This just in: Airline passengers are pissed! That is the gist of this week’s Middle Seat Column in the Wall Street Journal (A Big Jump in Gripes About Airline Service, Oct 7) and the corresponding video.Vodpod videos no longer available.
What is interesting is that complaints have gone up without any explicit decline in service.
Consumer complaints filed with the Department of Transportation are up a hefty 32%, to 8,797 from 6,676, compared with last year. The increase comes in a year when flights in the U.S. have been just as punctual as last year, according to DOT data. Moreover, fewer passengers have been bumped off full planes, and baggage-handling rates have improved considerably. So why all this griping amid the good news?
There are number of possibilities behind this outcome. One is that airline customers have just come to expect more. This follows from the usual argument that the evaluation of service quality is driven by gaps between expectations and reality. That doesn’t seem to hold water. Airline passengers are like a family with a crude, irresponsible uncle who got drunk and made a scene at his niece’s wedding and then was unapologetic about it. What reason do they have to expect a better outcome at Thanksgiving? Similarly, there seems no reason to believe that customers have upped their expectations of what to expect on a plane. (If that strikes a chord with you, check out the Journal’s interview with Jeff Smisek who runs the newly combined United and Continental (Lots of Email, Single Message, Oct 11.)
Another possibility is that the Feds have made it easier to complaint. That is, this isn’t so much a change in the market as it is a correction in data collection. There may be some true to that as the Department of Transportation says they have made it easier to file a complaint on-line. From the airline’s point of view, this may not be an all together bad thing. No one likes having customers whine to the DOT but if you are serious about competing on service, then more accurate data cannot be a bad thing.
The other point raised in the article is that, effectively, the recovery process at many airlines is broken. People are annoyed that flights are canceled but they are furious that airlines cannot offer a simple and reasonable Plan B. Why has recovery been so hard? For that we have these graphs from the New York Times (Flying Fewer Planes, Airlines Find Stability, Oct 9).
“Load factor” is simply industry speak for what fraction of seats are filled when the plane takes off. As the last chart shows, we are hitting an era of higher load factors than the industry has never been able to achieve before. This has come about because of a mix of caution and discipline.
“It’s a discipline based on fear, and that’s basically what makes it so effective,” said Hunter K. Keay, an airline analyst at Stifel Nicolaus, who said he expected that the number of scheduled flights in the United States would remain essentially flat this year compared with last. “It’s the first time airlines have done this voluntarily, outside of bankruptcy proceedings.”
The result has been less a case of anticompetitive behavior and more an instance of self-interest on a broad scale. It also reflects a more timid — and perhaps chastened — industry than in previous decades when aggressive executives competed fiercely with each other.
This has generally been good for airlines. It has helped support higher prices and allowed airlines to return to profitability. It has also created a very fragile system. With a high load factor, every canceled flight leaves a lot of passengers stranded. At the same time, there is little spare capacity to shift them to other flights. The scale of individual failures has thus increased even if the absolute number hasn’t. Thus the number of passengers delayed because of, say, mechanical issues has not necessarily increased. It is just that they are delayed for 2 days instead of 2 hours. While this might once have been common around the holidays, it is now becoming a year-round phenomenon.
Unfortunately, there is no easy solution to this. Bringing back mothballed airplanes and furloughed crews would make a difference but would also result in price wars and lower profits. One possibility is that airlines could try to proactively pool available capacity. A greater willingness to put passengers on a different airline in response to failures would make the best use of available seats. This could make a real difference when an airline has a plane with mechanical problems. It wouldn’t save the day when there are correlated problems across airlines (ie bad weather up and down the east coast).
This also raises the question of what defines the “service.” I think that most people wouldn’t drop several hundred dollars on a fragile physical good without at least thinking about what the warranty is on the item or what kind of support the retailer can provide. That is, the warranty is part of what you buy. So is it wrong that customers expect service providers have a reasonable back up plan? The problem is that services can be a lot more nebulous. They are also prone to correlated problems. My new cell phone may have mechanical problems but that likely says nothing about the other phones Verizon sold that. It is a very different story at an airline. If my flight is canceled, another hundred passengers are also looking for help. That can only be handled if there is some thought put into the system before the failure happens. It seems that airlines are giving up on thinking.