Monday, December 22, 2008

Airline Credibility Gap

The two worst managed industries in the United States are the auto industry, and the airline industry. While the auto industry threatens to go bankrupt, bankruptcy is a regular occurrence among airlines large and small.

I would argue that one of the biggest failures in the airline industry today is credibility. People rightfully just don't trust anything an airline says.

Examples include:

1. Lying About Bookings - When booking a flight on United Airlines, the "Economy Plus" section is always shown as "unavailable", with a picture of a person in the seat. Actually, it is available, just not to you, unless you have elite status. They could say that, but that would be too honest, I suppose. People are just led to believe that someone has already take those seats.

2. Lying About Delays - When has an airline ever given consistent or accurate information about the nature of a delay. Airlines frequently give out the "weather" excuse in order to absolve themselves of their contractual duty to provide compensation for mechanical or crew related delays. I would say this is ripe for a class action lawsuit.

3. Lying About Policies - When you call an airline, you are frequently speaking with overseas under trained call centers. These people will tell you anything to get you off the phone, truth be damned.

4. Lying About Costs - The "fuel surcharge" is one of the biggest frauds ever perpetrated on travelers. These surcharges bear little resemblance to airlines costs for fuel at the time of the flight, or the time of purchase. Airlines implemented no small number of surcharges and other fees over the summer that they blamed on record high fuel costs. Very few have disappeared now that oil is at record lows.

5. Little Value Correlation - People flying "full service" carriers like Delta and United, get charged for everything, while people on discount carrier Southwest rarely see any charges.

6. Price Gouging - Airlines love to price gouge. As the day of the flight gets closer, the price jumps by an order of magnitude. Simply put, there is little correlation between the cost of the service and the price charged. It is like a restaurant charging you more, depending on how hungry you are. Americans are surprised to learn that this is often not the case with airlines in other parts of the world, and it is rarely the case with other modes of transport such as buses, trains, and boats.

7. Lying About Customer Service - The image of airline customer service portrayed in their marketing is vastly different than the reality. It is common to see airline personnel treat customers in a manner that would get them fired from even the most shoddy restaurants or hotels. Again, this is rarely the case with foreign carriers.

8. Over Complication - Airlines make the experience of flying unbelievably complicated, often to their own detriment. Do you want to buy a ticket on Frontier? You now have to consult a chart to determine which of three types of fares is best for you, all of which have you sitting in the same seat. Want to standby for an earlier flight, the airlines routinely collect fees for standby , an insane practice that costs airlines the opportunity to fill an empty seat and sell a seat on a later flight. If the later flight is canceled, every empty seat on the earlier flight means one more upset displaced passenger. Finally, the baggage fees have created chaos as everyone is now carrying on the maximum allowed. People fight for overhead space, bags have to be gate checked, and planes are running late. I believe that people want to get from one place to another, not navigate a virtual world of rules and fees that is constantly changing. Worse, the policies obviously cost the airlines money, yet are marketed as revenue enhancing features.

9. Tarmac Strandings - Airline pilots must do everything in coordination with their operations manual, which seeming covers every contingency, except for not having a gate availible. In this situation, airlines throw up their hands and claim there is nothing that they can do. Airstairs, mobile lounges, and buses somehow cease to exist and passengers are trapped for hours on end, yet airlines argue against any rules requiring passenger evacuation in the event of a long term stranding.

10. Bait and Switch Frequent Flier Programs - You know the drill. You save up your miles and attempt to book a flight, only to be told there are no availible seats to multiple destinations over several months. This has been described as an unregulated lottery. No wonder passengers no longer have much loyalty towards their airline, the entire reason for the frequent flier program's existence.

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