The Airline Web Experience

No doubt you have heard about the United passenger that was hauled off the plane because they overbooked.  But, airlines have many more things that are wrong with them than manhandling customers.  Personally, I hate to fly.  On Tuesday we had to go to Cincinnati.  We were going to take a cheap flight but we forgot to make the reservation.   We wound up driving down and back in the same day.  To tell you the truth, flying would have only saved a couple of hours.

A person my size dreads flights.  I am 6’5″.  Now they charge money for seats with a couple of inches of leg room.  I saw a flight on American the other day where it was $67 extra to get an exit row or bulkhead seat.  In a normal row I am better off standing.  That’s another reason I prefer driving.  We bought a diesel in 2009 because we are on the road a lot.

The web experience with airlines is horrible.  It’s painful.  Their UX is awful.  Even using third party vendors isn’t that great.  The mileage and reward systems are a discombobulated maze of opaque garbage.

Kevin Williamson of the National Review wrote a great article.  Airlines don’t live in a capitalistic system.  Few industries are truly capitalistic perfect competition models.  Even though airlines were deregulated a long time ago, the entire system is heavily regulated.  Same with banking, health care and other industries.  That keeps competition out.  Airlines seem to be run for the benefit of their employees, not the customers. That’s why you see so many people treated so badly.

I’d love to see us get rid of all the regulations that purely give existing airlines a regulatory moat against competition and keep the regulations that are there which keep us safe.

My friend Nick Kokonos who co-founded Alinea and other awesome restaurants in Chicago, commented on airlines.  He says someone needs to create an airline that:

• Does not attempt to compete on price.
• Does not participate in any reseller programs
• That provides clearly superior service in every manner, including seating, food, and staff training.
• That rethinks the gate experience so that every passenger in the terminal sees the differentiated experience — it’s not hidden in a biz class ‘club’
• That never overbooks, but does not offer refunds after a 48-hour window prior to travel unless it is the airline’s fault
• That knows how to properly hedge fuel costs by hiring an actual trading desk and attempts to not only not lose money, but to make money on their fuel consumption.

Nick knows a lot about servicing customers.  You should try his restaurant booking service, Tock.  It’s intensely customer focused and transparent.  It makes dining out much more pleasant and easier.  It also helps restaurants service customers better.

 

  • TProphet

    There is actually an entire category of “business class airline,” with several players in the market on lucrative international routes: https://en.wikipedia.org/wiki/Business_class_airline – so far, it’s been a mixed bag. The majors come along and cherry pick when they have competition and can offer benefits that small airlines can’t (rebooking during irregular operations, larger network, interline arrangements for checked baggage, frequent flier programs).

    Fuel hedging? That’s a zero sum game. It can go either way. Cathay Pacific bet wrong and now they’re in real, serious trouble. You always look like a genius in high-stakes finance when your bets pay
    off. And you’re a dunce the following year. The real objective behind
    fuel hedging is to be able to plan your operations around a consistent
    fuel price, because as volatile as the oil price is, it’s otherwise hard
    to plan.

    To this end, Southwest and Alaska use the approach of partial hedges. In the industry, Southwest is the best at it (I’m guessing being based in Texas gives them access to better market insights and talent) but they still guess wrong occasionally, at which point their shareholders are howling.

    Even in premium cabins, airlines are a pennies and nickels business operating on razor-thin margins. They’re one of the hardest things to start–getting an FAA operating certificate can take well over a year. Labor regulations are byzantine. And the minute that you come up with a formula that is successful, you’ll have the major airlines coming along doing exactly what you’re doing in order to put you out of business (or they buy you and strangle you). An old hand in the airline industry told me once “If you want to be a millionaire, start with a billion dollars and start an airline.” Given the financial track record of the industry, this probably isn’t far off from the truth.