Why Airlines Struggle with Lean Sales and Service

As I search for great sales lean models I also learn from bad ones. Since James Womack talked about airline issues in Lean Solutions a decade ago not much has changed… Since I fly a lot I get to think about their ‘customer service’ approach quite a bit.

You would think that an industry that is permanently in the red would be the first to embrace Lean. While you hear that fixed equipment costs and labor contracts are hard to change however the is still so much to do to gain customer loyalty especially for the business traveler (I.e. most profitable segment). But it isn’t happening. While many airlines ‘lean out’ their MRO operations, frankly it is useless when business travelers switch to Singapore Airlines or Virgin for better customer service from a carrier with operating-room-quality 5S-optimized spare parts stores… So let’s all go back to the customer interface for answers and not the stockroom.

Traveling to Asia or the Middle East allows us to establish a work standard for service long lost on the American airline industry and trace back to the enormous value creation opportunities.
The business segment is much less price sensitive and in fact the perfect testing ground for lean principles: get me what I want, when I want, how I want within my price parameters.

Despite fierce competition in the economy travel segment, business class fares vary as much as 100-150% for major routes. So there is immense value opportunity.

Some airline structural issues even business travelers cannot overcome, like the need to fly though our hubs and connect. (Southwest solved this but I digress..)

Other non-value added processes could be more easily improved

1) Almost all queuing problems and capacity issues could be simply eliminated in this industry. All travel plans are known with high degree of certainty (except cancellations). The customers demand (number of passengers) and timing is clear. There should not be any surprise whatsoever on how many travelers are coming. How about giving all travelers a specific time windows (8:30-8:35) to enter the TSA checkpoint for expedited processing. If you are late, you are back to batch and queue.

2) – Parking companies could provide fixed time/parking spot for expedited scheduling and rescheduling in case of traffic delays.

3) Many checking counters are already well automated including bag-drop. Why is there still a line and many machines down? Conveyor belts… Figure it out…

3) – There is no reason anyone should stand in line at security. The travelers are known, their belongings could be scanned to take time. Exception processing (rework) is well defined. . Pre-check is established.

4) You shall never have to wait for your bags. All arriving passenger and the number of bags are known hours in advance. It is possible to get the bags to the belt in 15 minutes. Just connect the dots.

All real chaos starts in customer facing processes…

1) Most boarding processes are inconsistent. This should be fixed one and for all. Follow the process and you are at the back of the queue. Process variability absolutely kills boarding. Hold people to the boarding sequence and baggage rules. Watch Southwest do it and have happy customers.

2) Cancellation management is abysmal for most airlines. Why is it so hard? All variables are known. Number of passengers, alternative routes, airlines, cross-change agreements, fare schedules. This changeover / setup should be entirely automated and immediate. Especially because cancellation is when airlines are most likely to lose paying customers. Totally preventable.

3) Why can’t airlines recognize the phone number we are calling from like credit card companies. It is a very trivial telephony feature. Accelerate problem resolution, reduce customer queuing.

Airlines may be losing even more money because they think they are fixing the right problems (MRO, labor, logistics) when the right problems are customers getting frustrated and the most profitable customer segments taking their business elsewhere.

no queues

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