Service with a Smile

Customer service rankings of airlines are very interesting to me these days because it is the LCC carriers such as Southwest Airlines, JetBlue and Virgin America who are doing very well in these.   There was a time when legacy airlines such as American Airlines, United Airlines, Delta Airlines, etc would be the ones to garner high rankings and largely because they were regarded as full service airlines.

Before I go further, let’s just toss out first/business class experiences.  They are typically quite good no matter what airline you are on and it isn’t worth doing too much comparison.  The truth is, if you’re flying in first or business class on most any airline, you’re going to be well taken care of.

Economy class is where the differentiation takes place.  Legacy airlines have dumbed down their service so much over the past 4 years that few customers see real value in flying on these airlines.  The typical customer flying mainline service from one of these airlines can expect a cramped seat on an older aircraft on a flight whose departure and arrival are far more dependent upon a hub system that can have immediate ripple effects when there are problems at a hub.  In addition, that customer can expect to pay for checking baggage and even privileges such as a well placed seat or softdrink.  Best (or worst) of all:  the consumer can expect a less than friendly experience from service staff and that extends from the front door of the airport to the back of the aircraft.

That isn’t the experience on most LCC carriers.  To the contrary, a passenger can generally expect to *not* pay for checking a bag, not pay for a non-alcoholic drink, not pay for a snack and even not pay for changing a ticket (Southwest).  The aircraft are far newer and frequently have onboard entertainment available for purchase and WiFi for a small service fee.  The service staff tend to be friendlier from front of airport to back of aircraft and the fee structures that do exist don’t generally come off as someone nickel & diming the passenger.

In short, the LCC carriers are generally offering far greater value for the price of an air fare than the legacy airlines are.

The truth is that LCC carriers aren’t really low cost anymore in terms of sheer price.  In fact, it’s been noted that LCC fares are ranging far higher than once before and often they let the legacy carriers set the price in markets.  Where the LCC carriers are winning is in the value delivered:  few or no fees, better service, more comfortable aircraft, etc.

Ironically, this is how airlines differentiated themselves until the late 1970s.   Then, airlines didn’t get to differentiate on price because fares were set by regulatory authorities.  Instead, they could differentiate on schedule and service and they certainly did so.  People often flew those airlines based on the kind of service they enjoyed.  A TWA passenger wasn’t typically a Braniff passenger.  An American Airlines passenger wasn’t typically a Pan Am passenger.

That’s happening again.  A Southwest passenger tends to not be a JetBlue or Virgin America passenger and vice versa.  The differentiation is on service.  Southwest passengers tend to like the reliable, consistent and fast service.  JetBlue passengers enjoy the amenities vs price.  Virgin America passengers like the full service approach versus legacy airlines.

If you believe that your experiences on legacy carriers has been lacking, I couldn’t shout loud enough in favor of going to the LCC carriers for your needs.  The service experiences are far superior (in general) and for the same or lower price.  Each has their own loyalty programs that are as generous as anyone else’s as well.

This is an area where Virgin America does very well.  They are entering traditional route markets and competing on service for the business traveler successfully.  Their schedules are well suited to those travelers, their service product is superior and their prices are vastly more reasonable on those same routes.

And that’s the way it will continue to trend.  Legacy carriers who’ve even got their act together are still competing largely on price alone and while that works to a degree, it doesn’t work well over the long term.  To a degree, this is being answered with Economy Plus seating on these flights but those service options largely make it possible for the airlines to offer the frequent flier an “upgrade” that isn’t what  an upgrade used to be.  If it was intended as a real service upgrade of value, the pricing for that seating would be far more competitive than it is.

LCC carriers will continue in this path because they have a sustainable service model and a business model that allows the airline to earn the profits necessary to be sustainable as an airline.  They haven’t lost sight of the fact that service with a smile wins customers and keeps them.

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