The Airline Industry 22.May.2008
Earlier this week the American Customer Satisfaction Index was released. It is the results of a survey measuring how satisfied customers are with the companies they buy stuff from. Most famously they rate how satisfied customers are with the airline industry – or should I say – how un-satisfied customers are with the airline industry. The industry as a whole is always below the average of all other types of companies. It has been standard practice for airlines to change an extra free to check three or more bags, that seemed reasonable. But by April of this year, 5 of the 6 major carriers had started to charge for checked just two bags. In most cases $25 each way, that is $50 round trip. Then yesterday American Airlines announced that in June they would start charging $15 just to check one bag.
Hello, slower security lines!
All of this is an attempt to boost revenue. Back to the customer satisfaction index I mentioned earlier. Southwest Airlines has topped to list every year for the most satisfied customers for all 15 years the survey has existed. Southwest has also been profitable in everyone of those years. And Southwest is not charging its customers to check one or two bags. Coincidence? I don’t think so.
Customer satisfaction really does plan a significant role in keeping a healthy bottom line, the only problem is, it is hard to quantify customer satisfaction. The ACSI findings don’t have a dollar sign printed anywhere. So poorly visioned companies, like American Airlines, will continue to shoot themselves in the foot with their hair-brained “revenue boosting” techniques. Tough for them, I certainly won’t be fooled if I see they have the best price the next time I search on Orbitz.