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How to destroy your airline

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AlbieF15

F15 Ret/FDX/InterviewPrep
Joined
Nov 25, 2001
Posts
1,764
Aviators,

Just got done reading the AA thread, and it is getting hot in there. "Angry little troll", "idiot", etc. are being tossed around a bit too much as guys go back and forth--especially on the regional/mainline battle.

I'll offer 2 cents on what I see happening in my favorite Major down south...and the trend started well before 9/11. Then I'll offer a sad prediction of what I see happening next...

The issue of Major verses Regional has gotten a lot of press, so I won't beat it do death here. I will say that seeing an mainline MD-88 on the FLA panhandle is rare, and that the ATRs and RJs are the dominent airframe. We know that a mainline MD88 guy has gets paid more than those ATR/RJs, but I think there are issues that airline mgt is missing in their quest to cut costs, especially if your regional company's CSAs and flight management does not provide the level of service that customers expect for their money.

The interesting phenomenon that I see in ATL frequently, and saw again at DFW last night, is that when flights to several cities within 50-80 miles of each other are scheduled in the same bank, and there are a lot of empty seats on any one of the flight, one of the flights "breaks". Now--before anyone goes off on me making unbiased accusations, let me assure you the PERCEPTION of the paying customers in the lounge area is that this is a deliberate action. I have seen this happen so many times that is does give some credence to their suspicions. Regardless of the validity of the claim--many folks are upset and very suspicious of my favorite major's feeder/code share partner.

Frequently when this happens, the paying pax has 2-3 options.
*Accept going to original destination, often 12-24 hours later (saw this at DFW last night).
*Fly to nearby city (if seats available) and get bussed/taxied/shuttled to destination (painful at times)
*Say "h@ll with it" and drive (seen this several times in ATL

Common thread to all options--they are BAD and irritate the daylights out of paying pax. Angst, frustration, and a committment to NEVER fly said company again if at all possible develops.

Guys--we go back and forth here on the board about what a pilot is "worth" in wages, but if your company continues to alienate passengers, here is what will happen next.

First--your high dollar flyers, tired of security hassles, poor customer service, cancelled flights, etc. will gravitate towards fractionals, company planes, and charters when able. Although dollar for dollar airlines are cheaper, the company can justify its use of other options for both security and time management reasons. It can also consider such travel an incentive or perk for its frequent travelers, who probably consider avoiding airlines as a very attractive company benefit.

Next--your "backpack" and coach travelers just suffer. However--when competition shows up that offers good customer service, you can no longer win back your customers by "price matching" the new competition. JetBlue fares to MCO from JFK were MORE than Delta Express--but JB was full and making money while DE was bleeding with less than 3/4 full jets. Either company could have made money with good load factors--why was JBs so much higher? CUSTOMER SERVICE! You cannot continually p!ss in the coffee cup of even your "cheap seat" customers, and expect them not to notice. When given the alternative, they are GONE!

Don't believe it? In 2000 or 2001, the City of Pensacola gave Air Tran a million plus bonus or guarantee of some type to get them to move service from Ft Walton Beach (VPS) to Pensacola (PNS) in an effort to improve business travel to the area. When cities PAY you to start up there, you know the existing companies have generated some bad blood!

So...my 2002 prediction. My old favorite is going to continue to lose market share to Air Tran, JetBlue, and SWA (and Frontier if they compete in their neighborhood). And the issue is not just cost--it is attitude! While more and more flying goes to the regional connections, the poor customer service continues to alienate a larger and larger group. So when your city finally does get SWA, Air Tran, or JetBlue service, they will lose customers they can never get back. The brand loyalty they had in the 80s is dead--Generation X doesn't even know that (Southern Major) used to be the "customer service" airline...they look at them as the establishment. The upstarts that provide a smile, an honest answer, and actually seem to attempt to fly their timetables will develop the loyalty in the coming decade. Again--the 20-50 dollars difference in seat price may be enticing, but I know many customers in my area would pay $100 more to avoid headaches with the local regional.

So..the prediction? By 2008 (Southern Major)will no longer provide service to 30% of the cities it currently serves. It an attempt to cut costs, it will curtail flights in areas where it cannot maintain a yield justifying continued flights. Wages will be frozen, and in real terms go down at the current inflation rate. No significant mainline hiring will take place for 6 or more years. However, point to point expansion by Air Tran, Southwest, and JetBlue (in Florida) will fill the void and provide a higher level of customer options than are currently available.

Anyone who knows my background knows I hope I am wrong--but I don't see a lot of "light" for my old favorite at the moment.

Thoughts or rebuttals?
 
Last edited:
Sorry to say but I think you are right on target. You will not catch me betting any money against your predictions. Well thought out post.

KlingonLRDRVR
 
I believe AirTran got so much business in PCola that they upped the number of flights from 3 per day to 4 per day.
 
Albie:

Good post, very well said. I would say that you are slightly off in one area, that is pilot pay. USAirways just set the standard for that and it is for a large pay reduction. United will follow very shortly ( if they don't give at least 20 % they will go bankrupt ) then Delta and American will tumble. American not so much, as they never got the big pay raises that United, Delta and USAirways recently had. All of this happening and I still fly with captains that don't have the first clue about good customer service. We as pilots can have a positive impact on the customer service side just by doing little things like making good announcements; helping passengers where ever and when ever possible; and of course making a safe-smooth ( and I underline smooth ) flight.

Cheers,

Typhoonpilot
 
That is an excellent commentary and think you are on point with most of your observations.
AirTran has a guarantee (travel bank) in several smaller markets that allows us to move into that market with little or no risk financially. Basically the way it works is this - if we do not generate the required preset revenue expected or needed during a set period (1 or 2 years), we may submit a bill to the local chamber of commerce or city that is sponsoring the travel bank, for the balance of the revenue deficit. You are absolutely correct in your opinion that these particular cities have a serious axe to grind with the ticket prices of some of the majors (southern, northern or elsewhere). It is my opinion that the business models at most of the majors DOES NOT WORK, nor has it worked for the last 30 years.. as evident by predictable business cycles (hire like crazy... furlough like crazy). Their business models only work during good economic times, and rely on gouging business travelers for a bulk of the model dynamics. That is why I believe they are not necessarily THE place to hang my hat. Southwest Airlines... there is a model that works. Will their model always work... depends on if they are able to keep the same corporate culture that separates them from the pack.
 
Outstanding Post!

The flying public doesn't seem to want much except to get where they are going safely, cheaply, and in a timely manner.

Major Airlines answer to SWA and JB is to cut "frills" but they aren't copying what is making them really work. SWA keeps its airplanes in the air where they make money not on the ground where they don't. More importantly, their employees really seem to like what they are doing. Last several flights I've had on the Majors have all seemed that the pasengers were just in the way.

Thanks again.
 
I must add that the beefed up "security" must also be taking its toll. If a business executive had the option of a King Aire or Citation ride, with his rental car pulled up to the airstair and everyone polite and professional, versus taking off his belt and shoes for a mouth-breather with a minimum wage government job - he wouldn't care WHAT the cost was.

I just did a deadhead DSM- MEM - MOB, and had to take off my shoes and belt twice, and have my bags hand searched three times. All while in uniform. By the end of the day, I was doing something I rarely ever do - re-evaluating my career choices....
 
Huck,
I dont get it...you're at FDX, right...might this be the BEST place to be right now? Isn't the cargo flying the exception to the security hassles we see everywhere else? Say it aint so that even the cargo guys are getting fed up with all the monkey business!

Albie,
Great post...although I dont think things are quite so dire for the big boys right now. The "no frills" carriers are taking a chunk, but the main problem facing the big boys is the lack of DEMAND...killed by 9/11, the feds' mass buffoonery in airport security, and probably most of all, the economy. The excessive demand we experienced in the late 90's was wretched excess and it will take awhile to get back to those levels. Right now American businesses are cutting back everywhere to save money...IT budgets, travel, and other variable costs are the first to go because you can get by without them. Eventually the business traveler will return and he will want the traditional flexibility and benefits of the major airline...those that can take him anywhere in the world via an extensive route structure and codeshare agreements. Of course I doubt they will pay what they have been paying, but they WILL be back. Right now the industry needs consolidation and the feds are not helping with the bailouts. We need for free enterprise to work here and the strong players need to survive and the weak go away. There will always be the niche for the SWA's and the JBLU's but there will also always be the Merck's, the Pfizer's, the GE's, and the Coca Cola's out there that want the nonstop shopping for corporate travel. It may very well be a few years before it all comes back to normal and for those of us waiting to get on board, the wait may be too long, but it will all come back around. Service will return at the big boys and the feds will finally figure out that breast milk, while dull and unplatable, is not going to kill anyone...once a major player is allowed to fail. All the stupid feds with their stupid rules and policies and all the b*tchy FA's at the surviving airlines will finally get their sh*t together and realize that their life and jobs aint so bad and if they want to keep their jobs, they better start doing their jobs and doing them well....that's how the system works...and it does work. For us now though, the wait until they do get their sh*t in one sock will be painful while the poor guys on furlough and the poorer guys with no job at all sit and watch the process unfold. For the military guys, it may be time to think about orders for a couple years and for the civilians, God help you poor guys put up with just a couple more years on regional pay. It's a rough time for us now, but eventually things will all come around......

.......then again I could WAY off and we're all screwed.
 

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