High Airline Fees and Lacking Customer Service- What’s Going On? by Kane Minks

by Kane Minks

Airlines should be doing everything in their power to better serve their customers in these turbulent economic times. Many air carriers have not. Extra fees and charges are disliked by passengers, but are increasing as a way for traditional air carriers to counter low-cost airlines and rising costs.  Low-cost carriers are competing on cost leadership and traditional carriers are trying new ways to differentiate their services from their competitors to attract business.

Sky Jet Kane MinksLow-cost air carriers typically operate no-frills flights at a price point comfortable to the masses. To differentiate from low-cost air carriers, traditional carriers offer products and services not typically offered by discount carriers.  Increased leg-room, First and Business classes, premium in-flight entertainment, internet, first-rate food and beverage selections, clubs, and more can cost traditional carriers and their passengers more. Many of the added fees and upgrades are “options” passengers have to make their travel experience superior to flying with a low-cost airline.

This is not to say low-cost airlines do not have additional fees, and do not offer added products and services. Traditional carriers have to strategically do what low-cost carriers are not doing, which is usually a product and service that increases costs, but provides an overall flight experience unmatched, to some extent, by low-cost carriers.

According to the August 2012 U.S. Department of Transportation (DOT) Air Travel Consumer Report, overall passenger complaints have increased from 1,128 complaints in 2011 to 1,653 complaints in 2012. This is a considerable jump of nearly 47% in only one year. Specifically, customer service complaints alone doubled, from 142 in 2011 to 284 in 2012.  This should be a clear indication airlines may not be paying enough attention to passengers.

To break it down even further, low-cost and traditional carriers differ greatly in customer satisfaction.  The 2012 J.D. Power and Associates North America Airline Study results show low-cost carriers rate higher in customer satisfaction than traditional carriers. Traditional carriers averaged 647 on a 1,000 point scale versus an average low-cost carrier score of 754.  Low-cost carriers averaged 14% higher.

From these studies, traditional airlines are not just battling low-cost carrier prices, but also their customer satisfaction. Traditional carriers should, theoretically, excel in customer satisfaction. They supposedly offer some of the highest quality products and services as a competitive edge, yet they rank lower than discount airlines. Many low-cost carriers have excelled not only in customer service, but also in low prices- this has proven a winning low-cost combination for years.

When airlines should be vying for every competitive edge available, it seems some airlines may be overlooking good old-fashioned customer service and satisfaction. No matter how an airline operates, there is no reason customer service should be thrown over a cliff. It is an absolutely essential strategic component in any business today. Many businesses only have one chance per customer to do customer service right. Opportunity lost can be more costly than the price of a great customer experience. Traditional airlines have a real opportunity to improve for the benefit of their customers and their own bottom-lines.

Kane Minks

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European Union Carbon Tax To Face A Mounting Battle From Countries And Airlines Around The World by Kane Minks

European Union on World Map. Kane Minks

by Kane Minks

The EU airline carbon tax may soon crash to the ground as a coalition of powerful nations threatens to launch a trade war against the European Union. Russia, China, America and India have formed an anti-carbon tax coalition to oppose the EU carbon tax and are planning retaliation against the EU if it doesn’t back down.

The EU’s Emission Trading Scheme (ETS) demands that carriers flying into European airspace pay a tax on carbon emissions. The law came into effect at the beginning of the year. The ETS requires all airlines to give the EU emission data so that a tax can be calculated and collected. Many airlines have told the EU to go fly a kite.

The airlines in the U.S. have requested that President Obama stop the EU action by filing an Article 84 complaint at the UN’s civil aviation governing board, which is called the International Civil Aviation Organization (ICAO). The U.S. airlines, which are represented by Airlines for America, said that an Article 84 action would create a global framework for dealing with carbon emissions. This UN mechanism allows nations to settle disputes.

Eco-fascists and the head of the ICAO oppose the Article 84 action, claiming that the process would gum up the effort to charge passengers and the airlines a tax as soon as possible. The UN and the EU could realize tens of billions of dollars from this carbon scam. The Eurozone, with a number of countries facing imminent economic collapse, is engaged in desperate schemes to prop up their falling house of cards.

Meanwhile, the U.S. Congress is getting into the act by writing a bill that would shield U.S. airlines from the EU carbon scheme. Senator John Thune, a republican from South Dakota, and Senator Claire McCaskill, a democrat from Missouri, have co-sponsored the bill.

Internationally, the EU is standing alone on this carbon scheme and facing severe consequences if it goes ahead with this tax. The U.S. has called this carbon scheme an attack against its sovereignty. The government of India has formally backed its airlines and their decision not to give the EU any carbon data. China has threatened the EU with a trade war. Punishment against the EU could include limiting flights from Europe and refusing to buy aircraft from European manufacturers.

Under the EU carbon tax scheme, passengers will be expected to pay a punitive tax on every ticket they buy. This will increase airline travel expenses and make Europe a less desirable destination for tourism and business. The world is trying to save the EU from its’ big mistake.

Kane Minks

Airline Regulation or Deregulation…the Great Debate?! A Quick Good, Bad, and Ugly by Kane Minks

A Boeing 747 of Pan Am at Zurich Airport regulation Kane Minksby Kane Minks

Regulated or not, the airline industry has many intense and relentless pressures always bearing down on it.  Deregulation was a success by many calculations, including increased efficiency, lower prices, and increased service.  The evolution of the airline industry is what some experts point to as the best proof of why deregulation, for all its troubles, ultimately is better than a regulated environment.  While more regulation may have increased stability to an extent, the industry would have never grown as much as it did if the tight regulations of the past remained.

Back before 1978, the CAB had control (to a large extent) of the winners and the losers, as far as who could compete and how they competed.  After deregulation, just as in any other free-market industry or company, winners and losers are based on the decisions they make and how they run their businesses.  The airline industry and airlines figure themselves out based on what customers demand and what customers are willing to pay for.  Despite the era of airline deregulation, the U.S. federal government still regulates safety and the air traffic control system, and steps in whenever either seems threatened.

Further Reading: Did ending regulation help fliers?

Kane Minks