Profit or Customer Satisfaction

The article is so poorly written that I didn't bother to check the BW article it quotes (whether the inept wording is intentional or accidental doesn't matter). The terms "earnings" and "profits" are used loosely and there's a huge size difference between the airlines that are compared. Also the article fails to mention the meager wages paid by many foreign airlines....and a FA who reaches a certain age or doesn't meet subjective beauty standards is out a job.

I can't believe a business mag would even ask if a company's obligations are to the shareholders or customers. Like it or not, it's the shareholders. Of course companies are keenly aware that customer satisfaction is an important ingredient in shareholder profits. In the case of airlines, low-low-low fares are what keep customers satisfied. They curse the add-on fees and always come back for more on the next trip. And the airlines do offer higher service levels for a higher price....free market working as it should.

To make a profit is based on customer satisfaction for repeat business and growth do stupid issues really

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I just posted the link... Read it and wanted to hear expert opinions. [emoji6]

Skytrax: 1 name says about all it can. You wont need to look hard for a company that has more credibility than Skytax.

It's nearly impossible to compare these airlines as most of them have a totally different view on things than most US & European airlines.

Also, compare the revenue for these airlines and let the stats speak for itself, rather than an article that has been put fairly out of proportions.

But thank you for the link :-)

To make a profit is based on customer satisfaction for repeat business and growth do stupid issues really

 

 

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That's not terribly true when it comes to the airline business. The majority of people still go for lowest price. They may claim to hate an airline, but will usually go back when the price is lowest. And the people who give the airlines tens of thousands of dollars each year are so tied to the airline that they rarely leave to go elsewhere, lest they lose their status (I fall in this category so I can say it!)

That's not terribly true when it comes to the airline business. The majority of people still go for lowest price.

That is probably true. About a dozen years ago, American Airlines tried a strategy called More Room Through Coach (NRTC) where every single seat in economy/coach had more room, pitch of 34" or more IIRC which compares to 32" or less these days and AA tried charging a small premium for it.

Since fare search engines always displayed lowest fares first, you can guess who got the growth in fare revenue and who didn't and thus what happened to MRTC.....

That is probably true. About a dozen years ago, American Airlines tried a strategy called More Room Through Coach (NRTC) where every single seat in economy/coach had more room, pitch of 34" or more IIRC which compares to 32" or less these days and AA tried charging a small premium for it.

 

Since fare search engines always displayed lowest fares first, you can guess who got the growth in fare revenue and who didn't and thus what happened to MRTC.....

I did a whole report/case study on MRTC in grad school a few years ago. It was a fascinating thing to study. It basically proved how cheap most air passengers are. And that's fine, we all like keeping our money, but we can't also complain about legroom when we (collectively) gave AA a big FU when they tried to give us more for a fairly small price.

I did a whole report/case study on MRTC in grad school a few years ago. It was a fascinating thing to study. It basically proved how cheap most air passengers are. And that's fine, we all like keeping our money, but we can't also complain about legroom when we (collectively) gave AA a big FU when they tried to give us more for a fairly small price.

Much like how passengers used to complain about airline food and how it wasn't worth it, and then complaining when it was taken away......

That is probably true. About a dozen years ago, American Airlines tried a strategy called More Room Through Coach (NRTC) where every single seat in economy/coach had more room, pitch of 34" or more IIRC which compares to 32" or less these days and AA tried charging a small premium for it.

 

Since fare search engines always displayed lowest fares first, you can guess who got the growth in fare revenue and who didn't and thus what happened to MRTC.....

Now if they'd done the MRTC and charged a bit less for it they would have scored a very large share of the market and may have impacted their competitors. :D

Now if they'd done the MRTC and charged a bit less for it they would have scored a very large share of the market and may have impacted their competitors. :D

As in "we may lose $10 on every seat but we'll make it up in volume...."

That's not terribly true when it comes to the airline business. The majority of people still go for lowest price. They may claim to hate an airline, but will usually go back when the price is lowest. And the people who give the airlines tens of thousands of dollars each year are so tied to the airline that they rarely leave to go elsewhere, lest they lose their status (I fall in this category so I can say it!)

To a degree but ultimately they are bedded together in their own algorithm that brings best profits and continued passenger use

Ie level of satisfaction that is acceptable to clientelle also goes on par with what they

Pay

Each ends up a system of compromise on both sides that determined end results for supply and demand

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I always like how apples and pears are compared.

Most Asian and Arabic airlines are state-run and/or state-subsidized, whereas that is a often not allowed in the EU and the US due to anti-trust/cartel laws. I have a friend who works for Emirates, and the sky is the limit in the UAE. They have so much money sloshing about, they don't know how to spend it all.

Also, we have strong unions on both sides of the pond, where wages, workers rights, maximum rotation hours, etc. are strictly regulated. Many Asian and Arabic airlines weigh their flight attendants before each flight to prevent them from getting fat, force them to live in staff housing where visitors and curfew are strictly controlled, they are not allowed to marry or get pregnant, etc. If you are not young and beautiful anymore, you're out. I think I would rather be saved in an emergency by a happy well-paid FA with 25 years work experience who had a proper breakfast, thank you very much. :rolleyes:

Concur with earlier comments.

UKBayern nailed it, comparing US airlines with those Asian lines is like comparing apples and oranges.

I would hazard to guess that comparing the profits of US and Asian airlines makes no sense unless you look at the miles flown and/or flights. The American airlines are larger, and you would expect them to make more profits.

Of course, if that old Marxist influence rises up and says profit is a bad thing, exploiting the proletariat.

http://en.wikipedia.org/wiki/World%27s_largest_airlines

i find flying Delta to be a good experience. I would say that Air France has the edge on airline food.

One problem the U.S. was too many airlines and too many investors willing to burn money to fund new startups. Laws of economics dictated that oversupply = low prices and the U.S. airline industry have bled money since deregulation. I believe in the wake of 2001, the collective losses that year was more than the whole U.S. airlines had every earned cumlatively since it started. Over a decade ago, some IATA chief (I believe that was who it was) and the U.S. airlines and government have taken it to heart.

There were 7 major U.S. airlines (excluding Southwest) in 2001

America West has take over US Airways and then American (look at who senior management are)

Delta has taken over Northwest

Continental has taken over United (again, look at who senior mgmt are)

Noticed that there are fewer flights, more filled planes and higher fares in the U.S. these past couple of years? Market consolidation prima facie. Even Southwest is playing along and raising fares to keep everyone happy.

With profits, Delta is doing things like actually giving a choice of 3 mains, amenity kits and free booze on international flights for economy pax! Maybe one day, meals in the back cabin may actually come back.

Other thing that can be said of the European airline market is that there are too many these days in the wake of open sky treaties and deregulation.. .

As for the Asian airlines, some of them were where the U.S. airlines were in the golden age ('60s-'70s). Due to low birth rates in their home countries, labour shortages are in evidence for some of the premium airlines that operate out of the financial hubs (really only 3 markets/cities in Asia) and you're seeing progressively older flight attendants, and ones that aren't the image of demure air hostesses.

One problem the U.S. was too many airlines and too many investors willing to burn money to fund new startups. Laws of economics dictated that oversupply = low prices and the U.S. airline industry have bled money since deregulation. I believe in the wake of 2001, the collective losses that year was more than the whole U.S. airlines had every earned cumlatively since it started. Over a decade ago, some IATA chief (I believe that was who it was) and the U.S. airlines and government have taken it to heart.

 

There were 7 major U.S. airlines (excluding Southwest) in 2001

 

America West has take over US Airways and then American (look at who senior management are)

Delta has taken over Northwest

Continental has taken over United (again, look at who senior mgmt are)

 

Noticed that there are fewer flights, more filled planes and higher fares in the U.S. these past couple of years? Market consolidation prima facie. Even Southwest is playing along and raising fares to keep everyone happy.

 

With profits, Delta is doing things like actually giving a choice of 3 mains, amenity kits and free booze on international flights for economy pax! Maybe one day, meals in the back cabin may actually come back.

 

Other thing that can be said of the European airline market is that there are too many these days in the wake of open sky treaties and deregulation.. .

 

As for the Asian airlines, some of them were where the U.S. airlines were in the golden age ('60s-'70s). Due to low birth rates in their home countries, labour shortages are in evidence for some of the premium airlines that operate out of the financial hubs (really only 3 markets/cities in Asia) and you're seeing progressively older flight attendants, and ones that aren't the image of demure air hostesses.

I remember flying before deregulation. It was very expensive and all the airlines charged the same fares. The only difference in airlines was the service, so service was darn good.

I remember wanting to fly to Madrid, Spain from Atlanta, Ga in 1971 as a University group for European study and the RT airfare was over $400 pp.

In current dollars, that would be about $2000. I have flown to Europe in the last five years for an average of $1000, with one trip costing $825.

I remember flying before deregulation. It was very expensive and all the airlines charged the same fares. The only difference in airlines was the service, so service was darn good.

Not to mention leg room as much as if not more than what domestic first offers today...

I remember wanting to fly to Madrid, Spain from Atlanta, Ga in 1971 as a University group for European study and the RT airfare was over $400 pp.

In current dollars, that would be about $2000. I have flown to Europe in the last five years for an average of $1000, with one trip costing $825.

And people complain when fuel costs - the major cost component of air travel - has risen from $5 a barrel of cruide to $100 currently.