Thursday, August 28, 2008

Airline Stupidity Follow-up

I want to write a follow up post on my blog posts about United Airlines and the airline industry in general.

My Dad shared with me this Harvard Business Review podcast on the same topic, and it got me thinking more about the airline industry pricing and service.

I want to first share with you a flight I was on in Europe, from Brussels to Dublin a few years ago. I flew on Ryanair and my flight cost a total of about $16 USD after taxes and fees. The flight itself was 0.01€ (about a penny). This flight had no reserved seating, so it was almost a mad rush to get on the plane so you could sit where you wanted. There were absolutely no "frills" and if you wanted anything you would need to pay a premium (including checked luggage, beverages, etc.) These flights also came with a lot of advertising from posters, flight attendants, and I think even the pilots. I loved this flight, first and foremost because it was cheap and I was trying to travel through Europe with spending as little money as possible. But also because I got exactly what I paid for on the flight. I think this is a perfectly acceptable way to do business as an airline, or any other business and I think a company can do well at it. Ryanair may even be coming to the US.

The other way to operate an airline is to go all out, and provide all those frills for your customers. Obviously, you have to charge for those services, but they are all bundled in the price. This will also work, because people that don't want to worry about securing all the little frills will pay the premium to have them all included. This is evident in first and business class. People in first class arrive at the gate with the plane at the exact same time those in economy do. The reason people pay 3-7 times more for a first class ticket is exactly for those little frills. Being on a plane is almost exclusively for one reason and that is for travel/transportation.

My biggest issue is when these airlines are in the middle of cost increases and decide to go ahead with frill decreases. I think it is very dangerous to try to be in the middle somewhere, because that is where companies will get lost.

Here is my idea.
  • An airline should have a bare bones fee structure for the flight.
  • They could have different classes/cabins that would offer more leg room. Further back in the plane the less leg room the cheaper the flight.
  • Booking online can be utilized in a way that allows someone to choose all the frills they want for the flight. This could include beverages, snacks, light meals, blankets, pillows, checked luggage, magazine, newspaper, etc. The list could go on.
  • Each frill chosen would be an extra cost, and added onto the total cost of the flight.
  • Kiosks (digital or real people) could be accessed throughout the airport incase you wanted to add any of these frills to your flight, and of course when you check into your flight any of these frills can be added on.
  • I would remind customers to add any of the frills before boarding the plane. This way the airlines would not have to worry about bringing aboard extra magazines/food/etc. that are not going to be consumed. This will help alleviate fuel costs for extra weight.
  • For this kind of bare bones airline, advertising would be a great addition, but as always should be done tastefully and as unobtrusively as possible.
  • There could be other variable pay structures implemented as well. I've heard ideas before such as pay per weight, so that a passenger would have to not only pay more for heavier luggage, but their own body weight as well. The more weight the more it costs the airline in fuel.
What do you think of this airline structure? Would you fly on this airline?

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