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May 5, 2017

Pay more for less quality courtesy American Airlines?

American apparently wants to find out just where the insufferable pain barrier for full service passengers can be found

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Now stick your knees hard against seat back in your face

Most media today is covering news in stories like this that American Airlines, which masquerades as a full service carrier, will screw its economy class passengers even harder when it comes to legroom in the near future.

Of course, the stories aren’t for the most part written that way. They are obedient exercises in corporate dictation to a degraded ‘traditional’ , media sector, and lapped up by social media aggregators who seem clueless and disinterested when it comes publishing context or overviews.

Some of them also leave out the other side of the story, that American will make itself as tight, if not in some rows tighter, than the space available in high profile low cost carriers like Ryanair, in part because of tightness in both discretionary and paid work travel.

American for a very long time, was very generous in economy class legroom, but couldn’t see any evidence that this was actually improving financial performance or causing customer loyalty.

In the context of that disappointment, the changes we see in ‘legacy’ airlines in the US, Europe, Hong Kong and perhaps very soon, Australia, are like attempts to keep tightening the screws until kneecaps start to break, or the customers refuse to take any more discomfort.

It’s a management search for the pain barrier.

That is one of the ironies of the media where airlines have succumbed to similar management initiatives as grocery chains, in reducing the actual contents or dimensions of what have been staples, but keep the price the same or even jacked it up after an initial period, on the basis that customers have to buy what they are selling.

The messages coming out of some airlines no longer reflect the defensive attitudes we’ve seen in the past, apart from bland references to improving ‘customer satisfaction.’ It’s a case of take it or leave it, which is dangerous for the carriers, because if economic circumstances change in say America or Australia, more people might decide to pick up the phone, or just not bother with discretionary bookings.

Where will the trend lead us? There is a view that it will cause more customers to trade up to premium economy, where they might mingle with those executives bumped down from luxury business class cabins by a more ruthless tendency in cost control by corporate account managers.

But will that happen, and can it happen enough to replace the customers fleeing the confines from the tighter economy class environment which in some places, coincides with an unpleasant airport experience driven by security procedures gone bonkers?

As many marketeers have noted over the years, if you want to collect a premium for something, it has to offer a dollop of exclusivity, whether confected or not. There is nothing that might be described as exclusive in a jet in which far more seats are in premium economy or business class than in economy.

The idea of ever larger ‘loyalty’ clubs taking over more floor space at airports, especially those that are privately owned, is problematical. That space, if leased from the airport, is likely to be more valuable to its owners for retailing activities including car parking, rather than a place where entitled customers can compete for a shortage of celery sticks and seats in a lounge also divided into ‘special’ rooms.

In the meantime, the difference between declared low cost carriers like Jetstar, TigerAir Australia, Southwest, Ryanair and Germanwings and the ‘full service’ carriers diminishes toward vanishing point.

How the short term crush-and-charge more approach to air travel plays out as people get larger, and it seems, angrier, remains to be seen. It might not end well.

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6 comments

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6 thoughts on “Pay more for less quality courtesy American Airlines?

  1. Giant Bird

    It is going to be like the TV stations when the private equity investors got hold of them and started a race to the bottom of viewer satisfaction. Make short term profits by being the station with the cheapest programs appealing to mainly under 30’s, the most add time per hour and over running the start time the most. Then the under 25’s found alternatives to live TV and the advertisers also left in symphony. So the likes of channel 10 made some short term profits but now do not have the revenue and financial resources to win viewers back.
    Aircraft configuration is a much longer term commitment than TV programming and takes takes much more time and cost to change. Once you go the cheap and nasty route it can be almost impossible to come back to buyers accepting you as a quality supplier. Ben is correct people will pay for perceived quality and value, you just have to market it correctly. It is amazing how CEO’s paid tens of millions per year seem so clueless and inept in marketing quality. They try to blame the customer for the race to the bottom. The airlines have got it wrong. The same customes sitting in the cramped seats, do not buy the cheapest crappiest car on the market, the cheapest phone on the market, a back packers hostel to sleep in, cheap ugly furniture or cheap unfashionable clothing. The airlines are being lazy marketers.

  2. derrida derider

    Yep, a lot of full service carriers are suffering mainly because of poor marketing. When the LCCs arrived, they should have been willing to very quickly hand over the extreme-budget holiday crowd; positively encouraging such airlines to squeeze (in both senses) those customers as much as possible, while being very careful to strictly limit their own squeezing. Trying to compete with those brands in the squeezing space is dumb, dumb, dumb strategy.

    1. Dan Dair

      Well people, I’ll side with you.!
      I completely agree,
      but we are where we are,
      which generally-speaking, isn’t exactly where we’d like to be.? (not entirely unlike a Ryanair destination.?)

      So the question I pose is this;
      How much of a premium should ‘legacy’ carriers be charging for a ‘proper’ passenger service ?
      &
      How do those airlines effectively roll-back the negative changes to generate bums-on-seats AND profitablility.?
      (I know that’s two questions, but they’re different sides of the same coin.!)

  3. comet

    Well, Plane Talking did its bit to alert readers to which airlines offered more space, or less space in economy.

    It’s very unfortunate that American Airlines has decided to join the race to the bottom by making their cabins tighter and squishier.

    1. patrick kilby

      The other point is the absurd baggage policy that AA follows. Charge for check in baggage; no regulation of cabin baggage and chaos at boarding as about a quarter of the passengers have their bags checked in for nothing, the turnaround time is close to an hour as people wrestle bags and bag delivery to the belt takes forever. Give me th QF model any day. 30min turnaround and bags are at the belt by the time you get there.

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