A Blog by Jonathan Low


Apr 17, 2017

Why Technology Has Failed To Improve the Airline Experience

As in the tech industry itself, technology has created oligopolistic conditions that render customer service relatively meaningless. Reflexive ideological opposition to regulation (and to anti-trust actions) has contributed to this state of affairs.

The result is a system in which the economic incentives are designed to reward limited financial outcomes rather than encouraging innovation to enhance competition in order to improve performance and service. JL

Farhad Manjoo reports in the New York Times:

Uber defeated taxis. Airbnb made getting a room cheaper. Streaming (is) undoing cable. Tech has fueled airlines' race to the bottom. Everything about United Flight 3411 — overselling, underpaying for seats when oversold - has been accelerated by tech. Travel search engines rank based on price rather than quality. Online check-in, airport kiosks and apps allow airlines to serve customers with tech-abetted, bottom-seeking concerned with prices and profits with little regard for service.
There are many reasons for the sorry state of commercial aviation in America. When it comes to your routinely terrible flight — not to mention the sort of exceptional horror that took place aboard United Airlines Flight 3411 — regulatory failures as well as consolidation, which the authorities have allowed to occur unabated for decades, can be blamed.
But I come to you as a technology columnist to tell you that technology, too, has failed you.
People in Silicon Valley pride themselves on their capacity to upend entrenched industries. Uber defeated taxi cartels. Airbnb made getting a room cheaper and more accessible. Streaming services are undoing the cable business. Yet the airline industry has not just stubbornly resisted innovation to improve customer service — in many ways, technology has only fueled the industry’s race to the bottom.
Everything about United Flight 3411 — overselling, underpaying for seats when they are oversold, a cultish refusal to offer immediate contrition, an overall attitude that brutish capitalism is the best that nonelite customers can expect from this fallen world — is baked into the airline industry’s business model. And that business model has been accelerated by tech.
Travel search engines rank airlines based on price rather than friendliness or quality of service. Online check-in, airport kiosks and apps allow airlines to serve customers with fewer and fewer workers. What we are witnessing is the basest, ugliest form of tech-abetted, bottom-seeking capitalism — one concerned with prices and profits above all else, with little regard for quality of service, for friendliness, or even for the dignity of customers.

“The airline industry has been on a steady downward trajectory when it comes to customer service for nearly 40 years,” said Henry H. Harteveldt, the president of the Atmosphere Research Group, a travel industry research firm. He noted that American carriers were improving on some metrics — on-time service is up, baggage loss is down and prices keep getting better.
What keeps deteriorating are comfort and quality of service for low-end passengers (i.e., most people). Legroom keeps shrinking. Airlines keep tacking on separate fees for amenities we used to consider part of the flight. And customers keep going along with it.
“Consumers have shown that they’re willing to put up with an awful lot, including lack of legroom, lack of amenities, mediocre or worse customer service, dirty airplanes and more to save money,” Mr. Harteveldt said. “And the airline industry has evolved to meet that desire” for cheap fares.
Part of the problem is how we buy tickets today. The whole system is mercilessly transactional. When you search online, you look for price and travel times, and perhaps you consider some airline loyalty program. Customer service — that is, how the airline treats you — isn’t often part of the transaction.
As a result, airlines have little incentive to reform themselves.
“Airline executives will tell you they don’t view themselves as being service companies,” Mr. Harteveldt said. “They want Wall Street to view them as industrial companies, and they want consumers to view them as transportation providers. Customer service is just not what the airlines are about.”
You can see this in United’s initial response to what happened on Flight 3411. “I apologize for having to reaccommodate these customers,” Oscar Munoz, United’s chief executive, said in a statement dripping with all the warmth of a ransom note.
In a letter to employees, he repeatedly suggested that the customer, not the airline, was at fault. After all, the passenger was offered a bountiful $1,000 in United vouchers for his trouble. It was an offer he couldn’t refuse. As a United spokesman told The Times, the passenger was “asked several times, politely,” for his seat before anyone beat him up.
It took two days — and a plunge in United’s stock price — for the airline to offer a real apology. “I want you to know that we take full responsibility and we will work to make it right,” Mr. Munoz said in a statement.
Can technology improve how airlines work? Some people have ideas for how that may happen.
One of them is obvious and sensible: customer reviews. Last year TripAdvisor, the travel reviews site that has become indispensable for hotel bookings, began rating airlines. Its new rankings, released this week, show that over all, airlines get an average rating of 3.7 out of 5 from customers.
Emirates and Singapore Airlines are rated the best in the world; two American airlines, JetBlue and Alaska, made TripAdvisor’s Top 10 list. But Delta was the only major American airline to receive TripAdvisor’s seal of approval. United and American Airlines did not meet the site’s minimum threshold, though Bryan Saltzburg, senior vice president for TripAdvisor’s global flight business, said that the two had been improving.
One can imagine how such reviews could prompt improvements in airlines. If instead of just price, travel search engines included prominent warnings from reviewers — “This airline might give you a bloody lip while kicking you from your seat, 1-star!” — that could alter travelers’ calculations in booking.
“That would be a good idea — a filter on travel search that says, ‘Click this filter and it might cost you a few dollars more, but we’ll bias you towards airlines that treat their customers well,’ ” said Paul English, the co-founder of the travel search company Kayak who now runs another travel start-up, Lola.
That is small potatoes, though. A bigger disruption would come from altering how we pay for airfares. In the same way that Netflix changed the DVD business by charging a monthly fee, some consultants argue that a membership fee could radically improve flying.
“We’ve prototyped a subscription airline in the past, and it basically gets the airline out of the business of reducing service for offering the lowest fares,” said Devin Liddell, the principal brand strategist for Teague, a design firm that works with Boeing and other transportation companies.
Some start-ups have tried a monthly subscription model, and none have taken off. But airline start-ups face high capital costs; a new business model might work, Mr. Liddell said, if an established airline tries it as a way to break free from the accepted way of doing things.
You might wonder why an airline would dare try such a thing. After all, airlines are doing well; profits are up across the globe, despite your annoyance about flying.
But Mr. Liddell warned of long-term competition from other kinds of transportation. If self-driving cars make driving easier and more comfortable, midrange flights would face competition. Counting the time it takes to clear airport security and get to and from the airport, it takes just as long to drive between some places — Los Angeles to San Francisco, say — as to fly. If self-driving technology makes driving much more comfortable, too, lots of people might abandon planes for cars, Mr. Liddell said.
An even longer-term idea is the Hyperloop, Elon Musk’s vision for superfast tunnel travel. It’s a pretty speculative idea, but if it works, airlines would need to radically alter how they work.
For now, though, none of that hurts the commercial air business. Airlines are safe from self-driving cars and the Hyperloop. They are content to feed you ever-worse service for lower prices, because that is what the web wants.
Your only technological hope for better service is your smartphone camera and the viral push of social networks. If you are violently kicked off your flight, at least your fellow passengers will post a video to Facebook.


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