# Treating flyers well is bad for airlines’ business



## CHamilton (Nov 2, 2015)

Treating flyers well is bad for airlines’ business


> FOR all the frequent travellers out there just aching for airlines to make the flying experience slightly less unpleasant, there’s one fundamental obstacle: you. The airline industry recently undertook a wide-ranging study of passenger satisfaction, surveying 60,000 passengers on 30 airlines in 39 hub airports around the world, and examining 75 factors that contribute to a flyer’s satisfaction level.
> 
> The results make for sobering reading. The study concluded that there is no correlation between customers’ happiness and an airline’s commercial success. In other words, airlines can do all they want to pamper travellers—provide friendlier service, roomier seats, more movie options, better food, greater punctuality—and none of it is likely to lead to higher profits.



Unfortunately, Amtrak seems to be following this trend.


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## jis (Nov 2, 2015)

The problem is that passengers everywhere irrespective of mode seem to be driven by the same urges. So Amtrak being in that space hardly has a choice about it, specially with relentless pressure to improve their operating ratio. So their main struggle has been to lower expectations of a generation that has known better. The problem will solve itself with passing time.


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## Ryan (Nov 2, 2015)

Something that isn't exclusive to transportation either, our appetite for cheap crap runs the gamut from Wal-Mart to McDonalds.


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## CHamilton (Nov 2, 2015)

Ryan said:


> Something that isn't exclusive to transportation either, our appetite for cheap crap runs the gamut from Wal-Mart to McDonalds.


And cell phone service.

Sprint CEO Wages War on Free Snacks to Cut Costs

Our society has always chosen to pretend that advertising-supported or otherwise subsidized means "free," which it doesn't. You always pay: "free"ways are paid for by us, the taxpayers; "free" television is paid for by us through the increased prices we pay manufacturers for their advertising budgets.


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## Philly Amtrak Fan (Nov 2, 2015)

CHamilton said:


> Treating flyers well is bad for airlines’ business
> 
> 
> > FOR all the frequent travellers out there just aching for airlines to make the flying experience slightly less unpleasant, there’s one fundamental obstacle: you. The airline industry recently undertook a wide-ranging study of passenger satisfaction, surveying 60,000 passengers on 30 airlines in 39 hub airports around the world, and examining 75 factors that contribute to a flyer’s satisfaction level.
> ...


They're a monopoly. If a second railroad had a chance to compete with Amtrak, I'd tell them to give us a CHI-PHL train or I'll take the other railroad that has one! If the airlines are doing this while competing with each other, good luck getting Amtrak to do anything.


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## jis (Nov 2, 2015)

Or to get even 15 competing rail passenger companies to do anything other than concentrate on the markets where they can skim the cream, and ignore everything else.

This is why we require a strong rail regulator like in Britain or in several other European countries that are going for open access. There has got be service level agreements and a body to enforce them effectively. In the US there is a lamppost outfit called STB which has evident expertise in sitting on its hands and doing mostly nothing.

This is also a problem with Amtrak, since there really is no service level agreement in place between its funders (Congress and we the people) and it, other than endless political posturing by whoever has hold o the microphone at the moment. Airlines have regulations that have them face stiff fines if they hold a plane on tarmac away from the gate over 4 hours. There are no such protection for passengers on Amtrak or any other passenger rail carrier, just as a random example.


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## BCL (Nov 2, 2015)

Cost is really driving the demand these days. Airlines used to count of full-fare business travel basically driving their profits, but business travel isn't what it used to be and is also driven by costs.


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## Ryan (Nov 2, 2015)

Philly Amtrak Fan said:


> They're a monopoly. If a second railroad had a chance to compete with Amtrak, I'd tell them to give us a CHI-PHL train or I'll take the other railroad that has one! If the airlines are doing this while competing with each other, good luck getting Amtrak to do anything.


If airlines aren't doing this in a market where there is competition, what makes you think rail will be any different?


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## railiner (Nov 2, 2015)

The airlines have learned through trial and error, that offering "more legroom": or any other amenity, is always trumped by whoever offers the lowest fare....


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## cirdan (Nov 3, 2015)

When you talk about airlines pampering their clients, this discussion is mostly about how they pamper their business clients. And most business cleints don't book their own flights but their companies do. So from the airline's perspective its more about handling key accounts than handling individuals.

My employer somehow always manages to book me a ticket that costs more than what I would have payed if i had booked myself and scouted around a little for the best deal, even if I take things such as flexibility into account. But I'm sure that every time our CEO flies he gets the red carpet treatment and as long as he's happy we stay with that supplier. What the rest of us feel about what we're getting doesn't come into it.


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## BCL (Nov 3, 2015)

cirdan said:


> When you talk about airlines pampering their clients, this discussion is mostly about how they pamper their business clients. And most business cleints don't book their own flights but their companies do. So from the airline's perspective its more about handling key accounts than handling individuals.
> 
> My employer somehow always manages to book me a ticket that costs more than what I would have payed if i had booked myself and scouted around a little for the best deal, even if I take things such as flexibility into account. But I'm sure that every time our CEO flies he gets the red carpet treatment and as long as he's happy we stay with that supplier. What the rest of us feel about what we're getting doesn't come into it.


Well - that's sort of the way business travel traditionally operated, although many things are changing in order to save costs.

I remember one of my first job interviews on the East Coast. I got booked full fare via the company's travel office. When I arrived at the airport and collected the ticket it was $1300 round-trip, and this was 20 years ago.

A few years back when I booked my own ticket I was upset because my manager told me to wait if I was needed. I booked maybe one week later and the round-trip price for a flight to Florida had gone up from about $340 to $440.


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## jis (Nov 3, 2015)

The corporate travel agency that is used by my employer computes something called the Lowest Logical Fare for an itinerary. This varies depending on whether using the corporate partner airline or some other airline. If you use a fare that is higher than the LLF you have to give an explanation to get the deviation blessed. Otherwise you are reimbursed the LLF and the rest above that is your responsibility. I actually like this because I can merrily go about without getting anyone's permission things like points and cash upgrades on top of the LLF ticket. In the past they used to get bent out of shape if I did that on business travel since it according to them modified the official ticket. These days they don't care anymore since either way they have to pay what is a well defined amount and no more, and I can go to town with my own means over and above that. Comes in real handy to avail of the last minute 20k miles and $500 upgrades to lie flat seat BF class when flying to or from Israel. The other good thing is, if the manager delays a travel decision it is on him/her that the LLF went up. Not my problem.


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## Bob Dylan (Nov 3, 2015)

Back in Ancient Times, before Cell Phones, PCs etc. ( "What's a Fax Machine Grandpa?") when I traveled extensively on business ( I'm a retired Government employee), our travel office allowed me to make my own travel arrangements since everything was a fixed "Government Rate" ( transportation, hotel, per diem etc.).

I was allowed to keep any perks obtained thru travel ( ie travel coupons,upgrades, mileage, "free days"etc.) without them being considered income!

This allowed me to ride the Metroliners on the NEC, and to use Amtrak on Mid-distance trips instead of flying,which I still did lots of since Amtrak didn't serve lots of places I had to visit! I was also able to spend lots of weekends exploring places I liked at little or no cost to me since I was already on the road most of the time.

As with jis, any upgrades, extras etc.that werent covered were also up to me to pay or cover with bennies earned.

And I was also allowed to use my own Amex Card if desired ( I also had a Government Card)and was reimbursed and/or given cash advances for per diem,tips,taxis etc. if I elected that!

( best training I ever received was in Expense Account Creation!)

Of course things have really changed, now everything is tightly controlled, and the Bean Counters are everywhere!

Those were the days my friends, I didn't make any money but it beat working for a living,allowed me to see and do many amazing places and things, and kept me out of the infamous meetings and the rat race in Washington ( the rats usually win!)!!


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## BCL (Nov 3, 2015)

Bob Dylan said:


> Those were the days my friends, I didn't make any money but it beat working for a living,allowed me to see and do many amazing places and things, and kept me out of the infamous meetings and the rat race in Washington ( the rats usually win!)!!


In my (limited) business travels I've done it a few ways. Once I was supposed to pay out of pocket first, then get reimbursement. I thought I was supposed to collect meal receipts and get reimbursed, until I ran into someone else from a different group at the same company (at some big convention in Vegas) say he just got a flat-rate per diem. So the next time I traveled on business I chose that route. I spend maybe an average of $20 per day on meals and was allowed to collect $45. It always seemed kind of strange, but I understand it was pretty common.


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## Swadian Hardcore (Nov 3, 2015)

No, it isn't: https://www.youtube.com/watch?v=2BOM03RSxm4.


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## Ryan (Nov 3, 2015)

Bob Dylan said:


> Of course things have really changed, now everything is tightly controlled, and the Bean Counters are everywhere!


Eh, it isn't all that bad - there's some control over what airline you get by choosing your endpoint cities with some care. Hotels are still somewhat open as well, as long as they have a government rate.

I am enjoying piling up the miles and points, and I'm able to come out of pocket to tack on things like early bird checkin (Southwest) and Delta's Comfort+.


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## willem (Nov 4, 2015)

Bob Dylan said:


> Back in Ancient Times, before Cell Phones, PCs etc. ( "What's a Fax Machine Grandpa?") when I traveled extensively on business ( I'm a retired Government employee), our travel office allowed me to make my own travel arrangements since everything was a fixed "Government Rate" ( transportation, hotel, per diem etc.).
> 
> I was allowed to keep any perks obtained thru travel ( ie travel coupons,upgrades, mileage, "free days"etc.) without them being considered income!


As recently as 12 years ago or so, the government agency that employed me said that I could not keep any travel perk for personal use. Many of my co-workers had two frequent flyer accounts with each airline, to segregate the business and personal miles. (Then when this benighted policy was revoked, they moved the miles from the government accounts to their personal accounts and close the government accounts.)


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## jis (Nov 4, 2015)

Bob Dylan said:


> And I was also allowed to use my own Amex Card if desired ( I also had a Government Card)and was reimbursed and/or given cash advances for per diem,tips,taxis etc. if I elected that!


Trying to get reimbursed for hotel or air tickets that are charged on a personal card rather than the corporate Amex has been made so painful that there is almost nothing that makes it worthwhile at the place where I work.

As for food, unlike government jobs that I am aware of, we are not on per diem. We are paid for actual money spent though we do get our hands slapped if the amount per meal is extravagant. Also oddly within the US they strongly discourage submitting receipts for anything less than $75 because it costs too much to process and archive them supposedly. It has something to do with minimal requirements for paperwork from IRS too. This rule varies from country to country.

Of course we are free to do anything that we please as long as we are not asking to be reimbursed. For expenses to be reimbursed the rules are pretty strict, and the reimbursement happens straight from the company to Amex electronically. There is actually zero paper involved now. Even the receipts have to be scanned in and attached to he electronic voucher.


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## cirdan (Nov 4, 2015)

Ryan said:


> Hotels are still somewhat open as well, as long as they have a government rate.


I got into trouble earlier this year for self-booking a hotel that was cheaper than the one my comapny was suggesting, and also right next to the location I was working rather than right across town so I saved on taxi or rental car costs in addition to getting the hotel at a cheaper rate.

My company intially reafused to reimburse me for violating company travel policy and I had to escalate it to my superior until they backed down. But they only payed up after handing out a stern warning not to ever do that again.


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## jis (Nov 4, 2015)

I learned from some insider investigation that the ticket or hotel rate anomaly happens because even though the immediate rate may be a little higher, the company gets a volume discount, sometimes an enormous volume discount as a paid back rebate if certain volume thresholds are met, which at the end makes the effective rate way way lower. Such things are now programmed into the fare and hotel rate selection algorithms apparently.Such are the ways of how the selected provider contracts are written.


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## cirdan (Nov 5, 2015)

jis said:


> I learned from some insider investigation that the ticket or hotel rate anomaly happens because even though the immediate rate may be a little higher, the company gets a volume discount, sometimes an enormous volume discount as a paid back rebate if certain volume thresholds are met, which at the end makes the effective rate way way lower. Such things are now programmed into the fare and hotel rate selection algorithms apparently.Such are the ways of how the selected provider contracts are written.


If this is true, and I can belive it is, there is some strange reimbursement game goin on.

I have budget resposnibility for my activities, so although I can't approve my own travels, I do approve those of my subordinates. I also see both my own costs and those of my subordinates in my budget reports. I have never seen any volume discount leading to money flowing back into my department. So if it is happening, the repayment is being absorbed at a corporate level. So possibly my actions are cross-subsidizing somebody else's budget. Yet I am responsible for my budget and only my budget and required to use it wisely and be accountable for that. I'm not really able to do that if I'm not being shown the whole picture. It destroys the whole concept of accountability.


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## willem (Nov 5, 2015)

Back about the time my federal agency allowed travelers to keep frequent flyer miles and other travel perks for personal use, it also insisted that every traveler get a "government charge card for travel" in his or her own name. One co-worker, whose spouse worked for a bank, said that someone was getting a huge rebate, and it was not anyone local.


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## jis (Nov 5, 2015)

willem said:


> Back about the time my federal agency allowed travelers to keep frequent flyer miles and other travel perks for personal use, it also insisted that every traveler get a "government charge card for travel" in his or her own name. One co-worker, whose spouse worked for a bank, said that someone was getting a huge rebate, and it was not anyone local.


Such things apparently are not unusual at all.


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## Anderson (Nov 18, 2015)

I'm reminded of the saga of a friend getting pestered by the military (do _not _even get me started on their practices on this front...actually, just don't get me started on the military in general) to get a government travel card. Basically, _something_ got screwed up when he came into his present unit and the paperwork never got filed...he's basically said "to hell with it" and just files for reimbursement at this point.


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## jis (Nov 18, 2015)

If the government were as efficient as the company I work for he would cease to get anything reimbursed that was not charged on the company card where it is accepted. the only out would be to use only those companies that does not accept that brand of credit card, and boy that is quite tough these days specially when it comes to airlines, hotels and car rentals.


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## Anderson (Nov 18, 2015)

Swinging back to the main topic of this thread:
(1) Part of the problem is that most of the metrics being considered are dubious in terms of their actual utility. With some specific exceptions (NEC shuttles, for example) I highly doubt that too many pax get horridly bent out of shape if their flight is 15-30 minutes late. I suspect some threshold for "catastrophic delays" might be more useful on that front.

(2) Given that travel time for airlines is usually pretty straightforward (a direct flight EWR-SFO is probably going to take about the same amount of time regardless of airline +/- 30 minutes) and given how price-conscious most travelers tend to be, there's still going to be the strategy of "match on price and do better on benefits" which is where things seem to be heading on the more competitive long-haul routes (e.g. NYC-LAX/SFO): If I have two flights to choose from, their price is basically the same and they run about the same time, but one includes a free checked bag and another inch or two of legroom I'll probably take the latter. If I have four or five to choose from, this applies even more.

Basically, on less competitive routes (and/or short flights, probably under about two hours) pure price is likely to win since (A) time in the air isn't a major consideration for some inconvenience (i.e. for a lot of people the flight is short enough not to care if it's lousy) and (B) in many cases the city pair in question isn't big enough for a "real" fight. The exceptions are going to be markets that are (1) big and (2) long-haul...

...which has a direct parallel in the railroad industry, actually: New York-Chicago and a few other markets saw truly brutal competition in terms of amenities on trains because (1) runtime/convenience was similar on different routes and (2) fares were basically fixed. With the airlines, fares are also close to fixed...albeit being "fixed" by the lowest bidder in many cases rather than by the ICC or CAB. At that point it really comes down to the question of whether an airline is better off trying to slash costs to the bone to pad their margins (and risking a handful of empty seats) or trying to "scoop" pax with some added benefits to pad market share and load factors a bit more. But it really only applies on certain key routes...and much like in the railroad parallel, there are going to be plenty of people who don't get the shiny new express train, they get the crappy local that's still running heavyweight cars in 1965.


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