’m all for better info. Much of this is systems design. I ran through an experience with Delta’s data during an irregular operation in my blog entry, The Attack of Terrible Airline Data! From what I’ve seen the IT guys who designed this didn’t think to hard of about actual customer experiences and run through the data they had to generate info. Who cares if a flight is a minute earlier or two minutes later? That level of precision is unnecessary. Honestly the accuracy resolution should be no greater than 10 minutes. If you want greater accuracy than that charter your own jet.

    But providing accurate customer data doesn’t seem to be something that has been systematically thought through.. Instead of patching something new onto the system, start with a blank sheet of paper. Oh yeah theres that thing that no one will pay for it, it’ll cost money, and the airlines are perpetually broke.

  3. ML Harris says:

    A La Carte is good. Rolling optionals back into ticket prices, bad. For instance, I like the baggage fees. I carry an Air Boss, which I carry on, and my laptop briefcase. That’s everything I need for ten days anywhere. If I want to bring back a bunch of stuff, I have a duffel that I can check and pay the fee for. Fair enough.

    As to empowering front line employees, pay-for-performance, and other employee stuff, doesn’t there have to come a time when, for the good of the industry and the customers, the unions and the management stop being so damn adversarial and trust each other a wee bit. We’re talking legacy fights at United from before the Reagan administration. Legacy fighting. Which doesn’t help the company to profitability. Which doesn’t help the unions to get a fair share for their members (if the company is insolvent, there will be zero jobs), which doesn’t help the customer and which doesn’t help the industry as a whole. If you were designing your airline industry from scratch, you’d have pay for performance and you’d trust your frontline workers’ judgment somewhat to make a call on someone flying for a funeral.

  4. Matty D. says:

    I think it’s good to communicate with the customers (although I feel every 15 minutes is a bit excessive when the delay is obvious… can you just imagine, “Folks the weather is bad.” 15 mins later: “Folks the weather is still bad.” etc. I would rather them say “We’re delayed due to weather in Fogville, but our Dispatcher for this flight has informed me that forecasts estimate improving conditions in about an hour. We’ll keep you posted if any improvements occur before then.” I think the key is truthful information – how many times have we all experienced a delay, told it was weather related, only to learn our route and surrounding areas are clear, blue and 72! I would rather accurate and honest communication than frequent updates. This starts from the top. Employees only know as much as they are told and trained to do. Depending on the carrier, the information can be difficult to obtain – here lies the problem. Airlines (and businesses in general) need employees who are able to communicate with each other first, and then continue that communication to the customer.

    It’s interesting how often my colleagues say “I flew with US and they didn’t give us any free food!” Little did they know that nothing in business is free; as I learned in economics while still in college, “There are no free lunches.” For the longest time, it is my opinion that food and drinks were as expected on a plane as popcorn at the movie theatre. Even Southwest and AirTran, although you may not hand the FA any cash when you receive your “complimentary” drink and pretzel pack, has found a way to include those costs in the price of your ticket. However, LCC cost structures are completely different than legacy carriers, who have been trying to do anything and everything to compete in a market driven by price and little brand loyalty these days. Whether or not these fees are here to stay I suppose is up to speculation. Personally, I would like to see these fees paid up front at the time of booking (overweight, oversize, etc fees still apply). Perhaps after payment service vouchers can print out along with my e-ticket. For example, If I’m flying NY to LA on Feb 22, book my ticket on Oct 31 for $399, and today already know I will be checking a bag because I’m taking the family to Disneyland for a week, know that my 4 year old is going to want a drink and snack enroute, and would prefer the bulkhead, it’s easier for me to do everything at once. This way, when Feb 22 rolls around and we all arrive at the airport – at least I may have forgotten that I was “nickled and dimed” for everything since I am not reaching for my wallet each time I require a service.

    In my experience, it’s difficult for airline employees to remain cheerful when some of us are faced with such a grim propsects. Management is going to the bank with millions, while those on the front lines are barely making ends meet working double shifts. I really liked the idea of an optional interactive survey after each flight. Often the star employees with a company that go an extra mile get forgotten because of a handful of unenthusiastic employees. This would be a great way for management to give credit where it is due, provide an incentive for other employees, and determine where changes need to be made.

  5. A says:

    On paying very little to fly, yes I think this gets lost on the leisure traveling public. They have gotten far too used to $200 R/T cross country flights and such. As a frequent business traveler I pay (and pass on to clients) very expensive fares. $1000 from MSP to DFW is not uncommon for me. Recently paid $1200 to Austin for example. That’s the cost of doing business and I accept that. My complaint is that it’s a relatively short flight and even though I make the trip over a dozen times each year, because of switching up airlines to get desired flight times and/or save some $$$ I missed elite status on both AA and NW last year. So, for my super inflated last minute fare which keeps the airline in the black financially I’m given nothing more than the family that is making the same trip for $200/person with 2 week advance purchase.

    Rewards/Loyalty programs should have NOTHING to do with how many “miles” you travel and everything to do with how much money/profit you earn the airline. It really irks me when the 1st class cabin is full up with only frequent elite travelers. On most domestic flights this is the case. I’d be game for a total doing away with the loyalty programs and making people pay for everything…including 1st/business class. The current rewards structure isn’t fair and IMO doesn’t benefit the airline. I know people feel differently, but I know I’ll get called to a meeting and have to buy a one day advance ticket for a small fortune. If I knew there’d be a chance of getting 1st class because of what the ticket cost I’d be more than willing to pick that airline.

  6. eponymous coward says:

    Rewards/Loyalty programs should have NOTHING to do with how many “miles” you travel and everything to do with how much money/profit you earn the airline. It really irks me when the 1st class cabin is full up with only frequent elite travelers. On most domestic flights this is the case. I’d be game for a total doing away with the loyalty programs and making people pay for everything…including 1st/business class

    Fly Virgin America- every seat in F is paid (either as full paid F or day-of-flight upgrade for cash), and their FF program, Elevate, is based on airline spend, NOT mileage flown.

    Needless to say, the FF mavens on places like Flyertalk HATE this program (not surprising, since they are all about $130 mileage runs on crappy airlines that net them a big chunk of a F TATL ticket in some European airline’s F).

  7. Court says:

    The author of this article is Joel Mier, and we had a chance to chat with him about his article on the Airplane Geeks Podcast a couple of weeks ago. Very, very interesting gentleman who I was impressed with. He’s not necessarily an airline guy, but a marketing guy looking in from outside the airline industry.

    Sometimes we lose perspective from within the industry, and it’s refreshing to be reminded of how the rest of the business world views us. Something about seeing forests and trees…

    If anyone’s interested, you can listen to the interview with Joel Mier here:
    http://www.airplanegeeks.com/2008/10/14/episode-18-customer-service-with-joel-mier/

  8. David SF east bay says:

    I had read something about airlines rewarding passengers by how much money they spent and not how many miles they flew. Only two (at that time anyway) airlines in the world were doing that and it made sense. Since big airlines don’t do things that make sense it’s understandable why they will reward the person who buys a $100.00 ticket each week, and not the person who spends $1000.00 and flys only once a month.

    The nickel and diming issue is big because people didn’t see ticket prices go down when they had to start paying separately for food, drinks, pillows, blankets, checked baggage, etc., they felt the airlines were now cheating them and nickel & diming them for more money.

  9. CF says:

    Really great points about the quality of the data. It’s true – sometimes you can get better data by going on FlightAware than you can by going to the airline website and that’s ridiculous. The quality of the data does need to be improved, but I would still want updates every 15 minutes, even if the data isn’t great. It at least keeps me connected.

  10. Ron says:

    Speaking of keeping people updated, here’s a story I had with Delta this summer. I was in Morocco for a conference at the end of May, scheduled to leave on a Delta-coded, Air France-operated flight on June 1. Around May 25 or 26, many of my European colleagues at the conference started receiving messages from their airlines that their return flights were being pushed back by an hour, but the arrival time in Europe didn’t change. It turned out that Morocco, which normally does not observe Daylight Saving Time, decided as an emergency measure due to the spike in oil prices to enact Daylight Saving Time as of June 1, 2008, and the decision came with something like 2 weeks’ notice and was very poorly publicized (none of our hotels knew about it, for example, less than a week before the time change took effect).

    I didn’t hear a word from Delta, and even though I had already figured out what was going to happen to my flight, I decided to check the web. Indeed, the Air France flight was pushed back an hour (with arrival at CDG unchanged), but Delta still listed the flight with the original departure time. So I wrote to Delta suggesting that they correct this. I received a formulaic reply saying that their records indicate that there was no change in my departure time. I wrote back saying that I knew what their records indicated, and that the point of my email was to draw their attention to the fact that their records were incorrect. This time the reply said “We regret to hear Air France has not provided us with an update or information regarding Daylight Savings Time in Morocco … With that being in mind, please go with what Air France has posted on their web-site and in the meantime, we trust Air France will send us notification soon.”

    As you may expect, on the day of the flight (and for a few days later, I checked) the Delta-coded flights were still listed with the wrong time. On the plane I met many US-bound colleagues (required to fly on US flag carrier code-shares thanks to the Fly America Act) who arrived at the airport an hour too early — fortunately the change wasn’t in the other direction, but this was an early morning flight and the departure lounge in Casablanca is pretty boring, especially early in the morning. Of course, given the short notice and near-zero publicity of the time change I would suspect that the whole country was in chaos for a few days, but I didn’t hang around to find out.

    Bottom line: airline front-line employees do make an effort to give customers the best information available, but it seems that the person who responded to my second email, and who clearly understood the problem, was not empowered to trigger the actions that would lead to resolving the problem. This is just bad: if your employee knows of a problem that affects dozens or hundreds of your customers, they should be able to obtain access to the person that can fix the problem. But I guess a large enterprise like Delta customer service has bigger problems to worry about.

    [I must admit that I sent my emails partly as a test to see if customer input can lead an airline to fix an obvious error in its schedule, and I wasn’t surprised to find out that the answer is no.]

  11. Ron says:

    ML Harris — “you’d trust your frontline workers’ judgment somewhat to make a call on someone flying for a funeral”: I don’t understand why front-line workers should make a call on the fare a person pays. In industries where salespeople make this call, it ofter comes (in part) from their own commission — they’d rather close a deal that’s less profitable to them personally than lose it altogether. Airline ticket agents are not paid commissions and airline pricing is a well-researched field; whether a particular class of travelers deserves certain discounts (be it for reasons of compassion or pure cost-benefit analysis) should be a matter of company policy, and a front-line worker’s discretion should be framed within such policy.

    Regarding funerals in particular, expenses like flowers and venues often cost *more* for funerals than comparable arrangements for events of a more discretionary nature. People’s emotional distress and need for urgency present an opportunity for profit that many businesses in a variety of industries are happy to take part in. Airlines are also businesses, and they too need to turn a profit at the end of the day (or quarter).

  12. Ron – Thats sad, really really sad. I wonder how much of that is due to outsourcing and not empowering employees.

    If something like that happened in my company I’d at least sling an email, or open a ticket to whomever could fix it.

    I wonder how much of this is a problem with outsourcing? Since an employee at an outsourcing company wouldn’t have access to send that info on.

    CF – Does eponymous coward’s IP address belong to Virgin America?

  13. Ron says:

    Speaking of updates (and Delta), last night I got an email titled “Itinerary update: flight change” about my upcoming flight from MCO to LAX in December. After careful examination to see what changed (they don’t make it easy), it turns out it was the flight number; all the other details remain the same, to the minute. They’ve done this to me once before on the same flight — it changed from 1473 when I bought the ticket in September, to 1693 in October, to 1433 now. I understand it’s important that I have the correct flight number when I fly, but an email with the subject “flight change” is scary (I always assume it means my flight was canceled). Any idea why they keep changing flight numbers?

    And why their IT department can’t produce less alarming subject lines?

  14. Ron, the IT department shouldn’t be responsible for the subject line. Someone in customer operations should be. If I were to place a bet I’d think this is the key on the break down to both your problems — nobody actually looking at the customer experience.

    I had a friend who got a Delta flight notice that her flight was leaving one minute later. While I’m sure from a scheduling perspective that one minute was important, from a customer perspective it doesn’t really matter. This is fixed by thinking about it from the customer perspective, what changes are important to them, sure the change from 1473 to 1433 is important, but you would’ve caught that anyway when you checked in. (Hell, I don’t usually remember what flight I’m flying until I check in!)

    From a operations perspective this is pretty easy to fix: set thresholds, what is important to customers? a 5 minute change? a 15 minute change? a 30 minute change? an hour change? then program the computer to follow that.

    This is where Joel’s approach actually works: figure out what your customers want then give it to them.

    As much as we all love or hate US Airways they’ve done this thinking and have implemented it.

  15. I greatly appreciate and value the discussion that Brett and his readers have had about my “open letter”. Please allow me to quickly respond to Brett’s assessment.

    First and foremost, the main point of my post was that as a marketing professional who specializes in customer experience, my experience and analysis indicates that the airline industry has little to rare focus on this. And as industry examples (Southwest) and outside industry analogs suggest (Best Buy, Netflix), companies that are able to create and deliver a complete, quality customer experience win.

    I think Brett misses this point wildly. This is not about crying about being charged by baggage fees or drinks… it is about the thoughtlessness that goes into the decision to charge for baggage and charging for drinks. It has an impact of fliers. We can debate whether it should or not. Or we can be grown up and recognize that it is the reality of business- decisions impact a customer experience and that impact can result in a change in behavior that may OR may not benefit a company.

    I fly to the tune of $20,000+ a year and no longer have a preferred carrier. Is it wise for a carrier to understand me and my needs in order to better compete for my dollars?
    Of course it is… And while that does not mean they do everything I say, it does mean that it should be thoughtful and comprehensive in its evaluation and make an informed decision. Do you think that happens?

    Finally, Brett and I both recognize that change is hard. But hard does not equate with should not do it. My experience is that significant change within an industry comes from those outside the industry. Did the music industry create music downloads and MP3 players? Did video rental stores create rental by mail or VOD? No, Apple and Netflix did. Experience within an industry, while making us clearly more knowledgeable overall, too often prevents one from being able to see outside of their experience. I think Brett is not different from most in that he demonstrates this well. Read through the post again and you will notice:

    “Well, it’s hard”
    “…not something an agent can change.”
    “… no way to handle the flood…”
    “That’s not easy either.”

    In simple terms, if one cannot challenge widely held assumptions then the range of thinking will be dramatically limited. And someone else will win- plain and simple. The only “No” that exists are the ones we place on ourselves and result in limited thinking.

    The company that can balance business goals with customer needs in a way that is transparent and consistent will win- regardless of industry.

  16. Ron says:

    Nicholas, email and web usability are a customer experience matter, but expertise in this area is more likely to be found in the IT department — too often marketing people still “don’t get” the internet. It just so happens that Jakob Nielsen’s latest alertbox column is titled “Transactional Email and Confirmation Messages” http://www.useit.com/alertbox/confirmation-email.html ; the alertbox in general should be required reading for anybody doing business on the internet.

    Anyway, I was wrong in blaming Delta for my bad email experience, because the flight number update emails actually came from Expedia. Which makes it even worse — Expedia is primarily an internet company, and should be a leader in harnessing the power of the internet to deliver a good customer experience.

    Of course, Delta is still responsible for changing the flight numbers in the first place :-)

  17. Margaret Nahmias says:

    I think special needs or height requirement would be wonderful to assist in help a person find the right seat in advance. However, if you include personal information there is always a possibility of discrimination.

  18. Margaret Nahmias says:

    Whatever happened to common coutresy and intitative?

  19. CF says:

    > I think Brett misses this point wildly. This is not
    > about crying about being charged by baggage fees or
    > drinks… it is about the thoughtlessness that goes into
    > the decision to charge for baggage and charging for
    > drinks. It has an impact of fliers. We can debate
    > whether it should or not. Or we can be grown up and
    > recognize that it is the reality of business- decisions
    > impact a customer experience and that impact can result
    > in a change in behavior that may OR may not benefit a
    > company.

    You automatically assume that it has a negative impact on fliers when that’s not necessarily the case. I would argue that you’re the one thinking inside the box here, because not charging fees is the way it’s always been. That doesn’t mean it’s the right way to go.

    What about the person who doesn’t want to check a bag? Why should he have to pay a fare that includes that checked bag if he won’t use it? The same thing goes for almost any fee. As I’ve said, the problem here is that airlines need to make it easier to pay the fee up front if you want that product or service, and if you want an “all-in” fare, you should be able to pay for that as well. This type of structure allows people to pick and choose what they want, and there’s nothing wrong with that idea at all. Some people will prefer it, and more will like it once they get used to the idea.

    > I fly to the tune of $20,000+ a year and no longer have
    > a preferred carrier. Is it wise for a carrier to
    > understand me and my needs in order to better compete
    > for my dollars?

    Before airlines actually try to understand your needs, they need to figure out who actually is a good customer. You may spend $20,000 a year but that might be full of $200 cross country flights. On the other hand, someone else may spend $20,000 a year on two flights in First Class. Who is a better customer for the airline? The latter, because that’s a profitable customer. The airlines don’t even know how to decide if someone is a good customer or not, and that makes it very hard to justify working to serve their needs.

    Once they do that, then they absolutely should be making a better effort to learn about and recognize the needs of their best customers to keep them coming back. We have no argument there, and if someone is truly a good, profitable customer for the airline, then maybe they do want to make sure that you get an exit row because you’re tall. But first they need to figure out what it means to be a good customer.

    > Finally, Brett and I both recognize that change is
    > hard. But hard does not equate with should not do it.
    > My experience is that significant change within an
    > industry comes from those outside the industry. Did the
    > music industry create music downloads and MP3 players?
    > Did video rental stores create rental by mail or VOD?
    > No, Apple and Netflix did. Experience within an
    > industry, while making us clearly more knowledgeable
    > overall, too often prevents one from being able to see
    > outside of their experience.

    Ok, so if this is the case, then why hasn’t it happened in the airline industry yet? Consumer behavior shows that it’s insanely difficult to start a successful airline. Think about it. What was the last true success that started from scratch? JetBlue. Was it successful because it had TVs and it was cool? Despite popular belief, the answer is no. It was successful because it scored itself a huge number of slots at JFK and was able to create a strong niche in the largest market in the US before competitors could take it down. The TV was a great marketing piece, and now the legacy carriers have started to adopt it as well, but it hardly guaranteed JetBlue’s success.

    Look at most of the other airlines that have tried to come in and do something different. It hasn’t caught on. You can look at Virgin America now for a good example. They’ve got televisions, on demand food ordering, a sensible frequent flier program, and more. But they’re already on their third round of funding and clearly running through cash quickly. Why aren’t people catching on? Because they tend to fly based on price and schedule, and they are addicted to their mileage programs. Time and time again, we’ve seen new airlines come in to being, slash fares, and watch the legacy carrier match. What happens? People flock to the legacy carrier to get those low fares and then complain when they go up after the new carrier goes under.

    There have been airlines like Eos that treated their customers like kings and received rave reviews, but they could never make it work out economically and they folded. If people were willing to pay a hefty premium for this type of service, an airline like that could have survived.

    The reality is that starting an airline and succeeding is something that rarely happens. Now that many airlines are moving toward the fee-based structure, it does leave open a hole for someone (besides Southwest) to try to move in and create an all-in experience with excellent customer service. But unless they can match price and schedule of the other airlines, they aren’t going to succeed. And that can’t happen without massive capital to purchase a huge fleet of airplanes, access to airports, and a willing competition to allow them get started without pressure. That’s not going to happen.

    We’ve seen the big, successful pioneers of the past go down in flames, but that was due to a fundamental shift in the way the industry operated. Deregulation made all airlines adapt, and the old line guys weren’t able to do it so they failed. Even then, very few upstarts actually succeeded. It was the more nimble traditional carriers that stepped up and filled the void. Southwest was the biggest exception to this rule, and they came up with a fantastic model that had never been tried before. They kept their costs low and succeeded at a time when others didn’t know how to compete.

    I think it will take something completely radical, like teleportation, to allow a new carrier to come in and really make an impact today. Ok, maybe teleportation is a bit extreme, but you get my point. Just offering better customer service is not going to be enough to change behavior, IMHO. Please prove me wrong, because it would certainly make for a more pleasant experience!

  20. Ron,
    I said customer operations – not marketing…

    At far too many companies IT departments are tools, and act like such. (Nothing derogatory, they get asked to do something by another department and they do it.) The problem is the people who ask them to do something don’t think at the level of detail that the IT folks need to actually make something intelligible.

    I think airline emails should be managed by a department that sits under the same umbrella and very close to the call center folks. Let me give you an example:
    I recently got an award ticket from JetBlue – unlike other airlines their award tickets are awarded online then you have one year to redeem them. So online and in the email it said I had until October 25th to redeem them.

    I decided during the week of October 25th where I was going to fly, but on October 24th I was tired and though I’d redeem the ticket online on the next day.

    I attempted to redeem it and the award was gone!

    I called and had them book the award for me, and by the sounds of it they do this a descent amount. The supervisor who took the call said the expiration date/time was October 25th at 12:01 am!

    So because whoever designed the actual site didn’t think in usability and from a customer’s perspective they’re generating expensive phone calls.

    Its not the IT guy’s job to set that up properly, its the Customer Operations’ folks job to properly describe the needs to the IT guy. The fix for my problem is likely about four hours of coding, which would have a pretty high ROI..

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