Friday, February 22, 2013

Two Wrongs Don't Make it Right

Image courtesy of flickr account
Several people have asked me for my thoughts on the big airline news last week, the merger of American Airlines and USAirways. You know that I'm more than happy to weigh in, especially on the heels of the controversial American Airlines rebrand.

In a nutshell, my assessment is this:

"Two wrongs don't make a right."

Here's the problem - and I'm going to repeat myself a bit, given what I wrote about with regards to the American rebrand: There's really no good news for consumers. And while there are many reasons these mergers need to happen, I would hope that, through it all, there would be some acknowledgement from the airlines regarding the real impact on their employees and their customers, good or bad. I'm talking about the experience.

My fear is that, with this merger, it's all bad. Why?
  • Fewer airlines = fewer choices/options. Gone are the days of the pilot saying, "We know you have many choices when you fly. Thank you for choosing us."
  • Airfares will likely go up (but potentially for a variety of reasons).
  • And most importantly, there's still no mention of a greater focus on the people and the people experience.
On the website that American created to tell us about the merger, they have a section called Customer Benefits. Yes, they talk about the travel experience. But they don't mention the people experience. What are they doing to ensure their employees are engaged? What are they doing to train their employees on how to deliver the best experience for their customers? What hiring practices have they implemented to ensure that there's a solid cultural fit? Better yet, how would they define their culture? What are the core values of the new American?

Speaking of culture, it sounds like USAirways, while accustomed to acquisitions, has a mess of a culture. That toxic environment will combine with the American culture, and then you'll have an even bigger mess. 1.2 million people (combined number of employees) worth of bigger mess. And you think you've seen some cranky agents and flight attendants before?!

Since American didn't tell us what we can expect with regards to the customer experience, let's see what the experts have to say.

The Wall Street Journal told us that, in 2012, American ranked dead last in performance, with metrics such as these considered: on-time results, number of cancellations, excessive delays, mishandled baggage, bumped passengers, and complaints filed. Let's fix the policies and procedures that result in these failures, and let's train employees to handle them in a way that doesn't result in a miserable experience. I'm thinking about something as "simple" as communication, proactive, clear, and ongoing!

The Temkin Group tells us that US Airways and American were at the very bottom of the list in 2012 when it comes to customer experience rankings. These ratings are based on consumer feedback.

Trip Advisor airline ratings show only 50% would recommend American, while only 41% would recommend US Airways. Compare that to JetBlue (91%) and Southwest (93%).

Airfarewatchdog ranks American at #9 and US Airways at #8 out of 10 airlines.

J.D. Power and Associates gives us ratings for "traditional airlines," as opposed to low-cost airlines in their 2012 airline study. US Airways experience ratings are especially dismal, and American lands in the middle of the 7-airline pack.

Nothing to write home about.

Ironically, one AP writer stated that the merger "will elevate both airlines to the same level as Delta and United." Lord help us. While Delta's service levels seem to have improved (confirmed by The Wall Street Journal results noted above), United continues to fail miserably. And what part of that United-Continental merger left customers happy? I shared some of their lip service in a post I wrote last March, titled The Experience Speaks Louder Than Words.

OK, that's the end of my musings on the American Airlines rebranding and merger debacles. I honestly hope they figure it out and start putting people first. As for me, on to more-exciting and more-important things in the coming weeks! Time to move on...

When we are no longer able to change a situation, we are challenged to change ourselves.  -Victor Frankl

6 comments:

  1. Annette,

    I'm afraid the optimism a few people have (including the AP commentator plus management at American & US Airways) is based on "Mind over Matter." They think that simply making a big move - a merger! - will magically improve things. There is no audible commitment to taking on the heavy lifting required to improve the customer experience and lift employee engagement.

    As for aspiring to be more like United... Ooof. Years ago, witnessing a needlessly rude and negative passenger interaction with Surly the Flight Attendant on American Airlines, I joked that "American must be hiring from United," which raised a knowing chuckle from my fellow business travelers.

    I wish American/US Airways the best, though I do not share in their optimism.

    Sarah

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    1. Thanks, Sarah. Love that story!

      I'm honestly hoping for the best, too, but we'll just have to see how it goes. So far, it seems the airlines, with a few exceptions, just don't seem to get it.

      Annette :-)

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  2. Annette,

    I used to run my own business, it was me, nobody else. I used to obsess about my customers, they paid my mortgage

    Now I work for a FTSE 100 company. I am well paid, fat, comfortable and totally insulated from my customers. We use the word "customer" as a concept, not a person

    Bigger isn't going to help

    James

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    1. Hi James. Great way to describe it... sad but true that customer is a concept. Too bad businesses don't seem to realize that - and act like - we pay their mortgages.

      Annette :-)

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  3. Seems like these mergers are driven by financial or operational wrangling. What amazes me is that these attempts to "save" a company, a market, or an industry, lack the one thing that any "successful" (defined below) turnaround specialist knows. You have to have a creative and innovative initiative going along side, and that initiative must be customer-centric, and market-driving.

    All too often, "success" is measured by how well the "spreadsheets" merge to create a better balance sheet. For me, successful turn-around leaders (noted above) offer up a measurable number of percentage points off short-term traction to ensure longer term sustainable growth..., they put that edge (an investment) into innovation and creative efforts - not a new brand, not a new logo, not new paint..., but disruptively new products, services and levels of service, that change the industry.

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    1. Thanks, Andrew. Your thoughts are spot on. If these mergers are happening just to save the company, well, look at US Airways. How many companies have they saved... and now they've been swallowed up by American. The need to think beyond the bottom line is huge and relevant. The need to think beyond saving a crappy company is, too.

      I love that you suggest innovation and disruption. How refreshing would that be in this industry?! I again suggest that they look to Southwest or JetBlue for innovation. And yet, that's just the start; the new American, the new United, etc. ... any one of them could stand out from the crowd, trump SW or JB, if they were able to think outside the box, think creatively, and as you say, change the industry.

      Thanks for your comment!

      Annette :-)

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