There really does come a time when, as a pair of trains are getting close to each other and picking up speed, that you know you should turn away, or at least wince meaningfully, in anticipation of the crash and explosion of flames and flying metal that you know is just moments away. You know you should, a part of you wants to, but you cannot turn away.
That is the feeling that I have these days as I watch the airline industry. There they are, flying along with absolute, reckless abandon and it is just a matter of time before they hit something. I am not sure what they will hit-reregulation, economic reality, unlooked-for competition from upstart airship companies-but I do know that when they hit it, it will be spectacular.
So what is fueling all this talk of crashing trains and dire predictions vis-à-vis the airlines? Two words: Customer Service.
Any good businessman understands one thing-if he understands nothing else-that customer service is vitally important to the continued survival of a company. In fact, ask any small business owner the secret of his success and the answer will usually have something to do with customer service. You can have the greatest product in the world, but if you don’t work on customer service-making the customer’s experience as good as it can be-then you are not going to sell very much. If a recent survey from the University of Michigan is correct, this seems to be a lesson lost on the majority of airline executives these days. In fact, with the lowest scores since 2001, this is the worst of three straight years of decline.
The worst in terms of customer satisfaction were United Airlines and US Airways, finishing next-to-last and last, respectively. Continental and US Airways had the largest overall decline with double digit percentage drops. At the other end of the spectrum, Southwest remained on top, a position it has enjoyed for the last 15 years.
The problem is about living up to expectations. According to Claes Fornell, a University of Michigan business professor and the director of the research center that compiled the data, “There’s no other industry anywhere that has so many basic mishaps in terms of not delivering the basics. They’re supposed to deliver passengers with their luggage to a particular destination within a certain timeframe, and they frequently fail to do that.”
Unhappiness with the airlines is nothing new, but the terrible results from this year’s survey have put the spotlight on management in spite of the problems of higher fuel prices, crowded airports and other factors that are legitimately out of their control.
The Low-cost Business Model
Unlike many other goods and services, airline passengers shop primarily according to price. This leads to a business model where cost-cutting to allow reduced fares is simply more practical than a model that supports improvements in service and amenities that would help justify more realistic ticket prices. While this may seem like a case of blaming the victim, one must remember that the airlines are very sensitive to why people fly on certain flights and carriers and why they don’t and the choice usually comes down to price. However, while this may be the seed of the problem, it does not excuse airline management for some terrible lapses that have made the existing systemic problems worse.
Fees, Fees and More Fees
The airlines have learned that cut-throat price-cutting on tickets often means that the throat being cut is their own. After all, you do reach a point of diminishing returns and you have to make up lost income somewhere else. There are two ways of doing that: honestly and openly or under the table. In-flight meals were curtailed on many flights and soon other amenities either vanished or were assigned fees (remember when you got your earphones for free?). Once those things happened and the pressure of unrealistically low airfares was not eased, under the table tactics was the way the airline executives chose to go. This explains why such a big part of the outrage that travelers are feeling toward the airline industry comes from the hidden cost of travel, the unadvertised fees that take the bloom off the bargain ticket prices. Aviation.com and airfarewatchdog.com worked together to come up with the “Top 10 Most Obnoxious Hidden Airline Fees.” According to the results on Aviation.com, they include:
10. Making a reservation on the phone or in person. Fee: $5-$20. US Airways is among the greediest on this count: $10 to book over the phone, or $20 to book at the airport or at a city ticket office (if you can find one). Can it possibly cost US Airways that much for a simple 10-minute call? Surely the airline doesn’t pay its reservationists that much. United levies $15 for the privilege of speaking to a human. American, JetBlue, and Southwest $10 (for internet-only fares in Southwest’s case, but we’re told Southwest does make exceptions). Northwest and Virgin America charge just $5.
9. Cashing in frequent flyer miles without sufficient advance notice. Fee: $0-100. Who says frequent flyer tickets are free? Some airlines will let you book a frequent-flyer seat even up to the day of travel with no fee. These include Airtran, JetBlue, Northwest and Southwest. But others (Continental, Delta, and United) charge $75 if you book without enough notice (defined as 3 days on Continental but an unreasonable 22 days on Delta); and American charges an insane $100 if you book 6 days or fewer before departure.
8. Bringing a pet onboard in the cabin. Fee: $50-85 (each way). These fees have skyrocketed lately. Muffy and Buffy won’t be ringing the call button for a glass of milk, and they won’t be carrying bags or imposing on the airline’s bottom line in any way; but their fare might end up costing more than yours. Most airlines now charge $80 each way. On United you’ll pay $85, on JetBlue ‘just’ $50.
7. Re-banking frequent flyer miles. Fee: $50-100. If you cash in your miles and decide not to use your ticket, you’ll be hit with a fee to place the miles back into your account. Why? What cost exactly is involved here on the airlines’ part? These tickets are issued electronically, so what’s the big deal?
6. Checking luggage. Fee: $3-$25 (each way). We’re talking here just about checking even one bag, even if they’re not oversized or overweight (that’s a whole other story). Spirit Airlines charges $5 for each of the first two bags if paid for online, $10 each otherwise. The third bag costs a whopping $100, more if it’s oversized or overweight. Skybus also charges $5 for the first two, and $50 for each additional. Allegiant charges $3 for the first, $5 for the second. Air Canada gives you a discount for not checking baggage, which is a sneaky way of charging you if you do. It’s not like the airlines are giving us bigger overhead bins, so that’s the big idea here? Don’t be surprised if you see other airlines following suit.
5. Getting a refund when a fare goes down. Fee: $25 to $200 or more. If you bought a TV from Costco or BestBuy and they lowered the price the following week, chances are you could get a refund, no questions asked. Even Apple gave credits when it dropped the price of its iPhone soon after launching it. But most airlines either will refund nothing (British Airways and most other international carriers) or they’ll charge an ‘administrative fee’ of up to $100 on a domestic ticket, and even more on an international one. What justifies this? Does it actually cost them $100 to spend a few minutes to rewrite your electronic ticket? I doubt it.
4. Flying standby on the same day of travel. Fee: $0-50. Time was, if there were empty seats on a later or earlier flight on the same day as your original, the airline would confirm you for free. But now, most airlines charge to take an earlier or later flight on the same day as your original flight if you want a confirmed seat (you can still take your chances on many airlines and standby without a confirmation for free, but that’s not the same thing). Only AirTran, among the larger airlines, charges no fee if you show up at the airport before your original departure and wish to take an earlier flight, or ask to change to a later departure. American, Continental, JetBlue, Northwest, and US Air charge $25; Delta (always the fee leader) and United sock you for $50. Southwest is a different animal altogether: there’s no fee to fly standby as such, but you’ll have to pay the ‘walk up’ last minute fare, which could be hundreds of dollars more than your original discount fare
3. Paying for lap children. Fee: $10 to 10 percent of the adult fare (international flights). What on earth is the meaning of this? Your kid isn’t taking up a seat, and certainly isn’t partaking of the free food and booze (if any). Is the little tyke responsible for consuming extra jet fuel? On a fare of say, $1,200, you’ll be billed $120 or more for the privilege of holding the child in your lap for 10 hours (on a business class fare of, say, $5,000 you’ll pay $500). Domestically, Skybus, never to miss the chance to line its pockets, charges a $10 ‘administrative fee’ for lap children. Is that to compensate for the oxygen your infant will be breathing during the flight? By the way, if there’s a fuel surcharge on your flight, your kiddie will pay that too: as much as $90 each way.
2. Getting a seat assignment. Fee: $5-$11 each way. Air Canada, AirTran and Allegiant are some of the carriers that now charge for this ‘perk.’ AirTran charges $5 if you’re on a discounted coach ticket; Allegiant charges $11. AirTran charges $15 if you want to grab an exit-row seat and Northwest recently upped the charge from $15 to $20 (but I still think it’s worth it).
1. Using the lavatory. Fee: OK, airlines are not installing pay toilets. Yet. But the way things are going…
Sure, that last may be a prediction, but it is not beyond the realm of possibility. Add these and other fees to the fact that the Airlines have, according to the U.S. Department of Transportation’s Inspector General, failed to live up to the commitments they made in 1999 to improve customer service-low fares, a decent level of service, treating people right-and you can see how customer satisfaction can take a real hit.
Crowds, Delays, and Maintenance Issues
It is a rare thing to see an empty terminal at a major airport in this country and it is a rarer thing these days to see an empty seat on an aircraft. Many airlines are cutting back on the number of flights they offer and stuffing their remaining flights to capacity. It goes back to the forces that drive airline tickets down: The less you charge per seat, the more seats you need to break even. This, of course, makes the flight experience, which was once such a luxury regardless of what class seat you had, into something more akin to pigs stuffed into a railcar. This trend has led to other problems as well, including delays for the additional luggage on each flight, lost bags and so forth.
One reason for these cutbacks is fuel, but there is another reason as well-maintenance. America’s airliners are not exactly new. Statistics from the U.S. Department of Transportation shows that the average age of a commercial aircraft in the U.S. is 11.7 years. That is the average. Some are considerably younger and others are much older. Older planes are not, in and of themselves dangerous, but they do tend to require more maintenance than newer aircraft. Consider that the modern airliner is, perhaps, the most complex machine ever built with numerous structures, systems and subsystems, most of which can have an effect of the airworthiness of the aircraft.
The major problem here was identified by Consumer Reports in their investigation entitled “An Accident Waiting to Happen?” which detailed the way major airlines were outsourcing more than half of their repair and maintenance activities, often to foreign repair stations. However, to make matters worse, they discovered that the FAA was relying on the airlines themselves to inspect the aircraft. That, and a very cozy relationship between the airlines and the FAA made for a dangerous situation for the flying public and an expensive problem for the airlines.
For example, on March 6, 2008, the FAA levied a record $10.2 million penalty against Southwest Airlines. The reason was maintenance failures. They had operated 46 aircraft without performing mandatory inspections on the fuselage for fatigue cracking. The FAA’s investigations found fatigue cracks in 6 of the 46 airplanes, which could have proven disastrous. Later, the FAA launched a review of Southwest’s maintenance practices. At the same time, Southwest grounded 41 airliners to verify that they had been inspected correctly in response to an “ambiguity related to required testing” that they had discovered. More recently, American Airlines and Delta inspected more than 400 of their respective aircraft, canceling more than 700 flights.
The Bottom Line: Resentment
Consider the following comment, found on consumerist.com:
Airlines seem to have been waging a war of attrition on the whole idea of customer service for the last 20 or 30 years. When it gets to the point that it’s less painful to take two days to drive across the country with all of horrors of inflated gas prices, fast food, nothing on the radio but Rush Limbaugh and country music, and the state of Nebraska, you know something is terribly, terribly wrong.
The author of this comment is right, there is something terribly wrong-not just with a single airline but with the entire industry and their captive audience, the flying public, is getting sick and tired of it. With every new cut or fee, the airlines cry “poverty” and yet United was one of the top 10 most profitable companies for the first quarter of 2008. The airlines (with the notable exception of Southwest) have, in their drive to squeeze every last dollar from their customers, forgotten that business is more than that. It is about building a mutually beneficial relationship with customers that keeps them coming back. There was once a time when people had brand-loyalty to airlines the way they had with cars and other products. You had people like my parents who would only fly United; others would only fly American, or Delta or Continental. Those days are gone.
What are you doing to keep your customers? How are you enhancing their experience and turning them from “one-timers” into repeat business? The lesson of the airlines, an industry that once enjoyed tremendous prestige and has now become one of the most despised, is that without a concerted effort to create repeat customers, to create a great customer experience, you soon change from being the solution to a problem to being the problem itself.
Which one would you like to be?