Mike Platt, industry veteran and former HRG boss, questions the wisdom of allowing the demise of legacy carriers’ full frills service.
Who is ‘the customer’ and what do they truly want? The answer is not easy as, depending where you dip into the supply chain, you get a different definition of customer. It becomes clear that each definition of the traveller is more linked to who we want them to be rather than who they really are.
If you go to an airline like, say, American Airlines, they are likely to say to the traveller: “Go to an international corporation.” Go to a travel management company (TMC) and what they will say will depend on who makes the decision to appoint and who has the strength to sack. Go to a GDS and they will say: “We buy and sell segments from and to airlines and TMCs so we don’t need to know.” The GDS would be wrong to say this as their current sector fees are driving some customers to direct airline sites.
Now let us assume for one moment that the traveller is the decision maker. In many cases this is fact. They may get influenced either strongly or weakly by their budget holding employers but hey, they can usually find a way around that. So what do they want? Simple, you may think, but I contend otherwise.
If you read the papers, magazines, websites, etc, what everyone is interested in is price. How do I get this cheap, who can give me the best price package, how can I get lower fares but better perks? The low cost carriers came along and thrived by undercutting the big established boys and the glory of cheapness became a reality. But hold on a minute, those low cost flights were on high density short haul routes and every time a transatlantic model has been launched it failed. Does that say something?
It says to me that people are prepared to put up with most kinds of discomfort on little commuter routes, but not when they are going any distance. Then the cabin gets cramped, the service poor and the food practically inedible. But despite all this the media and corporate hype is all about how all travel should be cheap and fares stripped down to their component parts.
The result is that although the truth of low fares is that they are in reality getting less available, the call for them is getting greater. This is the reality now all routes, not just the one-hour local shuttle service. So how do the mainstream airlines cope with this demand? They simply give the customer what they think they want in a base price, but ‘nickel and dime’ they price up on ancillaries. Result? They are probably better off because they have also stripped out a load of service costs.
Unfortunately these extra services that have been removed out are the very things that differentiate them in the market place. They have also had a major impact on how they are perceived by ‘the traveller’. To me British Airways (BA) is a fine example of this although there are many more. BA has shed cost like a snake sheds skin. With all these customers supposedly wanting lower prices they either had to re-register as a charity or strip to the bone. They chose the latter and it is bearing dividends for them in the short term, but the backlash is growing.
I was reading an article recently in the Sunday Times Colour Supplement that was hugely critical of BA and its Heathrow hub. It self righteously condemned BA on everything from staff attitude to catering. “I did not get a proper traditional English afternoon tea,” one interviewee bleated; another was depressed about meagre snacks and miserable staff.
Come on guys, you killed the airline BA was in order to create the one you say everyone wants. BA simply charged too much for the modern world to stomach so what did they do? They made themselves competitive by taking on the unions to reduce overheads, shed unprofitable routes, cut back on catering, and started charging for previously free services. And what do we do now they have become lean, mean and cheaper? We criticise them and mourn the demise of those dear little things we took for granted.
So is there a moral behind all this? I think there is. And the answer, in part was in the final paragraphs of that idiotic article. The piece listed all the things that passengers are supposed to want from an airline like BA (most were what BA used to do) and then it said on behalf of the traveller ‘We’ll pay – provided it’s good’ Wow!
So the traveller wants service after all? Maybe it is not universally about price? Could people really be prepared to pay – provided it’s good? Your guess is as good as mine but in the meantime I suggest we could all take a good look at what we are turning this industry into and whether we are willing to pay to put part of it back together again – provided it’s good.
For more comments from Mike Platt, visit his blog: www.businesstravel.blogspot.com