Why One Airline Can Make Money


Jul 15, 2003
Why one airline can make money and others can't.......seems to me that a little customer service goes a long way.......
Our management will never understand this..........

HOST....I know its long but you needed a log in to to read a link
this is a good article



THE first indication that it was going to be an unusual airline experience was when the grandmotherly voiced agent who took my call at JetBlue Airways signed off by saying, ''Honey, you are so worth it.'' I expect a certain amount of attitude from airline employees, somewhere between sullen and downright surly. But respectful, efficient, friendly? It had been a long time since I had applied those adjectives to airline service.

That may be changing. JetBlue, which started in 2000, has attracted a loyal clientele by combining two seemingly contradictory philosophies: the low fares and single-class seating pioneered by Southwest plus frills and personality aplenty -- the airline is relaxed and hip. Following the lead of JetBlue, Delta started Song in April 2003, and United inaugurated Ted in February.

Can these new airlines remain true to their low-cost premise while living up to their own hype with perks like leather seats, satellite television and personal service from attendants in designer uniforms?

The answer, says David Beckerman, a Washington-based director of consulting services at BACK Aviation Solutions, is not always. In early February, he analyzed fares on 15 popular United States routes and found that the major airlines beat low-cost carriers 55 percent of the time. ''Farther out, every airline looks about the same,'' Mr. Beckerman said. ''Close in, it is often the traditional carriers that are cheaper.''

Ted, Song and JetBlue are very different entities, according to Michael Boyd, an airline consultant based in Evergreen, Colo. ''JetBlue is a stand-alone airline,'' Mr. Boyd said. ''They have built not so much a passenger base as a cult following by fostering the feeling that the company really likes to have people on its planes. Song is Delta's response to JetBlue. Ted is aviation shtick, pure and simple. United is spending money on a cute image, but it's basically the same fare, the same employees, and the same service as you got before they took United planes and painted Ted on their sides.''

To see for myself, in mid-March I embarked on a 6,000-mile, 40-hour odyssey aboard JetBlue, Song and Ted. It would take me along the East Coast between New York and Florida, where Song and JetBlue compete, with a side trip from Fort Lauderdale to Denver and back, a route served by Ted. I took advantage of every perk and bought sample meals when offered.

But first I had to get reservations. Twelve days before my departure, I went to JetBlue's Web site. Given the company's reputation for customer service and emphasis on electronic ticketing (it does not issue paper tickets), I expected a model of online efficiency. But the site was balky and slow. At one point, the screen said: ''Chill, this may take some time.'' How true. After 15 minutes, I gave up and called the airline. The grandmotherly-voiced woman got me a reservation, but couldn't assign a seat.

My next stop was Song. A few clicks on its site and I had what I needed. Emboldened, I decided to buy an onboard meal, selecting an organic oregano-scented chicken and spinach salad, paying with my credit card.

Ted greeted me with bold navy blue and orange graphics, but after entering my flight information, I found myself on United's businesslike site, where booking went smoothly. Because I would be spending the night in Denver, Ted's base, I decided to use the Hotels feature on the site and reserved a king room at the Brown Palace for $130 a night. I called the hotel directly and asked for the same room. Their best price: $230.

First, JetBlue

Still without a reserved seat on JetBlue, (800) 538-2583, www.jetblue.com, I lined up at the ticket counter in Burlington, Vt., the airport nearest my home, an hour before my scheduled departure to Kennedy Airport. There were two agents on duty and nine of us in line. One of the agents came around from behind the podium to speed up checking baggage. Another was helping passengers operate the touch-screen boarding pass terminals (which greeted us with the words ''Howdy'' and ''What's Up?'').

At the gate, I grabbed my free earphones from a bin by the door and walked into the Jetway. The seats in the Airbus A-320 were upholstered in gray leather, and as soon as I sat down, I noticed that there was far more space between my seat and the one in front than is normal in coach. I had lucked out. Last year, JetBlue removed a row of seats from its planes to give more legroom -- 34 inches versus 32. But the change only affects rows 10 and higher, about two-thirds of the seats. I was in Row 21.

The most noticeable difference between JetBlue and mainstream coach class, however, is the small TV screen on the back of every seat. I plugged in my earphones and tuned the DirecTV service to the ''Today'' show on NBC, one of 24 channels available. An hour later, after flight attendants had served me a free can of orange juice and a bag of chocolate oatmeal cookies, we landed at J.F.K. I hadn't even had time to try the exercises on the ''Airplane Yoga'' card in my seatback pouch. At $110 for a one-way ticket, it wasn't hard to understand why JetBlue is popular. The best fare I could find on a major airline for a one-way ticket from Burlington to Kennedy that close to departure was $184, on US Airways and United. Less obvious is how JetBlue has managed to be profitable for the past three years.

''We do more with less,'' said Gareth Edmondson-Jones, a company spokesman. ''Our planes fly 13 hours a day versus nine hours at many major airlines. Plus we have a very high load factor.'' For the first two months of this year, the airline filled 78 percent of its seats. Mr. Edmondson-Jones said that the airline, which announced the addition of four more cities to its routes in mid-March, for a total of 27, will be adding 16 Airbus planes this year.

Song in the Air

Many of JetBlue's flights compete directly with Delta between the Northeast and Florida. According to Stacy Geagan, a spokeswoman for Song, (800) 359-7664, www.flysong.com, Florida is the source of 30 percent of Delta's global revenue. Ms. Geagan said that beginning last April, the company refurbished 36 Delta 757's as Song aircraft, with a bright green logo and leather interiors. Kate Spade created the charcoal-gray uniforms with parrot-green accents (and an optional butterfly-wing accent in place of the traditional airline wings) that attendants will begin wearing this month. By flying the planes longer hours each day, paying Delta flight attendants less per hour (and in exchange giving them the choice to work more hours per month) and using only one gate attendant to board planes, which can accommodate 199 passengers, Song has cut costs, Ms. Geagan said.

But cutting the number of gate agents has a downside. I found the service at the J.F.K. gate slow and confusing. Once aboard, I was struck by the cheerful orange, green, purple and blue leather seats that offered 33 inches of legroom, more than usual in coach. Like JetBlue, every seat had a television screen.

It was getting close to noon, and my stomach was growling for that organic chicken salad I had ordered. I also had a thirst for a Song Sunrise, one of the airline's much-touted cocktails, a concoction of vodka, orange juice and cranapple juice served in a ''signature martini glass,'' according to the seat-pocket menu. Despite my having ordered online and paid $8, the flight attendant told me that they had run out of salads. ''You should have told us when you boarded,'' she said, curtly. Eventually, she found a salad in the galley. It was about half the size of the chicken salad sold at a deli in the terminal for $6.50, with a few tasteless squares of white meat on top of baby spinach leaves accompanied by a packet of Newman's Own balsamic dressing. I was still looking forward to sipping my Song Sunrise from that signature glass. Alas, the beverage ($5) came in the same cup as every other drink.

The woman sitting next to me on the three-hour flight, Adriana Diéguez of Miami, who had flown to New York for the weekend, declined to pay for lunch, and was making do with a free Diet Coke. ''The amenities on this plane are fine,'' she said. ''But a little complimentary snack would have been nice for $270.'' Ms. Diéguez also found the in-flight service wanting. ''It's not customer-oriented,'' she said. ''They rushed us getting aboard.''

Still, at $87, the Song flight was the best deal of my trip. The lowest I could get from a major airline was $281 (American).

The Name's Ted

The cost of a round trip from Fort Lauderdale to Denver on Ted, (800) 225-5833, www.flyted.com, was $277. (American again had the best fare of a major: $323.) From the cute name (the last three letters of United) to the touch-screen terminals that invited me to ''Push Ted's buttons,'' and the bright orange placards in the boarding area that said things like, ''Ted is happy to see you,'' United has gone to extremes to make Ted aviation's answer to those up close and personal restaurant waiters of the 1990's.

But Ted seemed to be suffering an identity crisis. Although we were surrounded by orange pillars and humorous slogans in the boarding area, the agent announced that United Flight 4321 was ready to board, then had to correct herself. Ted offers one-class service, but United's frequent fliers were allowed to board first. And were it not for the missing first-class cabin, the interior of Ted would have been identical to United's coach. There were no leather seats and no extra legroom in my row; an economy-plus section had more legroom, but those seats went first to the United frequent fliers.

The flight attendants wore United uniforms. Tedevision, as the in-flight entertainment is called, was broadcast from overhead screens and consisted of reruns of popular shows such as ''Friends'' and ''Scrubs.''

And although the touch screen that had invited me to push Ted's buttons had also assured me that I would be able to buy a restaurant-quality meal aboard the plane (a policy that applies to flights over two and a half hours), the flight attendant skipped our aisle, and by the time another attendant summoned her, the chicken salad I wanted was sold out. I settled for a $6 turkey pastrami sandwich that had a T.G.I. Friday's label but in all other ways reminded me of those tough, stale snacks they used to give out in coach for free. To Ted's credit, I was able to obliterate the taste with a bourbon on the rocks that cost $4, a dollar less than the same drink on the other flights.

Rich Benvin, a professional tennis coach from Denver, was sitting across the aisle from me. He said he had reserved less than one week before departing for a spur-of-the-moment vacation to Florida, and it was not until he arrived at the terminal that he realized he was flying on Ted. ''I booked on United's site, and this feels like United to me,'' said Mr. Benvin, who is a frequent flier on United. ''They are using this whole Ted thing as a marketing ploy.''

But Sean Donohue, vice president of Ted, said that there was much more to the airline than the cute image, which was developed by Pentagram Design of New York. ''We started Ted because, when you look at our fastest-growing markets like Denver to Phoenix and Denver to Fort Lauderdale, you see that they are being fueled by low fares,'' he said. ''Ted's costs are 15 to 20 percent below United's, which makes them comparable to Frontier.'' Frontier is a low-fare carrier that competes with United in Western markets. Mr. Donohue said that in its first month of operation, Ted flew with more than 80 percent of its seats filled. The airline will begin service this month out of Dulles, near Washington, and out of O'Hare, near Chicago, in May.

The final leg of my trip was back aboard JetBlue from Fort Lauderdale to J.F.K. The cost: $154. Each of the previous flights had been fairly full, but this one, scheduled to leave Fort Lauderdale at 5:50 p.m., was completely booked. The elderly couple next to me muttered to each other in Russian. Three bare-midriffed young ladies sat across the aisle and struck up a boisterous friendship with a trio of tattooed guys from Queens behind them. A couple with two active toddler boys sat behind me. It seemed that everyone except me had brought carry-on food. We were a raucous crew, but despite the pandemonium, the flight attendants took it in stride, smiling and chatting as they served free soft drinks and bags of blue potato chips, biscotti and cookies.

The sky darkened. I turned up the volume on my headphones to shut out the chatter and assessed my two days in this new world of commercial flight. I loved the leather seats, extra room and satellite TV on JetBlue and Song. But next time I fly Song, I'll buy food at the airport and carry it on. Flying Ted is virtually the same as flying coach on any other airline. And I'll take the smiles and can-do attitudes I encountered on JetBlue over designer uniforms any day.

Correction: April 18, 2004, Sunday

Because of an editing error, an article on April 4 about three low-fare airlines misstated the location of O'Hare Airport, where one airline, Ted, will begin service next month. The airport is in Chicago, not merely near it.
Doc said:
And I'll take the smiles and can-do attitudes I encountered on JetBlue over designer uniforms any day.

Is that supposed to imply that the MAJORS have designer unifirms? JetBlue and Song are the ones that wear designer uniforms, for Song it's Kate Spade. US Airways uniform is designed by Idaho Potatoes (originally itnded to be a potato sacK) and died a generic, funereal navy.
Hey LY! Quit putting the badmouth on my two best flying friends, Polly and Esther.

As far as the article and the thread title...
Note that the date on the article is 04APR. Their 3rd quarter profits were down over 50% from 3rd qtr last year. IIRC, they "warned" of a possible loss for 4th qtr. Aviation fuel prices still trump friendliness.
Out of curiosity, I'd like to know what the "smiles and can-do attitudes" are making over at JB as compared to U. Does money buy "smiles" and benefits "can-do" attitudes? Some will say yes (even though this article doesn't bare that out) and others will say, "no, it's about respect". The bottom line IMO is that the LCCs have brought in a whole new customer base whose loyalty runs only as deep as the bargain they recieve on their tickets. Much of our business travel is gone for good, so how do we compete for this new customer? COST. And how do we reduce cost? By reducing the cost of doing business, including the payroll.

I don't like these pay and benefits cuts worth a cuss, but how are we supposed to compete if we don't reduce the cost of doing business? Customer service will buy you a little loyalty from some, but it will not fill the planes. JB and the other LCCs have quite an advantage over us. Their people knew what the pay was before they took the job. U's employee pay and benefits have been cut and slashed to pieces. It only makes sense which employee group will be wearing the smiles.

So how do you put the smiles back on the faces of U employees? Here's a list I made up based on what I'm reading.

1. Fire the management
2. Fire USA320pilot
3. Liguidate
4. Have CWA, IAM, AFA strike and kill the company.
5. Give us full pay to the last day...it will all work out for the better.
6. Quit

This is a partial list, but it's the best I could do (my little one needs the computer for a typing lesson).

I'm waiting for some genius to respond with a cure-all that will fix this mess. Frankly, I don't think any of us knows what will turn U around.

A320 Driver