This Interview Exposes What United's CEO Doesn't Get About Customer Service

Discussion in 'United Airlines | MileagePlus' started by Infinite1K, Nov 11, 2011.  |  Print Topic

  1. Infinite1K
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    Infinite1K Silver Member

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    From Business Insider:
    This Interview Exposes What United's CEO Doesn't Get About Customer Service

     
  2. Wandering Aramean
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    That's a great opinion piece, but hardly anything resembling a factual article. The suggestion that baggage fees is intrinsically tied to the "complexity" that Smisek mentions is a rather uninformed view. And, despite the columnist's claim that no one wants to pay bag fees, those same passengers also won't pay more for the base ticket and the airline isn't going to give away the services for free.

    Great opinion piece, though sadly misinformed in a few areas. And I hardly think it "exposes" or "proves" anything about Smisek nor the airline, though it does about the author.
     
  3. Scottrick
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    "They're focusing purely on the numbers, without thinking about this question: If the airlines don't prioritize what customers (you know, the people who actually buy the tickets) think about the experience, then why should they bother experiencing it at all?"

    Answer: Because they still want to get from A to B.​

    The author is focusing purely on the experience, without thinking about this question: If the customers don't prioritize what airlines (you know, the people who actually sell the tickets) think about the experience, then they apparently care more about other priorities like low prices.​
     
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  4. colpuck
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    Q: if fuel drops to the price it was in 2000 when it was less than a third of the price it is today, would bag fees go away?
     
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  5. HaveMilesWillTravel
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    Would they re-instantiate the pensions of their employees?
     
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  6. PhlyingRPh
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    Oddly enough, Southwest seems to be doing rather well while NOT charging any fees for up to two pieces of checked baggage at 50 lbs each.
     
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  7. Wandering Aramean
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    But not markedly better than the carriers who do charge. This offers further evidence that, despite the opinion of the author of that "article," folks mostly don't care.
     
  8. EWR764
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    I think the argument can be made that Southwest's performance lags the industry, and a number of metrics show this to be true. It certainly is not performing as well as Delta or United at the moment.

    Further, I found that to be a fundamentally poor blog post (I won't dignify it by calling it an article), though I concede that customer service does not seem to be an overwhelming priority to Jeff. It's nothing more than a garden-variety complaint piece on bag fees and buy-on-board meals, based on quotations from a Smisek interview taken mostly out of context.

    In my mind, author's credibility lost. What an inane, childish statement.

    What does Wal-Mart or Target offer shoppers for free? Weak, weak, weak.
     
  9. Blue Skye
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    The comparison to shopping at walmart, she must not have been to my Walmart, where the staff is bored, unattentive and don't care if you ever shop there again. OTOH every time I shop there I wonder why I keep shopping there. LOL
     
  10. cordray2643
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    Let's face it, the most profitable customers for any airline are the ones who travel often and usually have elite status any way and never pay the bag fees. It is always interesting to read these articles that are written from the perspective of the traveler that only flies once or twice a year for vacation. I think that UA is more focused on the elite customers' experience to ensure return business. While some may think this is short sighted, I believe that this ensure the long term stability of any airline. What am I saying here? Bag fees and the like mean very little to the airline industry.
     
  11. Ygor
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    Ygor Gold Member

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    You keep going back to Walmart because it is cheap. The same ca be said about most business. If people get from point A to point B, they will keep going back to the cheapest carrier, all else being roughly equal.

    As a separate point, I don't know why people keep flying Southwest. Every time I try to book a ticket on them they are higher than UA.
     
  12. Misplaced Texan
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    I can't imagine this is true.

    While the most profitable customers, on a per-customer basis, are likely to be full-fare or nearly-full-fare frequent business travelers, that doesn't mean that there's not a significant profit to be made from gaining an additional $25 or whatever it is from each kettle on each flight. That marginal revenue matters.

    There's also a cost-side component. If you're encouraging people to carry on bags rather than check (basically incentivizing self-handling of baggage) then at some margin you're saving on ramp personnel.

    Casual empiricism using the upgrade list suggests that even the most elite-heavy routes are only 1/2 elite, maybe 2/3 in an extreme case. That's still a fair number of bag fees earned/bag handling saved from the non-elites making up the rest of the pax.

    I think multiple airline folks are on record saying that bag fees are a significant revenue center to the airlines and I know Doug Parker said at SMDII that they make the difference between profit and loss in some quarters for US. So either they are all lying to us, or you're wrong.
     
  13. HaveMilesWillTravel
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    Because they cleverly acquired the reputation of being the low-price leader. Except that they aren't necessarily, but it's in people's mind and they are too lazy to check more than one site (since Southwest's fares aren't available elsewhere).
     
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  14. Misplaced Texan
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    Not to get off-topic, but my company uses WN for a lot of flights for a several reasons:
    • For a small-to-medium business that serves clients who often won't pony up the Y fare for a legacy carrier, the fully-refundable WN fare offers a great option. In my company, we can also bill-through the change fee on a legacy discount fare, but that's more of a headache and some people I work with use WN exclusively because it makes their lives easier. I know that I spent more than an hour last week with our accounting folks matching things up from a couple of weeks with lots of changes and it was a real PITA.
    • WN offers a lot more frequencies on real aircraft from some locations. Our OKC office is almost 100% WN just because they have far more frequencies and all on 73x aircraft than any of the legacies who tend to serve OKC with a mix of regional jets.
    • WN has cornered the market on a handful of really convenient airports. This may be a Texas-specific issue, but DAL is far more convenient than DFW and, depending on where you're going in town, HOU can be a big time saver over IAH.
    • WN often has the only non-stop flight between airports that are not hubs for any airline. This year I've flown AUS-DAL and OKC-MCI, both of which would have required an out-of-the-way connection (or using DFW and driving forever) for other carriers.
     
  15. HeathrowGuy
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    1. Some legacies were, in fact, absolutely willing to not levy a free for the first checked bag IF they realized an upside in sales that was comparable to or exceeded the revenues realized from bag fees. Continental and Delta strongly resisted charging for the first checked bag when UA and AA launched the idea, but when virtually no customers were shown to have considered the bag fees in their choice of airline, CO and DL's management teams had a duty to not leave money on the table.

    2. Southwest does not charge bag fees because it presently lacks the IT infrastructure to support them. AirTran has that infrastructure, and I'm sure WN's folks are running the numbers.

    3. In some respects, customer service in the airline business has greatly improved in recent years, due in good part to a greatly expanded use of technology. Virtually all routine customer handling functions can be completed via major airline websites.

    4. Never forget that nothing is a ironclad constant in the airline business. The pendulum swings in one direction today, another direction tomorrow.
     
  16. Blue Skye
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    Actually, I do most of my shopping at a local store (living in a rural area makes for little choice. Either i drive 45 mins one direction or the same time in the other direction to Walmart.). Should I happen to be at that end of the county and only need milk etc then I do pop into Walmart. Fwiw I don't find walmart all that much cheaper than the local store especially when you factor in the specials and bonus buys.

    As for southwest, never tried them and don't intend to start now. I am sure they work well for some people. ;)
     
  17. HaveMilesWillTravel
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    What IT infrastructure are they lacking? Seems to me they are able to collect bag fees just fine. They just don't collect them for the first two bags as long as they don't exceed 50 lbs and 62 inches.
     
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  18. Phudnik
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    Their marketing for the past year or two has heavily emphasized their lack of checked-bag fees (for ordinary-sized luggage, at least). It would be a major about-face to abandon that, although to be fair "meals at mealtime" went away without much damage to the CO brand.
     
  19. Wandering Aramean
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    I do not believe this at all. If they can charge for the third bag or for overweight/oversize bags then they can certainly charge for the first or second one.

    It is marketing shtick. If it works for them, great.
     
  20. HaveMilesWillTravel
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    It wasn't nearly as big a marketing campaign though. At least here in CA.
     
  21. Ygor
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    My point wasn't meant to single out one particular person (even though you did say you go there :D). My point was that most consumer spending is price driven, all else being mostly equal.

    And I agree, Walmart isn't necessarily the cheapest. But people assume they are.
     
  22. Captain Oveur
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    From the opinion piece:
    What this author doesn't get is that there are many other things that go into decisions about which airlines business travelers fly on.

    Look at MP (and even FT), where the United flyers and flyers from other airlines bitch day and night about things about an airline. Yet, many people continue to fly those airlines despite those grumblings. Go over to FT and do a search on people who consistently complain about flying on an airline. Note the date, and then see how far later next to that person's status they still have "1K" or "EXP" next to their name.

    SOME people have things such as company contracts.

    SOME people decide to keep flying on an airline because, despite their rants, it's more convenient for them.

    Take it from someone who was brought to FT and MP by thinking about switching to another airline -- there's VERY little that's different. Sure, there are the routes, hubs, timetables and aircraft type and age. But when it comes to experiences, EVERY airline has its good eggs and bad apples. No idea as to what percentages those would be, but for any business traveler that piles up at least 50k BIS miles every year to say that EVERY person they have dealt with has been top-of-the-line professional, polite and to the customers' liking, is flat-out lying to you.

    And guess what? The airlines, including Jeff Smisek, know all of this.

    Despite the author of the article having some valid opinions, very little of what he/she says is really based in fact.
     
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  23. sithlord
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    If you want to buy premium fares you would be on crack or meth to fly on usa carriers and their pathetic service compared to cx,sq,ek.
     
  24. KVS

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    Someone thought that through as well and the http://en.Wikipedia.org/wiki/Fly_America_Act was created ;).
     
  25. sithlord
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    Good point!! Speaking of gov travellers and ugs should not mix!
     

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