Ancillary Revenues

I was reading a recently published e-book THE ANCILLARY ART Maximizing Airline Ancillary Revenue & Customer Loyalty – Miyuru Sandaruwan which makes interesting reading (click here to download).

When low cost airlines started, they unbundled air fares, they went back to basics and anything else was paid for on demand (food, blankets, newspapers etc..). In the last couple of years legacy airlines started unbundling their air fares, except with a twist, their air fares remained the same, so it was like paying twice for the same thing, with no additional value added.

My pet peeve is Checked Bags. You pay for the bags and you get no guarantees. It took United Airlines 40 minutes to get my checked bag to the baggage claim area in Chicago, considering my flight from Detroit to Chicago was about an hour. Of course my bag was not the only bag in the hold, there were more unpaid for bags in the hold than paid. All these oversize so called carry-ons, ended up in the hold and got delivered at arrival at the door of the aircraft. So on most US carriers you have no baggage allowance when you travel on an aircraft and for sure dishonesty apparently pays.

It appears that the airlines gave up on efficiency and savings and good customer service as a means to improve revenues. Instead they reverted to all these surcharges that amount to paying twice for the same things and the irony in all of this, these ancillary revenues mostly apply to economy class passengers, the mainstay of their traffic, that sustained the airlines as their darlings in Business and First class abandoned them and jumped ship.

Ah well, go figure....

The World's Favorite Airline

The World's Favorite Airline, who else but British Airways and it is still my favorite airline.

That was true when it was an innovative and efficient airline and lead the industry in setting standards.

Now that tough times have hit, it is fraying at the edges and really getting tattered. I fly with BA home to Detroit from Dubai at least 3 times a year, and I like the multi stops flight because it breaks up a long flight in manageable 7 hours segments. I enjoy the lounge in T5 its naturally well lighted, comfortable and wi-fi connected.

However, off late things have changed at BA.

• I still pay the same price for my tickets I did the previous 2 years and the surcharge is the same as when fuel prices were double ($145 a barrel).
• The staff are still courteous but are a little distracted, abrupt and indifferent.
• The cabin Crew smile but you rarely see them going through the cabin except during the service. All you hear is chatting and laughter in the galley
• Equipment has been downgraded from B777 (my favorite airplane) to squeaky B767.
• Automatic upgrades to Business are a thing of the past, I dare not ask for one because all I got was an abrupt no or quoted a price and no you can not use your miles.
• The food service quality and quantity has deteriorated a little

True to its legacy roots and to stem losses, BA turns and starts putting restrictions on bags for economy. The darlings (First and Business) of the airline having abandoned it, the economy class passenger is the one that feels the pain.

What happened to the innovative management approach that made The World's Favorite Airline or is that a Good Times management style only, come on BA you can do better

Tattered or not BA is still my favorite airline and worthy of my support.

Running scared

It is relatively easy to be successful and somewhat innovative when the economy is booming and life is good so to speak. As the world entered in its deepest recession in decades what made companies successful just lost is relevance, it just became the recipe for disaster. All of sudden these buoyant and confident, and sometimes over confident and damn outright cocky executives, are no longer sure of how to react. They know they have to be more cost effective and more efficient. The product has to be tailored to meet new customer realities.

So, enter first gut reaction, we need to save on expenses, OK so far so good. So please make sure you vet your office related bills and pay for all your personal calls or else we will charge you for the whole bill, and please reduce the use of stationary, and we just go from cost effective to cheap on all non technical purchases. Basically, we went petty.

Then, next gut reaction, no more hiring, full stop end of story, but we need this person for a function that will increase productivity or efficiency. Sorry, no hiring, gotta save buddy.

All of a sudden, they wonder why staff is demoralised, easy it is the prevailing economic malaise, nah more like the prevailing scared and petty once over confident executives. Staff can smell fear guys.

Economic downturns are awful and not a pretty sight but remember cost cutting is subject to the law of diminishing returns and revenue enhancement the sky is the limit. You need cost cutting, efficiency and productivity increase then ask the experts.... duh....... yep you got it champ, ask your employees. Oh you forgot they were part of success and you thought they were coming on your ride. Involve your staff, they know their work, they know what, where and how to give you real savings, real productivity and efficiency.

They also have a stake in making the company thrive, harness their energy. Treat them right and the will Billy Ocean sings "When the Going Gets Tough, the Tough Get Going" http://bit.ly/1DS8jZ