Customer service supreme, even on a bad day

by Tom Johansmeyer on

Whose bad day matters more? When a customer and an employee are both struggling with foul moods, endless work headaches or even distracting personal problems, the tie always goes to the person paying – not the person being paid. For most businesses, this is a common sense approach to managing customer relationships. I know that when I was frustrated or annoyed with a client, back in my corporate days, even hinting at my mood would invariably make my day far worse … as I’d wind up on the receiving end of my boss’s ire.

We routinely avoid restaurants and bars, hotels and professionals (e.g., doctors, lawyers and accountants) because of both actual and perceived slights. For this reason, especially in the professional services space, every effort is made to hide the symptoms of a bad day – and to tolerate those shown by clients. It’s the nature of the beast: making money matters more than expressing your frustration.So, I do find it strange when airline employees use this as an excuse for poor service. There have been plenty of examples of frustrated airline employees who have garnered support from their peers, from the orange juice meltdown on American Airlines to Steven Slater‘s recent slide to infamy. The level of sympathy in the industry, it seems, ranges from “bad day” to “I’ve always wanted to do that but never had the nerve.”

It’s time for the airlines to do what the rest of the business world has endured for years: deal with it. Everyone who’s worked in a customer- or client-facing position has had to soldier through a tough day when his client is unhappy. It may be painful, and we may know that we’re right … but ultimately, the business relationship comes first. Eventually, the customer emerges from his funk, and the investment made in tolerating the temporary difficulty pays off.

The first step toward being treated like a professional is acting like one. Endure customer madness with a smile, even if you’re having an awful day too, and the world will start to change.

[photo by Maks Karochkin via Flickr]

Five reasons airline fees up 50% year-over-year

by Tom Johansmeyer on

Does your wallet feel a little bit lighter? A new USA Today analysis reveals that airline fees are on the rise, with some up more than 50 percent relative to a year ago. The study compares the extra fees (not to be confused with fares) of 13 airlines and shows just how important this revenue source is to the airline sector.

According to USA Today, “The numerous fees are a sore subject for many fliers, but their dissatisfaction hasn’t deterred airlines from bringing in record revenue from additional fees.”

The fees were good for $2.1 billion last quarter, with $893 million of it coming from checked bags and $600 million from changed reservations.

So, where did all this money come from? Here are five ways airlines have turned those extra charges into a big business:

1. First checked bag: most airlines in the United States hit you for up to $25 for the first bag you check, with only Southwest and JetBlue abstaining. Most charged $15 a year ago, according to USA Today, with four not playing this aspect of the fee game.

2. Change fee spikes: a year ago, the most expensive coach change fee was $250, charged by Continental, Delta, United Airlines and US Airways. This year, it surged to $300, an increase of 20 percent, charged by American Airlines for some international flights.

3. Pay to call: still resisting the internet? Booking by phone costs an extra $35 on US Airways, while Allegiant Air hits you for a $29.98 round-trip booking fee and another $14.99 for “convenience.”

4. Preferred seating: United asks for up to $159 for preferred seating, which can give you up to five more inches of leg room. A year ago, it would have set you back only $119.

5. Get a receipt: Continental (for which this isn’t new) – along with American, Hawaiian and US Airways – have an extra fee for passengers who want a receipt after they have taken their flights.

[photo by Deanster1983 via Flickr]

Are airline fees about to go higher?

by Tom Johansmeyer on

What could possibly be next? Absent Ryanair-style fee insanity, there seems to be little the airlines can do to our wallets now. Blankets, bags and beverages are just the tip of the iceberg: it seems anything that can come at a price does. The only thing missing is a seemingly well-intentioned Congress that wants its share of the airlines’ recently found largess.

Make no mistake about it: extra fees translate to real money for airlines. Last year, they amounted to $7.9 billion in the United States, and in the second quarter of 2010, the top six airlines in the country picked up $2.1 billion. Following the effects of the 2008 financial crisis, this is cash these companies desperately needed to collect.

This is where Congress enters the picture. Right now, the government scores a 7.5 percent on fares. By effectively unbundling certain “amenities” – like checked baggage – from the fares, the airlines can charge lower prices, with the ancillary stuff charged on a pay-to-play basis. In the end, the feds are stuck with a smaller revenue base to tax. And, the airlines are able to bypass the excise tax, and boost their profits a bit.To plug the hole, Senator Jim Webb of Virginia has proposed legislation that would subject the additional fees to the same 7.5 percent tax as the fares, restoring at least some of the lost tax revenue. From the perspective of Congress, this makes sense. The feds took it on the chin financially when the airlines unbundled, and they need to make up for it (because cutting spending just doesn’t seem to be an option).

For the airlines, this poses a problem. Either they can swallow the pill and take the 7.5 percent it against their revenues, or they can pass the additional cost along to their customers. Since 2011 is likely to be a tougher year for the sector than 2010, it looks to me like the writing is on the wall. Why absorb it when you can pass it along, right?

The tax is being proposed, so give it some time. But, if it hits, I’d expect we’ll feel it, too.

BREAKING NEWS: Southwest Airlines will buy AirTran for $1.4 billion

by McLean Robbins on

Southwest Airlines (NYSE: LUV) announced today that it has entered into a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings, Inc. (NYSE: AAI), the parent company of AirTran Airways (AirTran), for a combination of cash and Southwest Airlines’ common stock.

“Today is an exciting day for our Employees, our Customers, the communities we serve, and our Shareholders,” said Gary C. Kelly, Chairman, President, and CEO of Southwest Airlines. “As we approach our 40th Anniversary of providing exceptional Customer Service at everyday low fares, the acquisition of AirTran represents a unique opportunity to grow Southwest Airlines’ presence in key markets we don’t yet serve and takes a significant step towards positioning us for future growth.

“It offers Customers more low-fare destinations as we extend our network and diversify into new markets, including significant opportunities to and from Atlanta, the busiest airport in the U.S. and the largest domestic market we do not serve, as well as Washington, D.C. via Ronald Reagan National Airport. The acquisition also allows us to expand our presence in key markets, like New York LaGuardia, Boston Logan, and Baltimore/Washington. It presents us the opportunity to extend our service to many smaller domestic cities that we don’t serve today, and provides access to key near-international leisure markets in the Caribbean and Mexico. Finally, this accelerates our goal to boost profits and achieve our financial targets,” he continued.

The agreement has been unanimously approved by the boards of directors of each company, and closing is subject to the approval of AirTran stockholders, receipt of certain regulatory clearances, and fulfillment of customary closing conditions.

Based on an economic analysis by Campbell-Hill Aviation Group, LLP, retained by the airline to conduct market analysis, Southwest Airlines’ more expansive low-fare service at Atlanta, alone, has the potential to stimulate over two million new passengers and over $200 million in consumer savings, annually. These savings would be created from the new low-fare competition that Southwest Airlines would be able to provide as a result of the acquisition, expanding the well-known “Southwest Effect'” of reducing fares and stimulating new passenger traffic wherever it flies.

Bob Fornaro, AirTran Airways’ Chairman, President and CEO said, “This agreement is great news for our Crew Members, our shareholders, our customers and the communities we serve. Joining Southwest Airlines will give us opportunities to grow, both professionally as individuals and as a group, in ways that simply would not be possible without this agreement. This agreement with Southwest is a testament to the success and hard work of the more than 8,000 AirTran Crew Members who have built this airline. I am tremendously proud of the things we have accomplished together and look forward to continuing that great work during this next exciting chapter of our history.”Under the agreement, each share of AirTran common stock will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines’ common stock, subject to certain adjustments, based on Southwest Airlines’ share price prior to closing. Including the existing AirTran net indebtedness and capitalized aircraft operating leases, the transaction value is approximately $3.4 billion. At Southwest Airlines’ closing stock price of $12.28 on September 24, 2010, the transaction values AirTran common stock at $7.69 per share, or approximately $1.4 billion in the aggregate, including AirTran’s outstanding convertible notes. This represents a premium of 69 percent over the September 24, 2010 closing price of AirTran stock.

Based on current operations, the combined organization would have nearly 43,000 Employees and serve more than 100 million Customers annually from more than 100 different airports in the U.S. and near-international destinations.

Until closing, Southwest Airlines and AirTran will continue to operate as independent companies. Southwest Airlines plans to integrate AirTran into the Southwest Airlines Brand by transitioning the AirTran fleet to the Southwest Airlines livery, developing a consistent Customer Experience, and consolidating corporate functions into its Dallas headquarters. The carriers’ frequent-flyer programs will be combined over time, as well.

The company has launched a website, www.lowfaresfarther.com, to detail more information about the acquisition.

Galley Gossip: IndiGo flight attendants forced to cut their hair – or wear a wig

by Heather Poole on

Meet the flight attendants from IndiGo Airlines. They’re young, chic, and might be wearing a wig. Well that is if they refuse to cut their hair. According to Anindita Ghose in the article A Curious Case of Stewardess Hair, the airline’s new uniform includes a grey tunic with an indigo corsage and a hat to be worn with a uniform bob. The new look was launched on August 15th.

IndiGo Airlines is a private domestic low cost carrier based in Gurgayon Haryana, India. It’s main base is Delhi’s Indira Gandhi’s International Airport. In 2008 the airline won the title “Best Domestic Low Cost Carrier.” I wonder if the airline is trying to reclaim that title by having their flight attendants sport what the airline reports is a more sophisticated and international look? According to the stylist for IndiGo airlines in an interesting article, long hair or hair buns do not go with IndiGo’s new image, a look the airline believes makes their flight attendants appear younger and smarter and, in my opinion, quite French and very vavavavoom! But in a vintage way.No doubt about it the IndiGo girls look great! But the new short do apparently has them preoccupied with their hair. Passengers have noticed them either constantly messing with the lock that curls midcheeck or adjusting the wig to keep it in place. All I can say is I’m glad the airline I work for doesn’t make us wear the exact same hairstyle, or worse, wear someone else’s hair! Imagine serving hot coffee and PLOP! There’s a wig in a lap and a flight attendant sprinting into the galley to hide. It’s only a matter of time, ya know. Let’s just hope no one gets burned in the process. As for the spill left behind, passengers can just mop it up with that sharp looking wig! But don’t ring the call light to ask the flight attendant to dispose of it as she’ll be passing through the aisle shortly with a pick-up cart – that is as soon as she figures out what to do with her hair! Priorities, people.

While it was initially mandatory for the flight attendants of IndiGo Airlines to wear the bob after the airline launched its new image, they now also have the option of wearing their own hair in a “French roll or tie bun.” This after they put on what was reported as “a brave front in the face of severe scrutiny by curious passengers” known to love long hair. Thankfully things have changed. If it were me, I’d go with the French twist. It’s just as sexy and a lot more practical.

Photo courtesy of LiveMint.com