A bum deal for airline passengers

Anyone who has flown domestic in the US recently knows that the experience is not one you would choose for the sheer pleasure of it.

Long gone are the days of on-board economy class piano lounges (they really did exist, on American Airlines in the carefree days of the early 1970s). Instead, with a few exceptions, flying domestic in the US today is mostly a utilitarian chore that makes even Asia’s budget airlines seem welcoming and luxurious.

But for an airline that for decades has urged us to “Come Fly the Friendly Skies”, the experience of one United Airlines passenger this week marks a spectacular new low.

Business is about getting bums on seats. Any seat without a bum on it is a loss.

For United the public relations disaster wrought by viral videos showing a bloodied and upset passenger, forcibly removed by armed security staff from one of its aircraft is obvious. The passenger involved, Dr David Dao, will almost certainly try to never fly with United again, and those passengers who witnessed – and filmed – the distressing incident are unlikely to become great brand ambassadors.

The worldwide vitriol aimed at the airline on social media will also be costly, though in time that will pass. Likewise the millions wiped from United’s share price will doubtless recover.

But there is something else on show in Sunday’s incident that should worry any service organisation – a spectacular failure of service culture. This, I think, is the bigger, more enduring story. And it need not have happened.

Bums on seats

Aviation is a cutthroat and hugely costly business with fixed assets – aircraft – that need to be kept as full as possible and as often as possible in order to pay for themselves. Business is about getting bums on seats. Any seat without a bum on it is a loss.

For airlines, empty seats mean lost business

 

To get around this, airlines the world over have long figured that they can sell tickets to more bums than they actually have seats to accommodate. The logic being that, every day, for some reason or another some bums simply don’t show up for their flight, and so no one will be too upset.

The key lesson for any service organisation is that contingency procedures need to be in place before circumstances spiral out of control

Most of the time this system of overbooking works well. Data modelling shows airlines the margins they can comfortably operate within, and passengers generally get where they want to go when they want to.

Inevitably though, from time to time, things go wrong and overbooking means some bums need to be, well, bumped – as, apparently, happened on Sunday’s United flight.

Design, train and empower

In my MBA marketing classes, we use airline overbooking scenarios such as this as a great way to explore the concept of “service recovery” – essentially lessening the impact when something goes wrong by acting professionally and proactively.

There are many ways to do this – pre-emptively off-loading passengers the day before, for example, before they have even travelled to the airport. Or they could be offloaded and compensated at check-in with cash, vouchers, and upgrades on offer to sweeten the deal. A backpacker, say, would most likely happily take a few hundred dollars to get bumped onto the next day’s flight – and the airline might even gain some good word-of-mouth PR to boot.

The key lesson for any service organisation is that contingency procedures need to be in place before circumstances spiral out of control – the three essential words being design, train and empower.

The treatment of Dr Dao marks a spectacular failure of service culture

 

This is not something an organisation should expect their staff to improvise. These procedures need to be carefully designed, they need to be trained for, and frontline staff must be empowered to put them into action.

I was, fortunately, not on the aircraft involved, but as a distant observer it is plain to see that there were no procedures in place that applied to this instance. Consequently staff simply had no idea how to manage a situation where none of the passengers were willing to give up their seat – in spite of an arguably attractive compensation – and that they were not empowered (or willing) to offer a higher compensation until someone was willing to give up his/her seat.

Serious failings

For any organisation, a situation like this is damaging and hard to defend. For an established, global business employing thousands and with a turnover of billions of dollars, it shows serious failings from senior management on several fronts.

Certainly, Sunday’s incident demonstrated incompetent handling of customers, laid bare to the world through the power of Facebook.

But it will also impact staff morale and the quality of future recruitment. If you were a friendly, service-oriented individual in the market for a job, would you be looking to join United?

At a broader level, it also raises questions over the capabilities of senior management as stewards of the business. After some cringeworthy initial statements about the incident, United has finally apologised with its CEO, Oscar Munoz, describing it as “truly horrific” and promising the company would “fix what’s broken”.

But Sunday’s extraordinary scenes at Chicago airport were about more than one passenger being forcibly evicted from their seat. It shows what can happen when a service business loses focus on its service culture.

Such a downward spiral is very hard to reverse – recovery will need strong leadership to address fundamental organisational failures.

A version of this article first appeared in the Straits Times, April 13 2017

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