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Wednesday, Jun. 25, 2008 at 12:18 pm

Dear Airline Industry, Being “Least Awful” Won’t Save You

By Brian Bond
June 25th, 2008

derrie-air airlinesEach day it seems there’s a new headline about the latest “amenity” for which an airline plans on charging us, which, of course, causes a ripple effect as every other airline chooses to follow suit with a justification that comes across as, “Well, now that Airline X doesn’t have to give you free water, neither do we.”

Correct me if I’m wrong, but doesn’t this sound like the opposite of the effects competition is supposed to create?

Like us, many of you are frequent fliers and are concerned about these trends. So when Jeff Eisenberg pointed out a site that highlights the fees associated with this growing phenomenon of sacrificing service to maintain pricing, I thought I’d share it with you.

For me, this illustrates a couple of things.

1.) We have surpassed the number of elements it takes to trigger over-choice behavior (aka “analysis paralysis”). Before, it was just price, departure/arrival times, and brand that influenced our flight-booking decision. Now, with so many other factors involved — multiple bags, bag surcharges, seating, drinking, and the (in my eyes) completely unforgivable “minimum stays” United just announced — has caused consumers to be put in the position of having to make a very complex decisions, which typically causes people not to choose*. The way I see it, the airline industry is headed right back to the time of the travel agent, paying someone to make sense of the mess.

Unless the travel sites can quickly adapt and easily incorporate these new elements to their functionality.

2.) The airline industry is devoid of real positive differentiation and unwilling to compete beyond price. As Jeffery pointed out in our conversation, airlines will become completely dependent on their ability to market being the “least awful.” One Philadelphia newspapers even launched a spoof of this concept last week with ads for a fake airline called Derrie-Air, which supposedly charges passengers by the pound. (Hat tip to the Influential Marketing Blog for spotting this.)

Normally I would say, “Market-capitalism to the rescue!” and insist that open competition will allow the fittest to prosper. But amid government subsidies and an apparent lack of interest by carriers to compete on something other than price, I’m skeptical this will right itself. So this is my open call to airline owners (yes, even Virgin Airlines) to reposition their fleets by differentiating themselves by meeting or exceeding customers’ wants, not just the bare minimum expectations we’ve grown accustom to by the current state of the airline industry at large.

My question to you, dear reader, is this: What ideas would you bring to bear on this problem? How would you change the company, product, or marketing to better meet the consumer’s needs, as well as the health of the industry?


*From Barry Schwartz’s “The Paradox of Choice” presentation at TED.

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About the Author: Brian Bond is VP of Marketing and Product at FutureNow, Inc.

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Comments (14)

  1. Interesting to see that United recently discontinued Ted, its no-frills discount airline (no relation to the TED conference linked to in the post).

    JetBlue seems to be bucking some of these trends. Although its “Happy Jetting” campaign has received mixed reviews, it’s pretty clear that at least they’re trying to differentiate themselves in the marketplace by not removing basic services. They even made this interactive timeline of the rise and fall of airline customer service to illustrate how “jetting” with them is somehow different from “flying” (a term that’s been tainted thanks to other airlines).

    Still, one has to wonder how different “jetting” actually is when, according to that site Brian linked to, JetBlue charges up to $30 extra for decent leg room.

  2. The problem is not the airlines, it is the consumer. Very few people are willing to pay $100 extra to be treated like a human being for 3 hours. Put another way, many people are willing to be treated like less than a human for 3 hours if it means they save $100.

  3. @ Kevin–

    It’s also a factor of changing perceptions due to TSA / Government regulations. The security “policies” have made flying such an unbelievable hassle to begin with, it exacerbates the price / service issue even more.

    It’s not just “I want to spend $100 dollars less because it’s cheaper,” it’s, “It’s going to be an insane hassle getting in and out of the damn airport anyway, why pay 60/75/100 dollars more so I can get a marginally better experience for the three hours I’m on the plane?”

  4. Good post and well said…

    Given the price hikes it’s going to be interesting to see how this plays out as airlines keep raising fees and find more and more things to charge for because we all know it’s not over. It’s definitely becoming more difficult to gauge costs when you factor in different food, drink, baggage, seat and other fees. Thus far I haven’t seen any website really factor in the extra fees, I assume they’ll have to start adding options for “bags checked” or something as there’s certainly no reason why you have to pay these fees or check anything. Once one of the travel sites gets it down they’ll definitely have an edge up the airlines at computing the true all-in cost.

    That said, airlines may have an opportunity to get more infrequent fliers into their flier programs as there’s now a whole lot more reason to be an “elite” flier (i.e. not paying fees for everything ever) which should make for some interesting marketing campaigns.

  5. I’d pay $20/flight not to be threatened with arrest just because I have to use the bathroom during mild turbulence. The airlines have gone well beyond just lacking customer service; they’ve used the TSA (IMO) to beat consumers into submission and treat us like virtual prisoners once we get on the plane. Even when we pay $1,000+ for a flight and get lousy service, we’re all afraid to complain, especially during the flight.

  6. Came across some published results on a recent survey, courtesy of the Center for Media Research, showing just how consumers are reacting to these changes. I think the most interesting not is the lack of confidence for positive change in the future. Its an uphill battle for these brands lets hope they find a way to win back trust and confidence.

  7. I absolutely agree with the idea that competition in its current state won’t rescue a virtually non-differentiated airline industry (and certainly not one competing on “least awful”), but also interesting is the fact that there is little if any competition from alternative methods of transportation to mix into the equation (perhaps trains in some sense on the East Coast but even then that’s limited).

  8. Two flights ago, I went to a wonderful deli and bought my own food. My diet would have prohibited airline food. Then, came the security prohibitions.

    My last flight was leaving after midnight. I went to the airport after work, parked, and on arriving at the terminal found my gate wasn’t going to open until 9:30 pm. I had not eaten supper. I didn’t have my ticket, so I couldn’t get into the terminal, even if I could have ditched my bags. Once I got my ticket, the food operations were closing up, and the only food left was awful.

    I drive. That way I don’t have to stay overnight, eat bad food, or put up with the other indignities that air travel has become. In a lot of cases, I can drive there quicker than I can fly. Try flying from Austin, Texas to Santa Fe, New Mexico. Driving is the way to go.

    And, I FedEx my bags. They always arrive.

  9. If you could pay more, and with today’s economics you can’t, or is it just me, why not fly a charter.

  10. The issue with the airlines is similar to that of the auto makers. They no longer are truly competing. Instead they are actually relying on eachother. If indeed one airline went out of business it would be worse for all the other airlines, not better. Therefore, the basic principals of competition don’t really exist anymore because none of them want any of the others to go under.

    What must happen, and of course the US Government won’t let it happen, is one of them needs to completely go under. The industry needs to feel the pain, and only then will they learn their lessons and straiten up.

    One man’s opinion.

  11. If you can afford it I really think the answer to this is looking into a private jet service. Not only do you not have to deal with long lines but you will only have to stop where you want to go, not where the airlines can pick up more passengers.

  12. The airlines have such a notoriously bad record with customer service, you have to think that some airline will eventually come along and save the industry…anyone?

  13. I agree, the service over the years has gone down. I must admit I would not pay any extra to be treated differently, but why should you, the extra is for comfort not service.

  14. @ Kevin: Why should one pay for something they should anyway get? I was shocked when my aunt,coming back from Italy by plane,was forced to get rid off some of her luggage. I know that there’s a limit for the luggage but what is over that is payed.No, she was told that she must throw some things, that’s she’s not allowed with extra luggage.

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