Friday, May 07, 2010

Why are we blaming the airlines?

Now I am sure that I will ire several people with this perspective but I am going to raise the issue. Why shouldn’t the airlines charge for carry-on baggage? Have you seen what some people carry-on to the airplane these days? Now there are lines on the boarding ramps waiting for hand checked bags. Isn’t that like valet parking? Shouldn’t there be an extra charge for that?


Now let’s think about this. For years we have been pushing the point of view that the customer is always right. And we have also decided somewhere in that same equation that every vendor is out to take it to their customers. That it is somehow wrong to make a profit. That everyone is price gouging and should only be allowed the profit that the customer deems appropriate. When did the average customer become so knowledgeable that they know exactly the actual cost of production? Oh and don’t forget every employee working at these companies should be making a good salary. What is a good salary? Who decides what that is?

Then there are the board of directors and stockholders of the company. I am sure the directors and stockholders want a huge profit so they can get increased dividends. Is there a limit on what the profit should be? What is the compensation for the board members? Who decides? Do we really want the government to get involved?

Whatever happened to letting the market set the acceptable price based on the demand? Why are we telling companies what price they can charge for their product or services? Several years ago people complained that the price of tickets were too high. So the airlines cut the price of tickets by reducing some of the services. What did everyone expect? Has air travel become a right of every citizen?

I am not aware of the reason for adding the checked bag charge. It could have been to help cover the cost of having baggage personnel. It could have been to get people to bring less baggage. But it appears to have raised the amount of baggage being carried on to the plane. Could this be an example of trying to fix the symptoms and not looking at the root issue?

I’ve not been involved in the airline industry but maybe the organization studied what the customer was asking for (cheaper flights) and found a way to provide what they wanted. The result was, in essence, an ala carte menu of flight services. The flight (the seat on the plane and transportation to the chosen location) is the basic purchase. Then you can add other services: food, checked bag, carryon bags, etc.

What I see is a clear example of conflicting expectations and assumptions. And maybe some of the expectations are unrealistic. For example would it be realistic for me to expect that I should be able to fly non-stop to all my travel destinations? Oh and I want it at the same price as the other flights. And I want a free upgrade to first class. With a perfect meal. Is this really realistic? So what is a company to do?

I am not saying that all airlines are running as efficient as possible, but what company is. Maybe we need to look at what we are expecting from our companies (all companies) and realize that for our US companies to successful and compete on the global market they need to profit. Let the companies work on their internal improvement processes. The consumer should then make the best decision available to them.

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