In last week’s Insight, we discussed how Boeing failed to operationalize its “safety-first” principle, resulting in two tragic 737 Max crashes and significantly eroding both its market value and brand reputation. This erosion was swift and strong, like the mudslides we see when rain-drenched California hills suddenly give way, consuming everything in their pathways.
This got me thinking more about brand reputation, and how some major airlines are potentially encouraging the dangerously slow process of undermining consumer confidence and trust. I am not talking about the pressure American Airlines put on Boeing to speed up its 737 Max design and production timetable – that is another story. I am talking about how airlines have increasingly been playing with seats and pricing to the dismay of consumers. The airlines, which are thriving, saw the new profits in baggage-handling fees, increasing them from $1.4 to 4.5 billion in the last decade. Now they are even monetizing the specific location of seats.
A seat is the most important possession that a passenger has on an air flight. A booked seat is viewed by consumers as a transaction completed, a right of the passenger, and an obligation of the carrier. Now, we all know that on the major airlines, a seat in Business class is more valuable than one in Economy Plus (more leg room) or one in regular Economy. If you want an upgrade, you pay for it. But if you have traveled recently, you might have noticed that there are many more tiered seat choices throughout the plane that are now available for a wider range of premium prices. The middle seats behind Economy Plus and most of the seats in the back of the airplane are now considered standard seats. Aisle and window seats now command a premium price that increases the closer they are to the front of the plane.
I am pretty sure, based on my own experiences and conversations, that the pricing of individual seats is causing dissatisfaction among traveling families. To save money on two separate flights in two separate months, my wife and I booked and chose seats located together, one purchased with cash, and one purchased through point redemptions. In both cases, we became separated when new seat assignments were given to us at check in. “Wait a minute, Mr. Air Carrier – you have now broken my trust by giving a seat, that I booked weeks before, to someone else willing to pay a premium!” I was told that because I had booked those seats in different ways, that I could not be guaranteed to sit next to my wife. Really?
This situation also happened to my daughter and her husband, who booked two seats next to each other so that they could manage their 18-month and 3-year old girls together. After the airline had similarly split up their seats, the flight became quite uncomfortable, both for her family and the passengers nearby. Their flight experience was compromised and negative feelings were evoked about the airline because of this.
Airlines have to think carefully about the contract of expectations they establish with the flying public. In booming times, airline executives don’t have to worry too much since the planes are pretty full. But brand trust and loyalty is something air carriers have to earn, just like with any other business. Losing that loyalty will open up doors to existing and new competitors who are willing to innovate in order to put their customers’ needs and experiences first. The question is, which airline will be the first in this new wave of premiums to recognize customers’ dissatisfaction and improve their experience in a meaningful way?
June 27, 2019
Written by Tom Sullivan
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