I had the unfortunate experience of flying cross-country a couple of weekends ago and was struck by the utter demise of the airline industry. It has wholeheartedly embraced a culture of mediocrity and has been reduced to peddling a commodity.
Like so many industries who’ve failed to rise above the commoditization of their product or service, the airline industry – for the most part – has adopted a “red ocean” strategy of nickel and diming the public while reducing customer service. Somehow they think their customers are going along with their master plan like indifferent cattle.
In their persistent march towards alienating their market, airlines are inadvertently laying the groundwork for an alternate, “blue ocean” strategy to emerge. Instead of looking for ways to add value, elevate service, introduce new features, improve ease-of-use, and enhance convenience, airlines use antiquated aircraft (one of my flights actually had ashtrays in the arm rests!), follow out-dated systems, and impose ever-increasing rates, hoping no one will notice or object too loudly.
These are the last desperate acts of a dying industry. They perceive their industry to be a monopoly – immune from the forces of outside competition. Consequently, at a time when most companies are looking for ways to add value, attract untapped market segments, leverage social interaction and embrace technology, airlines have adopted a culture destined to fail.
This indifference to their customers by their front line, by their systems, by their pricing policies, by their amenities (or lack thereof), ensures that someone will come along, change the rules of the game, and displace them. Every industry has experienced this. Poor restaurants close every day as soon as better competition arrives. Retailers collapse as competition – better tuned in to the desires of their market – come upon the scene. And older technologies fall by the wayside, giving way to newer technologies better attuned to the needs of the market.
I may not be an expert in the airline industry, but one thing I know for sure. The time is coming for an upstart to create a refreshing new strategy, which will overtake the dinosaur that the airline industry has become. Maybe we should be thankful for the indifferent attitude of the airlines after all…
I spent the last 40 years of my life traveling on business and I saw this demise taking place the whole time. Everyone running an airline should fly on their airline. Their strategy seems to be “see who cracks first.” We should give some credit to Southwest Airways, a company that seems to understand how to treat customers and make money. All the others, except perhaps Virgin Atlantic, are sheep following the herd with no idea how to differentiate themselves or to create loyal customers. I experienced a corporate downsizing three years ago and am very thankful that I no longer have to regularly put up with rude gate agents, uncaring flight attendants and flight operations that are designed to favor only the airline due to unexplainable delays and cancellations. Anyone who thinks the airlines have a real business strategy has no idea how to manage a business.
Thanks for sharing your experiences with this, Gerald. It’s sad but true.
An impressive share! I’ve just forwarded this onto a friend who had been doing a little homework on this. And he in fact ordered me breakfast due to the fact that I stumbled upon it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanks for spending the time to discuss this matter here on your website.
You’re welcome!
Thank you for this much needed blog. You could not have said it any better. I wholeheartedly agree with your account of the airline industry. They would be wise to heed your advice or risk being stumped out by their competitors. I think the airlines would tremendously benefit from applying the emotional intelligence ideas and practices to improve relations with their customers.
Le
No question about it, Le. I’m a big advocate of EI.
I try to fly Southwest whenever I can – even if it means taking a “Direct” flight ( with 1 or 2 stops but no change of plane ) versus a non stop on a “mega” airline.
Why?
Mega airline: Stewardesses / Stewards ( and now increasingly Gate personnel ) that seem exhausted, depressed or both; In-flight personnel that seem offended if you get up and ask for a 2nd glass of Soda; In-flight personnel that offer no assistance / management of the boarding process ( bags in bins overhead ); legroom that is so tight that is someone reclines your kneecaps are crushed
versus Southwest whose in-flight personnel are happy, telling jokes, seem to have friendships with one another; in-flight personnel who tell jokes during the “flight safety’ pre-takeoff briefing, legroom that NEVER has my knees touching the back of the seat in front of me; … oh, and the Southwest Frequent Travel and “A-List” program are phenomenal ( unlike the Mega airlines who seems to only value their frequent traveler program for generating credit card signup/enrollment “revenue” from their Bank Partners.
I (obviously) agree, David! As soon as an alternative airline (like Southwest) or an alternate means of transportation is uncovered, those airlines will be out of business in a heart beat.
Thanks Michael. As in the case of many airlines world wide the airline business in India is chaotic ,except for a few
who mean business and show they care, namely Indigo and Jet Airways. Our National Carrier is in a miserable condition with insurmountable problems. Is it apathy on the part of the airlines or our indifference and acceptance
which leads to this?
Meenakshi, my feeling is that the acceptance on the part of travelers is due to the fact that no meaningful alternative really exists at this time. If there were more airlines like Southwest Airlines (in the U.S.), they would crush the competition. [Even if Southwest isn't perfect, at least they make the effort to be.] I believe the airlines take the attitude they do because they are essentially a monopoly.
Your thoughts are always “out of the box” and are always very very helpful, Thanks for sharing Michael!
You’re welcome, Jyoti!
I have to say that after flying on business trips for the past few years, it really is a discrace the way airlines make their customers feel in the 21st century, especially on domestic flights within the US.
When boarding a big airlines’ plane lately, it actually feels to me as if I am being ripped off for wanting to get proper service – If you’re hungry on the flight you have to pay staggering prices for ridiculously low-class food, If you have 1 lb (!!!) over in your suitcase, then the entire airport has to see your underwear as you take them out and put it in the extra bag they make you send and of course, pay a ridiculous price for that as well (two bags are heavier and consume way more room than one!). Unfortunately the list goes on and on…
I actually prefer long drives over flights these days, mainly to avoid the annoying feeling I get after flying.
Couldn’t agree more with your great insights and observation Michael,
Thank you for the great post!
You’re very welcome, Elay. Unfortunately I could have gotten into even more specifics as to the deplorable service I’ve had and seen over the last years.
And I – as you – much prefer a long drive over flights.
I’m sorry folks, but this is not analysis, this is venting. We’re all responsible for the state of the airline industry. They don’t cut all these services and use old planes, because it’s more fun. They do it, because each of us chose one too many time the cheapest flight over the better flight.
So unless anyone here comes up with a plausible way to convince their/our finance/accounting/procurement department that they should pay for value, then the above is group therapy, but not a business conversation.
Hi Dirk,
No question that my post was venting, however I feel my thoughts are absolutely valid. There ARE a handful of airlines that do a decent job and still provide value. If the industry as a whole focused on value over price, there is no doubt that prices would go up a bit, but they would have a loyal following and raving fans. Having a value-focused industry doesn’t preclude airlines whose main focus is price. It’s no different that any other industry. There are luxury/high quality players, mid-quality players, and low-cost players. The airline industry has become homogeneous as a low-cost player.
You must not have flown first class recently, because if you had, you’d know that even in their attempt to provide a high quality option to travelers, they have reduced the value to the absolute lowest denominator.
So yes, I am venting, but it doesn’t make my reflections invalid.
The next research project might be to see the effect of Hotwire, Expedia, etc on airlines, hotels, and rental car companies. There just aren’t enough first class and business travelers to make up for the race to the bottom promulgated by the bucket shops.
I agree, Dirk. But that still doesn’t excuse poor attitude and uncaring service…