Sunday, February 9, 2014

Airlines: Love 'em? Hate em?

Personally, I love airlines and the places they can take me.

Of course, all my flights are my own choice. Business travelers, who must fly often, may have a different opinion. One friend said that in a one-week period she made four flights and her luggage failed to arrive with her twice.

Then there are the hated baggage fees. At least they are logical. If you want to bring more stuff, you must pay more. On the plus side, baggage fees have added a massive cushion to the airline’s bottom lines – a record $3.5 billion in 2013.

From an investor’s point of view, airlines seem to finally have gotten their act together. They’re making money. As a result airline stocks are soaring. But so is passenger discontent. Passenger complaints to the U.S. Department of Transportation soared almost 22% in 2012 from the year before and jumped another 17% in the first quarter of 2013.

Flying can be an unpleasant experience, partly because airline employees seem to have shorter fuses these days. That’s understandable because of the tumult the industry experienced over the last ten years. Sales, mergers and consolidations have improved the financial situation, but employees have often been on the losing side. Airline workers, like other employees, are asked to do more for less. That can be a dangerous combination in a service industry.

Cost cutting and improving operations are laudable. But when it is done without regard to the customer experience, it can result in short-term gain but long-term pain.
I recommend that all airline executives must fly at least one time incognito with their families in economy class on their own airline.

The friendly skies aren’t always so friendly anymore.





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