How has Southwest executed value-based pricing?
It’s the same plane going to the same place at exactly the same time. But these days, not all airline passengers are equal. Nor do they all pay equally. In fact, a person on any given flight has likely paid a different price for his or her ticket than the people on either side of them. No matter where they sit, however, all passengers seem to have one thing in common: Almost nobody’s happy with what they get for what they pay. Tempers are flaring over rising air travel prices coupled with fewer amenities and less attentive customer service. Industry-wide, satisfaction ratings dropped last year for the third year in a row. Something is just not right with the airline price-value equation.
Most of us probably have had experiences like those of Doug Fesler, an executive at a medical research group inWashington, D.C. He wasn’t expecting much in the way of amenities on his American Airlines flight to Honolulu. In fact, knowing the airline no longer served free meals, he had packed his own lunch for the second leg of his flight from Dallas to Honolulu. But he said he was shocked at the lack of basic services and the overall condition of the cabin. On that flight, the audio for the movie was broken. The light that indicated when the bathroom was occupied was squirrelly, causing confusion and, in some cases, embarrassingly long waits for passengers in need of the lavatory. And though food was available for purchase, the quantity of food was depleted before the flight attendants could serve the entire cabin, leaving some fellow passengers looking longingly at the snack he had packed. His return flight was just as disappointing. This time the audio for the movie worked—but only in Spanish—and his seat refused to stay in the upright position. “I was just appalled,” said Fesler. “You pay $500 or $600 for a seat, and you expect it to be functional.” He said he has considered refusing to fly airlines with such poor service but added that “if you did that with every airline that made you mad, you’d never get anywhere in this country.”