in Organizations

Flying High, part II

More notes from Flying High:

  • “You can call every day to United and get a different price (for a ticket). The reality is you get nickel-and-dimed. And more importantly, the customer thinks ‘You’re screwing me.’ So it’s better to just ask one price. You want to keep the service offerings very simple. The whole key is keeping trust in the system.
  • Three elements that ‘insure’ customers to a brand: First, flawless execution. Second, make things right with customers when things go wrong, because no matter how flawless you try to be, sometimes things will go wrong. And third, a company needs employees that are ambassadors for their brand, who are proud to belong to the organization.
  • Behind the scenes, there’s a surprising amount of lean-but-progressive use of technology, such as a paperless cockpit. They own everything from their own booking system to the LiveTV, both of which they license to other airlines.
  • Basic metrics: “…the airline looks at the impact on CASM (cost per available seat mile), the industry’s standard metric of efficiency. This is the expense of flying one passenger one passenger one mile. Available seat miles (ASM), a benchmark of an airline’s total capacity, is calculated by multiplying the total of all seats available on every route by the length of the routes. If you divide an airline’s total operating costs by the ASM, the result is the CASM. Airlines also pay close attention to RPM, or revenue per passenger mile. RPM is the number of seat miles for which the airline is actually filling a seat and making money. Divide the RPM by the ASM and the result is the airline’s load factor.”
  • “…the marketing department’s funds come under the operations budget, reflecting a company philosophy Curtis-McIntyre strongly endorses: ‘Product and marketing should be intimately involved—in each other’s face and on the same side of the fence.’ “
  • On putting mission statements into use: “If subordinate workers feel a leader is not living up to these principles, they are encouraged to ask supervisors how the conduct in question complies with the principles, thereby providing for accountability.”
  • “Neeleman insists he doesn’t pay much attention to how much shares are trading for in the open market. “Herb Kelleher at Southwest Airlines said something very insightful,” Neeleman relates. “At the time it sounded shocking. He said, ‘I don’t care about my shareholders.’ ‘What do you mean you don’t care about shareholders?’ ‘Because I just take care of my employees. I know if I take care of my employees, they’ll take care of my customers, and my customers will take care of my shareholders.’ “

Also notable for the approach of culture fueling product is this quote from Gareth Jones, VP, Corporate Communications about their competition…

Song isn’t the success you might have heard it is from Delta. We’ve trounced them on any route we’ve shared. They copied the wrong things. They copied the obvious. They don’t focus on the human experience…they focused on the cosmetic. Ted is United with a different coat of paint.

  1. Mr Gareth Jones may be going off old information.

    Song has been able to maintain a higher RASM than Jetblue in Boston in the latest 4th Quarter 04 data put out by the Department of Transportation. Additionally Song has consistently narrowed the RASM gap in JFK markets.

    Song has been rate a better product in articles published by the LA Times, Palm Beach Post, Reader’s Digest, and Businessweek.

  2. I’m sorry, I should have said 4th Q 05 data from the DOT.

    But as I look at the Alf report it is from May 04 where Jetblue enjoyed the advantage in JFK of Song being the new kid on the block. Not so in Boston.

  3. To be honest, I feel the JetBlue experience has fallen off lately, it no longer seems special. Or maybe that’s my getting used to it, not sure which. I do think they need to up the customer experience anti.

    Regarding the press, there have been just as many critical looks at Song, e.g.
    http://www.usatoday.com/travel/columnist/brancatelli/2004-05-13-brancatelli_x.htm

    It’ll be interesting to see if JetBlue’s advantages in human resources and technology can continue as they grow and the business and planes get older.

  4. Joe’s a former old school travel agent from the days of 10% flat commissions and free expense paid vacation of behalf of the airlines. He’s more of a commentary guy than an objective journalist. He took some of that review back in a later article.

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