Wednesday, June 25, 2008

Lowering Landing Gear Extra


So I just read the newspaper of how the airlines are desperately trying to squeeze profit by charging everything. "we get a tin can flying into the air and you pay for everything else" is how they put it. There are hidden fees all over the place. Sandwich? Extra.

They routinely book more passengers per plane than available seats. Meaning people will have to be shuffled. What happens when there comes a time when overloaded schedule means people cannot be shuffled? Such as that snow stormy Thanksgiving Day? Would people settle for not going home that one special week for "free (but heavily restricted)" voucher to fly four months later?

"fool me once, shame on you. Fool me twice, shame on me." the airline industry is a SERVICE industry! Without good service, the airline will flounder! Richard Branson of Virgin Airline once said that you don't cut service to lower prices. You provide superior service and quality, then people will flock to your company, then you can afford to lower your prices!

It's not rocket science. When a service industry does not provide service, it will fail. Don't blame the economy or fuel prices! I think British Airways responded to Virgin Airlines by illegal means that they have to settle the matter in court. That's obviously a wrong headed way to run a business.

It's not the only one, though. I wonder whether this is a failure of school in general, or just HR. However, the problem is very real. Phone companies who changed the service agreement terms underhandedly will certainly lose a customer, possibly for life. When suddenly "Free" is loaded with tons of hidden fees, you're just opening your company to lawsuits. And when, not if, your customer ran, don't expect people to bail you out. In fact, they may just opposed your request for loans.

Who can we trust? Personally, something with hidden fees hurts more than a more expensive thing without. People on ARM found this out the hard way. When I was quoted 4 points over standard, I asked "what's the ceiling?" Without one, I simply walked away. Free costs too much.

So here you are 13000 feet in the air, and the pilot announced that the company cuts cost by not servicing the hydraulic system. "I want $100 per passenger or I won't be lowering the landing gear when we land." Can we sue for extortion?

So, everybody complains about fuel prices. If tire prices quadrupled tomorrow, what are you going to do? Give up? Rising prices is a fact of life. Sometimes it goes higher than expected, but everyone is impacted the same way. I think it's time for these business schools to start earning their fare and start producing quality graduates. Too much stupidity hurts, and hurts bad.

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