GREAT NEWS! Airlines Can’t Make The Flying Experience Worse Without Losing Customers

I learned a new industry term this week: “passenger burn”

While ultimately air travel is frustrating and uncomfortable for many — with tight legroom and packed planes — because that is what consumers are willing to pay for, and they make decisions based on price it turns out that there are limits.

Most people don’t really investigate the quality of airline service in advance. As I say, consumers generally make their purchase decisions based on price. Business travelers who aren’t price sensitive (their tickets are paid for by someone else) tend to buy based on non-stop flights and flight time. And brand loyal customers are often basing their choice on a frequent flyer program, especially elite benefits.

But actual inflight service, while playing a role in choice of frequent flyer program and bundle of benefits that one becomes loyal to, plays only a limited role. Or so the conventional wisdom goes at least.

Still, there are people who make the decision on price and regret it. And while they’ll still make decisions on price in the future, they will rule out certain airlines because the experience is so bad.

It’s called “passenger burn,” and it’s a cost-of-doing business for most Ultra Low Cost Carriers, or “ULCCs” in industry parlance.

“Passenger burn occurs when passengers use a ULCC service once and do not return as a repeat customer,” Jetlines, a new Canadian airline, told prospective investors last month. Jetlines plans to launch this summer with two aircraft based in Vancouver. It wants to be the Spirit Airlines, or EasyJet, of Canada.

This new low cost carrier chose 30 inches of pitch (major airline standard is 31 inches) rather than the 28 inches offered by Spirit is because they believe the pain threshold would chase away too many customers with tighter seating.

“In seating tests conducted by Jetlines with the new slim line and pre-reclined seats, a 6’3″ passenger will still have space between his/her knees and the seat ahead of him/her (about 2″),” the airline reported. “With the 28″ pitch seating, this same passenger would have his/her knees touching the seat in front of him/her, which Jetlines deems unacceptable in the Canadian market given the longer sector lengths.”

Apparently economy passengers will make choices based on inflight experience at certain margins of limited legroom and on long enough flights.

So there are limits to how bad the basic coach experience can get based on airline self-interest. This low cost carrier believes they can’t make things worse — even as bad as Spirit — without it backfiring.

And this is something even a low cost carrier believes.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary, don’t rag too much on EasyJet. For us at least, they’re more than acceptable for typical European short hops, barring irrops where they’re very thin on the ground. RyanAir, on the other hand is definitely past the point of “passenger burn”.

  2. Unlike with legacy majors in the US and/or Canadian markets, passenger/customer burn rates are a major issue for a new/start-up airline trying to run in a market dominated by players with oligopolistic/monopolistic power and governmental waivers and favors to collude in one or more ways.

    For legacy majors in the US market, passenger/customer burn is way more “affordable” — more so if Southwest and JetBlue do as the big 3 U.S. industry cartel kingpins want them to do.

  3. Of course there are limits. They aren’t only competing for customers with an airline with “one more inch of legroom” but also with “drive”, “stay home,” and “take a train or bus”, depending on the customer, the market, and the destination. Indeed all airlines must consider those other options that many of their customers have. Having different models to choose from is a good thing. If an LCC came to my airport I’d certain give it a try, having had good experiences on them in Europe and Asia.

  4. “A spokesperson for United commented that at UA, they feel a passenger burn rate of 40-45% is acceptable given the over entitled nature of most customers. ‘We give them a f*cking seat, for God’s sake! What more do they want?’ “

  5. The problem is that airlines seem to WANT to shed customers. Maybe shedding customers IS a problem for LLCs — I flew Southwest in 2003 and never, ever again — but big airlines just park some of those expensive jets and chalk it up to profit when they lose customers. They don’t make money from flying people around. They make money from fees. Right? I know lots of people who have quit flying in this century, I think we all do, and yet the air industry has finally become profitable. With 7 billion people in the world, airlines don’t really have to care about passenger burn, do they? I’m not sure what your argument is. Hell, I’m not sure what my argument is. But I don’t think the remaining majors care what the LLCs think about bag fees, seat pitch etc.

  6. If you think of passanger burn in the context of bus travel in a 3rd world, you can easily see the vast majority of the population is willing to tolerate no AC, chickens on the bus, etc in order to save a few dollars on a 10 hour bus ride. Then the AC coaches may charge a few dollars extra, and often run with significantly less passanagers.

    Obviously airlines are segmented the same way in the US. I know a lot of people who absolutely refuse to fly Southwest, let alone Spirit. Hell, I’m a plane snob to some extent, but the features that suck about Southwest, I’m willing to tolerate. As a tall big guy though, I can’t tolerate less than 31″ seat pitch, and in fact my biggest factor in deciding a flight is getting leg room.

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