How to destroy your airline

[AlbieF15]

Gumby,

My point is that the current poor customer service will be the death knell for some majors, even when those customers return. In the past, when faced with a choice between an upstart (Peoples Express) or a major (USAIR), the customer could expect that on the major they would have a higher level of customer service, a "classier" aircraft with a more comfortable seat, and good CSAs who helped if/when flights were delayed, bags were lost, etc.

Fast forward to 2002. Jetblue offers a lower fare than many majors (but not always the LOWEST fare). When you get a last minute notification of a business trip, you don't feel like you are "raped" when you pay the walk up fare. The planes are new, the seats are gucci, the TV has 24 channels,the FAs are friendly and helpful, and when (RARELY) something goes wrong, the CSAs are the best in the industry at trying to make it right. My favorite story...a guy loses a baby stroller somewhere between boarding and deplaning...it got sent to the wrong spot vice to the jetway at the arriving aiport. He got angry, then caught himself and said "Oh well...this is JETBLUE...I know you didn't do it on purpose.." In other words, the repuation and product is so good, customers will give them the benefit of the doubt when, in rare cases, things go wrong. Compare that with "oh...they cancelled my flight again..must not have been full..." cynicism that I heard in DFW two nights ago and often hear in ATL.

Compare that to the Delta/ASA act. Delta still appears to try hard, but cost cutting (grab your "sky deli" sandwich bag on the jetway) and the horrendous reputation of ASA for poor customer service (lost bags--cancelled flights--indifferent CSAs)mean the whole experience is WORSE than the "upstart". Instead of spending MORE time and effort on customer service in lean times, the majors have got it backwards. There is no incentive right now except for frequent flyer programs for pax to travel on AA, DAL, or UAL instead of Air Tran, JetBlue, and Frontier. SWA is a "cheap seat", and don't compete on service. However--the other 3 "low cost" carries provide a better product these days, IMHO. The gal bumped in DAL from her PNS trip specifically mentioned she had flown Frontier recently, and mentioned how nice it was. She didn't say "it was cheaper", or "I saved 50 bucks.."--she mentioned the SERVICE. A good ticket price will get someone to try your airline, but good customer service will keep them coming back. Jetblue and AirTran have grown tremendously based on those ideas. I get the idea ASA survives simply because "they are what we got at our airport...". The DAY that AirTran or JetBlue show up in an ASA city is the day Delta is starting to lose that market. That won't happen in some markets, because a 150 seat Airbus or an 717 may still be too big for some markets. However--time and growth will gradually reduce the number of those small, regional only enclaves. Unless there is a fundamental change in ops, when faced with a choice there are a bunch of angry customers that are GONE.

As for the wage/scope issues--I'm not an expert. All I know is that product verses product, most days, JetBlue and AirTran offer a superior traveling experience. As their routes expand, they will grow at the expense of other carriers. I think they could raise prices and payscales (which they won't--at least for a while) and still whip up on majors in some markets. The fix isn't in the hands of the pilots--its at the CEO, marketing, and human resource department. I've seen a lot of angst on these boards about "why does SWA/JetBlue do such a detailed background check?" The answer is simple--they don't want jerks in contact with their paying pax. The majors could take a lesson or two from that attitude.

 

[Rick1128]

Gumby

From what I am seeing, I believe your comment about corporate aviation is off the mark. While several company flight departments have either downsized or shutdown completely, many more are upgrading or adding equipment. And other departments are starting. Some, like my previous corporate employer, are restarting their flight departments. After 9/11 there have been a lot of first time corporate operators starting up. In jets and I don't mean CE500's or LR20's. I mean Hawkers, CE650's, etc. It is an interesting trend. And I believe it will continue as long as airline service continues the way it is and the airports treat the people who really pay the airlines' way (business travelers) like dangerous criminals and terrorists. And they will travel whatever way is most comfortable and convenent for them.

 

[Gumbydammit]

Albie,
I agree that the PRODUCT itself is far superior at JBLU and AirTran and even probably SWA because of the reasons you mentioned, but I think EVENTUALLY the majors will come around and be back in the mix. Like I said, we are a long ways away from a fix here....much has to happen that will not happen for awhile...we need a "come to Jesus" so to speak in a big way. However, how much business do you think Delta will lose to these folks before they start digging their heels in and playing hardball? I'm not sure they have the right answer right now (RJ's just aren't a better product), but I think they eventually will compete and offer the service people expect...they will eventually solve the problems of surly employees and wasteful business practices. In the end they can give the corporate customer what the startups can't give them and that is one-stop (not nonstop like my previous post) shopping for their travel needs and the coveted frequent flyer miles everyone wants. You were a military guy...how much did it suck going commercial on a different carrier everywhere you went? The corporate/government travel money will be back eventually and the fractionals are just not practical for one or two people going to a sales conference somewhere. On that note...Rick does have a good point...corporate flight departments will continue to grow and pick up business. All it takes is an experience like Huck was talking about to convince anyone of that...a first class and pleasant flying experience is a misnomer nowadays...these airport security guys are IDIOTS. Who the he11 makes a lady drink her breast milk?!?! Cr@p like that will eventually stop for the most part....sanity will (hopefully) return here and someone will finally realize that frisking the pilot flying the plane who can kill everyone on board anytime he wants is probably not helping. In the meantime, I agree the fractionals will grow as a result, but much of the time they just aren't PRACTICAL. How can a corporate flight department justify spending thousands to move two people to their sales meeting somewhere on their corporate jet when they could just send both on a commercial ticket for less than a grand? The market is there...it's just cyclical and the recession with all the other factors is kicking the crap out of the big 5. Once the shakeout happens, pay will freeze or retract, and those left will either pick it up or pack it up once they realize that the customer is what puts food on the table. For us now though, the big 5 just aren't an option and probably won't be for a few years, but we've all got to realize that it will all come back around sooner or later...probably not quite like it was, but not too far off either.

 

[HA25]

Albie15, I agree with 99% of what you are saying. I did a post some two months ago about the state of "customer service" at the majors, and the nature of F/A's and gate agents today vs the "old days" when they were young peope who were excited about their job. The unions have destroyed them.

I belive in pilots unions, but sorry, I don't think that F/A's and other employee groups (less the mechanics) need unions. But we are stuck with them, like it or not.

 

[Shag_McNasty]

How can a corporate flight department justify spending thousands to move two people to their sales meeting somewhere on their corporate jet when they could just send both on a commercial ticket for less than a grand?

We do it every day! We'll even do it for one passenger. We'll even fly empty to Europe, pick up one or two pax, and fly them back to the U.S. The justification is safety, security and convenience.

 

[AlbieF15]

Divide a 6 or 7 figure income by number of days a work per year. Now do the math with corporate aviation allowing 1 mtg per 1 day, or airline allowing 1 mtg per 3 days (ie...tue travel, wed mtg, thurs travel) and you see the math. Even a Beech Baron for a small company amortized over 10 years can make sense if you price in ASA ticket prices ($600 walk up fares for PFN to Savannah, for instance)

You don't have to take my word for it--ask the corporate guys "how's business?". The fractionals allow corporations who could not justify owning a citation or lear outright the option to cost share with other companies (sort of like a GA partnership....haven't you seen the adds for 1/3 interest in Mooney 201, etc). Throw in a lifeguard or Make a Wish flight every once in while for good PR and altruistic purposes, and the whole thing isn't nearly as "offensive" to stockholders and the general public as it might have been a few years ago. Corporate aviation isn't just a luxury...its generally a pretty cost effective way to do business when you factor in the other benefits.

Yes...there have been abuses in the past. However...9/11 allows companies to tell stockholders with a straight face why it is to their advantage to avoid airline travel.

 

[Shag_McNasty]

Albie,

Well said. Yes, business is good on the corporate side. Just ask Falcon Capt. I think I heard him say his company has cut 50,000 jobs over the last year, but yet he still has a job. A few years ago he would have been the first one out the door.

Mike,

The answer to your question is yes, only top level execs travel alone. Mid to low level execs typically travel in groups of 4 or more to make it more cost effective.

 

[LJDRVR]

Albie is correct. Not only has on-demand 135 charter been on the rise since September 11th, I hear a new refrain from our charter customers that I didn't hear before. Many of my pax recount their "customer service horror stories" on the scheduled carriers, and tell me they try to stay away from the airlines as much as possible. I seem to hear these all the time now. I can think of several customers I fly on a regular basis now that are begining to use charter more frequently.

Of course these people can afford to "vote with their feet." The vast majority of the travelling public can't afford to ride in a private jet. These masses though, are having the same less than wonderful experiences that I hear about from my passengers. Some major airlines, in a post deregulation cost-cutting frenzy, have alienated legions of previously loyal customers. I like how Gordon Bethune put is in his book:

How running an airline is like making pizza

Say you're running a pizza place and your boss says, "the only way we're going to be a successful pizza place and get customers and make money and win is to make a cheaper pizza," What are you going to do? If you want to win, if you want to be rewarded by your boss, You're going to keep trying to make a cheaper pizza. You're going to make thinner and thinner crusts to save on flour. You're going to use less and less sauce to save on tomatoes. You'll buy canned vegatables rather than fresh. You'll buy frozen meat instead of fresh.

Sooner or later somebody's going to get the bright idea to take half the cheese off, or all the cheese off and make the pizza out of cardboard. Well, you can make a pizza so cheap nobody wants to eat it.....So, you're going to be making these incedibly cheap pizzas, and the people in the cost department and the people in the supply department are going to be hapyy and high-fiving each other. They'll be saying, "We're winning back here!" And meanwhile up front, where the orders have dried up and the customers are complaining and no pizzas are selling, you're not winning at all. In the end it's like a canoe-the back end can't be winning while the front end is sinking. If any part of the canoe is sinking, nobody cares how good the rest of the canoe is doing, because the whole thing is going to sink.
(Bethune 1998)

This may be an overly simplistic and trite metaphor for part of what's ailing our industry, (CAL is hurting too.) but I think it illustrates the approach some of our leaders have taken to our product.

I really do think Albie is correct in identifying customer service as the key. Until we all realize the importance of CS, there will be no meaningful recovery.

 

[Caveman]

I agree that improving customer service is the single best answer to getting people flying again because it directly counteracts the two primary reasons people aren't flying: cost and security hassles.

Until we get some common sense back into the equation security will continue to be a joke and ineffective. In other words there isn't anything in the short run that we can do to combat the security hassle other than kill them with kindness in all other aspects of their flight. Bad security notwithstanding, that should be the goal regardless. Happy customers are repeat customers.

I disagree that JB and AirTran are winning the war mainly because of customer service. Anyway you slice it their labor costs are significantly less than the big 5 or 6. While JB or AirTran may have slightly higher fares in a few markets, across the board it cost less to buy a ticket on them. Ask Joe 6 pack what is the predominant factor on which they base an airline purchase. I'll bet the farm that the overwhelming majority will say ticket prices.

 

[Clownpilot]

Oh my God

All you mental midgets who think they have the entire airline industry figured out just SHUT THE HILL UP. The guys running the shows are waaaaaaaaaay smarter than any of you and they know that the key to survival is to find the current way to compete in a down economic cycle. As soon as the economy goes on the upswing again they will go back to many of the policies and programs they had before and will be raking in the cash again as they were before. Don't get pissed cuz the current climate has you stuck at a package carrier or crappy regional airline. Thats the way the ball bounces. You just came up on the short end of the stick and now you want the major guys who got your dream job to suffer as you do. Well, too bad. This is temporary the industry WILL recover. Jetblue MIGHT survive. And none of you have the faintest idea how to run or compete in the airline industry but you sure do like hearing yourselves talk and patting each other on the back about how right you all are in your assessments. If you were right, you'd be running the show not them. Go back to your sad little lives and stick to things like tic tac toe and beer drinking. You know, stuff you can comprehend.