Rich Thomaselli | April 23, 2015 2:14 PM ET
At Some Point, Airlines Have To Give Back
There is a life philosophy out there that says, “Do good and forget about it.”
The U.S. airline industry has done good of late.
Very good, in fact.
And along the way they’ve forgotten about it. Forgotten about the passengers that they serve.
Frankly, some U.S. airlines – looking at you, the Big Three of American, Delta and United – have been so caught up in their fight against Persian Gulf carriers and government subsidies and unfair market practices and what not, that they have lost sight of customer service.
That’s a shame, because when you get right down to the nitty-gritty of the numbers – and numbers don’t lie – you would hope that at some point the airlines have to start giving back.
And those numbers are staggering.
- More than 846 million people got on a plane last year according to Bureau of Transportation statistics. That’s 12 percent of the world’s population, says CNN Money.
- A flight needs to be at 80 percent capacity for the airline to make money. Flights averaged 85 percent capacity last year.
- Airlines recorded record profit in 2014. And lest anyone think it’s a fluke, consider that in the first quarter of this year just ended on March 31 – a time period generally recognized in the industry as the worst quarter of the year for airlines given the propensity for bad weather, delays and flight cancellations – Delta had a record profit of $746 million. United had a record profit of $508 million. Southwest? $453 million.
* And, perhaps the most telling number, American Airlines CEO Doug Parker announced that he has opted for an all-stock compensation package, a sign to investors and Wall Street analysts that he believes the company will continue is profit-generating ways.
Parker made $12.3 million last year in salary, stock, bonuses and other compensation, and he made about $17 million the year before thanks to bonuses and rewards from closing the US Airways merger. Parker is an industry innovator and a learned man and a magnanimous one for all we know, but let’s be candid – he wouldn’t make this move if he thought his salary was going to drop to significantly.
Moreover, despite a slight uptick, airlines continue to be poorly rated. In this year’s ACST survey of customer satisfaction, airlines remained one of the four lowest-rated industries in the country.
So where is the goodwill? Where are the give-backs?
I won’t even broach the subject of why fares aren’t falling in line with a huge drop in jet fuel prices, a big part of why the airlines are turning such tremendous profits. I get it – fuel is volatile. Somebody in the Middle East sneezes and oil is back up to $100 a barrel. You drop your fares now, only to have to raise them again if fuel goes up, and it becomes a PR nightmare.
Still, it’s less about public relations than it is about customer relations.
In some ways, the airlines are starting to come around. We're talking baby steps, but there are steps.
There are certainly things to draw off of, such as the Alaska Airlines gate agent who paid for a ticket for a passenger out of her own pocket when a series of mishaps caused the woman to miss a flight.
United Airlines announced that starting on June 1 it would have free meal service on international flights for economy passengers. Heck, Dallas-Fort Worth Airport started a healthy eating campaign last month by giving away free fruit and prizes.
There are even reports that seat-making companies are designing more comfortable seats, which, hopefully, maybe, sorta, the airlines might consider.
It’s a start.
But at some point, the airlines have to acknowledge the repeated business – and the trust, and the faith – that its customers have given them.
Beyond just “Have a nice day and thank you for choosing us.”
More by Rich Thomaselli
Get Travel Deals and Travel News
Latest Travel News
Airlines & Airports
Hotel & Resort
Features & Advice