American Airlines’ Chief Revenue Officer, Vasu Raja, has raised some eyebrows by equating the airline’s schedule with its full product. He’s right in some ways — if the airline doesn’t fly to where you are going, it’s hard to see why you’d pick them. Traditional views of marketing would put more into the product bucket, however. If your flight is delayed, is how the airline communicates with you, and protects your travel if needed, part of its product? If you choose to fly an airline to build points in a loyalty program, couldn’t you say the loyalty program is part of the product?
Yet surveys show regularly that price and schedule are overwhelmingly the two factors that consumers consider when picking their airline. The schedule does dominate in many ways. In a fast food sense, the schedule would be the food served. Other things would be the cleanliness of the floors and tables, time spent in line, etc. You don’t go to Chipotle because the tables are clean, but if the tables are dirty that may affect your view of that store. In the same way, the airline schedule is why most people first pick their airline. Whether they repeat or not, though, brings other things into the product definition.
Schedule And Price Rule
Every survey of customer preferences shows that price and schedule dominate all reasons people choose their airline. Softer items, like seat pitch, inflight entertainment, and food matter to some. For frequent travelers, loyalty programs are proven to drive some decisions. Customers exhibit pricing sensitivity on a range from only price matters to willing to pay for for better options.
Schedules can be nonstop or connection. Connections can be convenient or circuitous, and add from one hour to many hours versus a nonstop. At Spirit Airlines, we regularly carried people from Atlanta to New York even though the only way we could do this was through a several hour connection in Fort Lauderdale. We used to joke that time ain’t money if all you got is time (a line lifted from Midwest folk singer Greg Brown.)
An airline’s schedule is the basis of its product. If an airline can’t get you from where you are and want to go, they don’t even enter the decision matrix. You may love Emirates, but would you pay the price and take over a day to fly them from Washington, D.C. to Chicago via Dubai? Or if flying from Boston to Richmond, you wouldn’t even have that kind of ridiculous option. This is why schedule dominates the product discussion. First, figure out who can get you there within your timeframe. Then, find the lowest price within that group. This is how most customers choose.
Frequent Flier Programs Matter To Some
For more frequent travelers, loyalty can drive some airline choice behavior. If you live in St. Louis and travel mostly to the Southeast, you’d have the choice of building points with Southwest, Delta, or American. Once you started, this may drive future flight decisions until you meet some desired threshold. One of the structural problems of most airline loyalty programs is that they reward past travel for future benefit. As the year ends, the flyer who meets a tier level on Delta may switch to American to try get some status on each carrier. Rewarding on a rolling 12-months basis makes more sense.
For these kind of travelers, the loyalty program is clearly part of the airline’s product. One of the main reasons to build within a program is to make upgrading possible. Now, the schedule had to be there to make these kind of games accessible, so saying the schedule is the product is not a far stretch from the truth. It’s just that given the schedule, other factors are part of the airline’s product mix.
Being Good When Things Go Bad
Airlines often differentiate themselves when things get bad. Communication, protection, and empathy can all make a huge difference between misery and tolerance. Again, given the schedule, the airline that treats you best when the snowstorm or thunderstorm hits would absolutely be considered a product attribute by its customers.
Technology is playing a bigger role here. One of the biggest frustrations when flying is the lack of control. With better apps and options, the airline can give the customer some control regarding options for them. Services like Dohop can add by finding even non-airline protection options. Increasingly, the airline with the best consumer-facing technology will be considered the best product, as long as long as they fly to where you are going.
Customer Service Versus Indifference
Once on the plane, product becomes the seat, overhead bin space, entertainment or not, food or not, and the flight attendants. Again, you don’t get to this level of the product onion until you win the price and schedule level. When it comes to the flight attendants, the biggest issue is indifference. I have been on flights where an elderly person is struggling to get a bag in to overhead bin, and the flight attendant just ignores it and lets a customer help. I have also seen flight attendants that watch carefully and jump in to help as soon as needed. The person seeing either kind of behavior is likely to think very differently about that airline’s product.
A More Complete View Of The Airline Product
An airline’s product is more than its schedule. But an airline doesn’t get to flex their product to win unless the schedule works for the customer. A more complete view of the airline product would be thought of in two steps: what makes me choose an airline, and what makes me repeat with that airline. The schedule is critical for the first step, but not so important in the second. That’s because the schedule is already given at that point. To repeat with an airline, unless no other airline has a schedule that works, is a complex set of issues that include loyalty, airport, and onboard service.
The biggest argument for schedule as product is based in nonstop versus connection. In Dallas, American Airlines wins the product war because they uniquely fly nonstop to many places. The three largest U.S. airlines — American, Delta, and United, essentially operate an oligopoly where they have divided up the geography. Among these three, no one threatens Delta in Atlanta, United in Newark, or American in Charlotte. It is up to the smaller low-cost airlines in the U.S. to provide price competition with some schedule access in the big airline controlled hubs. They are proof that product is more than schedule, because they can win traffic on a lower price, fewer aircraft attributes, and limited schedule.