12 June 2011

Are US Travelers Stupid?

For a long time the value of brand has been that you can persuade someone to do something that they might not do otherwise.

In today's online - "just a click away" culture - the assumption is that the consumer is now better informed and will therefore make a better decision.

So what about fact?

Are the brand values we know and respond to actually meaningful and correct? Indeed do the brands match up to the expected value that consumers have for them?

In reality often times they don't. Case in point Southwest Airlines.

In 2000, my team did an assessment of Southwest and found that in most cases for the top 25 US based markets southwest did not have the lowest fare in all classifications. In reading Scott McCartney's analysis in the Wall Street Journal last week this trend is really showing. With the end of WN's legendary fuel hedging advantage - WN is well just like any other airline.

Indeed domestically WN is the largest airline in the USA market.

With the merger of AirTran that number has indeed grown.

According to the US DoT WN's average ticket price has skyrocketed 39% in the past five years, while the average ticket price for domestic trips for the industry was up 10%, and much of that is driven by the changes in WN's model.

But you also have to watch for some of the Gotchas. WN used to let you standby for an earlier flight at no cost. Not any more. They used to check a bag no matter what. Not any more - there is a weight and size limit that is typically lower than that of the average bags. They used to treat everyone the same. Not any more you can pay for a premium package with 2 levels of business class fare. You used to be forced to get to the airport early if you wanted a reasonable seat. Not any more - you can buy an earlier boarding pass.

So WN is no longer a discount carrier. It has old planes. It has older employees. It makes money from Ancillary Revenues. It participates in the GDSs. It charges more than 1000 dollars for a ticket.

Yup that makes them a full service airline. But they still like to poke their noses at others. And they still like to accentuate beautiful females to appeal to the male travellers. It will be interesting to see if they ever put a guy on the side of the plane....



Anonymous said...

Southwest gets a premium because it doesn't fleece customers as a policy, and treats them with respect; both of these are things the "legacy" carriers regularly do.

Professor Sabena said...

OK - I will bite on that one.

I think that statement is relative. Do they REALLY treat you with respect or is what the others do SO BAD that anything is better?

I think WN really tries. Gotta give them that. They are also more successful than any other airline.

Do they do the whole job? Are they truly better? Well in the days when they charged truly less - I was prepared to accept lesser service served up with a smile at less money. In today's environment will I accept the same service but with missing components (such as seat selection).

Hence my question. Are US travelers stupid in just accepting the mediocre service just because the other one is SO BAD. That said - WN - keep it coming. We need them to keep the others honest. But the days of WN being CHEAP and Cheerful are long gone.


Joao Mark said...

The problem is that most customers are lazy and dont do a research in the market.