Other Forms Of Communication Are Evolving. Airline Travel Is Not.

Those terms pretty much describe the situation facing the U.S. airline industry in the midst of this Covid situation.

But one there is one other dynamic in play that hasn’t yet been completely grasped or even identified by the airline industry

It’s called evolution.

Air transportation is one of the nation’s communication channels. All communication channels have been affected and changed by the response to the pandemic. Air travel in particular has been choked, forcing the use of other channels in the day-to-day inter-communication of business, government and private citizens. Since physical travel is hampered, electronic means of interaction have seen massive growth.

A lot of the consensus is that when this crisis is over, the channels of communication, including air travel, will just bounce back to where they were. That’s only partially accurate. The surprise coming to the airline industry is that the use of a substantial number of these electronic alternatives will not be temporary. The world is finding that some of them are actually simpler and easier than air travel.
Naturally, electronic modalities cannot fill the entire role that air service occupies, but they will shift a part of it permanently away. They have evolved… they are easier to use than ever… changes in formats have made them more accessible and cheaper than ever.

In short, other modes of communication have evolved. The process to make use of air transportation has not. It is still as hurdle-intensive as ever. Airlines have made no moves to evolve and counter the new competition from other channels and protect their market share.

The Evolution Started Long Before The Pandemic – But Now It’s In High Gear. In our work with communities around the nation in regard to air service, we have found that alternative modes of communication have already permanently supplanted air travel in many short-haul regional routes and also in rural markets.

The reason is that the process of using air transportation is often too slow compared to other ways of getting business done, and too much hassle. In some cases, it’s due to consumers using larger airports an hour or more away, but with much more service that makes up for the drive time.

Now, in the middle of this Covid situation, in addition to the challenges at small airports, a portion of what was the airline industry’s entire customer base is shifting into electronic ways of doing business.

Of course, there never will be a replacement for most face-to-face interaction, both business and leisure. One cannot get a sunburn and run on the beach electronically. Or go skiing in Vail. A billion-dollar business deal isn’t going to be done via Skype or Zoom.

But at the very margins of the demand spectrum, consumers are finding that the traditional processes needed to use scheduled air service are increasingly comparatively onerous. They will – will – in the future stick to some degree with what they’ve found over the last four months – electronic communication has no refund rules. No rebooking fees. No need to be concerned with fine print.

The point is that, spurred by the effects of the pandemic, other forms of communication have evolved to be easier and faster and more convenient for part of what was the airline industry’s core traffic base. The process of air travel fundamentally has stayed the same. Sure, there is now electronic ticketing and smart phone boarding passes and really great apps from most airlines. But nevertheless, the range of hurdles and potential hassles that consumers need to navigate to take an airplane trip have not materially changed.

Violate A Rule & Pay For It. To be very clear, air travel demands a certain amount of process, just for safety and security. But the fact is that there is no “process anxiety” with electronic communication. Make a mistake and there are unlimited Mulligans.

In air travel, the process over the years has become accessorized with all manner of additional airline-imposed rules, regulations, fees and systems that can represent financial punishment should the customer fail to comply for any reason.

Those rules and hurdles need now to evolve in order to retain some percentage of the travelers that airlines are going to lose – the ones that are fleeing to easier ways of communication where possible.

Airlines have the right to charge for their services. They have the right to require customers do business in a certain way in regard to things like ticketing, baggage checking and itinerary changes. That’s not the issue.

Today, however, the question the airline industry needs to face is: what is the general public perception about the customer orientation of airlines? Regardless of the fact – and it is a fact – that virtually all U.S. airlines are focused on customer service more than ever (actually, some are flat-out excellent), the perception of the public doesn’t reflect this.

The main reason is the complexity of the process, and the anxiety of being penalized for missing or breaking a rule. It’s also the uncertainty and the difficulty – represented by penalties and fees – of even making the initial determination on when to fly. Once booked, that money is usually gone, and the consumer is locked into what he or she originally planned, lest there be a huge “service fee” should a change be necessary. That complexity is becoming more and more obvious as other channels become more utilized.

Think about the almost ironclad enforcement of rules on the airline side. For example, it seems to be a tacit contention that buying a ticket is somehow the customer’s contractual commitment to taking a trip, even when weather precludes the airline from delivering on the date promised. Typically, the grand waiver from the airline goes something like this:

“You are now permitted to re-book, without penalty, within 10 days, as long as it is on the same itinerary and on the same fare basis, blah blah blah…”

Really? Air travel is all about the time-certain need to be somewhere. A weather or mechanical or other circumstance that precludes the airline from flying is understandable from time to time – it’s an intrinsic part of the business. But for the folks who made the reservation, thinking that they would get to the destination as scheduled, it’s not that simple. The wedding is now over. Grandma’s funeral was held anyway. The big meeting was missed. The cruise ship sailed. Somehow, the customers miss the supposed largesse implied by the “permission” to re-book later.

Often, the money the customer paid to get to these events is not to be easily refunded. You committed to a trip to Omaha, pal. Period.

Taking Great Customer Service And Trashing It. The airline’s airport and cabin staff can deliver incredible customer service, only to have it all torpedoed with one condescending form letter from the refund department, usually buttressed with an attachment of some rule or an excerpt from the airline’s contract of carriage, in the tone of a trial lawyer citing authorities. Same thing with a saccharine-stupid machine-generated “terribly sorry, but it’s our rules” email from what is passed off as the customer care department.

Here’s the bottom line. The airline industry needs to understand that they have new competition from other forms of communication, and they cannot just assume that they don’t need to respond. Yes, it may just represent loss of revenue in the low single digits, but that’s still a big chunk of the profit margin, and one that they should fight for with new innovation.

The airline industry needs to look at procedurally evolving to better compete with these pesky new forms of competition. They don’t have a lock on all the traffic that they did one year ago. The need to adjust to the threat.

It may mean looking at different – or even fewer – sources of marginal fee-based revenue. It may mean loosening the “rules.” In any case, there is now a part of their traditional customer base that’s up for grabs.

Darwin observed that it isn’t necessarily the strongest that survive. Nor is it the most intelligent that survive. Instead, he maintained, the species that are best able to accommodate change are those which don’t end up in the fossil pile.

The airline industry needs to take note.