Flying the Unfriendly Skies
Flying the Unfriendly Skies

How far can airline brands fall before they go into a tailspin?

MATT, a 40-year-old dad, his 5-year-old daughter and his 3-year-old son board a plane. As he approaches his seat, he notices that it is smudged all over with chocolate, crumbs and other less recognizable filth.

He presses the call button. A grim-looking attendant, DARLA, shoves other passengers to the side, left and right, until she gets to him.

DARLA: WHAT?!

MATT: Um, excuse me. I am a customer.

DARLA: Did you pay the $20 Sunshine Fee?

MATT: The – um – what?

DARLA: The Sunshine Fee. For a flight attendant to smile at you. Blow sunshine up your –

Matt puts his hands over his son’s ears and cuts Darla off hurriedly.

MATT: I called you because our seat is dirty.

DARLA: Did you pay for the Clean Bee package?

MATT: What is... a what?

Darla sighs loudly.

DARLA: I can take your credit card right now. We will wipe down your seat for $50. Otherwise you have to live with it.

MATT: My daughter is allergic to peanuts … I mean, I have to clean this seat. So… so I guess here.

Darla snatches up his card.

DARLA: Okay, I am adding the Premium to the Clean Bee Basic since your daughter has a known food allergy... we would hate to miss a spot (Darla cackles), and you can never be too sure. That’ll be an additional $200.

MATT: $200?!

DARLA: Look buddy, you want to play fast and loose with your daughter’s life?

MATT: Uh … okay. And then I really don’t want to ask this now, but you guys seated my kids five rows away from me. My son is 3, and –

DARLA: $50 each to move within two rows of you, $300 for the same aisle.

MATT: Are you serious right now?

DARLA: Buddy, you’re on my last nerve. I can just throw you off the plane, you know. We have a strict no-refund policy for belligerent jerks. And I already charged you.

Darla gives Matt a truly wicked, Cheshire-cat grin.

MATT: I will be posting this on Instagram!

DARLA: No one cares.

MATT: I’ll fly somewhere else!

DARLA: We’re all the same. (She presses a button on her wristwatch.) Hey, Bob. Send Mick. Looks like we have three open seats to sell to the next customer.

**

Zero percent of repeat passengers over the age of 5 will tell you they enjoy flying economy. Once the novelty of looking out your plane window at clouds, ant cars and tiny land-stamps wears off, you are left with diminishing leg room, poor customer service, ever-increasing hidden fees, delays, cancellations, frustration, smelly seats and Wi-Fi that probably isn’t working that day.

And yet we keep buying tickets. Plenty of them. We aren’t quite where Matt is yet, but most of us probably think that’s where we are headed. Airlines seem to think that is where we are headed. Analysts advising Southwest Airlines to unbundle their services like everyone else think that’s where we are headed. Darla definitely thinks that is where we are headed. She’s already submitted her application as Head Tormenter in the impending air travel hellscape.

But OF COURSE WE CAN’T BE HEADED THERE. Or at least not any worse than there. Because the lower these airlines go, the closer they get to tipping over. And they will tip over. They are increasingly top-heavy, investing all of their improvements in first class with little to no interest in making economy less awful.

So whether by land or by sea or by air, someone is going make a better option for Matt, the guy who wants, and can afford, a little comfort for himself and his family but certainly cannot shell out thousands for first class plane seats. When that option emerges, do major airlines really want to get caught with their wheels down?

 

 

From Point A to Point B: How Airline Brands Got Here

We often romanticize the “good old days” when people “dressed up to fly” and ate “seven-course meals” in what looked like a Mad Men cocktail party. We lament the bedhead and pajamas crammed into the seat next to us and the sad bag of pretzels on our trays. We resent the hard, narrow seats and having our knees pressed into by the .03-degree incline of the seat in front of us.

The vintage plane photos are indeed stunning in contrast. But they looked that way because air travel was reserved only for upper-class citizens prior to the 1970s. It was ONLY first class.

On October 24, 1978, President Jimmy Carter signed the Airline Deregulation Act. According to Business Insider:

Prior to deregulation, the US government was the kingmaker in the airline industry — dictating which routes an airline could fly, which airports an airline could dominate, and how much they could charge.

According to [Airways senior business analyst Vinay] Bhaskara, airfares today are roughly 40% cheaper than it was in the 1970s — effectively democratizing air travel. In addition, deregulation also reduced the barriers to competition, airlines expanded their operations — offering more flights to more destinations.

Everyone could then go places – lots more places. And for all the hidden fees, air travel was and is still cheaper, opening the door to Matt in the first place.

On the other hand, that meant that our society and culture largely became dependent on air travel, which is still costly, even at lower prices – especially as fuel prices soar. People like Matt still need to get from point A to point B, regardless of what they want. That opened the door to budget airlines and the “unbundling” of services. According to CNBC:

Airline executives measure the success of their low-end products by how many passengers pay the higher fare to avoid them.

Airlines are dividing up the scores of seats behind first or business class into smaller and smaller sections, each with their own set of perks — or lack thereof. The strategy is playing out in the refurbished cabins and new jets of major U.S. airlines. Carriers are nudging passengers to shell out more for comforts like extra legroom, better food and seat-back screens, or perks that used to come with the cost of a ticket, such a coveted aisle seat or one next to your travel partner, or the use of overhead bins.

At the same time, airlines make the vast majority of their profits from a very small percentage of travelers. The above article goes on to note:

Business and other premium cabins remain an outsize source of revenue for airlines. They accounted for 5.3 percent of international passenger traffic but generated 27 percent of revenue last year, according to the International Air Transport Association, an industry group that represents about 80 percent of the world’s airlines.

The Road to Darla is paved with profit margins and a growing divide between first/business class and coach. As the New York Times cites:

“The gap between what’s going on at the front of the plane and in the back has never been wider,” said Tim Winship, publisher of the FrequentFlyer.com website. He added: “If you’re one of the lucky few who flies first or business class these days — it’s as good as it’s ever been. It’s all about profitability.”

Southwest Airlines: Matt’s Old Model Plane

In a world of hated legacies, failed budget models and misguided niche operations, Southwest Airlines has been the brand disruptor Matts could get behind. The company started in 1971, before deregulation, when flight was reserved for the upper class. According to Skift.com:

When Southwest took its first flight in 1971, the airline industry was expensive, the province of the upper class. Someone who wanted to travel between, say, St. Louis and Kansas City, or Houston and Dallas, would usually drive. Back then, Southwest wasn’t competing against legacy carriers for passengers, but instead marketing toward people who rarely or never took airplanes. The approach made the airline revolutionary.

By driving down costs on these short- and medium-haul routes, Southwest created new markets for the industry, and forced other carriers to lower their prices as well — what came to be known as the “Southwest Effect.” Studies have shown the Southwest Effect is real. Historically, when Southwest entered a market, it lowered average ticket prices by dozens of dollars, and sometimes by over $100.

The brand has adapted with the market since then and for a while was the only airline to remain consistently in the black while other major network carriers were filing for bankruptcy in the late aughts. According to this article from Wired in 2008, Southwest’s secrets to success included (paraphrased):

  • Having one plane model for its entire fleet. This offered consistent customer experiences, drove down costs for repairs and parts and reduced delays.
  • Point-to-point flying vs. hub-and-spoke. Southwest flew literally from point A to point B rather than sticking customers with more delays and layovers.
  • One-size-fits-all service. Business travelers may have wanted more than Southwest offered, but their customer service and experience was consistently “basic but good” for all their passengers.
  • Strong management. Despite the allure of fat profit margins, Southwest remained on brand and kept things simple.
  • A relatively happy workforce. According the Skift.com article, “[Southwest] has a one-of-a-kind profit-sharing program that pays out hundreds of millions of dollars to its employees in its peak years.”
  • Aggressive fuel hedging. From 1999 to 2008, Southwest’s fuel-hedging program saved the airline roughly $3.5 billion.

But while the brand has remained well-liked, Southwest has grown and expanded so much that their overhead is finally weighing on them in similar fashion to the legacy airlines. Analysts are urging them to hop down from their pedestal, shorten that legroom and stop letting those first two bags get checked for free. They have already changed their “one plane fleet” model to make way for smaller, more fuel-efficient machines, and some of their flights even offer a “Business Select” option.

If the brand changes much more, it might sacrifice the loyalty of customers who have followed their Matt-friendly product to this point.

 

 

Matt’s Best Lift Over Drag Ratio

As Southwest Airlines, the only consistently successful industry disruptor, is failing to keep Matt’s interests at heart, doesn’t this prove that passengers are simply willing to take the increasing abuse to maintain lower prices? Do airlines really have any incentive to serve him when most people will just be duped into higher prices by confusing bundle and policy language?

Not yet. But they will.

At some point someone is going to see how ripe Matt is for the picking, and it might not be an airline at all. Several plans for bullet trains are progressing. Car technology is advancing rapidly. Even teleportation is not completely off the table, though it is admittedly much less imminent than the other two technologies.

In the meantime, airlines are being extremely shortsighted. In the opening scenario, Matt wants:

  • Decent customer service
  • Fee transparency
  • To sit with his small children
  • Cleanliness
  • Consistency
  • To punch Darla in the nose

Most of these are not difficult or extremely costly to deliver. Additional ideas that would vastly improve travel experiences for the Matts of the world:

  • Working Wi-Fi
  • Sufficient overhead space
  • Comfortable seating
  • Free baggage checks
  • Better rewards options
  • Complimentary drinks

Airlines (existing, budget or niche) should start testing the market on a smaller level and see where they can earn loyalty among the Matts with minimal disruption to their balance sheets. They don’t need to check all the boxes above, just some. The bottom line is that there is a lot of money in the middle class, and this class is fed up with flying. If they don’t need to choose the sad offerings currently available, they won’t, and they won’t need to forever.

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