Major airlines are structured in a manner that makes it impossible for them to care about your happiness. Over the past few decades, via consolidation, bankruptcies, and restructuring, the number of individual airlines has been reduced to the point where a few major players control the market. During this period of consolidation, the competitive environment has shifted so that customers themselves wield very little power and are instead at the mercy of the major carriers.
The fact is that the major airlines don’t actually operate most of the flights you fly. Despite the fact that you may purchase a ticket from a major carrier with a well-known brand, in fact most short-haul, domestic flights are outsourced to regional air carriers. These carriers are paid on a per flight basis. In other words, no matter how many customers are on board, the outsourced player still gets paid the same amount of money.
This basic structure presents a problem. The party that has the most knowledge of the market and the customers has no control over the process. The major carrier whose brand forms the basis of trust on which the transaction is based is simply using itself as a marketing vehicle to sell tickets. The outsourced carrier, who has knowledge of an individual routes popularity, performance, and customer dynamic, has no influence on whether service will expand, contract, or change at all.
The system itself is built in a way to promote congestion, confusion, and consternation. Airports have grown from small municipal gateways into major cities in their own right. These cities host millions of travelers each day and employ thousands of workers. Very few elements of the modern day terminals are centered on the customer. The focus of the planning, construction and operation of the terminals are the airlines. They are built in a manner to make sure that the major carriers can use these facilities as hubs of their operation, linking their network of flights from around the world.
Loyalty and affinity programs aren’t helping the process. Being part of a loyalty program essentially guarantees that you will return to that airline as a customer. You are saying to the airline, “I don’t care about how well you perform, I will come back no matter what”. While there are obvious benefits to loyalty programs, the programs are taking the element of competition out of the market. As a result, there is little incentive for the major carrier to perform up to customer expectations.
In instances when a customer doesn’t fly on its preferred airline, where they are enrolled in a loyalty program, the purchase decision is almost entirely based on price. In this instance the customer is telling the airline, “I don’t care about how well you perform, and I don’t care about your rating, I just want the cheapest ticket”. The result of this has been the emergence of low frills, budget airlines.
The fact that a non-loyalty program purchase decision is mostly based upon pricing makes it clear that the airlines themselves are commodities. There is very little way of differentiation between the major carriers. While airlines may tout in flight services or increased legroom as a means to stand apart from the competition, the fact remains that the majority of the available seats are on outdated aircraft where the original intent was to squeeze on board as many seats as possible. There is only so much an airline can do to improve the flight experience on these aircraft.
This unfortunate state of affairs presents a unique opportunity for start-ups in the field of aviation. Companies that can differentiate their offering and focus on customer service hold a distinct advantage as compared to the major players who have turned their service into a commodity. A few such air carriers have launched in the past several years across the US. Mostly these carriers operate out of smaller, less congested airports that are overlooked by major carriers. Should the major carriers continue to operate under their current policies, look for more of these new carriers to pop-up and for the customers to begin to return to a time when they actually enjoyed flying.