Plane Conversations

Any number of b-school power plays will cite the competitive advantage necessary in hard economic times.  But how many people talk about the cooperative advantage?

Information is power

When the buyer has the same information as the seller, markets are more efficient.  The Internet has made information free and easy to transport.  So, understandably, any business that hopes to survive by restricting information will ultimately find competition from a start-up that does not.

The “equal information” playing field

This scenario plays out over and over as industries as diverse as newspapers to higher education to government to commercial aviation are forced into profound transformation by the availability of equal information.  True to conventional wisdom, good information creates more good information and bad information creates more bad information. For Social Flights, our best customer is the educated customer because they’ll educate each other.

Coming to an Airfield near you…

The true cost of flying private jets is one of the best-kept secrets in aviation.  Corporate Jets are a source of mystery, controversy, and symbolism. There are many reasons for suppressing true costs such as avoiding public disclosure of VIP expenditures,  or to protect profit margins enjoyed by charter brokers.

On the other hand, there are many important and legitimate reasons why some people should fly private instead of commercial. Social Flights believes that there are many situations where the true value of private flight greatly exceeds the cost of private flight for a large population of travelers. The problem is to find possibly millions of passengers who do not know that Social Flights applies to them.

Information Transparency

For this reason, it is essential that a baseline cost be established in a market so that everyone can use the same data to make educated decisions about how to travel efficiently.  It is essential that the market can eliminate price distortions, suppress arbitrage opportunities, and equalize asymmetric information.  The focus of the industry should be on expanding the market through transparency, not short term gain by hoarding the limited existing market.

Cooperation is the new market advantage

Social Flights has developed an instant flight quote feature that calculates a nominal estimate to fly a private aircraft from any airport in the US to any other airport in the US.  This establishes a baseline on the actual cost to fly.  From this baseline, jet operators can bid and win missions that are naturally most profitable to them. Or, operators can cooperate with each other by sharing legs in an abundant market rather than compete with each other for a constrained market.

Event planners, corporate executives, travel agents, economic development agencies, and travelers of every type now have the information that allows them to access private aviation inventory for businesses and the magnificent value that it brings to communities.  That is the new market advantage.

Things are moving very fast in the era of social media. As soon as an airline makes a move, everyone downstream needs to adjust. New applications are built a new competitors form responses.  There is no “book” to read about how to do business in this rapidly changing environment.  So when a customer has a new question for a new situation, they go directly to the Internet to find the answer. And what do they find? Enter the online travel agent (OTA).

From Travel Matter:  Why Blogging Makes Sense for Travel Agents:

Then sites like TripAdvisor entered the industry, allowing travelers to access (and create) user generated reviews of hotels and booking travel became even more of a DIY process, that didn’t require expert guidance. Other sites even let travelers find out which seat on an airplane has the most leg room or which wing of a hotel has better views. Even guidebooks began to show this DIY attitude, as Lonely Planet outsold other publishers.

DYI-mania

As more and more layers of DYI independence are offered up to customer, so too is disinformation, incomplete information, conditional information and thousands of “options” that mask the true value of the travel experience.  It is largely in the best interest of OTA to consume the “time” of the traveler seduced by the promise of low prices.  First, this allows OTAs to impress more ads; and second, the DYI’er eventually get frustrated and click through to the more expensive (profitable) option for lack of time to deep dive through the details, restrictions, and caveats.

The Indispensable Knowledge Resource

All along, the traditional travel agent; once an indispensable resource has fallen by the wayside.  Some argue that the travel agent is to blame for not reinventing their profession from “broker” to “helper”.  Perhaps being technology savvy never entered the profession as it had for so many other professions.  Increasingly, the travel agent skill set is needed.

The Experience Traveler

Travel Agents have the ability to organize people around a set of events, opportunities, locations, and modes of transportation.  The experience of travel is finding it’s way into the value proposition of the decisions that the travelers make.

Everything from social media to Google to Groupon has re-focused consumers’ attention on small businesses, and given local businesses the tools they need to compete in non-local markets.

Few can aggregate local information better than travel agents

If given the right assets, they can put together offerings in anticipation of travelers.  Social Flights is constantly looking for that perfect skill set of location knowledge, transportation knowledge, and concierge service to whom we can entrust an available aircraft asset.

Travel agents can help redefine the door-to-door value proposition and Social Flights is here to help with a full array of private jets and corporate jets for private and public charter for scheduled service between any city pair that one can envision.  We are not the only ones; hotels, experience tourism, conference and events all search for the elusive traveler who has so many options but so little time. Travel agents can now manage a scarce and protected inventory once again where their knowledge, creativity, and social skill matter.

During training at the American Airlines Learning Center in Dallas, new agents were given a specific protocol for checking passengers and their bags in at the ticket counter.  We were to greet the customer by name as it was printed on the ticket.  Ask them what their final destination was – just to make sure the ticket was right - and ask them how many bags they would be checking.  This was long before that silly question of “have your bags been out of your possession since you packed them,” like anyone would actually admit to that.

I once had a woman tell me that her final destination was her mother’s house.  While I agreed that a visit to her mother was surely a wonderful thing, I could not check her bags to her mother’s house.  She gave me her final airport, I checked her bags through and all was right with the world.

This woman’s trip raises a question in my mind.  I know the city-pair on her ticket; however, that citypair didn’t really  match her real travel intentions.  She might have departed from Columbus, Mississippi, but might actually have lived Macon, Mississippi.  She might have traveled to Charleston, West Virginia, but might actually have needed to go to Parkersburg, West Virginia.  Because of limited choices in scheduled airline service, she ended up with a drive on both ends of her trip.  Now, until we have personal jet packs, we’re not going to be able to leave our homes and fly to exactly where we want to go.  Can you imagine the air traffic nightmares that personal plane a la George Jetson would bring?  Yikes! 

Still, we know that general aviation can reduce our drives simply by virtue of the fact that there are more general aviation airports.  Put new and better technology with new and better aircraft and you have a few people with similar intentions sharing flights.  Vancouver has over 60,000 fans on two Facebook pages and a population of over a half million people in the city, not taking suburbs into account.  Surely a few of those people could agree on a time to go from the Abbortsford airport to the Blatchford Field in a Cessna Mustang.  Wouldn’t you think?

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Anyone in the aviation industry is familiar with the success of Southwest Airlines.   We have heard the stories of both employee and customer satisfaction that seem to represent an anomaly among the large air carriers.  Many reasons are given for their success including the use of one type of plane, emphasis on simplicity of service, or use of less congested airports.  Several bestselling books have focused on the leadership of Herb Keller and the Southwest team.  In her well-researched book, The Southwest Airline’s Way, Jody Gittell demonstrates that while all these are indeed factors, there is another underlying and more foundational reason for SWA’s accomplishments –its ability to foster and sustain relationships.  She writes:

“Southwest’s most distinctive organizational competency is its ability to build and sustain relationships characterized by shared goals, shared knowledge and mutual respect.” 1

In short, it is about the human network.

Other companies, large and small, are now learning this valuable and often overlooked lesson.  Relationships are how we do business.  Relationships that are (forgive the often-used buzzword) authentic, can truly make a real difference in how we attract, sustain, and build business.

Sales used to be stereotyped by the iconic image of the used-car salesman.  Fair or not, the image often conjured by mentioning this is one of a greasy, manipulative, and patently untrustworthy individual who views customers simply as walking dollar-signs.  There is a low-level of trust between the salesperson and the customer and many people avoid this type of exchange if at all possible.  In a recent Gallup poll the sales professions ranked in the lower 10 percent of professions that foster trust in the public eye.2  Why?

Because more and more, we are choosing to do business with those we know and trust, particularly with high-involvement products such as cars and yes, aviation related purchases.  Research has shown that while we may indeed seek the absolute lowest price for a box of cereal, most people are willing to pay more for an expensive item or service when they sense that the person or company has a relational connection to their product or service.  Certainly price is a factor, there is another set of factors at work in our businesses –the relational.

Think about Apple computers.  The base-model Apple Computers are clearly more expensive than a comparably equipped PC.  Why do these computers regularly have strong sales, even in a down economy?  It is the connection Apple has created in our culture.  In his book What Americans Really Want… Really Frank Luntz discusses this culture Apple has been able to create:

“Mac people want you to know they are Mac people.  You’ll see the Apple logo on cars or on the backpacks of college kids.   Thousands of people attend MacWorld….People who own Macs want you to know that they are part of that community of people…People are prepared to pay an Apple premium because their products satisfy all our other needs (fewer hassles, longer lasting,  fewer worries and less stress.)”3

It’s the connection with the human network and a clear message about how this meets more than the real need (computing).  Their products also meet the felt needs of our modern society, connection and relational trust.

There is a lot we can learn from this in the aviation community whether we sell multi-million dollar aircraft, charter, or flight lessons.  We need to examine our place in the human network and our ability to demonstrate our ability to foster trust and real relationships among the people we work with and the people we serve.

Historically (Southwest being a notable exception) we have not been great at this in the aviation industry.  The true value of the products we offer can only be built where we take the time to build relationships of trust.  In a recent article on sales and trust Todd Duncan puts it simply when he says, “Sales are made when trust exists.”4

While our goal will certainly be to make our companies strong by working hard to make sales, may we not neglect the lessons of trust and the human factors that enable us to establish it.  When we take the time to build an authentic human network, we may well discover an increase in affinity for, and interest in, the great products we have to offer to the aviation marketplace.

1.  Gittell, Jody Hoffer The Southwest Airlines Way (McGraw Hill, New York, NY, 2003) page 12

2.  Duncan, Todd “The Velocity of Trust” Success Magazine, January 2011, page 20

3.  Luntz, Frank What Americans Really Want…Really (Hyperion, New York, NY, 2009) pages 19-21

4.  Ibid, Duncan

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My son came home from school one day with a classroom story I found disturbing.  It was at the beginning of the school year and the teacher asked each student to introduce themselves and to tell what their career goals were.  One student stated that he wanted to be a famous rap artist.  The teacher’s advice to the student was to pick another career, he’d never make it in that one.

I’m sure that there were plenty of people who gave the same advice to Marshall Mathers and Curtis Jackson; but, apparently neither Eminem nor 50 Cent took notice of the naysayers. 

Several months ago, I read a blog entitled Misfit Entrepreneurs that really stuck with me.  In the blog, Dan Pallotta wonders how Bruce Springsteen could communicate his aspirations to his father, “How does he tell his father, ‘I’m going to be Bruce Springsteen?’ “  How does any true visionary communicate their vision to the rest of us?  How can they explain their dream to expand or alter a current reality?  How can they define what we can’t even imagine?

At the moment, my son wants to be a stand-up comedian.  He’s pretty hilarious; so, this may be a good fit for him.  I remind him that the path is difficult and that the price, in terms of work, will be high.  However, if Jerry Seinfeld can do it, I don’t see why my son wouldn’t be able to – provided he’s willing to do the work.  Those are the real keys, aren’t they?  We must be able to envision the goal and we must be willing to do the work.

In the charter side of Business and General Aviation, we often talk about the problems in our industry.  Operators all over the country have shut down.  Those of us still flying struggle with ever-thinner margins.  Customers want more stringent standards; but, they often want to pay less for them.  The market is unwilling to pay price increases that keep pace with cost increases.  How can we continue to operate under these circumstances?  We operate smarter.

But, we can’t operate smarter until we change the way we view ourselves and our product.  We have to envision ourselves as Bruce Springsteen before we can actually translate the vision to reality.  We have to stop seeing our industry only for what it is and, instead, see it for what it can be.  What if we can increase fleet utilization without substantially increasing costs?  What if we can increase our margins simply be changing our customer base?  What if we could increase our customer base by tenfold?

What if I told you that we can?  What if I told you that the vision was becoming reality right on the horizon?  Would you be willing to envision it?  Would you be willing to work on it with us? 

We can do it.  After all, Bruce Springsteen exists.

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Photograph by: Chris Ware, Getty

Bloomberg and Associated Press report that June 2010 airline traffic rose 2.3% over June last year with US airlines carrying 65 million passengers. Annualized that comes to 780 million passengers. DOT projections say we will hit the 1 billion annual passenger level in the US in about 10 years.   

In spite of low customer satisfaction with airline service, people keep coming back for more. If you listen to all the grumbling you would think that, surely, travelers have had enough.  

The need or desire to travel must outweigh the pain of going to the airport and flying by airline.

People don’t like to fly the airlines but they keep doing it and the numbers are growing.

People love to fly in their own aircraft, ride in the back of a business jet or even a prop aircraft on their own schedule, and without the hassle of airline system,  but our industry languishes in this economy.

What is wrong with this picture?

It seems that price outweighs most considerations for the masses when it comes to travel.

Wouldn’t we all rather ride in a private jet if we could do so for the price of a Southwest Airline ticket?

How do we move a very small percentage of the market of travelers over to our side of the game?

It would only take a very small percentage of those 780 million annual passengers to radically change the fortunes of business and private aviation from manufacturers to service providers to the operators of the aircraft.

Move a few percent of the market share of travel to business and general aviation and, suddenly, the world looks a lot brighter for those of us in this industry.

I see a lot of effort being put forth; but, mostly, the efforts are in their own silos. I don’t see a lot of effort as an industry working together to solve the problem. There seems to be a general acceptance that it is what it is and that the situation on a macro level is not going to change quickly anytime soon.

It is worth thinking about to see if we can come up with solutions, isn’t it?

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In a September 2 post I discussed Congressman Oberstar’s statement that possibly we should consider re-regulating the airline industry. His opinion is that the mergers happening between major carriers are bad for the consumer and will leave them with fewer choices, higher prices and less service.

I am opposed to regulation of the airlines in matters of customer service and free market competition. With the exception of matters of safety, I believe the government should step aside and let the market work things out. The government does not have a good track record meddling in matters of the free market.  

A September 5 blog by William Swelbar at www.swelblog.com has been posted that intelligently puts the facts out and further convinces me of the government’s need to get out of the way. The blog title, “Dear Chairman Oberstar: What Do You Mean This Is Not What You Voted For?” sets the tone of this post.

If you are interested in this issue Swelbar’s post is a well written argument on the history and merits of the deregulation of the airline industry that happened in 1978. Jump over to his site and take a read .

Even though business aviation and general aviation compete with the airlines for some portion of the travel market it is still good for the economy and the aviation industry as a whole to have a free market system of profitable and competitive airlines to keep our economy moving.

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Delta is in the Social Media Game

You can now book a flight on Facebook on Delta Airlines Facebook  page and tell your friends about it without ever leaving Facebook.

When you are on Delta Airlines Facebook page you click the “Book a Flight” Button, then click the get started button. Immediately Delta asks for permission to access your information on your Facebook page including your Friends, user ID, networks, gender, and profile picture. If you don’t allow it the process stops as far as I can tell.

I guess the assumption is that you must give up your data if you want to play the booking game through Facebook. So to figure this out, I let them have my information.

From there it is a fairly easy process and not much different than booking on their main site. You have the option to share the flight with your friends. I have not booked a flight on Facebook to see what happens next. If anyone reading this has used this application I would like to hear your thoughts.

I can see this being used for personal travel but not so much for business. I am not totally sure what the real value proposition to booking through Facebook is at this point, with the exception of the ‘Sharing” of my flight information, and maybe for the Faceobook junkies who cant leave the site it does something?

I wonder what Delta does with my information they now have access to? Will they use it to help me solve travel problems or use it to target me for advertising messages?  

Delta at the time of this posting has about 38,500 Fans on their page. Lots of comments:  some positive and and a lot of negative about service issues.

It is hard to tell if Delta uses Facebook to actually communicate to the market.

Delta has also gotten more active in the use of Twitter and now has a staff to respond to Tweets. When I go to their Twitter acccount  they have 78.000 followers, they follow 730 people and it looks like they don’t respond daily as there are lapses in their tweets on their corporate account.  They do have a Twitter account “deltaassist‘  that focuses on resolving customer issues. This account has 2300 followers.

The airlines are waking up to the use Social Media tools. What will be interesting to watch is how they use the technology. Will they enhance the customer experience, listen and react to the market of travelers needs, or will it just be another way to get more money from the traveler with no value added?  

Could Business Aviation and the Air Charter Industry use these same tools to reach the market in a postive and social way?

An Article  titled Six Ways the Travel Industry can use Social Media is a good read if you have the time.

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In the New York times bestselling book, Delivering Happiness, Zappos CEO Tony Hsieh (pronounced “Shay”) chronicles the rise of Zappos .com from obscurity to profitability and finally to its now infamous  1.2 billion dollar acquisition by Amazon.com .  He outlines Zappos’ legendary focus on customer service and corporate culture.   As I read Hsieh’s book, I couldn’t help but imagine the possibilities and implications for those of us who love flying and aviation related businesses.

In the introduction, Hsieh, takes us into his thoughts as he prepares to announce to Zappos’ employees that Amazon was acquiring the company.  While the media was focused on the sheer size of the deal, Hsieh’s thoughts were elsewhere:

 “To all of us in the room, we knew it wasn’t just about the money.  Together, we had built a business that combined profits, passion, and purpose.  And we knew that it wasn’t just about building a business.  It was about building a lifestyle that was about delivering happiness to everyone, including ourselves.”¹

There are several things noteworthy in this quote.  One is the sense of team that you feel.  Hsieh speaks in terms of “us”  and “together”.  Clearly the focus is on something more than the bottom line.  Words such as “passion”, “purpose”, “lifestyle” and “happiness” all speak to the company’s core values and goals.  Hsieh notes later that, “We decided that we wanted to build our brand to be about the very best customer service and the very best customer experience.” ²  What Zappos discovered was that by creating a culture centered on these values and expectations,  profitability developed.  

 Zappo’s Rabid Dedication to the Customer & Employee

As I read, I would often seek out my wife to read her passages (some guys read poetry to their wives…so much for romance!)  I would begin with saying, “Can you believe that a company would do this?”   Here are a few examples: 

• Customer service that includes free, unannounced upgrades in shipping.  You place an order for shoes that should take 4 days to arrive and without warning –for free—they’re on your doorstep the next day.
• A reward system for employees for pursuing personal development.  A lending library of the best personal growth books was created in the lobby to do just this.
• Free shipping on all orders…and if the shoes don’t fit you can send them back for free!
• If they don’t have the shoe in stock, they will research three competitor’s websites and will direct the customer to the competitor.
• In 2008, Zappo’s was faced with making a round of layoffs.  Instead of the standard 2-week severance, they offered to pay each employee through the end of the year (which at the time was about 2 months).  They paid an additional amount for those who had been with the company 3 or more years.  They reimbursed laid-off employees for 6 months of COBRA payments.

This made me want to buy shoes, just to have the Zappos experience.  Which is exactly the point- the experience.

 The Zappos Experience- Happiness

In 2009 Zappos inserted a simple statement into their vision that reflects the underlying core value that is at the heart of their company.  It says, “Zappos is about delivering happiness to the world.”³

Hsieh and Zappos are not talking about some “fuzzy” notion of happiness, which many people equate with silly giddiness.  Instead, Hsieh studied the concept of what makes people happy and investigated ways to integrate his findings into his company.  In his book, he offers several frameworks to consider, such as our need for perceived control in our lives (having a say in our future and in our work), perceived progress (we can see that we are going somewhere—don’t we all hate “dead-end” jobs?), connectedness (being in relationships that are truly fulfilling) and meaning/vision (being a part of something larger than ourselves that we believe in). 

This type of corporate emphasis helped develop a company culture that focused on amazing customer service, which aimed ultimately at customer happiness.   While Zappos was certainly concerned with profitability and bottom line, they managed to never lose sight of the crucial importance of what they were delivering, but how.  I think this begins to intersect and have application for the aviation industry. 

What if a flight school moved into the realm of radical customer service?

As an industry it simply doesn’t appear that we’re asking the customer experience question.  And yet, in some ways, flying is all about experience.  It’s built into the act of flying.  But what isn’t built in is how we attract and retain customers by giving them an experience of service.  

For instance, let’s consider flight training.  How do we attract and engage the customer before they officially become a customer?  What could we do to serve them before we’re asking for their money?  

• How about having a pleasant lobby area and facilities that are well kept?  (Seriously, the urinal that overflows regularly should be fixed. Gross.)
• How about having snacks available for free?
• Coupons (have any Flight Schools tried Groupon.com) for flights?
• Free airplane rides.  Publicize well, donate a couple of hours on a Saturday to give rides to the community.
• Flight training material professionally produced and ready to be given to the new student.
• Aircraft that are clean, up-to-date, and well-maintained.  (If your preflight involves duct-tape, think again.)

 As a customer, what kind of experience might we give our customers if we:

• Randomly chose a student to receive a free hour of instruction?  They come in from the flight line only to discover they owe nothing. 
• Instead of having them buy more and more books and videos, develop a lending library
• If you have access to a twin or jet and space permits, let your student go for a ride
• Quarterly celebrations for new solos and new licenses.  Could be as simple as a cookout at the airport in honor of these new pilots. 
• Encouraged lifelong learning by giving seminars and offering guest speakers to the larger aviation community

What about instructors?

• Incentives for recruiting (Bonus for giving 5 or more discovery flights…extra for each one who begins training) 
• Bonus for each student who successfully receives their license
• Reward for longevity (create a stable base of instructors)
• Instructor dinners and socializing
• Opportunities for adding new ratings at reduced cost and free recurrency training.

These are just ideas, some of which might be difficult to employ.  How refreshing it would be to potential pilots and employees to discover a flight school with a culture that was geared to providing the best possible service and create what Hsieh calls a “WOW” factor. 

Whether we’re talking about flight schools or maintenance departments or FBO’s, I believe there is something to be learned from Zappos.  Imagine, tomorrow, what it would be like to be “WOWED” by your company in its relationship with you.  Imagine what it would be like to WOW your customers and the transformed relationship with them.   Imagine the impact of those combined experiences, the word of mouth that would ensue, and the absolute fun of being in the flying business.  

It begins with a commitment to developing or changing the culture and embracing a foundational shift towards clearly defined values and competencies that will shape the entire organization.  It is about delivering an experience that is first class and recognizing that our happiness is found not only in profits (which is certainly needed) but in living with passion and purpose. 

If Hsieh and Zappos can do it with shoes,  I believe we can certainly do it with airplanes. 

Delivering Happiness: A Path to Profits, Passion and Purpose, Tony Hsieh, Business Plus, New York: NY, 2010

 1. Page 11

2. Page 121

3. Page 177

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Airlines are trying to make a profit; something that has not happened in aggregate in their entire history of serving the traveling public. In an effort to make a profit in the past few years they have unbundled their pricing and added fees back in for everything imaginable.

I can’t blame them for trying to make profit. Profit is not a bad word. 

But somehow this whole idea of  add-on fees is having an anti-social effect on the traveling public. Mainstream media has spent a great deal of space on this issue.  The latest comes from the New York Times in an article titled “Airline Fees Test Travelers’ Limits”. 

You can almost feel sorry for the airlines because it seems at every turn they are getting kicked by either the government or the media. And the more kicking they do, the more the public demands a change. It is almost to a point where we feel that we have a fundamental right to travel cheaply by air and without problems. I don’t remember seeing this in the Constitution, but you never know. An amendment dealing with airline travel may be forthcoming.     

Congress thinks they can solve it by putting more rules (laws) in place to regulate everything from how you advertise your rates to how long you can keep a person stranded on an aircraft sitting on the tarmac. How can you regulate customer service?   

 I wonder if there is a point where the airlines figure this out?  The solutions are neither simple nor obvious because the airlines must make a profit.  At this point, though, they don’t seem to have a vision of how they can create both profits and happy customers.

 We run a business that offers an alternative form of travel. It is not cheap, but travelers do like to travel in our aircraft. 

Most days we have happy customers. Occasionally we make a mistake or weather and the laws of mechanical physics conspire against us and we end up with an unhappy customer. The air conditioner breaks on the hottest of days or weather prevents us from departing or making an on time arrival or …..

 When that happens, it is up to us to make it right. We should do what it takes to fix it. If we don’t make it right, then shame on us. Those customers who see you do the right thing when things go wrong become the best customers. When you don’t do the right thing, then the customers go somewhere else for the solution.  

Our customers are smart and successful people. They run businesses themselves and know what it takes to deliver their product or service at a profit while meeting the expectations of their customers. They also know that things can sometimes go wrong; so, mostly, I have seen a degree of patience from our customers to allow us to “make it right.”

I don’t see that with the airlines. Patience has run out. As the NYT article title suggests “travelers’ limits are tested”.

One side of me smiles and says I hope that the airlines keep doing more of what they are doing. It pushes people to consider using our form of air travel even though the dollar cost is more.

The other side of me says that the airlines need to figure out how to make their customers happy if at all possible.  The economy of this country will win if they do that.

The bottom line is that travel is about productivity. Efficient travel contributes to economic productivity and inefficient travel kills productivity. Stress in travel has to reduce productivity, too.  Let’s figure out how to eliminate the stress.

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