Airlines almost never tell their customers the truth. But from time to time, they tell their own employees — more or less.
Here’s a memo sent out to US Airways employees a few days ago. It’s formatted as a “FAQ” and is an apparent effort to help them respond to outside criticism and questions about their company.
Here’s the memo in its entirety:
Q: When is the company going to realize how bad of a reputation we have service wise? Even with the upgrade in Envoy this spring the product is not competitive with our peers in either cabin, regardless of any press releases stating otherwise. Have you actually sent people out to see how we compare? The competition blows us away.
A: We regularly review our international product attributes with those of our competitors to confirm our market position. A recent review resulted in the new food service that we now offer onboard.
We also survey our frequent flyers to determine what they see as areas we can improve. While there are always areas we can improve in, the reviews from the recent changes in Envoy have been positive. New higher quality blankets and pillow will be introduced in Envoy soon.
Q: At point do we hurt our product enough (Dividend Miles cuts, onboard fees, ticketing fees, etc.) that we see demand decreasing below the benefit (revenues) of the new fees?
A: In many respects, the process of introducing fees or adjusting frequent flyer benefits is similar to the process of adjusting fares. After any change is made, analysts attempt to isolate and measure the impact of that change. In some cases, it is clear that the benefit outweighs the cost incurred.
So, to make a long story short, we are watching bookings closely, however haven’t seen an indication of book away.
Q: It seems like Southwest is doing a pretty good job of educating consumers via advertising on bag and other fees. Do we expect a drop-off in reservations as consumers begin to understand that fees need to be considered when determining the cost of a reservation? Do we have any plans to counter their advertising?
A: We are watching our market shares versus Southwest and others very carefully as the industry adapts to new challenges. The product we provide has always been different than Southwest and will continue to be so – those differences drive how we price, distribute and market our services. So far we have not seen a need to launch new promotional advertising.
Q: Any idea what year we will fly additional European flying out of CLT with the new A330-200’s coming on line?
A: We recently announced new CLT-Paris (CDG) service using a B767. We’ll evaluate additional opportunities as they become available.
Q: Have we been able to hedge fuel and if so, has it had a negative impact on the lower fuel prices?
A: We actually suspended our hedging program in the middle of 3Q due to concerns about the impact of fuel hedge collateral requirements could have on our liquidity. We are in the process of reevaluating our strategy to make sure the type of hedging we were doing continues to make sense in this volatile market.
Q: I flew Air Canada full fare to Honolulu earlier this year rather than use a pass. After purchasing the ticket online, a menu of other options came up including the option to select and purchase onboard meals in advance at a discount of $2-$3 off the aircraft prices. Once aboard the plane the flight attendants had a meals list showing who had already bought. Are we considering adding this easy option?
A: Great thinking! As it so happens, we are working to develop technology to allow for pre-purchase of some a la carte items (particularly bags and Choice Seat sales) on the Web. Vice President, Reservations and Customer Service Planning, Kerry Hester reports, “We’re thinking we may even provide some incentive for customers to use this channel. The challenge is making sure that we tie the payment to the customer’s PNR (passenger name record) in a way that will survive changes to the ticket. Stay tuned, though, we’ll get there!”
We’d like to someday provide our customers with the option to pre-purchase buy-on-board meals through different automation channels (e.g. on the Web, travel agent, kiosk, etc.) however we have no plans to offer this service at this time. In the mean time, our new GuestLogix handheld devices are starting to appear on mainline flights offering our customers the ability to use a credit or debit card for onboard purchases.
I find this memo deeply disturbing on many levels.
US Airways basically admits that it’s pushing the envelope on fees until its passengers scream. And according to the memo, they haven’t screamed loudly enough yet.
It all but acknowledges that its product is inferior, that it refuses to compete with Southwest Airlines, and that it is deeply committed to deceptive a la carte pricing.
Well, can’t say we weren’t warned.