Costello: “The traveling public cannot be ignored any longer”

Jerry Costello is the co-sponsor of the FAA Reauthorization Bill of 2009, which contains several important new rules designed to help air travelers. I asked the Illinois congressman, who is also the chairman of the House Aviation Subcommittee, about passenger rights and the prospects that new rules would be adopted by the Senate and signed into law.

Q: The latest American Customer Satisfaction Index gives the domestic airline industry an average score of 64 our of 100 — essentially, a failing grade. What do you think needs to be done to fix the industry?

Costello: Ultimately, service will be as good as an individual airline wants it to be. The economic pressures of running an airline – which hit rock bottom after 9/11, through the boom period of the middle of the decade, to another lull currently – will always be there. It is a cyclical business. The key is to be able to focus on the customer experience at all times, and Congress can help emphasize these issues.

Q: The FAA Reauthorization Act contains a number of provisions that could potentially help passengers. If they become law, which of the new rules do you think will improve air travel the most?

Costello: Short-term, I believe the emergency contingency plans for airlines and airports to better prepare for long tarmac delays can have an impact on the worst of these situations. We won’t eliminate all of these situations, but I am hopeful the horror stories will be dramatically reduced. Long-term, empowering the Joint Planning and Development Office to really drive the NextGen process, and providing the funding to do it, will improve the system for everyone.

Q: In a statement following the passage of the Act, you called the new law “long overdue.” Can you elaborate on that? When it comes to passenger rights, how long overdue are these new laws? Why do you think it’s taken so long to get here?

Costello: The bill is overdue because we started the reauthorization process in 2007. The House passed a bill similar to H.R. 915 that year, but the Senate did not.

It could be argued that the passengers’ rights provisions were more timely in 2007, coming off of the very public tarmac delay incidents in the beginning of the year and a very busy summer travel season, and the fact that this year the number of flights have been dramatically reduced and some improvements in passenger satisfaction have been recorded. However, they are still extremely important, for as I mentioned above, this is a cyclical business, and the problems of tarmac delays and congestion and delays still need attention.

Q: I want to ask you about one section of the bill that’s gotten a lot of attention, regarding airline emergency contingency plans. The current bill would require airlines to come up with a plan to provide food, water, restroom facilities, cabin ventilation, and access to medical treatment for passengers onboard an aircraft at the airport that is on the ground for an extended period of time without access to the terminal. It would also allow passengers to deplane following excessive delays. What is an “excessive delay”?

Costello: Trying to determine the precise answer to that question is the wrong approach to the problem. What we have seen clearly through the hearing process and anecdotal evidence is that this varies depending who you ask. For one traveler, half an hour can seem interminable, and for another, far longer is OK, if you get the traveler where he or she needs to go that evening. Most would agree that beyond three hours is becoming excessive, but what if the plane can leave five minutes later?

It is also clear that airlines and airports need some flexibility in dealing with these situations, because they are not one size fits all. What H.R. 915 does is make sure that the proper planning is taking place, that food, water and basic necessities are being met while making preparations to get passengers off of the plane in the worst situations. If these plans are not made, fines will be issued.

Q: I asked an executive at one of the major airlines about passenger rights last week, and he said he believes many of the issues raised by your bill have already been addressed by the airline. If that’s true, then why are these passenger rights provisions needed?

Costello: For some airlines, that may be true, and I hope it becomes the norm. But we have seen over the last decade that the airlines have not been good at self-regulation. The statistic you quoted in the first question bears this out.

Q: There are several other provisions that have gotten virtually no attention from the media. For example, there’s a new rule about disclosure of insecticide use on aircraft, a rule that tightens the smoking ban on planes, a requirement that airlines must offer the option of flight change notification by email, and a requirement that the Transportation Department set up a complaints hotline. Why were these issues important to Congress? In your opinion, why have tarmac delays generated more public interest?

Costello: In general, the flying public is tired of getting poor customer service, and more than anything, just want good, on-time information. People can accept bad weather or a mechanical problem, but they want to know what is going on. The e-mail notification and hotline provisions address this need. The other provisions address health concerns.

Q: Your bill contains a prohibition against voice communications using mobile communications devices on a scheduled flights. Why is that necessary?

Costello: Everyone has experienced poor cell phone etiquette and how annoying it can be. Our bill will make sure the current ban on in-flight cell phone use is not lifted. Beyond the annoyance factor, this is a safety issue. Flight attendants already have to deal with people that will not hang up their phones, and physical altercations between passengers are not unheard of. Also, in-flight cell phone use is not conducive to providing safety instructions and other important announcements.

Q: One other thing about the bill that struck me was language that says the Secretary of Transportation must begin investigate consumer complaints regarding flight cancellations, overbooking, lost and delayed luggage, refund problems, fare overcharges, frequent flier issues and deceptive advertising. Isn’t that what the Transportation Department was supposed to be doing all along?

Costello: In my experience, the FAA’s performance improves on an issue with vigilant congressional oversight. We want to make it clear in this legislation – to both the FAA and the airlines – that the traveling public cannot be ignored any longer. This is precisely why we have held regular hearings on consumer issues since taking over as chairman of the Aviation Subcommittee.

Q: The bill is being considered by the Senate now. What kinds of changes should we expect, when it comes to passenger rights issues?

Costello: I am not expecting many changes, but that is a question for the Senate. The key is to move quickly in passing a bill so we can get to conference and enact it into law.

American Airlines’ Mitchell: We want to give passengers “what they value most”

Mark Mitchell, American Airlines’ managing director of customer experience, is the point man for customer service at the airline. With the summer travel season now underway, I asked him how air travelers could have the best possible experience, and what airlines like American are doing to make it better.

Q: What can air travelers do to get the best possible customer experience from an airline like American?

Mitchell: Our goal is to provide travelers the best possible experience, and it begins long before someone steps inside an American Airlines plane. We strive to ensure that our tools, processes and interactions make it easy for someone to choose American — whether it’s booking online at or redeeming AAdvantage miles with our new flexible awards booking tool or making a call into our reservations system. And once in our care, the American Airlines team is committed to doing everything within its power to offer travelers the best customer service.

We take this very seriously. More than 200 employee-led teams across our network over the past two years have been working to identify issues and develop solutions within six key issues customers care about: delays and delay management, gate interactions and the boarding experience, on-board interaction, cabin interior condition, baggage handling and baggage resolution.

Q: Is it possible to run a profitable airline and have happy customers? Or does an airline have to choose one over the other?

Mitchell: We believe that customer satisfaction is a critical part of the path to profitability. American is committed to enhancing the customer experience, and we believe that will help turn our company around financially.

Although the economic environment remains challenging, we continue to look for new ways to improve operations to provide passengers the best experience possible. For example, we know on-time performance in the form of predictable and reliable schedules is important to our passengers. Some aspects that affect on-time performance — such as bad weather — we cannot control. But American is focused on those things we can control.

We implemented new procedures last year, including adding time to our schedule, re-adjusting flight plans to increase speed, pairing pilots and flight attendants with specific aircraft and deploying new technologies to help speed our customers through the airport. The enhancements were made with one simple goal — get our passengers to their destinations on-time, with as few hassles as possible. And while we do not control bad weather and delays because of air traffic control issues, we are seeing that the new system we have built is helping us to navigate a better airline when these events occur.

Q: What should customers expect from an airline like American?

Mitchell: They should expect that American will deliver on its promise to offer safe, dependable, on-time service. American is continuing to invest prudently in the airline, even during these difficult economic times to help us deliver on this promise more consistently. In addition to many technology investments to provide better tools for our employees and customers, we also began taking delivery of 76 Boeing 737 aircraft that will help us keep customers loyal to American while helping the company reduce costs.

Customers should also expect that American will continue to lead the industry in making booking travel easier. American recently introduced ”One-Way Flex Awards” — this gives our 63 million AAdvantage members more options to redeem travel. They new technology provides customers the ability to use miles on a one-way basis at half the round-trip mileage requirement and to combine different types of award travel on a single ticket.

Q: What should they not expect?

Mitchell: Travelers should not expect airlines to be able to account for bad weather or airport delays caused by congested airports or outdated air traffic control system in every instance. However, we continue to invest in new technologies that will help us better navigate through these issues and speed up recovery when they occur.

Q: American Airlines created your position in 2007. If I recall, the idea was to demonstrate American’s commitment to a better overall customer experience by adding a new leadership position within the company. How is the customer experience better today than it was when you started?

Mitchell: The customer experience has improved on many levels. I am fortunate to work every day with a dedicated team of employees from various backgrounds, including information technology, maintenance, flight and customer service, to support our frontline employees where the customer experience activities ultimately take place. Our role is to track results, identify best practices, and work across various functions and organizations to facilitate and ensure activities are successfully carried out.

By all measures, we have been successful. For example, in year-over-year comparisons between December 2007 and December 2008, American has seen complaints across all six issue areas decline by more than 28 percent and a marked improvement in customer experience ratings in five of the six customer service issue areas.

Q: Last year, American Airlines implemented a new customer blueprint that focused on delivering the basics, including safety, dependability, cabin cleanliness, baggage handling, courtesy and professionalism. Why was such a blueprint necessary?

Mitchell: The customer blueprint was born out of our need to formalize how we wanted to differentiate the travel experience for our customers and was based on feedback from the many different work groups involved in improving our customer experience scores. It also provides the basis for our roadmap and to establish priorities for our many customer initiatives.

It is tangible and visual, and it serves as a good reminder for all of us to keep the customer experience first and to remember to give our customers what they value most.

Q: The latest American Customer Satisfaction Index has just been released, and your airline scored a 60, which is down more than 3 percentage points from last year. What accounted for that drop, in your opinion?

Mitchell: I can’t account for the Customer Satisfaction Index, but I can tell you that American’s internal customer satisfaction surveys — from cabin cleanliness to handling baggage to onboard interactions with our flight attendants and delay management — show marked improvements from a year ago. And the benchmarks we measure ourselves against indicate otherwise as well. In fact, in mid-May, American paid out $14 million to approximately 72,000 frontline employees for meeting customer service and operational goals during the first quarter of 2009.

Q: It’s been a year since American Airlines added a $15 fee for the first checked bag. From a customer service perspective, how is that working out?

Mitchell: Customer acceptance on domestic bag fees has gone well. Even in the earliest days a year ago, the process went more smoothly than many expected. Since then, customers have come to understand — and we believe, accept — the process and the concept of paying for the optional services that you choose.

Selling food onboard is another similar example. Basically, those who use it, pay for it. Those who choose not to pay for it, don’t. That would include approximately 50 percent of American’s domestic trav
elers who do not check a bag and therefore do not pay a fee.

Incidentally, that percentage of carry-on travelers has not changed — it is about the same as before the fee was implemented. We have seen a decline in the number of second checked bags. Also, premium travelers are exempt from the charges. That includes top-tier AAdvantage members, full-fare travelers, as well as those traveling on military fares.

When it comes down to it, approximately 25 percent of American’s domestic travelers actually pay the first checked bag fee — that means about 75 percent do not.

Q: In Gerard Arpey’s recent remarks at your shareholders meeting, he said the key to American’s a la carte pricing initiative’s effectiveness is that it gives customers the ability to customize their travel experience as they see fit, according to what they value most. What are the customers you interact with telling you about a la carte prices?

Mitchell: The fact is airlines’ costs continue to outpace fare increases and have not produced the type of returns necessary to sustain a healthy business. The key to our unbundled — or a la carte — pricing initiative is that it gives customers the ability to customize their travel experience as they see fit, according to what they value most.

As an industry leader, American recognized that the industry needed to balance revenue with giving value to our customers. We began offering unbundled services such as buy-on-board food in 2004, and continued to lead this trend on the bag fee front in 2008, with the rest of the industry following.

We recently enhanced our buy-on-board food service in the coach cabin, selling Boston Market sandwiches and salads on some longer flights. We have assembled a team as well to focus on maximizing the customer value proposition across all the optional services we have available. This team is working diligently across our many channels to understand how to offer each of these in a way that customers get the value for what they choose to purchase.

Q: I want to stay on the subject of prices for a second. Transparency seems to be a big buzzword in the travel industry. Some online travel agencies have starting quoting total prices for certain items, like hotel and car rental rates. Do you believe your customers would benefit from having fares quoted that included all taxes and mandatory fees?

Mitchell: While total price may sound like a simple concept, in practice it is not. If one or two airlines were to choose to do that while others did not, their prices at first blush would appear to be more costly than those advertised or offered by competitors. Most Internet Web sites and computer reservation systems show the lowest prices first. Those who follow the industry know that it takes only a very small difference in price on any given route to drive customers away.

The bottom line is that the absolute full price, including any additional taxes or fees that are not already within the base fare, are fully disclosed to the shopper before they ever have to push the purchase button. They do see the bottom-line price before purchasing and that is the most important fact here. Full price before you buy.

Q: There’s a debate raging in Washington over passenger rights at the moment. I think it’s fair to say the airline industry has resisted most of these proposed new rules. Do you envision any scenario under which the defeat of the latest passenger rights legislation might lead to a better customer service experience?

Mitchell: We believe that the issue of how passengers are treated on flights when delayed on the ramp has been addressed by each carrier individually. Our goal at American is to ensure our customers and their belongings get to their desired destinations safely and on time. In the event of bad weather, we’ll always make the safe decision. As I mentioned earlier, we have implemented a host of new initiatives designed to enhance the customer experience, especially when planes are uncontrollably delayed at airports due to bad weather.

Read more of Elliott’s interviews on his travel blog.