Qantas gets it wrong with Effiency

These 3 photos where taken at Melbourne airport on a Friday night.

This is of a quick check (self check in terminal)of which there are 22.

This is of the the bag check in staff of which there were 3 working. (They have spaces for 22 employees)

And the this photo is of the ensuing crowd and chaos.

(the crowd goes around the corner it’s at least 100 deep)

I asked the staff member if she’d like some help tonight – she seemed flustered with how busy she was. She said “of course, but it’s ‘cheaper’ this way”. Then I asked if she thought “quick check” was quicker. She said “definitely not”.

So here’s the thing – Qantas make money out of the quick check. The save on overheads. On the balance sheet it makes sense. But what is the ‘real cost’ of doing it?

What it does is, is actually diminish what they actually provide at a differentiated level. It reduces their product from “service” to “travel”. They further commodify themselves against their low cost airline competitors. They make us ask why we are actually flying qantas and paying a premium…

– Is it the food service? – Not likely, given the food is most often a gourmet cookie & juice.

– Is it the service in the air? – Not likely, given their staff are less polite than budget airlines.

– Is it the airplanes? – Not likely, given all domestic players use the exact same aircraft.

– Is the the baggage allowance? – Not likely, given the allownaces are the same 20kg’s to tohers.

– Is it the terminal ambience? – Not likey, given it’s shared with jetstar.

– Is it their safety record? – Not likey given recent scares & that no major aircraft has ever crashed in Australia.

– Is it the inflight entertainment? – Maybe, but it’s a stetch these days given we all have mobile entertainment devices in our pocket.

– Is it the Frequent Flyer points?  Maybe, but it’s marginal at best.

– Is it the Qantas Club? yes – if you are preapred to pay the $775 per annum.

And it can’t be their ground service, given the example above on a Friday night.

Qantas need to ask themselves some hard questions about what they actually offer – as a long time loyal customer, it’s waining quickly. Their point of difference is in a massive state of decline.

Here’s what Qantas ought do if they want to avoid further decline:

  1. Offer Hot meals & drinks every flight. Not just at dinner time. If we are travelling we didn’t have time for dinner or lunch, regardless of when our flight was. We are just as hungry on 7pm flights as we are on 6pm flights. It’s not the food which costs the airline, it’s serving it up. So, if you are going to serve it. Make it worth the effort.
  2. Make the ground experience comfortable and convenient. A few more staff members on the cehckout is a nice start.
  3. Provide free wifi to anyone with a boarding pass.
  4. Have a ‘no tricks’ Frequent Flyer program where any seat on any flight is available, and not for ‘extra points’ – we’ve already paid a premium for our tickets – remember Mr Qantas?
  5. Have separate terminals for your Budget Airline (Jetstar) and your Premium Airline (Qantas).
  6. Sing out loud in your advertising about how different the Qantas experience is. Make us feel special.
  7. Charge the price needed to make it profitable. You’ll be surpirsed how many of us will be preapred to pay for it.

It’s about time Qantas started to focus on it’s customers and forgot about it’s competitors. Eventually we all morph into what we focus.

I’m sure Qantas will tell us this isn’t possible – but tell that to the person who pays twice the price for a Mac book pro versus a Toshiba with the same configurations.

Startups out there: “Beat your competitors – don’t be them!”

‘Oh, by the way’…pricing & fuel surcharges

The latest trick of many airlines is to segregate elements of their product cost

 

        Introducing the “Fuel Surcharge”

 

Apparently this provides pricing transparency. Thanks Mr Airline, but we know the price of oil is rising. 

 

 

Isn’t fuel a fundamental input cost for airlines? (30%)

Do they think we care what their input costs are?

Do they realize that we’d rather the total price – no tricks?

Do they know it reduces ‘trust’ in their brand and industry?

 

And just to show my total disdain for fragmented and aggregated pricing here’s a few questions I’d like to propose to the airline Industry:

 

Does Nike have a shoe lace surcharge?

Does Ford charge extra for the steering wheel?

Does Coke have an aluminum can surcharge?

Does Nokia charge extra for the buttons on the cell phone?

 

Fuel is not an ‘optional extra’. So work it out, include it and charge us a price. That’s what business is…. Businesses are meant to be working this stuff out to reduce the complexity in our lives. That’s what business does.

 

No wonder airlines have the highest business failure rate of any industry, and the worst profitability of any Industry in history. (which by the way is a net negative over the past 100 years)

 

Start up blog says: Consumers hate ‘Oh, by the way’ charges. Avoid them at all costs.

Innovative or annoying?

Emirates Airlines have just announced they will be…

  

“the first airline in the world to commercially launch an inflight mobile telephone service, affording even greater convenience to passengers wishing to stay connected while traveling.”

Hmm… has one of the last bastions of peace and tranquility afforded by the lack of mobile phones has just been destroyed?

 annoying-cell-phone.jpg

  

The question is this: Which airlines will decide that many passengers will hate this ‘innovation’.

 

I can only see it making the traveling experience less pleasurable. On top of this Emirates has invested some US$27 million to fit its fleet with the AeroMobile system. On something which may actually turn away customers!

   

It’s also true that Emirates currently has 7000 calls made per month from its in seat phone service. Approx $200,000 revenue which will be lost every month.

With certain innovations smart startups will often need to decide which half of their customers they want to keep happy. It will be interesting to see how this one plays out.