A flight delay is as good a time as any to sit down and write a blog entry. It is also an excellent illustration of one of the unintended consequences of the outsourcing that has occurred in the industry as a result of cost pressures caused by competition and “me too” strategies of airlines who appear incapable of not copying each other.
Passenger airlines have been ‘forced’ to spin off, outsource or contract their ground services. In separating management of the ground experience from the in-flight experience, either senior managers were being ridiculously optimistic or were doing an ostrich like response to the consequences of their organisational changes.
Managing passenger airline services is complex enough as it is. By outsourcing the ground services, they may have reduced their direct costs and fixed asset exposure, but they have undermined a fundamental part of their value proposition – seamless travel services from the passenger perspective.
I’ll give you two anecdotes to illustrate the point.
- I was taking a short flight from a hub airport to a feeder airport – as we were coming in to land, the flight attendant of the hub carrier announced that “should you have any questions, our colleagues from the ground staff will be able to help”. It made me smile. I know this regional airport well. I know that the hub carrier doesn’t have ground staff but contracts with a larger ground services operator. I know from personal experience that unless you have a question about luggage, there is nothing that the “colleagues from the ground staff” can do. At the time I arrived (around 22.00), there were no representatives of the hub carrier at the airport either.
- When I checked in for my flight today, I knew the inbound flight that would take me out of here was delayed coming in – I checked the outbound airport’s website and saw the flight delay there. I asked the check-in agent (who works for an outsourced ground services operator) whether the flight was on time. She didn’t check the real time flight information, she didn’t contact the flight coordinator of the airline, she immediately said “yes sir, the flight is on time”. Again I smiled.
This is the weak link – passenger airline companies assume or believe that the service level agreements they sign with ground service contractors will ensure that passengers are treated appropriately and given the correct information. This is either optimistic or incompetent.
The incentives for a ground services operator are quite different from those of a passenger airline. In practical terms, once the check-in agent has taken my suitcase and handed me my boarding pass, her job is done. However, the passenger’s experience continues. In signing “service level agreements” with ground service contractors, passenger airlines give them very little autonomy to help passengers. They also set performance targets that only indirectly seek out customer satisfaction. I am confident that you have experienced a situation where a problem occurs and the ground service staff say: “this is not my problem, it’s the airline’s”. You ask to speak to an airline representative and are told that you need to send an email or fax to the “customer relations” department. The airline guarantees a response in 30 working days. Hardly solving your problem on the ground at the airport in that moment.
The outsourcing model requires the airline to create a firewall between them and the passenger. The decline in ground service quality caused by outsourcing leads to more complaints, the airline needs to make it as hard as possible for customers to complain.
Passengers need up to date information, seamless travel experiences and honesty from the passenger airline carrier. The outsourcing model – with its emphasis on cost efficiency – works against this need.