As an avid reader of your intelligent, well reported magazine I was surprised with part of the February editorial, Crisis over - but don't let up. There is no doubt that the airline industry must change, and that companies must be more innovative and responsive in future. My main concern focuses on the list of 10 commandments to manage the upturn.
Some of these are contradictory: you allude to treating company employees well, managing them effectively, professionally, and as a worthwhile resource, which most airlines don't do well today.
Yet you encourage companies to outsource as much work as possible. The bind is that outsourcing is a short term fix for airlines. It is a long term nightmare when airlines might deal with multiple outsources for the same services. Imagine having company A doing the work in Los Angeles, B in Seattle, C in Chicago and London/Heathrow and so on.
This concern applies to departments such as reservations, baggage service, ticketing, ramp, cargo and maintenance. The nightmare of dealing with multiple suppliers and the incredible inconsistencies in service would be legend very quickly. And customers would go wild! If service is the key to success, outsourcing airlines are in trouble.
The industry should look at the automobile industry which used to deal with multiple suppliers and outsourced heavily. They finally wised up and now do much of the work themselves, or through a minimal number of suppliers.
The airline industry would be wise to quit jumping to the tune of every new buzzword as it has done historically. Grab the employees, level with them, get their involvement, and do the job.
It is interesting to note why the airlines are even considering this option - they caved into strong unions or were over-confident in their performance and profit outlook. Further, it is a subtle recognition that they may have done a poor job managing the employees and company. The end result is that they actually created competitive niches for upstarts. Now that has happened and there's a crisis in incumbent headquarters.
Airlines have even created a 'have' and 'have not' situation in the industry. One needs only compare salaries of executives (not just chief executive officers) in US airlines with the salaries, options and benefits for worker employees.
Why should the industry have such highly paid executives who turn in such shoddy results? Does it make sense?
The industry needs a purge of 'golden parachutes' at all levels, and a purge of nonsensical procedures and practices, and get back to running an operation that is responsive both to the customer and the market place.
Tim A Becker
Source: Airline Business