Sunday, October 14, 2007

How to fix the airline industry mess and improve customer experience?

Responding to Don's post on airline passengers rights (bill of rights) and on how to resolve the big mess in the airline industry and their level of service.

I feel like it's a lost cause to fight for better service on public airline travel, but obviously there is nothing that is impossible to fix. It will probably be more difficult and take a longer time to fix.But as of now, unless we like driving so much or have the means to buy our own plane (or buy franctional jet ownership like NetJets which is becoming more affordable nowadays), it seems like we just have to be content with these airlines.

Right now, the biggest problem that I see is the attitude of these airlines is: "You need us (more than we need you)". I understand that most of their workers have long days at the airport and have to deal with a lot of obnoxious customers (who get upset when flights are delayed and cancelled). And the cycle continues and eventually everyone gets upset. Interestingly, in other industries, Companies can't afford to treat customers this bad.

I think there are several things that needs to happen before customers can feel that they are satisfied with the level of service of the airlines (i.e. before the airlines have any incentive to improve service and feel that they need the customers).

One of the critical factor is: these airlines needs to start making money (which is probably the million dollar question on how can they achieve that). With profit, these airlline can start thinking about customer experience and customer satisfaction (which will take money to do that). Right now all they can think of is how to survive. How are we going to make it through the next quarter is probably the most common theme in the board/management meeting. Maybe our government needs to continually subsidize them (to give them incentive to improve) like the operation of the USPS (which is losing money each year but customers seems to be satisfied with their service). However, I am a believer of capitalism and Laissez Faire system.

Here are some of the things that the airlines can do to try to get to profitability:

1. Continue to cut salary of those Pilots and all other workers (both union and non-union worker).
2. Make sure most flight is full (and make more people pay more for their seats).
3. Try to create a plan to reduce their pension liability.
4. If they have cash left, try to improve some of the equipment (both the planes and the systems on the ground).
5. Persuade plane maker to build lighter planes and jet engine that can use less gas for the same distance.
6. Reduce management workforce.
7. Merger with other airline that has stronger and more efficient operation and reputation.

Obviously safety should be their #1 priority. I don't mind if the delay really will improve safety (if they find engine issue and need to be fixed before flying), but they have to reduce the number of occurence of engine maintenance related delay.

I mentioned earlier about being content. I used to live in Wisconsin, so I have had my share of bad experience with airline travel (snowed out in Madison, stranded in Chicago O'hare, 10 hours delay in Detroit DTW, lost luggage, double booked seat, missed international connection flight in SFO which you know sometime only fly once a day, bumped to a red-eye fight, etc, you name it.) Lately, as I lowered my expectation and do better planning, I rarely get frustrated anymore. Better planning is definitely key. If we know we need to be in a very important meeting, we want to plan to arrive early (build some fluff for delays. i.e. expect the delays). I know that time is valuable for people and many can't afford to arrive earlier but just like investing or any other part in life, we just have to weigh the risk and return. For example, earlier this year, during high season (for that area), I went to Omaha to attend a meeting that I don't want to miss so I went a day (24 hour) earlier, and the plane did get delayed, but I didn't miss the meeting.

So there are several things that we can do to improve our travel experience (and make lemonade from lemon):

1. Plan better. Build fluff/time cushion. Get a non-stop flight if possible. set enough time for each layover.
2. Watch the weather a day or two before the trip and see how it might impact your flight.
3. Bring some work, books or music/ipod
4. Enroll in one of the airport lounge membership program (I use priority pass and I think it is well worth it if you travel often).
5. Don't check in any luggage if possible. Carry on only.
6. Get enough rest before the trip.
7. Drink enough water to stay hydrated.
8. Stretch/walk once every hour or two.
9. Keep Tylenol/Advil handy (also your other medicines).
10. Finally, if you get delayed, take a deep breath and remind yourself that there is no help/benefit of being upset.

On a side note, due to the situation in this industry, I have avoided all airline stocks, even some of the best ones like JBLU and LUV and I definitely will not touch all the rest that mostly have lost money for the last couple years or the ones that is nearly bankrupt and is selling in the pennies, even if that will give me a multibagger return opportunity.

I guess there is no one size fits all kind of solution for this mess, but in the mean time (while the industry and congress are trying to fix this issue), we can try to do several things in our end to try to imporve the public air travel experience.

Happy flying!

Sincerely,

Sidarta Tanu

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