Customer service will prove to be the most crucial battleground in the airline market of the future, says Ron Kuhlmann, vice-president of Unisys R2A Transportation Management Consultants in California.

The biggest non-story of 2004 is that most of the world's traditional airlines are in a mess. There is no foreseeable end to this trend and even the most myopic legacy carriers are reluctantly agreeing that the downward pressure on fares and yields is here to stay. It is also clear that some, perhaps many, legacy carriers will be unable to adjust to this new reality and will fail.

This rush to cut cost has resulted in some very unusual developments. Low-cost carriers are offering amenities and on-board comfort superior to the established players. As American Airlines battles JetBlue in many markets, American dispenses with "more room" as JetBlue adds it. The competitive landscape is in flux and all the rules are being rewritten.

Well, almost all. While air transport is now a commodity product, it remains, at its heart, a service industry, and it is my premise that as the fare platform stabilises at a new, lower level, and price becomes an equivalent factor, the battle will again be fought on the basis of customer service.

It will be a differently defined service level but passenger satisfaction will ultimately cull the ranks. In this aspect, the newcomers have a definite edge. Not only is their corporate culture differently structured, but they also have no "glorious past" that can serve as a baseline for passenger expectations. Having been in the industry for over three decades, I am aware that passenger dissatisfaction is not a new development. I remember in the 1960s and 1970s when passengers identified themselves as part of WHEAL, an acronym for We Hate Eastern Air Lines.

However, the current aviation chaos, abetted by the capacity of the internet, has produced a completely different level of outrage. Whole sites spring up overnight in response to changes in frequent flyer plans, and global sites like Skytrax provide forums on which to share experience with all who are interested.

If you will support my premise that economy seats are more similar than dissimilar across the industry, the service assessment parameters become far more dependent on intangibles, such as attitude, quality and effort.

A quick glance at many complaint sites confirms that it is in this area that the legacy carriers most often fail. People describe staff at low-cost carriers as being enthusiastic, helpful, pro-active and cheerful, while favourable reviews of legacy carrier staff use positive, but less enthusiastic words such as competent or attentive. However, more commonly one finds the words rude, obstinate, indifferent or unhelpful. How has this happened? How has the dominant mode of common-carrier intercity travel become the focus of so much disfavour? Internationally, how have the representatives of global flag carriers moved from ambassadors of goodwill and culture to purveyors of barely tolerable encounters?

I believe that there are three main contributing factors - all fixable - and that the legacy carriers, in their drive to survive, have lost sight of the basic aspects of human interaction.

Before proceeding, let me include one huge qualification: My observations are macro in nature; each day millions of legacy carrier travellers are efficiently and courteously served by dedicated employees. What has happened, however, is that the number of bad experiences has reached a critical mass.

Premise 1. Technology adds vital tools but customer service is, when things go wrong, human interaction.

Online sales channels, check-in kiosks, phone prompts and other technological advances are cheaper, generally time-saving, and usually accepted as more efficient. However, if there is a breakdown or case where these alternatives are not applicable, human intervention must be available, competent and confident in their ability to assist. With so many technological opportunities for self-service, staff should expect, and be prepared for the fact, that personal contacts will likely involve extraordinary circumstances and should therefore be trained and authorised to deal with such situations. This is frequently not the case.

Premise 2. Staff need to be trained and empowered to make logical decisions.

Airlines have been careless in their staffing, often replacing higher-paid staff with new hires. Simultaneously, training has been cut on the assumption that new technological tools are more user-friendly and therefore can be mastered more quickly. The result is a loss of vital expertise that is ever more important in maintaining customer loyalty.

The situation is further complicated by the lack of authority given to line staff. Many legacy carriers have assumed, or at least seem to assume, that since they have automated and become a commodity, there is little need for expertise or comprehensive training.

I realise that this is a broad statement, but encounters by phone or at airport locations often are frustrating because the employee is unfamiliar with unusual situations.

Premise 3. Inflexible rules are rarely the best way to achieve value.

Probably the most stunning difference between low-cost carriers and their legacy counterparts is the size of their rulebooks.

While it is true that many legacy carriers offer equivalent low fares, they almost always come with far more restrictions and penalties than apply to the low-cost model, and many staff have spent their careers enforcing the rules as a baseline of customer interaction.

Unless the legacy carriers can retool attitudes along with fares and aircraft utilisation, they will continue to measure poorly against the new competitors. We can all agree that lower costs are vital. However, that new cost platform will not create success unless and until the corporate ethos recognises that low fares will be the norm and the deciding factors will again shift to service and attitude.

Southwest has long hired for attitude and trained for skill. Their mantra has been absorbed, with variations, by most of their low-cost cohorts. This is the real challenge for the legacy carriers.

Note: Since this was originally written the 2003 annual customer service ranking for US carriers, compiled by the University of Nebraska, has been released. Three of the top four spots were taken by new generation carriers.

Source: Airline Business