Friday, July 24, 2009

Airlines as a Business

This past week I had the pleasure of attending the High TECC Summit in Vail, Colorado. Then I had the displeasure of flying American Airlines back.

I mention American Airlines only because this was a specific flight, but my thinking here applies to all airlines and the industry as a whole.

Years ago I adopted the attitude that once I entered the airport everything about my trip was out of my hands. I took the attitude that I would never expect to arrive on time anywhere and only moderately expected to live.

This week I found I could no longer stay so emotionally unattached.

The flight from Denver to Dallas was delayed, but since I had two hours before my connection to my flight to RDU I had no issue.

We boarded on time for the RDU leg. I thought things were looking up.

Then we sat. And sat. And sat.

There were no weather problems. No mechanical problems. We were good to go. But we sat.

Finally the Captain told us we were waiting for about 15 folks on a flight that was late from San Francisco. He said it would be about 10 or 15 minutes.

I was OK with that. American has held flights for me for that long and I appreciated it. Plus, that much of a delay in departure is always easy to make up by flying faster.

We sat for 1 hour and 20 minutes.

So here is what American Airlines did - to make 15 customers happy they disappointed 60 customers.

No wonder they have money problems.

So I started thinking about this issue. I mean I don't think the folks at American are stupid. I do think they have lived in the airline culture so long they don't even see alternatives. Well, I do, so here they are for what they are worth.

Here is my quick list of public transportation industries:

  1. Airlines
  2. Buses
  3. Ferries
  4. Trains

Only airlines has this constant problem with on time.

I admit weather has a larger impact on airlines. But that is not the major cause of delays in my personal experience of 40 years of flying commercially.

The major cause may be overbooking of airport access - maybe.

Regardless here is my thinking.

I would be glad to pay a 50% surcharge for an airline that absolutely guaranteed on time departure. If I am late the doors are closed. Trains, buses and ferries do this all the time. Heck, it is the norm.

If the airport is closed, I will accept the delay.

But if the airport is busy I want my flight to have priority access to departure. The airline should pay more to the airport for this access - maybe 50% more.

I rarely fly first class because you still are on the same plane that was not on time. That is of almost no value to me.

I would always fly guaranteed on time. That is of great value to me and I will happily pay for it.

Plus, guaranteed on time is a true marketing differentiator. I have been in sales and marketing all my life. I could sell that difference in a heart beat.

I would also want a financial penalty to apply to the airline if it did not leave on time for any reason other than the airport being closed. Maybe a double my money back - and not crappy airline dollars but those real United States cash dollar bills kind of dollars.

So to recap, the airline increases it's cost, increases it's revenue, the airport increases it's revenue, I pay for a better value.

That is change I can believe in.

Oh, by the way - here is what American Airlines should have done.

They saw the options as making 15 people happy or making 60 people happy. They apparently never saw the option of making all the people happy. They should have let my flight leave on time and trotted out another plane and crew for the late crowd.

I can hear the hollering about the cost now. I can tell you for a certainty, the cost of providing terrible and inexcusable service to those of us who were held up for 1 hour and 20 minutes is many times the cost of the second plane and crew.

You can never save your way to growth and health. You have to make yourself worth more. I suppose the most common mission statement in the airline industry is "We are no worse than the other guy."

You reap what you sow.

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