PROFIT, PROFIT, PROFIT . . . Service, Service, Service

baggage feesIt seems that, after banks, airlines have become the most hated companies for customers to deal with.  I’ll bet there is not one person reading this blog that hasn’t had multiple bad experiences with airlines; either at check-in, on the phone or internet, boarding or trying to unravel the mystery of lost luggage.

But what gets me about the airline industry is, they just don’t seem to have the desire to improve.  Oh, they rebrand (at a cost of millions; e.g.. American Airlines new logo and branding) but they don’t improve their customer service.  As if we are supposed to accept crappy service because the paint is new.

“We’ve changed our look on the outside to reflect the progress we’ve made on the inside, revealing our new logo and the refreshed exterior of our planes.”  quote from the American Airlines website

One of the issues I hear about most from airline travellers is the hidden charges that have sprung up over the past several years.  It seems that every function and department now is a profit centre (instead of a service centre).

It’s not just a simple ticket fee any more.  Now you have to pay an extra charge for baggage, then a fuel surcharge, many charge for seats, and of course the exorbitant ticket change charges. Some airlines even have an early-boarding charge, many now charge for meals (if you call those high carb snacks a meal), and a drinks charge.

So what’s next on their ever escalating search for more profit?  I wouldn’t be surprised if they begin charging for life vests. How about a charge for a seat belt? A charge for use of the lavatory? Next in line will be a toll charge for walking up and down the isles. Oh, and they could make some real money by charging for the air vent and to recline your seat!

Profit ahead of service seems to be the motto of most airlines today.  Their lame defence about all these charges is that the cost of fuel is so high they risk going out of business if they don’t have other revenue sources.  To me the real costs in the airline business are poor employee productivity, bloated management layers, exorbitant executive salaries, and poor teamwork.  “It’s not my department!” is the standard reply when asking an airline employee for help!

And recently at our summer Young Virtuosi Music Festival in the south of France we ran into a particularly onerous fee charging policy.  It seems that to take a musical instrument, like a violin or cello, on board the plane, you must by a separate seat ticket for it.  And since no one wants their precious instrument to go in the cargo hold (also known as a “trash compactor”), this is pretty much standard and grudgingly accepted by travelling musicians.  And of course it’s a full fare ticket, not a reduced ticket.

But here comes the best (or worst part) of the customer service equation.  You are not allowed to check any luggage on that instrument ticket!  In other words, you have standard baggage allowance for a passenger ticket, but no luggage allowance for a musical instrument ticket, even though you pay full fare!

Do they actually try to piss off customers on purpose, or is this just another example of a business run by accountants?   After all, customers or customer service isn’t a line item on the balance sheet so they must not be important.

Let me be very honest and just say that if any airline would let me take the violin and the laptop on board I would fly that airline all the time.  ~Lara St. John

United Airlines slogan used to be “Fly the Friendly Skies of United”, but they dropped that for “Let’s Fly Together”.  No service promise implied!

It’s tough being an airline customer! And expensive.

Tight Lines . . .

John R Childress

john@johnrchildress.com

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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3 Responses to PROFIT, PROFIT, PROFIT . . . Service, Service, Service

  1. Anonymous says:

    Yes, you’re right, John.

    Low cost airlines are no longing genuinely ‘low cost’ airlines but airlines with low headline fares and lots of (almost inescapable) price add-ons.

    We need to go back to the days of Freddie Laker, easyJet and possibly also Southwest Airlines (but I’ve only travelled with once Southwest and by then they weren’t exactly low-cost) to find examples of airlines really trying to lower the cost of flying and thereby expand the air travel market.

    One thing we can predict, with confidence, is eventually there will be new entrants into this market who believe they can make money from a low-cost proposition – albeit we might have to wait for another 20 years.

    Then, once these new aspirational entrant(s) join the industry, it will take less than 10 years for them either to go out of business (aka Laker) or to become higher cost providers (aka easyJet and Ryan Air).

    And so the merry-go-round of air travel continues to go round and round – seemingly oblivious of opportunities to improve customer loyalty (and hence future revenues) and to improve employee engagement (and hence outstanding organisational performance).

    In my experience, there is only one airline in the world that comes close to this aspiration, and this is Norwegian (see http://www.norwegian.com/uk/about-norwegian/our-company/.

    If anyone would like to experience what is possible in terms of low-cost flight travel, just book to fly with Norwegian.

    Their prices are low, it takes seconds to check in, your bags arrive at the other end, planes both take off and land on time, and their staff are really friendly – and they don’t impose stupid surcharges.

    Alan

    Like

  2. Raunak says:

    John, had an irritating experience last evening flying Indigo, a “low cost” airlines in India. Indigo’s branding exercise lays a lot of emphasis on On time arrival and departure. But, they’ve gone a little too overboard with it.
    I prefer boarding my flight in a relaxed manner. Exploring the various parts of the airport, window shopping and grabbing a bite are somethings I enjoy doing before I board the plane. I always set aside 15-20 minutes for this. However, last evening when I checked in at the airlines counter, the staff got all excited about how late I was (I was an hour before the flight!) and made me hurry with my check-in before rushing me through the security check.No sooner was I done with the security check than the staff at the boarding gate announced commencement of boarding and kept screaming in the mic urging all passengers to hurry. I rushed to the gate and boarded the flight only to find that the flight was half empty. I sat in the plane for 20 minutes cursing the airline as I saw other passengers trickle in slowly. I was pissed and am not gonna take that airline again!

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