It’s not often that I defend the domestic airlines, but while catching up on industry reading last week, I found myself doing just that when I stumbled across a Salon.com article titled “10 Ways Monopoly Airlines are Actively Trying to Make Your Life Miserable.”
The article builds upon the 2014 New Yorker article, “Why Airlines Want to Make You Suffer,” by Tim Wu. The premise is that airlines are waging psychological warfare with consumers, evidenced by the increasing number of previously “free” travel features that today are available only for a fee (e.g., early boarding, larger seats …) or for free only to high-status customers. Evidently, the unbundling of the features from the ticket price, along with reduced flight capacity, have resulted in a truly wretched customer experience, intensified by side effects of the industry consolidation that has occurred in recent years.
The money quote for me is:
“…in order for fees to work, there needs be something worth paying to avoid…That necessitates, at some level, a strategy that can be described as ‘calculated misery.’ Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it.”
While not old enough to have experienced the golden age of air travel, outside of the TSA-controlled security process, my air travel dissatisfaction level has not increased markedly in the past 20 years. Crying babies still annoy me and middle seats are a significant source of angst … as they’ve always been. Losing out on “free” in-flight food? Either I’m just too picky, or my memory of the quality of these meals or snacks is just foggy. Missing peanuts or pretzels? No problem. I can bring the snack of my choice with me on the plane. Really, the primary issue I have with airlines is their repeated devaluation of frequent-flier miles, which really is a much greater cost to the frequent traveler like me, than to the sporadic flier.
I acknowledge that my travel experiences are not the same as the infrequent leisure traveler. I also recognize that airlines have taken action to improve profitability by reducing the number of flights, adding seats to planes and decreasing seat pitch on average, all of which can negatively impact the consumer experience. However, I believe that these authors or editors are overstating their case, confusing dastardly and collusive behavior with poor customer experience design and execution, which is exacerbated by ineffective marketing communication. Whereas in other categories or industries, critics trumpet the benefits of empowering consumers to customize or personalize their experiences, this unbundling of features by airlines is perceived solely as a calculated effort to fleece consumers.
Also, central to evaluating the argument is assessing how pricing has changed over the years. As a result of the success of low-cost carriers, airlines developed pricing strategies that appeal to the most cost-sensitive consumers as a means for survival (driving load factor). To deliver at lower prices, airlines had little choice but to pull back benefits, and offer these benefits à la carte to those consumers who are willing to pay for the added value provided. Effectively, as with much in life, you get what you pay for. Should you prefer greater comfort or flexibility, you can pay for it … and at a historically low level.
Even accounting for a shallow pricing uptick in the past few years, and even when adjusted for the new fees, hard evidence points to a steady reduction in inflation-adjusted airfares since deregulation. If the industry’s critics achieve their mission to reinstate the former status quo, with rebundled features at much higher prices for all, we are sure to see fewer fliers and a path back to bankruptcy for more air carriers, ultimately leading to even less competition.
Airlines are an easy punching bag. This is especially true due to their ineffectiveness articulating why today’s value proposition is on many dimensions reflective of a wide spectrum of consumer preferences. Over the next decade, the airlines that win will be those that:
- Successfully articulate the consumer benefits of the unbundled experience; and
- Effectively activate big data insights to further personalize and make seamless the end-to-end customer experience
This is not a sign of “calculated misery.” Rather, it is the early indicator of true business model innovation.