Since I started writing this blog, I’ve come to one thought many times:  Airlines, at least most of them, work very hard these days at trying to be all things to all people.  The reason for this is that the airline business, particularly in the United States, is all about market share. 

In other words, to be viable as an airline, particularly a larger airline, you have to have a pretty significant chunk of market share for a set of routes.  Without that share, you won’t average a load factor that earns you a profit.  In fact, it isn’t just about market share of a particular segment.  If you dominate solely in leisure travel, you’ll struggle to survive much less make a profit.  Even Southwest Airlines has learned the value of the business traveler. 

But is that the right direction going forward?  Some variation of that is probably going to remain the truth for some time.  However, I do wonder if airlines aren’t harming themselves by trying too hard to be all things to all people. 

When it comes to domestic service, I do think it would be wise for more airlines to emulate United’s 3 class domestic service of First / Economy Plus / Economy.  Offering more value for more money is a strategy that plainly works although I also understand the perceived risk involved with that.  You can’t easily change the configuration of an aircraft to meet changing seasonal demand for a particular product.  This is an area where aircraft manufacturers could do some work.

However, at the international level, I think many US legacy airlines are trying too hard to be all things to all people.  I’ve always admired Continental’s approach with their BusinessFirst and Economy products.  BusinessFirst is business class and, let’s face it, that’s what is going to sell at the front of the aircraft day in and day out when compared to first class. I think the new ContiUnited (I must come up with a new moniker for that) would be wise to adopt the Continental model BusinessFirst and the United Economy Plus/Economy model.  It’s 3 classes of seating but really 2 classes of service.

Airlines seem to be overstressing themselves in other places as well when it comes to trying to appeal to everyone.  When you’re trying to market to the leisure crowd, the business crowd and the uber-rich crowd, your message gets muddy.  Can you identify who does what best for which crowd in objective or subjective terms? 

You have far less of a problem with that in other parts of the world.  If you want best price in Britain, you’re likely going to fly Ryanair or EasyJet.  If you want a more business oriented service, you’re likely going to pick British Airways.  It’s notable that BMI has more of an American approach and they don’t do so well.   Ryanair specializes in delivering the best price possible and has focused on that goal relentlessly.  British Airways specializes in service and image and focuses on that goal pretty well despite current problems and criticisms. 

We could stand to see a bit more focus out of our airlines.  Isn’t it interesting that when airlines set up “specialty” brands in-house, they usually did pretty well and only went away when the competition in that specialty went away?  I think there is a lesson there.  Does every flight need to meet every need?

I think the key to becoming more adept at specializing in customer needs, we need aircraft that are more easily configurable for particular demands.  It’s interesting to me that business class in Europe is often coach seating with the middle seat “blocked” from use.  Sometimes that same middle seat can be folded down into a “service” area for the aisle and window seats.  What if an airline or seat manufacturer came up with a product that allowed configuration of seat pitch in a manner of minutes with the addition of a row or two of seats in less than half an hour? 

There is nothing wrong with segmenting service for various needs and charging for it.  No objects to those pricing models.  The issue with “fees” is charging for something that had no charge until recently and acting like you are doing someone a favor.   Airlines could create a great deal more value in their product with more specialization towards particular customer needs and wants. 

After 40 years, I think coming up with seating that is configurable “on the fly” shouldn’t necessarily be quite the challenge it’s made out to be.  The industry should be able to meet this challenge and I think when they do, they may find a way to more reliable profitability.

Filed under: Aircraft Development, Airline Seating, Airline Service by ajax