Winning Over The Customers?

[WestCoastGuy]

Dea Certe is exactly right in the fact that our management team needs to get out into the "real world" of the airline and see and experience what our customers see. They are so buried in the Crystal Palace offices counting the beans and barking out new rules that they forget one thing. It's the customer that decides to spend their money with us. Oh, Ive seen exec's flying thru before, but always in the First Class cabin, making sure they are not inconvienced by having to set in the the coach cabin. And one thing we'll NEVER see, is an exec in a Middle seat between two paying customers!

 

[ELP_WN_Psgr]

If I was the head Marketing Honcho at US, I would do the following, in any Airport the SWA & US compete head to head all I would do is show a continous loop of of Airline at the US boarding areas. US Airways could not buy better advertising.

I don't know.

Allegedly Eddie Rickenacker, while at Eastern, made the comment that an airplane crash was like getting a million dollars in free advertising.

And you are right, Bob, we don't need to hash and rehash why we choose the airlines we choose. You don't care for WN. Okay fine. I absolutely detest DL, not real fond of CO, I find AA to be okay, US is in the take-it-or-leave-it category. I honestly find the service on WN superior. But that's me.

You can be the USAirways Marketing guy and I will do the same for WN. For every episode of Airline you show, I will have reprints of the article about the "we don't give a crap about your brain tumor, no refund and no wire coathangers!" or perhaps tape recordings of fares quoted by USAirways reservations sales agents "That fare, Philadelphia to Buffalo, withh be $938 RT and that includes all taxes and fees."

Imagine. Only $938. They even paid the taxes and fees.

You ought to look at the DOT O&D statistics sometime. It's pretty interesting. On most NE-FL stuff these days WN commands a fare premium over USAirways. Wonder why people are willing to pay more? Maybe it is because they perceive greater value (that'd be my excuse, anyhow.) But one real dilemma that faces USAirways is the fact that tigers don't change their spots. It doesn;t really matter if you have offered a $29 RT between Philadelphia and West Palm Beach, if you are perceived as porking the public on a regular basis, that is not a good thing.

Treating Customers Poorly i.e. high fares in captive markets. The Plan of Transformation addresses that very issue. IF the current restructuring goes forward US Airways will be a formidable competitor to LCC's and potentially deadly to it's legacy competition.

You might like to think they will. They may very well have told you they will. They've told people (esp the employees) so many different things that I am sure they are having trouble remembering everything they have said.

Right now, there is nothing to stop them from having put GoFares and a taional pricing plan in every market, on every flight, effective yesterday. Nothing at all.

Maximizing revenue? Selling more Y tickets and fewer el-cheapo-advance purchase-highly restricted-we are only doing this to undercut WN type tickets does a whole lot towards maximizing revenue.

For every $451 seat they sell from PHL to BUF they are selling a dozen $99 seats from PHL to LAX. That wreaks havoc on yield and leads to losses.

Employee concessions were not and are not necessary for them (the management) to try and do something about the revenue side of the equation.

I am sure they wanted you to believe that once these concessions are in place, a new day will dawn and everyone will be able to fly around on luxurious USAirways aircraft in low cost splendor.

Once they get the concessions, there is absolutely nothing to stop them from doing just like they have always done, namely, squeeze every customer for every penny they possibly can to maximize revenue.

It won't be like the company hasn't hosed two sets of shareholders. After the second CH 11 reorganization I expect this management team to need to maximize revenue so they can pass around congratulatory bonuses to management for having saved the airline. With all these big bonuses and trying not to hose these shareholders, taking care of the customers will fall by the wayside. Fares might come down a little, mainly to keep LCCs from entering particular markets, but it won't be any boon to the consumer. Hide and watch.

The real deal is IF the airline had been interested in any way, shape, or form in simplifying and lowering fares, they would have done that a long time ago. The foot dragging ought to tell you they aren't really interested and, after the alleged contract violations and the way employees are treated, you ought to be able to see that these folks are not completely trustworthy.

The "we need the concessions first" mantra is the biggest crock of crap I have ever heard. I have a hard time believing any reasonably intelligent indicidual would fall for that. The best indicator of how someone will behave in the future is how they have behaved in the past. Two rounds of concessions with no structural changes in the airline, continuing to charge obscenely high fares in any and all markets where it is still possible while matching LCCs in other similar markets...that doesn't really give a person a warm, fuzzy feeling that the airline is going to magically "transform" into a LCC interested in providing passengers with fair fares.

 

[MarkMyWords]

ELP

Isn't the idea to maximize revenue. If you can charge 1200.00 and customers will pay it, so be it. What you find with the lowering of fares is that customers will no longer pay the 1200.00. Going by your theory, then all the BP, Citgo, Mobil and Sheetz gas stations should all charge the same for gas as the Costco and Sam's Club. Why doesn't it happen? Cause the consumer is still willing to pay what the other stations charge. If suddenly, everyone was getting their gas at Costco and no one was gassing up at BP, you better believe that BP would lower their price to the sam level. If they couldn't make a profit doing it, then they would have to go through the same restructuring that we are. Kind of a very crude comparison, but why is it that things that work in other industries don't apply to air transportation?

 

[longing4piedmont]

PineyBob, along with a few others set up a most successful meeting with some of our Executives. I really admire that effort and have a new-found respect for those in management who attended Roachfest 04. It had to prove our customers are interested enough in the survival of this airline to take their own time and money to try and make a difference. I hardily applaud all who attended and promise if there's a Roachfest 05, I will be there.

I hope management learned a lot from our very loyal customers during that meeting. And I'm hoping they will continue to be receptive to what was said.

Dea, you might find this thead of interest. I think they are listening.

http://www.flyertalk.com/forum/showthread.php?t=349999

Thanks for the kind words and the support, BTW

 

[sfb]

Isn't the idea to maximize revenue. If you can charge 1200.00 and customers will pay it, so be it. What you find with the lowering of fares is that customers will no longer pay the 1200.00. Going by your theory, then all the BP, Citgo, Mobil and Sheetz gas stations should all charge the same for gas as the Costco and Sam's Club. Why doesn't it happen? Cause the consumer is still willing to pay what the other stations charge. If suddenly, everyone was getting their gas at Costco and no one was gassing up at BP, you better believe that BP would lower their price to the sam level. If they couldn't make a profit doing it, then they would have to go through the same restructuring that we are. Kind of a very crude comparison, but why is it that things that work in other industries don't apply to air transportation?

[post="173667"][/post]​

Well, the comparison is indeed crude and it's not applicable in any case. When you're comparing the difference between what various gas stations charge, you have to keep in mind that you're talking about pennies per gallon, or at most 20-25 cents per gallon. Even with a big SUV, the total difference is a few dollars per tank, or about 10%. And you can charge a bit more for convenience since it often doesn't make sense to drive several miles just to save a buck. Grocery stores, drug stores, discount department stores, etc. are the same way. The total difference in price in dollars or as a percentage just isn't that large. And, moreover, those gas stations charge every customer roughly the same amount (aside from cash, fleet, membership discounts).

What's different about airline tickets? Well, for one, the most expensive tickets in legacy markets cost anywhere from 5 to 10 times (or more) the least expensive tickets! I mean, how does a customer feel after paying $1200 for a ticket when he or she finds out that the guy next to him paid $99. How do they feel when the airline charges then $99 to go from BUF to Florida (via PHL) but wants $500 for just the BUF-PHL flight. They feel cheated! And it builds resentment.

And the long-term problem with charging "what the market will bear" is that this policy draws low-cost competitors like a moth to a flame. It's easy to undercut $500 walk-up fares for 300-mile flights. It's a lot harder to undercut $99 walk-up fares for 300-mile flights.

As for maximizing revenue, one could easily argue that selling 10 $1200 tickets and 90 $100 tickets does not provide much more revenue than 35 $300 tickets and 65 $100 tickets.

 

[mbmbbost]

You ought to look at the DOT O&D statistics sometime. It's pretty interesting. On most NE-FL stuff these days WN commands a fare premium over USAirways. Wonder why people are willing to pay more? Maybe it is because they perceive greater value (that'd be my excuse, anyhow.) But one real dilemma that faces USAirways is the fact that tigers don't change their spots. It doesn;t really matter if you have offered a $29 RT between Philadelphia and West Palm Beach, if you are perceived as porking the public on a regular basis, that is not a good thing.

[post="173641"][/post]​

It'll be interesting to see if those figures change once US has NE-FL nonstops (which they haven't had for a while, other than PHL). I know plenty of people that have paid a small premium to get nonstops on other airlines and avoid connecting flights on US to FL. In this case I think the greater value is in the nonstop flight, which WN offered.

 

[ELP_WN_Psgr]

Isn't the idea to maximize revenue

The goal is to maximize revenue.

You don't do that by killing your market.

To wit:

Philadelphia & Pittsburgh are two major cities, located 267 miles apart, in a populous state. The two have a strong community of interest. The two should generate healthy air travel between themselves.

Average O&D traffic is 462 pax per day at an average fare of $238. A little less than a dollar a mile.

Dallas and Houston are two major cities, located 252 miles apart, in a populous syaye. The two have a strong community of interest. The two should generate healthy air travel between themselves.

Average O&D traffic is 3851 pax per day at an average fare of $85.56. That's 34 cents a mile.

Now, depending upon which airline we're looking at, we're looking at ASM costs of between 8 and 13 cents, roughly.

Any way you slice it, If you are getting 34 cents a mile and carrying some healthy passenger loads the CEO's wife is not liable to have to take in washing or turn tricks in a truck stop to help make ends meet.

You don't charge "what the market will bear" because the market is not static.

You lower your fares, you make the market bigger.

You make the market bigger, you can fly more flights, which better utilizes your aircraft and employees, and causes the ASM cost to drop, which means you make more money.

Granted, there is some experimentation that has to go on.....to try and find the "sweetest spot" where your fare causes the size of the market and the fare you are charging to generate the most revenue possible. But it doesn't take a genius to figure out that is usually not a dollar a mile.

In this case, the yield is 1/3, but the traffic generated is nearly 9x larger.

In addition to generating the largest possible total revenue, setting fares with a certain amount of reasonableness pays other dividends.

Goodwill. If you don't screw your clientele simply because you can, they are less likely to seek alternatives and be more loyal to your product. Piney Bob decries the cattle car and unassigned seating.....but the folks who gather at Love Field for the 50 min hop to Houston Hobby at half hour intervals during each and every business day are scarcely the dispossessed. We're talking Fortune 500 folks who ride the ugly planes and never bat an eye. They collect those nasty old Rapid Rewards credits and some of even dabble in Southwest stock to put the kid through law school or somesuch.

A higher percentage of full Y fares soild. Let's look at Dallas to Houston. Southwest's full Y fare, as I recall, is $93. The advance purchase cheap seats usually run in the $34 to $39 range. What an average fare of $85.56 tells us, if you can remember Algebra, is that a whole lot more $93 seats are sold than $34 tickets. You haven't priced yourself out of the market.

Just how many people buy those $1200 tickets? And the few that have to, for whatever reason, how many of them come back and buy more tickets any time soon?

Maximizing revenue on a one time basis with high fares is very shortsighted, because it does nothing to promote the goodwill necessary among the ticket buying public to ensure that the company maximizes total revenue generated over the long term.

 

[Bear96]

I just don't understand all the fuss.

People buy these types of tickets because they are CHEAP. In exchange for their CHEAPness is the understanding that the passenger is taking the risk that if they don't fly for whatever reason, THEY have assumed the risk of that possibility.

If you are unwilling to assume that risk, purchase a different fare class.

Having a brain tumor and all the other terrible things that can befall us as humans is certainly very sad-- beyond words sad.

But if I purchase a home or rent an apartment, and then because of [insert your very sad story of choice here], and so as a result I have to spend extra money on other housing costs for the month such as hospital bills / hotel bills to visit my sick relative / [insert your very sad story of choice here] so that I am suddenly short of cash to pay the mortgage / rent that month, do I get a break because I spent less nights than usual in my home? No.

And will my mortgage lender / landlord be vilifed on a public discussion board because s/he wouldn't give me a break? No. If I am wrong, please provide the link to that discussion board to prove it.

Or. If I purchase $100 of groceries from Piggly Wiggly and then drop dead the next day so that I don't have the chace to consume those groceries, do we expect Piggly Wiggly give $100 to my estate (even in exchange for them taking the groceries back to the store in an attempt to resell them)? No.

You get what you pay for. If you choose to buy a cheap ticket, you get conditions attached. If you are unwilling to go along with those conditions, don't buy the cheap ticket.

Everyone wants airlines to act more like other businesses-- except when it may mean they have to cough up another dollar or two on their $39 cross-country ticket which will take them across the country safely at almost the speed of sound.

 

[US1YFARE]

But if I purchase a home or rent an apartment, and then because of [insert your very sad story of choice here], and so as a result I have to spend extra money on other housing costs for the month such as hospital bills / hotel bills to visit my sick relative / [insert your very sad story of choice here] so that I am suddenly short of cash to pay the mortgage / rent that month, do I get a break because I spent less nights than usual in my home? No.

And will my mortgage lender / landlord be vilifed on a public discussion board because s/he wouldn't give me a break? No. If I am wrong, please provide the link to that discussion board to prove it.

Or. If I purchase $100 of groceries from Piggly Wiggly and then drop dead the next day so that I don't have the chace to consume those groceries, do we expect Piggly Wiggly give $100 to my estate (even in exchange for them taking the groceries back to the store in an attempt to resell them)? No.

[post="173700"][/post]​

I think the comparison to lease agreements and mortgages is flawed. You are talking about a long-term commitment v. one flight. Also, a mortgage company cannot simply foreclose on your house--several intermediate steps need to be taken. Still, in certain situations, that lender or landlord would make an exception and allow a late payment or work something out if the circumstances so justified. I see it all the time.

I do think the Piggly Wiggly would take back their groceries the next day just like US would give you your money back if you died.

Hotels make exceptions all the time, even if you have not canceled in time. I don't think US, or any other airline, should give the store away, but there are certain situations that justify an exception and the airline realizes this because they have made exceptions. The problem here may have been a bad res agent taking the call. And, even if that is the case, overall, I think US's res agents are the best in the business--especially at the CP desk.

 

[reznc]

Call me crazy, but in the rest of the world people understand the philosophy of nonrefundable, penalties etc. with contracts and I am at a loss as to why Americans think they are different when it comes to making a contract and attempting to change it. Noone said they couldnt use the value of the ticket, they said the complete opposite, and then they decided that wasn't OK so took it to the media and were rewarded for not fufilling their contractual obligation, in the meantime the supervisor that denied them has handed out the message as per management request even though in the past they had more flexibilty and probably had a nastygram placed in their personal file for an "alleged" remark, (after all it is hearsay).



Since 9/11 our flexibilty has become less, and there is two sides to this story; firstly it highlights that the rep.s were doing their job correctly/enforced as per management policy, be it right or wrong, secondly the only way change seems to be instigated is through the public, definitely not from the frontline at the moment.

As for the response regarding LH and US, please they are probably the hardest airline to work with after BA, they only have to have see an american airline on the reservation and they will not touch it even if it is their responsibilty, we are having to handle alot of their resposnsibilities and I am sorry that US1Yflyer had to demand assistance. some I know that the CSD International regularly go beyond and for everyone regardless of status, regularly the policies are reinterpreted to manoeveur around the lack of flexibilty, and heated debates occur with CCY regarding policies that are not always in anyone's best interest.

 

[KCFlyer]

I just don't understand all the fuss.

People buy these types of tickets because they are CHEAP. In exchange for their CHEAPness is the understanding that the passenger is taking the risk that if they don't fly for whatever reason, THEY have assumed the risk of that possibility.

If you are unwilling to assume that risk, purchase a different fare class.

Having a brain tumor and all the other terrible things that can befall us as humans is certainly very sad-- beyond words sad...

You get what you pay for. If you choose to buy a cheap ticket, you get conditions attached. If you are unwilling to go along with those conditions, don't buy the cheap ticket.

Everyone wants airlines to act more like other businesses-- except when it may mean they have to cough up another dollar or two on their $39 cross-country ticket which will take them across the country safely at almost the speed of sound.

[post="173700"][/post]​

The one thing you are forgetting is this. If I bought a $50 ticket On U in PHL and got sick, they are glad to change it....for $100. If I buy a $50 ticket in PHL on Southwest and get sick, I'll get full credit towards another ticket. And...if I get a brain tumor and can't fly, if I write SWA a letter and include a letter from my doctor, odds are pretty good that I'll get a refund. Now...you paid the same for both tickets. Who "got more of what they paid for"?

 

[reznc]

The one thing you are forgetting is this. If I bought a $50 ticket On U in PHL and got sick, they are glad to change it....for $100. If I buy a $50 ticket in PHL on Southwest and get sick, I'll get full credit towards another ticket. And...if I get a brain tumor and can't fly, if I write SWA a letter and include a letter from my doctor, odds are pretty good that I'll get a refund. Now...you paid the same for both tickets. Who "got more of what they paid for"?

[post="173733"][/post]​

ANd they paid for what....different service, no peanuts, preassigned seats, ability to upgrade....

 

[ELP_WN_Psgr]

ANd they paid for what....different service, no peanuts, preassigned seats, ability to upgrade....

That dog won't hunt. It never really has, and alot of airline management has thrown away alot of stockholder money by pretending that the products are vastly different.

I have flown both carriers. Recently. And here's the real deal.

There's really not adime's worth of difference between the two products....if anything, WN's product (to me, not Piney Bob) is better.

Not everybody gets to upgrade. That's a given. So let's compare apples and apples. Coach cabins.

On USAirways I get someone to tell me what seat I have to sit in. I have no visibility of who may be inthe seat next to mine. It could be an attractive blonde. Or it could be a 450 lb gentlemen who should shower more often. I get about 30" of pitch. I get the cart rolled down the aisle once to give me the beverage of my choice, then it gets parked and I could looked at like I've grown athird eye in the center of my forehead if I suggest that a refill on my beverage of choice might be nice. That's if I get abeverage service at all - on a not too distand MDT-PIT we were told that due to the short duration of the flight there would be no beverage service inthe main cabin. Flight was scheduled, I believe, for about 58 mins on a 737. I might accumulate some miles.....let's say 500. How many is it gonna take for me to get a free ticket someplace? Depending on where I am going, chances are good I will get to connect at PHL or CLT.

Heck, I might not even really be on USAirways at all. I might get to the gate only to discover, much to my dismay, that it's really Mesa and a Barbie Dream Jet.

On Southwest: I know I will be on a full size aircraft operated by the airline I bought the ticket from. The seat pitch, for the Y cabin, is generous at 33.75" or so, which isnice because my jeans are 34x38 (long legs). The beverage service will come from a tray and it will come pretty quick and pretty frequently unless we are running into some rough air. The plane might stop, then again it might not.....but my chances of having to connect at a hub are much less than on your typical network carrier. Even if I just flew 155 miles AUS-HOU, if I booked online I have acquired 1.5 of 16 credits necessary to get a free ticket. If I was smart I printed out my boarding card at home before going to the airport and will no doubt be in the A group which means that the lack of an assigned seat just means I will get toselect the one I want as I get on the plane. On a short flight, I will probably get lorna doone or cinnamon graham cookies at breakfaast, wheat thins, ritz air crisps, or cheese nips later in the day, as well as the ever popular peanuts.

All that and if I don't go, I have lost nothing as long as I can go within a year. And if I don't wish to go within a year, I can use my credit to book a friend and let them give me cash---the unused credit is transferable. If I buy a $134 RT ELP-DAL-ELP, and decide not to fly back.....they give me full credit for the unused leg without jacking up the price of the ticket going over.

Airlines are CUSTOMER SERVICE BUSINESSES. It doesn;t really matter what your rules or policies are. People expect to be treated well. Airlines that are user-friendly will generate more business and capture business from less user friendly carriers.

Airlines that persist in thinking there is something inherently inferior about the product WN offers the consumer will discover/are discovering/have discovered the fallacy in that belief. I told people that 6yrs ago over at Planebusiness.com's boards (and the MetroJet people just scoffed and said they would kick WN's tail out of BWI) and it is no less true today. Southwest treats everyone well. They just don't treat anyone special. This doesn't endear them to the self-anointed elite passengers who want to be carried from the airport parking garage to thegate in a sedan chair and have the Flight Attendants wipe their rear, but it does endear them to the rest of us huddled masses.

 

[Bear96]

Hotels make exceptions all the time, even if you have not canceled in time.

[post="173712"][/post]​

That sure hasn't been my experience. It just happened to me-- I couldn't make it to a hotel because of circumstances beyond my control; I gave them a full 24 hours notice; they had a 72 hour cancellation policy; apparently I am SOL and out $139.

I'm not happy, but I understand that the 72-hour cancellation policy is what it is, and I do not intend to go to the media or a lawyer over it. If I didn't agree with the policy when I booked and it was that important to me, I would have found a different hotel.

 

[bobcat]

I'm glad to see that some have spoken logicaly and like responsible adults on this topic but, others have not.

As you grow up and supposedly become responsible adults you should kind of get the gist of how the world works. There is a right way of doing things and the wrong in our society, there are laws or rules to most everything (for a reason), legal and illegal acts. We learn the way of the world and go along with it to live our lives in the best way that we can and raise our children that way.

We should all know that if we pay a bill late you pay the late fee, if you get caught speeding you pay the fine, if you're in an accident your insurance goes up, if you don't pay utilitites they get shut off and the list could go on forever. US does not hide the rules and restrictions. They are not doing something devious and they are not holding a gun to anyone's head and forcing them to buy a ticket. They are purchased at will and they are paying a specific price to fly to and from specific cities on specific dates and times, period. If something unforseable occurs and you can't take those flights they will allow you to use the credit towards another ticket with a penalty. It's told to every passenger before hand and in black and white on the website. If you can't agree to the terms don't buy it.

There are a few websites such as Cheap Tickets and Priceline that have the policy that there are no changes, no standby and no refunds no matter what. From what I have seen they stick to that policy. People buys those tickets of their own free will and I have seen many get stuck buying another ticket when there are emergencies or plans change. They b**ch and scream about it but they buy another ticket directly from an airline and then will go back and buy tickets for another trip from Priceline again because it's cheaper. I don't see Priceline's name splattered all over the headlines. People just don't care what the rules are until they have to abide by them.

There are a couple of stores that I will not shop at because they have a no return no refund policy. It's not because they are terrible stores and what they sell stinks. It's because I never know when I'll need to return something. So, I shop at stores that have a return refund policy. As far as someone mentioning rent payments and so on...I was in a terrible accident some years ago and was immobile, housebound and unable to work for eight months. I had no source of income and all utilities, creditors and landlord were made aware of the situation. Believe it or not I was still expected to pay every last one of those bills on time. The only one that kind of cut me a break was the landlord who said she would would not evict me but I would still be responsible for the late fees. I worried about how I would pay for everything but, I didn't scream and cry and call the newspaper. I knew the score and dealt with it.

Youngblood stated earlier that Res agents do not make the rules but must abide by them. It is their job whether they like it or not. Sure it would be wonderful if US dropped the change fee and the non transferable policy. It would make the agents' job 100% easier. But until then that is US policy. Everyone has a choice to buy or not to buy. If you buy you follow the rules and restrictions. Just like everything else in this world.