Study Shows Lccs Outshine Legacy Carriers

[Ch. 12]

The JB "twist" is if you simply no-show, you lose all the cash, as if you flew. Much like buying a movie ticket and not making it to the movie. You may not have seen the show, but you did purchase the seat for two hours.

Other than WN, the other carriers do this as well. Only if you cancel prior to departure (for non refundable tickets) do you get to use the value of your ticket (minus change fee) for a different flight. JB is not covering new ground with this policy.

 

[funguy2]

Other than WN, the other carriers do this as well. Only if you cancel prior to departure (for non refundable tickets) do you get to use the value of your ticket (minus change fee) for a different flight. JB is not covering new ground with this policy.

Really? The few legacy carriers I have had to deal with on this topic specifically allow you to not show up on a non-refundable ticket, and still rebook for the $100 fee. I learned this about JetBlue because I thought you could do the same, only to learn later this was not true. At JB, calling ahead to cancel is the requirement, as I found out the hard way. At the legacies, it was just an encouragement...

My recollection is that US Airways tried to implement the JB system, and some competitors went along, some did not, and all dropped the system after not-to-long, after generating alot of customer complaints.

I guess I am not saying the JB system is new... I am saying it would seem intricately tied to the overbooking policy. If people were allowed to no-show at departure time with less penalty, then I would think they would have to overbook, as the majors do.

 

[Ch. 12]

Funguy,

I suppose that as with many airline policies, it may be harder in print than in practice. According to policies at US, "Changes or cancellation must be made prior to departure date or the ticket has no further value" and at AA, "the itinerary must be canceled before the ticketed departure time of the first unused coupon, or the ticket has no value." These are fairly recent (2002-ish) policies so perhaps your knowledge is from prior to that? Or, as I mentioned, perhaps these are unenforced rules. Technically, though, that is the policy at legacies as well.

Now...if these policies are ignored at the legacies, then there is another important difference between LCCs and legacies...consistency. The LCCs have policies that they enforce and there is little grey area. Legacies, on the other hand, tend to manipulate the rules to fit the mood of the day and that is what upsets customers. They can get a different answer to the same question every time they ask because the true policies are not enforced.

So to ramble more...I guess that it isn't that the legacies have to create the same beneficial policies as the LCCs...they just need to ENFORCE them!!

 

[mweiss]

Treat the top-tier elites poorly and they may take ALL their business somewhere else...

Precisely the reason I abandoned CO this year.

 

[mweiss]

I am in no way saying to ignore the most loyal passengers...just that the legacies have missed the boat by putting all of their energy into this group and forgetting about the population that only needs to have their hearts won and not their lavish needs fulfilled.

I'm not sure that I agree with this statement. The most successful companies do an excellent job in targeting a specific market segment and doing the best job serving that segment.

So there's nothing inherently wrong with the legacies going after the most lucrative customers, just like Porsche doesn't sell to the $15K crowd. The big question is whether there's enough high-dollar business to support this particular segmentation.

 

[Ch. 12]

I'm not sure that I agree with this statement. The most successful companies do an excellent job in targeting a specific market segment and doing the best job serving that segment.

So there's nothing inherently wrong with the legacies going after the most lucrative customers, just like Porsche doesn't sell to the $15K crowd. The big question is whether there's enough high-dollar business to support this particular segmentation.

...and that's the paradigm that the non-LCCs cannot escape...that they MUST spend all of their effort on the highest yielding passengers. The difference between an airline and a Porsche dealer is that there is no leisure segment for the Porsche dealer. Basic rules of optimizing the revenue are that there are a very limited number of high-yielding passengers and they must be on the flights. HOWEVER...(especially in the past 3-4 years) it is the volume of virtually limitless leisure/mid-level passengers that are the true bread and butter. The cost associated with focusing on the elites is high in both real dollars and lost opportunity cost. WN/JB/F9, etc have focused on ALL passengers and since most passengers are not elite, they get a better overall consumer rating.

True...the most successful companies in the service age have been those that have coddled their elite while ignoring the masses but the airlines operate differently (in theory...not practice) AND we have moved from a service age to an information age. It's no longer as easy to keep the business passenger loyal on your carrier because they have so much more information regarding competitive pricing and schedules. As this segment becomes more difficult to keep, the legacies have been pouring even more resources into trying to appease the high-yielders while the bulk of the revenue (leisure and mid-yielders) are running out the back door to JB, WN, etc.

Legacies must escape this tunnel vision on the quickly shrinking high-yield "loyal" customers and begin to focus on all passengers. That is obviously what the masses want if you look at the studies and most importantly...the bottom lines. LCCs win in both areas.

 

[GadgetFreak]

I think some people are somewhat missing the point here. The article does say it is a survey, but that isnt completely accurate. If you read carefully the rankings are not due to customers saying they are satisified for the most part but are based on objective criteria. The only thing that is actually based on customers saying something is customer complaints. That is only a part of the rankings. The other things, lost baggage, on time percentage, involuntary denied boarding, etc are objective measures. Whether a customer is paying less for a ticket has very, very little to do with these rankings. What matters much more is if they can get on their flight and get to their destination on time and get their bags. What the study shows is that not only do the LCCs cost less, they do better at basic operations than the majors. This isnt a popularity contest.

 

[Ch. 12]

I expanded beyond just this article. And it is the misconception that "this is not a popularity contest" that helps legacies to lag further behind. It IS a popularity contest as JB and WN have shown all of us...and the winners make money at this popularity contest.

Being popular will drive loyalty more than exerting more and more costs to treat the elite lavishly.

So yes...I am "missing the point" if I should only stay within the confines of this article. But it is ignorance of the fact that the legacies are wasting their time, money, and energy in the costliest sector (which is not the crux to profitability anymore) that keeps them unprofitable. I am merely outlining the major difference in customer service which is what keeps people coming.

 

[WingNaPrayer]

If it is any consolation, I am seeing a rough rough ahead very soon for JetBlue. They are about to take AA on in a couple of their Latin American markets (Dominican Republic - Santiago/Santo Domingo) nonstop from JFK. There is no way JB is going to be able to make these treks on peanuts and soda.

They are about to find out what "full service" is all about, and I don't think they are equipped to handle it, at least not right off the bat.

In any event, it should be interesting.

 

[mweiss]

Ya know, Wing, you may be right. Or it may be that the legacy carriers have cut service so far as to change consumer behavior, such that they are prepared to bring their own food aboard anyway. If that's the case, B6 should do a fine job against AA.

The cool part is we'll get to find out soon...no idle speculation here.

 

[WingNaPrayer]

On top of that, they're going to find out the nasty toll these markets take on their aircraft . . . on the inside where travelers from those countries have zero respect for the planes, which they consider to be their own personal flying garbage can, and think nothing of a dirty aircraft.

Kind of like New Yorkers on the MIA runs. Man those people can trash a cabin!!

 

[mweiss]

I'd assume that the JFK-FLL customers aren't all that different from other NYC-MIA routes, which would lead me to believe that they are already aware and prepared for this market.

 

[GadgetFreak]

Ch. 12, people like JetBlue and WN more because they are on time more, get thier bags there more often and dont make them wait as long. It has nothing to do with the fact that they dont treat frequent flyers as well. Whether benefits for frequent flyers is worth it is a separate issue. It has nothing to do with why JetBlue and WN are more popular. And I didnt say that JetBlue and WN werent more pupular, they are. I said that this survey was not for the most part a popularity contest but a measure of the quality of the airlines operations. And the fact that JetBlue and WN are more popular is not based solely or even mostly on cost, it is based on the fact that they do the basics of airline operations better than the majors. That is why they are more popular.

 

[Fly]

It's pretty difficult to lose luggage when there isn't a connection. Time will tell. How many departures does JetBlue have a day? Not too difficult to hold a good track record with so few flights. Let them get into the thousands, then it would be a fairer assessment.

I love aviation....so much DRAMA!!! 😛

 

[GadgetFreak]

Southwest flies a lot of flights, but in general I think you are correct. As to losing bags on flights without connections, thats a different story. I think that is perfectly possible. The last time I remember checking a bag on AA was 1982. I saw it about 5 days later although that was a connecting flight. That and the related customer service interactions at DFW kept me off AA for 20 years. I started again last year and have been very happy flying AA, but I dont have bag check experience with AA recently. However, I have certainly have had bags lost and hugely delayed on non-stops on other carriers. My favorite was a few years ago flying NRT-ORD-LHR. After customs in Chicago I had to check my bag on the non-stop to LHR. It ended up in JFK. Since I dont check bags on AA the carrier is pretty obvious, but it has happened on other carriers as well.