Boyd's Hotflash on Regional Airlines this week

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Hot Flash -[FONT=Tahoma, Verdana, Lucida] March 19, 2007[/FONT]
[FONT=Tahoma, Ariel, Lucida]Customer Service "Downsourcing" -
Major Airlines Are Starting To See The Light[/FONT]​

[FONT=Tahoma, Ariel, Lucida]Over the past 15 years, major airline systems have increasingly subcontracted aircraft, crew time, and ground customer service handling from what some still mislabel as "regional airlines." [/FONT]
[FONT=Tahoma, Ariel, Lucida]While these entities were once independently-branded carriers, the majority today are simply in the business of selling lift and airport services under contract to major carriers. Generally, these companies make few decisions regarding where they operate, fares charged, or schedule. For the most part, they sell no seats to the general public. They are now just "Small Lift Providers," not "regional airlines." [/FONT]
[FONT=Tahoma, Ariel, Lucida]In effect, the business relationship isn't much different than other lease arrangements at major airlines. Delta leases aircraft from, say GECAS and ILFC, and it leases lift from Republic and SkyWest, too. The only real difference is that the latter two come with crews as well as airplanes. And increasingly, major airlines have also contracted out - "downsourced" - handling of their passengers at many airports to these SLPs, too. Where American or United once had their own people handling their passengers at Syracuse or at Charleston, today, those functions are often contracted out to one of their SLPs. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Saves lots of money. Maybe.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Cheap Customer Service Is Very Expensive[/FONT][FONT=Tahoma, Ariel, Lucida]. To be sure, replacing mainline, often unionized, agents and ramp people with lower-paid SLP new-hires represents an enormous reduction in cost. [/FONT]
[FONT=Tahoma, Ariel, Lucida]But major carriers are starting to find that in some cases it can be exorbitantly expensive.[/FONT]
[FONT=Tahoma, Ariel, Lucida]While some SLPs really do a superb job, the unfortunate fact is that in many cases this downsourcing simply tosses the airline’s passengers into a system that is staffed by low-paid kids who have not the training, the support, or the supervision to properly provide comprehensive customer service, particularly when things go off-schedule. [/FONT]
[FONT=Tahoma, Ariel, Lucida]The problem is compound - in some cases, SLPs generally don’t pay well, the training is minimal, and "customer service" gets translated into passengers too often being just processed by employees who have questionable skills to do the job. [/FONT]
[FONT=Tahoma, Ariel, Lucida]There are cases where the pay is so low that these SLPs cannot keep staff on the job more than a few months. The result is enormous customer dissatisfaction and lost future revenue for the major carrier. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Big Airports. Sometimes Really Small Service. It's not just at small airports, either. In some cases, the concourses at hubsite airports where major carriers have downsourced passenger handling to their SLPs resemble Ellis Island on a really bad day. Multiple flights going out of small hold areas never designed for this type of operation. There are semi-confused consumers standing around with no place to sit. For entertainment, they can sometimes hear the agents' squawking radios revealing the inner workings – or inner confusion – of the operation. "Where's the crew for 6108?... I dunno, I just got back from lunch..." Really professional stuff.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Paint The Walls? We Did That Back In The 70's. The SLP facilities at big airports are sometimes hand-me-down and clearly not a priority on the part of the major carrier. Passengers forced to schlep down filthy stairwells littered with trash, and then walk across a confused ramp often covered by the stuff that drips off airplanes and ground equipment. Then they leave their "carry-on" at the foot of the stairs, on the wet ramp, out in the rain, if they're not lucky. The whole show is almost intentionally second-rate.[/FONT]
[FONT=Tahoma, Ariel, Lucida]At smaller airports, the horror stories are legion. There are cases where passengers in line 29 minutes before departure of a 34-seat turboprop are routinely turned away because they are "late." Incidents where staff have no idea how to re-book a passenger due to weather cancellations. It is so bad that some communities are in danger of losing all air service, simply because the consumer base uses other airports, refusing to be abused locally by poorly trained airline employees. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Excuses, Excuses.[/FONT][FONT=Tahoma, Ariel, Lucida] One major airline executive became quite indignant when this was mentioned at an industry conference a few years ago... "These are separate companies, and we don't have control over them..." Goody, that means you're selling seats under your name and then doing a bait-and-switch by giving the customer downsourced service on what is, when there's a complaint, not your problem. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Not much has changed, either. Last December, two 70-seat United Express flights, full of United passengers, diverted to Cheyenne, Wyoming due to Denver International being closed by snow. United has no employees at Cheyenne. The airplane crew - who worked for the leasing entity, Shuttle America - ran out of time, and the passengers were left to their own devices to find hotels for the night.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Passengers were effectively stranded when the next day the two airplanes flew out empty. Not us, was one of United's excuses. "That's Shuttle America..." No, that's cut-and-run service, since none of these passengers booked a seat with Shuttle America, which was just the leasing company providing the planes. (Other stories on this incident include desperate passengers calling United reservations, only to get some clown in India who had no idea where Cheyenne was.)[/FONT]
[FONT=Tahoma, Ariel, Lucida]If You Can't Afford The Table Stakes... Or there's the excuse from the SLP side that might be made - "We can't afford to pay wages and benefits that will keep employees!" Okay, if that's the case your entire business is untenable... if you can't afford employees who can do the job, then you really need to go out of business, toute suite, and stop abusing consumers.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Light At The End of The Concourse.[/FONT][FONT=Tahoma, Ariel, Lucida] But this is not universal, and there are bright spots on the horizon. The poster-child for what airlines should be doing at hubs is Northwest. At both DTW and MSP, every SLP flight has a separate hold area, and in most cases, jetway boarding. From a facility standpoint, it is totally transparent with the rest of the Northwest operation. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Another bright sign is that Delta has apparently thrown in the towel and decided to take over what has been one of the most egregious long-term affronts to airline customer service – the ASA Concourse C operation at Atlanta. Probably the beneficial result of the SkyWest acquisition of ASA, Delta will install its own staff to handle its passengers. Small communities throughout the Deep South should be dancing in the streets. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Going forward, the trend is going to be major airlines demanding that the entities to which they sublease flying and customer service meet the same standards as the mainline carrier. This will be concurrent with the decline in the number of regional jets in operation, which is forecast to drop by almost 700 units by 2017. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Final point: airline profitability is a combination of costs and revenues. When significant parts of an airline's customer service delivery is sub-standard, both of these factors go in the wrong direction. [/FONT]
[FONT=Tahoma, Ariel, Lucida]Tightening up on SLP operations could result in a lot more black ink to the bottom line. Right now, in a lot of cases, it's driving business away.[/FONT]
[FONT=Tahoma, Ariel, Lucida]Bad service is an expense they cannot afford.[/FONT]

 

[xjlifer]

[FONT=Tahoma, Ariel, Lucida] The poster-child for what airlines should be doing at hubs is Northwest. At both DTW and MSP, every SLP flight has a separate hold area, and in most cases, jetway boarding. From a facility standpoint, it is totally transparent with the rest of the Northwest operation. [/FONT][FONT=Tahoma, Ariel, Lucida].[/FONT]​

Yep they have almost the same disdain for customers that big brother CSA's have.

Actually Boyd was pretty much spot on with this article.​

 

[DrewBlows]

Members of this forum like to give Boyd a hard time, but he's usually right on the money. This is the first time I've heard the term "small lift provider", it seems to more accurately describe what we call "regional airlines" since most are neither "regional" and some aren't even "airlines" in the classic sense.

 

[Soverytired]

I loved that article. Boyd has some pretty good stuff, and a very entertaining writing style (if a bit overly self promoting).

I read this and thought this is a pretty good description of Mesa . . . well, except Mesa loves high turnover, because it's "cheap".:

[FONT=Tahoma, Ariel, Lucida]"While some SLPs really do a superb job, the unfortunate fact is that in many cases this downsourcing simply tosses the airline’s passengers into a system that is staffed by low-paid kids who have not the training, the support, or the supervision to properly provide comprehensive customer service, particularly when things go off-schedule. [/FONT]
[FONT=Tahoma, Ariel, Lucida]The problem is compound - in some cases, SLPs generally don’t pay well, the training is minimal, and "customer service" gets translated into passengers too often being just processed by employees who have questionable skills to do the job. [/FONT]
[FONT=Tahoma, Ariel, Lucida]There are cases where the pay is so low that these SLPs cannot keep staff on the job more than a few months. The result is enormous customer dissatisfaction and lost future revenue for the major carrier. "

[/FONT][FONT=Tahoma, Ariel, Lucida]"Or there's the excuse from the SLP side that might be made - "We can't afford to pay wages and benefits that will keep employees!" Okay, if that's the case your entire business is untenable... if you can't afford employees who can do the job, then you really need to go out of business, toute suite, and stop abusing consumers."[/FONT]

 

[CFI2766]

I don't know who Boyd is, but great insight.

(sigh...)

It might as well have been written in a foreign language that management can not understand. The concept of investing more in employees to help the bottom line on the company's income statement became obsolete with the advent of online ticket reservation systems that allowed the general public access to "SUPER LOW FARES". That evil genie can not be put back into the bottle.

This concept is why WAL MART is grossly successful, even after Sam Walton passed away and the company's emphasis on customer service took a back burner to "SUPER LOW PRICES". Anyone remember what Wally-World was like before Mr. Walton passed away? If you had any problem with any product or service you bought at Wal-Mart, you took the issue to the customer service desk and a refund was made, right there on the spot, receipt or not. Customer service was seen as a way to keep customers, not as an item that impacted the financials. This is no longer the case at Wal-Mart. For emphasis, buy something at Wal Mart and attempt to get a refund, both with and with out a receipt. 'In store credit' will likely be the solution of the day.

Back to the airline business: Let's talk about my employer. I fly an ATR for a 'regional' carrier based in Atlanta. As an example, let's discuss a morning flight I recently had from Macon to Atlanta. The airplane was supposed to have a maintenance issue fixed while in Macon during our overnight. It did not. The next morning, as the passengers are now boarded and waiting in the back, the maintenance issue raised its head as not being fixed. (For those curious, it was related to the prop brake not working.) The flight was over an hour late, and by the time we taxied into the morass of ramp 4 on an earling morning, we were almost two hours later than scheduled into the gate.

I don't know this, but I strongly suspect that the passengers, no, customers, on that flight missed some of their connections. At the very least, I strongly suspect that between my airline and the major entity that we provide lift for, there was very little done to make this situation 'right' to our inconvenienced customers.

This will be an unpopular observation on a forum focused directly at the pilots of regional airliners, but there was very little that either my employer or their major business partner could do about the situation. To compensate the people who were clearly inconvenienced by our companies' (both my regional who didn't get the aircraft fixed, and the mainline carrier that created the schedule) lack of competence would make impossible the low fares that initially drew our customer to begin with. To pay people 'enough' (I don't know what that amount might be, but I'm definately not seeing it being direct deposited in my checking account every two weeks) to provide the best possible customer service would also make impossible the ability of the airline to provide the "SUPER LOW FARES" that the flying public clearly has demonstrated a strong demand for.

I'd like to see Mr. Boyd write an article about that.

 

[Texx]

Members of this forum like to give Boyd a hard time, but he's usually right on the money. This is the first time I've heard the term "small lift provider", it seems to more accurately describe what we call "regional airlines" since most are neither "regional" and some aren't even "airlines" in the classic sense.

>>....Another bright sign is that Delta has apparently thrown in the towel and decided to take over what has been one of the most egregious long-term affronts to airline customer service – the ASA Concourse C operation at Atlanta. Probably the beneficial result of the SkyWest acquisition of ASA, Delta will install its own staff to handle its passengers. Small communities throughout the Deep South should be dancing in the streets.<<<<

Boyd fails to tell the whole story.

DAL bought ASA in 1998 and sold it to Skywest INC in 2005. During these years, DAL management was in "direct" control of the ASA operation but "failed" to correct these problems. The same problems that DAL bought ASA for in the first place.

Boyd is not god. Most smart pilots had already figured out what he puts into print.

 

[Flyer1015]

Boyd's Hotflash on Regional Airlines this week

Is Boyd having hotflashes, again?

 

[USC328]

I don't know who Boyd is, but great insight.

(sigh...)


For emphasis, buy something at Wal Mart and attempt to get a refund, both with and with out a receipt. 'In store credit' will likely be the solution of the day.

CFI2766,

This post is neither for or against your argument. However, it's just a tip in case you try to return something at Wal-Mart. I can unfortunately say I spent 3 years of my life working there at the Service Desk within the past decade. (No, not as a first year regional FO, I APPLIED!!, but they wouldn't hire me back. My availability wasn't good enough Anyways, if you get a store credit, it's usually a gift card. (At least it was at my store in Denver.) Most people don't know this, but you can cash out your gift card at anytime. I did it all the time when I needed cash. I bought a gift card with my credit card. Then I went to the service desk and cashed it out so I could get some food at the local golden arches. (Before they accepted credit cards) Hope this helps you on your Wal-Mart return adventures. OR...Just tell them you want a manager. They override EVERYTHING, even copyright return laws and Wal-Mart policies on CD and Video returns.

Another tip. If you return without a receipt over $10 in value, they want your driver's license to track your return history. Only 3 returns without a receipt was the policy. Yet, to validate my management overriding argument, I had a customer give me his license...42 returns on his record.. 39 were overridden by management. There are ways to get what you want done. Hope that helps

 

[CFI2766]

Well, thanks for the insight from the other side of the desk. As I'm sure you could tell from my long, rambling post, I meant no disrespect to Wal-Mart.

(I worked a customer service desk at a K-Mart in El Paso, TX, the day after Christmas of '93. This particular K-Mart was located close to a major border crossing from Juarez, Mexico. I've had some long days in each of the jobs that I've had, but that particular day was the longest of my life. 16 hours of "No, we can't give you a complete full refund like Wal-Mart does...how 'bout a nice exchange?")

I don't know the answer for Mr. Boyd, other than to have a disclaimer etched into the passenger seat backs along the lines of "Hey, don't complain, you get what you pay for..."

 

[atrdriver]

This will be an unpopular observation on a forum focused directly at the pilots of regional airliners, but there was very little that either my employer or their major business partner could do about the situation. To compensate the people who were clearly inconvenienced by our companies' (both my regional who didn't get the aircraft fixed, and the mainline carrier that created the schedule) lack of competence would make impossible the low fares that initially drew our customer to begin with.

Yes, there is something that could have been done. Maintenance could have fixed the problem in the first place, and given you a good aircraft to start the day. I can't tell you how many times I left an ATR in Macon and ended up either with the same things broken on it the next morning, or just flat has to ride Groom back to ATL when they couldn't even get it out of the hanger. Low fares are the rule of the day. How low those fares go, however, is up to the airlines. They are so afraid to raise ticket prices because they are convinced that they will lose passengers. I would argue that maybe someone on a transcon $69 one way fare might be someone you WANT to lose.

 

[BAT31]

Unfortunately, Boyd is right on with this one.

After putting up with this kind of customer service for a few years, I am happy to say that I don't work for a regional anymore. I didn't move on to a major, nope. I just got smart and quit.

One of the worst times was a day in August in Atlanta a few years ago. APU was dead, no air cart, the EMB120 was hot as heck. Ofcourse we had passengers on the plane. As we were waiting for something, an older lady was literally about to pass out. As the captain slumped in her chair and looked out the window, I got up and personally apologized profusely. But it didn't matter. There was nothing I could do. At that moment, I realized who I was working for. I just did not want to be associated with that kind of customer service.

And that is what you get for those payrates. I really do hope that every commuter airline goes out of business. They are horrible places for passengers and workers. Ofcourse, ticket prices will go up, but so be it. I guess consumers get what they want and bright-eyed airline pilot wanna-be's get what they want.

Good luck to my friends at ASA, you're going to need it.