AMandL

The challenge of unremarkable airline operations

“There is not much to say about most airplane journeys. Anything remarkable must be disastrous, so you define a good flight by negatives: you didn't get hijacked, you didn't crash, ……, you weren't late,…... So you're grateful.

— Paul Theroux, The Old Patagonian Express, 1979.

Recent media coverage about EasyJet and its operational problems have reminded many people of the truism in Paul Theroux’s quotation. When a flight is on time, with OK cabin service, and your luggage arrives when you do, most passengers do not notice. The service is unremarkable. This is how it is supposed to be, so what is noteworthy about that?

Unremarkable service, however, is the product of skilled operational managers who constantly integrate and adapt the outcomes of many different functions from within and outside an airline. They in turn are often regarded as unremarkable in terms of the role they perform and their visibility compared to the powerhouse functions of corporate strategy, international relations, finance, marketing and systems development. They usually only come to notice when the operation suffers serious disruption, or when further cost savings need to be made since they often control large numbers of direct or contracted staff and, on the principle that elephants are fat, then additional savings are looked for.

Now, however, airlines are looking with a renewed focus on operational performance as a competitive differentiator. Not least because the web enabled world creates very fast and uncontrollable customer feedback, and is seen to be increasingly influencing buying behavior. Also as the recession eases European airspace is also likely to be increasingly constrained by almost no new airport expansion and a delayed Single Sky air traffic management system, and at a time when pan-European train operations are likely to become faster and more reliable.

So unremarkable service may have to get a whole lot better if it is to stay unremarkable and the talent management required to sustain competent multi-skilled operational managers may also need to be reviewed.

VULNERABILITIES

In such a context four factors are combining to render today’s airlines more vulnerable to perceived poor operational performance than previously. These four factors are: the impact of a sustained period of cost—cutting, the growth of ancillary revenues, the importance of global networks, and the socially networked markets in which airlines compete for customers.

Relentless cost-cutting

One result of the seemingly endless cost cutting of the last three years has been a reduction in operational management and staff. As a result in a crisis there is no additional available resource to commit – this has been ruthlessly pruned. If training has also been reduced then the front-line competence may be thin. At the same time a loss of collective experience as job levels are removed and experienced may result in a greater dependence upon the operating manual when the exercise and judgment and empathy with passengers may be more important.

Increase in ancillary revenues

The pursuit of ancillary revenues is also starting to impact upon airline passengers and their perception of what is good operational performance. If a passenger pays more for the carriage of their bag it had better arrive and quickly; if a passenger pays more for a pre-ordered meal or on-board snack it had better be available and edible; if a passenger pays more for preferential boarding and seat allocation it had better take place and produce a preferred seat; etc.

The importance of global networks

One attraction of offering global networks is the connections they offer through single or multiple hubs, with seamless service and compatible products. At the airport level delivery of some of these expectations provides multiple challenges from privileged lounge access, baggage allowances, size of carry-on baggage upgrading policies, through to language skills and an ability to meet growing requests to respect diversity. This is not new. Major European airlines have protected certain high profile commercial connections for years. What is new is the multiplicity of partners and increasing knowledge of corporate customers.

Significance of social networking

In a discussion on whether test cricketers should twitter during a match a group of five English test players were reported as having about 60,000 “followers”. Now think of the number that football stars, film stars and other celebrities have “following” them and then think of them starting to twitter at airports – whilst delayed; at airports waiting for their bags and hoping they will come; and after flights describing their experience. Probably they will also soon be twittering on flights. In such a world Pandora cannot be put back in her box and recent research shows that in this networked world it is another on-line person who is believed rather than an airline or an official statement.

DEMANDING LEADERSHIP

The manager at an operational level is responsible for some brief moments for the combined value generated by all the inputs to the company. On her watch the value generated by marketing initiatives and brands are combined with the technical expertise from engineers, pilots, operations control, ground handling, passenger services, catering come together - or not. On her watch the value generated by the inputs from the company are enabled by the value of the inputs from alliance partner airlines, code-sharing partners, service partners, hotels, and transport services come together – or not. On her watch the value generated by the inputs from the company are enabled by the value of the inputs from parallel agencies responsible for airport infrastructure, terminal facilities, security, immigration, and air traffic control are enabled – or not.

The key to good operational management is that the important decisions are taken in advance and in the light of emerging and ambiguous patterns – hence experience and accessing experience of specialist colleagues is important. This is second nature to the operational manager, it is what makes the job worthwhile, provided they understand the bigger system.

It is possible, however, that one product of the constant cost cutting of the last three years is now impacting upon the capability of airlines to manage the disparate function known as ‘operations’. There are fewer managers, and fewer staff, and amongst these there may be a reduced collective experience of how to avoid disruption, anticipate passenger reactions, and recover airline operations with a minimum of fuss, and in the quickest possible time.

THE COMPETITIVE THREAT

Perhaps this is one reason that stakeholders in low cost airlines are increasingly concerned about potential damage to their brands. Brand values are built on emotion and as more people speak of their disappointment instantly and uncontrollably through social networks then the level of emotional reaction intensifies. But the challenge is not unique to low cost airlines: maintaining premium pricing demands maintaining premium service, including punctuality.

The role of the operations manager is to maintain these perspectives and to work continuously on both the inside world of the airline that delivers the outputs required and the outside world of passengers and customers.

This is an extract from a longer article to be published in Aviation Strategy this Autumn.