Airlines forget what got them here

Tom Dougherty, CEO – Stealing Share

20 May 2009

Let’s give our airlines away – to the foreigners

 If every cloud has a silver lining, the airline industry today demonstrated that the silver lining is very tarnished.  First out was a report on how passenger demand and cargo demand has declined. The report said the number of people flying on U.S. airlines continued to decline in April with 6.3% fewer passengers compared to last year. Airline Transportation Association CEO James May explained it in terms of the slowing economy. “The industry is seeing less demand in the cabin, as well as in the cargo holds – clear signs of the widespread slowdown in global economic activity.”

 What makes this story interesting is that airline stocks were climbing higher this morning, not on the news of declining usage but instead because Delta announced that Air France-KLM will jointly operate their trans-Atlantic routes.

What does all this really mean beside the fact that Wall Street ups and downs are as related to economic health as the roulette wheel is to retirement planning? Well, it says that there is fundamentally something wrong with the way the US airlines operate their businesses and that their brand promise only correlates to the price of your ticket.

No doubt the loss of revenue from freight and cargo is a result of the economic downturn and no doubt the reduced passenger demand is influenced by it as well. However, the US airline industry is refusing to look at its own failings and inability to compete for our affinity. Let’s face it, we all hate flying and would prefer to not have to fly at all.

Some of it is beyond the control of the airlines, but a lot of the problem belongs squarely in their laps. They treat passengers like they don’t matter, forget they are in the service business, assume no responsibility to air traffic control delays, charge you for simple courtesies, and are so understaffed, overbooked, and overloaded that delays have become a permanent part of every business travelers strategy. This causes travel to be reduced because “just to make the meeting” often includes extra days in hotels and rental cars.

However, before you think I have sunk into just another tirade on the industry, unfairly signaling out the US airlines, I want to take you back to the second headline today. Remember, airline stocks were up this morning on news of the Air France-KLM and Delta venture.

The reason for this bounce is that most everyone who travels knows the international carriers do a much better job of everything, from service to food, to customer relations. It is a collective sigh of relief when we hear the foreign airlines are involved.

How sad is this? It reminds me of what we have allowed to happen in the auto industry, an industry we invented.  We forgot how we got here and took our customers and their loyalty for granted.

See more posts in the following related categories: Air France-KLM Delta Airlines US Airlines

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