NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
In the airline business, there’s always been tension between the forces in a company such as marketing or finance or operations.
This trio have different needs and goals: marketing advocates acquiring customers; finance champions profits; and operations grows the business by doing its best every day in whatever activity it delivers.
But lately I've sensed a disturbance in the force.
Recently, having bought and paid for a flight on a US airline, and then checking in online, I was offered the opportunity to "improve the experience" by paying $25 for a preferential seat and another $15 for early boarding privilege.
On the surface, this appeared to be just another way to add ancillary revenue, increase profitability, and follow the crowd of competitors that have been promoting similar tactics.
But standing in the terminal waiting to board, it dawned on me that these type of "benefits" are dramatically different because the airline has denigrated its product and service while inflicting pain onto its customers to establish the value of a $25 seat location and $15 for early boarding.
In this instance, gate agents announced eight boarding groups during a 30-minute process.
The first three groups were told to use the "special privileges lane", but as branded credit card holders, frequent flyers, mega-mileage holders or First Class, they were already queued up in the nicely carpeted fast lane.
The remaining seating areas (two to five) were told to use the general boarding lane with verbal-emphasis-added to ensure understanding and compliance, which would have been hilarious had I not noticed some of the crowd taking it very serious, as if the Transportation Security Administration told them so in a private screening room.
In another departure from the past, it wasn't until the fourth group when the gate agent announced that families with small children were invited to board, further emphasizing another class distinction worthy of paying a premium, formerly given as a courtesy.
Rebels versus the Dark Side
Make no mistake, this is not about the positives or negatives of ancillary revenue programs, pricing a beer at $7, or charging $25 per checked bag. We all know about fees, taxes, and other cleverly worded surcharges -- get used to it.
This is different because it harms customers and the company by cheapening the product and inflicting customer pain to establish economic value.
Seat location -- front vs. back, aisle, window, center, bulkhead, exit row -- have different value but access to the seat has been considered "first come" because that's the way you buy it.
Airline seats are not sold like theater or stadium seats where you specify exactly where you are sitting in advance and pay the price posted; denying access and charging incrementally post-purchase may be legal but everyone knows its not right.
This is damaging to the brand, denigrates the reputation of the airline, and punishes loyal behavior.
What’s more, the humor of charging for early boarding is simply tragic. It's not like the plane departs any earlier, or that once your section is called that you don't have to wait on another line in the jet-way or in the aisle as First Class passengers are served.
The tragedy is that everyone brings a carry-on to avoid the baggage charge and overstuffs the overhead bins which makes access to stowage the real benefit.
Remember who your father is
In the recent 2013 Harris Reputation Quotient report, airline reputations have fallen -18%, putting them barely ahead of banks and financial institutions who crushed the global economy, not just a sub-segment of the travelling population.
This huge negative reputation against airlines flies in the face of the travel and tourism industry posting the second highest positive rating behind the first place technology industry. We all love to be there, but getting there is increasingly painful.
What's more, not a single airline is among the top 58 most visible companies in America with an above 50% positive rating; this is in contrast to the 2011 report that included 3 airlines who posted 61% or better reputation quotients.
Planes are flying full these days, but with history as a guide, new entrants will increase capacity and expand customer choice. Airlines must rethink (and remember) how they interact with their customers and charge more for true value.
Pain should remain an accident not a business practice.
NB: This is a guest article by Larry Smith, a partner at US-based Thematix.
NB2:Darth Vader image via HDWallpapers.