Twenty years ago, American Airlines told us – over and over in their TV ads – that they knew why we flew. But these days it’s not clear that the carrier even knows why it flies.
And that’s according to American’s own head of sales, marketing and loyalty, not some smart-aleck media wag.
An American Airlines flight attendant serves drinks on a crowded plane. Tight seats, late flights ... [+]
“It's a long time since we had a brand purpose and a brand campaign,” said American Sr. Vice President Kurt Stache on a recent episode of “Tell Me Why,” a podcast aimed mostly at the airline’s 126,000-plus employees.
Stache was addressing American’s declining scores in response to the common customer survey question “How likely are you to recommend” the carrier to friends and family. Those numbers fell in 2018 for the first time since American’s merger with US Airways in 2013 despite the airline’s widely-proclaimed intention to improve passengers’ experience by operating a little more on time. And that’s a critical indicator – arguably the most critical indicator - of just how well, or poorly the world’s largest airline is treating is customers, especially relative to how its rivals are treating their passengers.
On time operations are rightly seen as a really important key to airline customer satisfaction – and thus customer’s likelihood to recommend it to friends and family. But when an airline’s on-the-cheap efforts to improve its on-time performance involve more schedule padding than actual operating efficiency improvements; when that happens at the same time the airline is scrunching its already uncomfortably tight seats even closer together; and when the carrier seems to be doing nothing to make their customer-facing flight attendants and airport agents even a tiny bit more pleasant and helpful , American’s very modest goals for improving its on-time performance rings rather hollow.
So, aside from the obvious answer - “To Make Money!” – why is it, again, that American flies?
American’s leadership apparently is not sure anymore, or they’ve stopped caring about the answer to that question. The carrier that used to boldly proclaim in its ads that “We’re American Airlines, Doing What We Do Best,” last went public with a big ad campaign a couple of years ago. It was aimed at encouraging its customers to behave better and complain less. Centered around the theme “The World’s Greatest Flyers,” American’s campaign backfired badly when nearly everyone took the ads to be condescending messages instructing passengers to improve their flying manners so that everybody else around them could better cope with the reduced amount of leg room and personal service being provided to them by the airline these days. The perceived failure by American executives to take responsibility for the worsening travel experience of their customers was so ridiculed that the airline pretty much has avoided big-themed ad campaigns the last couple of years.
And, to be fair, the same question fairly can be asked of several other big U.S. carriers. Why do they fly?
They at times appear to be telling us travelers how much they value us while they work overtime to make our air travel experiences even less pleasant and more dissatisfying than they already were. You can see that lack of consideration for air travelers in their ad slogans.
Delta’s recently-replaced slogan “Keep Climbing” is a great example. What the heck did that mean, especially to someone looking for just a reasonably comfortable flight half across the country? How does sitting in a cramped coach seat and getting served one measly half-cup of Coca-Cola and a tiny bag of pretzels help you climb, metaphorically speaking? Delta, apparently, couldn’t find anything great enough about its service to brag about as something that set it apart from the pack. So it opted to build an entire, expensive ad campaign around some meaninglessly vague platitude.
Meanwhile, United’s recently-retired slogan “Connecting People. Uniting the World” may have set a new world record for pretentious high-minded bloviating. We’re just trying to get to Chicago on time, and we hope to be able to stand erect without back pain when we get there, not negotiate world peace. But you’d think from those “Uniting the World” ads that that United CEO Oscar Munoz soon will be meet us upon landing and lead the Global Village in a rousing rendition of Kum Ba Ya. Even United’s recent resurrection of its famous “Fly The Friendly Skies” ad campaign, abandoned 23 years ago, falls short of telling us why United’s in business (beyond, of course, to make money). It shies away from the implied claim that flying on United’s friendly planes will make your life more enjoyable, and uses the more mechanical, less personal and less compelling phrase “Flyer Friendly.” Well, gee, you’d certainly hope that an airline would be flyer friendly, wouldn’t you? If that’s the best the airline can say for itself it’s certainly not saying much.
So, getting back to the central question, why do these airlines fly these days – beyond the obvious “to make money” answer. There’s nothing wrong with their making money. In fact, that’s a very good thing. It’s what assures us that they’ll be there in a few days when we need to fly back home. And it assures those who invest in the airlines’ shares – as well as those who invest in their bonds and the private capital funding groups that finance their aircraft – will get a reasonable (but still-not-market-leading) return on their money. Historically that – consistent, reasonable levels of profitability – still is a relatively new thing for airlines, which pretty much were money-losing machines over the first 80 years of the their industry’s existence.
Yet, there ought to be more behind airlines – or any group of companies – reasons for existence than just to make a profit
Indeed, you never hear a company proclaim proudly that “We exist to make money by giving our customers the very least amount of service possible and still keep them coming back.” Even Walmart and the various dollar store retail chains state publicly that their reasons for existence generally include helping people of modest means enjoy a better life by being able to buy items that make their lives a little better at affordable prices.
U.S. airlines, or at least some of them, today seem to have lost touch with even those only slightly higher-minded purposes for their existence. Indeed, well-run companies don’t seek to increase their profitability not by gouging customers for more dollars while delivering the bare minimum in terms of service (or goods). Rather they provide their customers services (or goods) that are so much better than the alternative (in terms their value-to-price balance) that those consumers will want to buy more of those services and do so more frequently. But that clearly is not the case today when it comes to airline travel. Think about it. What American alive today really wants to fly more, especially if they always fly coach?
American’s notion of operating on time more than it has in the past is a good one, as far as it goes. But there’s two problems with the way the airline is going about it.
First, as noted, for the most part American is doing it by adding time to its published flight schedules, not by actually operating more efficiently. The carrier over the years has pushed flights that used to be scheduled to last three hours to three-and-half hours, and flights that used to take 45 minutes to 70 minutes. The distances between airports have not grown; just the inability to operate efficiently. By simply incorporating those longer actual flight times into the published schedule itself, many flights that used to be considered late arrivals now go down as on time arrivals. Whoopee! But the passengers still don’t get there any sooner than before. It still takes longer for them get there than it did 15 years ago.
It also means the airline has to buy, maintain and operate dozens and dozens of additional planes costing $75 million to $300 million each just to cover a schedule with all that extra, inefficient time built into it. Just think how much more business a carrier the size of American, with around 960 big jets in its fleet today, could drum up if 10% of those planes could be freed up to go hunting for additional passengers on new routes or to add more flights on existing, under-served routes? And in the process, the airline would become better able to provide a bit more space and a bit better service to its passengers, even as its profits grow.
And second, even with all that added schedule padding, American’s goal is still pitifully inadequate. In a presentation to analysts earlier this year the company said it wants to get is on-time flight departure performance rate, called “D-0” for “Departure 0 Minutes late,” up to a whopping 69.7%. Don’t be impressed. That means the carrier’s bosses are perfectly fine with the idea of 30.3% of their flights each day leaving the gate late. Indeed, they’re saying, in effect, that you being able to count on their ability to operate more efficiently than that just isn’t worth the trouble.
As discussed in this space many times before, the technology and the methodology for operating airlines more efficiently already exists. Adopting those, more aggressive logistics management processes would help an airline significantly more market share and higher revenues. And it would even more significantly lower their costs. Estimates place the results of such a change at $1 billion or more in additional profits annually for each of the Big Three U.S. airlines. But American – and Delta and United, too – apparently would rather keep on under-serving and disappointing you, their customers, while making mere pedestrian profits than find better ways to server you more comfortably and more efficiently while earning bigger profits at the same time. It’s just easier to do it that way than it is make the hard decisions and accept the risks that come with making a big change to better serve consumers.
That’s why the question needs to asked once again: Why do they fly?
