• Bad Profits on American Airlines

    Posted on September 28th, 2006 by and currently 7 commenting.

    This morning, I boarded a 6am flight headed to a mini-vacation in Austin, TX. Now, I don’t know if Al Gore is right about all of this global warming stuff, but the expected temperatures in Austin this weekend are the high 90s and I am dressed accordingly – kakhis and a t-shirt. I grabbed an extra sweater just in case the plane’s AC was too chilly.

    After takeoff, the temperature in this tin can (I’m writing onboard) sunk to levels that induced shivers despite cocooning myself in my wool sweater. I asked the friendly cabin attendant if there were any blankets available. She sheepishly informed me that there were blankets. For $5.

    Dear American, you will sooner be inconvenienced with the removal of my icy, hypothermic corpse from seat 4C before I pay $5 for a blanket.

    I don’t know if they have just beaten me down, but I am somehow OK with paying $4 for a snack onboard the aircraft. I would have to pay for a meal at home or in the terminal, so it seems fine to pay on a flight. I am not normally, however, held captive in a freezer with a temp in the 50s, so turning around a charging me to stop my teeth chattering screams ‘bad profit’.

    Fred Reicheld writes about bad profits in his book ‘The Ultimate Question’. Making money by spreading badwill creates short term profit, but long term damage. Examples of bad profits include charging $6.50/gallon if you forget to refill the tank of your rental car or outrageous overdraft fees at your bank. Reicheld’s WOMMA presentation mentioned bad profits both alienate customers AND demotivate employees (like the embarassed flight attendant). . Making money off customer anger is not a growth strategy.

    My gold status and zillion frequent flier miles on American has previously motivated me to go to great pains to try to fly with them. A freezing flight and $5 blanket will cause me to think twice in the future. Maybe the drive to Charlotte to fly JetBlue isn’t so long after all? JetBlue makes me want to be their customer because of they earn it every flight with a remarkable experience. So, I ask you, is the experience you provide your customers rewarding and remarkable? Would they go out of their way to do business with you?

  • http://www.mpdailyfix.com Ann Handley

    Virginia: Great post… but sad story. How much for a hot drink? 30 bucks?

    Other examples of bad profits: Concessions at concerts/theaters.

  • http://www.comblu.com Steve Hershberger

    Does the fact that essentially every airline operating in the U.S. other than Jet Blue, Virgin and Southwest has been in or is headed towards bankruptcy tell you anything about their ability to understand what drives the customer…or for that matter, how to run a business for more than a week?

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  • Dave

    Virginia: Great post. Don’t expect much sympathy out of American. They are willing to ride this customer service strategy (or lack thereof) right into the ground. Should you ever wish to offer your opinion or file a compliant, you’ll be met with plethora of red tape…and no way to contact a real person. Word of caution to AA, be careful of the bed you make…

  • http://seller-beware.blogspot.com/ Alex S.

    Love your post, speaking of “Making money off customer anger is not a growth strategy”, I just got nailed for $50 per person by AA for navigating through their useless new “voice response” customer service system for thirty minutes because we had to change a flight to come back home a day earlier than we anticipated.

    I’m actually fuming at the experience and will go out of my way in the future to avoid AA like the plague.

  • MMM

    AA is a huge rip off! $5.00 for a blanket? Give me a break. AA should just do the world a favor and close its gates for good. Sell to another airline that knows what the meaning of professionalism is such as Southwest or United. I am tired of stuck up, strutting pilots and FAs with too much stewtude. Save face and leave the industry.

  • Ted

    American Airlines has not at any time charged $5 for the use of a blanket, even during it’s more dire financial situation after 9/11. You may not see pilows, you will pay $5 for liquor on flights where it used to be free and you may not see more than a dozen blankets available for 166 people, but there isn’t now nor has there ever been a $5 charge for the use of a blanket.