The airline industry will soon face substantial headwinds which will force an evolution of the flight experience. The question is that what will become, whom the bold shall be and who will survive.
What I believe we will we see in the very near future:
1. Cross utilized employees: The bottom line is that the system today is already pressed to the break point and remaining options short of deep pay cuts will be increasing employee productivity. Ground operations employees will be tasked to work customer service and ramp service (above & below wing). Layovers will be reduced or eliminated as staff are cross utilized and many stations become defacto "bases" to position crew and aircraft simultaneously and eliminate expenses.
2. Creation of "Buy on Board": Nothing will be free. The winner will be the carrier that recognizes that Airport and In-Flight Revenue are expansion opportunities. Why should Hudson or Host get the revenue passengers will be on-board for several hours. A quality operation will ultimately lead to a favorable result. Instead of "why do I have to pay for a sandwich" the 2002 and beyond perception could easily be "I enjoy the variety of offers on board" On a 4hr flight, I would really enjoy a quality in-flight menu and even some value added services which will include seat back AVOD and other media availability.
3. A return to Reality: Air Transportation is a conveyance, getting you from Point A to B. Funny how so many people point to the "glory days" of air travel were actually born after de-regulation. The glory days of travel were directly related to regulation and control of routes and fares, along with $20 per barrel oil. More than most, I would encourage limited regulation or consolidation of the industry; but, am prepared for a 20-40% spike in fares in exchange for industry stability. It is obvious that the industry is not capable of policing itself and issues such as congestion should also be addressed by the DOT through slot restrictions. The air transportation industry is a utility. In so many words, it is addressed as such whenever a strike hits and the Railway Labor Act is dusted off and carried to Congress.
4. Further automation: Touch tone reservations, internet and airport automated check-in The reduction of the human interaction in the initial reservation process. Take the initial reservation through automation and internet applications, service premier passengers and existing reservations only through internet, telecommute and cross utilized staffing. The good carriers will see this as an opportunity to maximize the human element. A reliable means of using reservations and airport staff for premier passenger and peak demand opportunities.
5. Union harmony: In crisis the worst of enemies can ultimately see eye to eye. We are within $20-$25 per gallon increases for a period of 60 consecutive days from seeing carriers in BK and complete voiding of all Labor Contracts. All parties need to sit at the table and think not in pay raise or pay cut; but, in how both parties to mesh cost of living with cost of business. The easy answer is improved productivity. Radical; but, done. Both groups can be remarkably civil and cooperative if they are both facing the same gun. Creativity and thinking forward will be the key. See the end of point #7 below for an idea of creative thinking.
6. Airports: Sooner or later, airports that are facing or faced cuts in service will see that an international approach will best protect their interests. Las Vegas is breaking ground with multi-use check-in machines and share use gate concept. Now take it one step further and make it an open use counter concept and serve as ground handling agent for all carriers. The carriers will see relief from leases, staffing and equipment. A simple turn cost established for "as-service" contracts. More so for mid to small airports; but, this will empower them to offer a valued added service to the carrier instead of having to reduce fees, offer incentives and/or ultimately lose service. Instead of staffing overlap, it will truly maximize productivity, departure management and offer cost benefits.
7. Spin off of employee groups. A bit contrary to some thoughts above that I believe would be more beneficial; but, similar to AMR spinning off the ground service unit. An independent unit that would bid for ground handling contracts. The parent can reduce short/long term expenses while the new unit can be free to grow revenues to taking on contract work. This could work well with #6, in that an airport can contact with this company to pursue the overall ground handling concept. Smaller perspective, instead of each carrier having staff at seasonal airports, a ground handling company handles it all.
See point #5 above: A union could offer to "buy" the employee group from the carrier and run it independently on a contract basis. This could merge similar work groups (same representation) at multiple carriers. This would empower the union and membership to control their own destiny, determine their own cost of operations structure and focus their energies. At this point in time, the carrier would likely offer money and equipment for the work group to be spun off. Not sure if anyone has the "stones" for this concept; but, it is definitely the most empowering for control of destiny for the work group.
8. Non refundable tickets: A carrier and more specifically, a flight is just like a concert. Once it is over, your revenue opportunity is over as well. You can't go to the box office and say "I missed the show, or I would like to change my ticket to the show Thursday". The lower (H,Q,S,T,W; etc.) fare buckets need to be 100% non-refundable, non changeable. If your plans are not secure then don't book the flight. This will better manage and stabilize revenues and increase productivity. Another view would be to offer a cancellation option at the time of reservation. Offer an a la carte $10 charge which would permit one (1) free internet change of itinerary, subject to original class of service availability and fare rule; i.e. advance purchase requirement; or, when not available the service charge would permit full use of the fare value toward purchase of a new ticket.
9. Collateral Revenue: although I never checked a bag on People Express. I think they charged to check bags, $5 each I think. I would encourage the expansion of all "choice" revenue opportunities. Charge for check baggage, advance seat assignments, buy on board, "live" reservations, airport check-in. Essentially, unless you book online, check-in online (reserve seat free within 24 hours of departure), have carry-on baggage and bring along a bottle of water, we should be charged a reasonable fee for everything else as they are "options" and not inherently included in "air transportation".
The air carriers pay for all the services we "choose" to use and we should in turn pay for these services. The custom of reservation and facility fees are not new. Ticketmaster, concession and building fees when we buy circus, concert or performance tickets are well established. I would suggest that when making a reservation online, the process is free. When making a reservation via telephone or at the airport, there would be a service charge applied.
The featuring offering a choice to reserve your seat in advance would be a HUGE money maker. At $20 bucks a pop, I would estimate at least 30% or more of the cabin would pay for advanced select seating. Not the whole cabin would be utilized in the program, just identified select seating or it could go as far as all seat assignment prior to 24 hours are available for a change, seats assigned day of departure are complimentary.
The question will be whether a carrier today will be bold enough to lay the ground work that people will discuss 20 years from now.
I could go on for days; but, all we need to do is look into the not so distant past to see what could very well work in todays world. One thing I am certain is that when these concepts evolve, they will suffer from crappy marketing. The concept needs to grasp the element customer service and not cost cutting.
Why should all passenger be treated the same when they are each unique? Charge a base fare for transportation and offer everyone the opportunity to customize or personalize their flight experience.
