Tuesday, February 05, 2008

Fly Commodity Airlines

United Airlines says it will charge a service fee for a second piece of checked luggage, a move experts say will spread across the beleaguered industry.

Why is it that the more airlines try to make money the more desperate they become? Charging for second bags, banks charging for talking to tellers - The inexorable march toward commoditization not realizing that once you trade on price you've gotten your brand equity so far down a hole you'd have to climb up a ladder just to get to the bottom.

What companies used to do with brains (the creation of positioning strategies that actually changed consumer habits and practices regardless of price), they now do with brawn. But then again, the airline industry never was very nimble with this type of creativity and differentiation. When the competion drops the bar this low it makes it real easy for some one like Herb Kelleher and Southwest Airlines to steal the business just with a joke. I love Southwest. Last time I got on the flight attendant said, "Thanks for flying Southwest today. If at anytime during our flight today you need something, you make sure you just let us know... ... ...right after we land." Later, "Thanks for flying Southwest today. This concludes our flight. If there was anything you did not like about our flight today make certain you call ... United." Fabulous!

Trading on the humor selling dimension rather than business class segmentation and price. Then again, this is what happens to a company when it crunches too many numbers. Promotionally driven price-biased companies that must whine for government subsidy to stay afloat. Why do they make my life so boring? As Professor Kingsfield said in The Paper Chase, I wish they'd "Fill the room with [their] intelligence."

Not long ago I flew to Miami on Southwest and the flight was booked solid. Once again, everyone enjoying the personality and humor infused by the CEO. On the way back I was less fortunate in flying American Airlines. The flight was empty. In discussing the differences with flight attendants to pass the time Southwest was disparaged by the flight crew as being "Sooo unprofessional." To which I said, "But it seems unprofessional sells."

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