Brian Sumers writes in The Airline Observer that “The airlines that still view the cabin and the seat as a commodity generally have underperformed.”

A trend that some in the industry date back a decade, but that unquestionably accelerated rapidly during the pandemic, customers no longer buy tickets just on schedule, price, and perceived reliability. Airline seats are no longer just commodity products. Airline experience always mattered, but it’s become a lot easier for customers to differentiate and decide based on product.

New American Airlines Business Class Suite For Boeing 777-300ERs And Some 787-9s

• Some of this is changing consumer preferences (and the industry is on pins and needles waiting to see if it endures) but it’s also a shift in technology and merchandising.

• Customers used to largely just get presented with schedule and price, so that’s the information they based purchasing decisions on. Now they have access to more robust details – during the booking path, and easily at their fingertips online – to help them understand what they’re buying.

While some just want the cheapest transportation possible, many are willing to pay more for a better or more comfortable experience (and each customer defines that a little differently).

Realizing this, even Spirit and Frontier are making a play for premium business by offering first class products. Southwest Airlines, for its part, is adding extra legroom seats.

Frontier Airlines First Class

Delta is adding premium seats and turning to AI pricing and basic business in hopes of avoiding selling too much of that increased supply at lower prices.

Yet current American Airlines CEO Robert Isom said prior to the pandemic that his focus was on having the airline compete with Spirit and Frontier.

[T]oday there is a real drive within the industry and with the traveling public to want to have really at the end of the day low cost seats. And we’ve got to be cognizant of what’s out there in the marketplace and what people want to pay.

The fastest growing airlines in the United States Spirit and Frontier. Most profitable airlines in the United States Spirit. We have to be cognizant of the marketplace and that real estate that’s how we make our money.

We don’t want to make decisions that ultimately put us at a disadvantage, we’d never do that.

Now he tells employees never to spend any more than they have to. He thinks that customers believe seats are more comfortable and food tastes better when flights are on-time. All they need to do is run a reliable operation.

American Airlines Boeing 737 MAX Last Row

What Isom fails to realize is that this is table stakes. If you don’t run a reliable operation, customers will avoid you. But they’ll still make a choice from those carriers that do. And since he runs a high cost airline, he needs to earn a revenue premium. He doesn’t just need to fill seats, he needs customers to spend more for those seats – more per square inch of aircraft, more than competitors charge – or else he’ll never cover those high costs and earn a return on capital.

Sumers interviewed Air Canada Executive Vice President Mark Nasr last month. Air Canada’s brand is inextricably tied to Canada itself. It’s generally viewed as a little bit better than its U.S. peers, though with highly variable onboard service and with arguably a better frequent flyer program than big U.S. carriers. Nasr explained some of what they’re trying to do, though, and there are really important lessons in some of his insights.

Nasr had some really interesting insights about airline food.

• Onboard food drives customer satisfaction.

  Food service is an important part of our experience..one thing I found consistently in my career. This was very true at Continental where we were the last to have complimentary economy food service.

  If you ask customers what their priority is, it won’t rank particularly high…but when you provide complimentary food service it has a halo on the brand and it shows up in customer satisfaction.

  And when you take it away, particular for flights that are on-time where you’re delivering the core product, you see it very clearly.

  
  Air France Business Class, Paris – London, 216 miles

• Onboard food creates important moments. I’d add that when other passengers walk by the premium cabin during boarding, and see customers relaxed in bigger seats with a nice drink, they aspire to that more and ultimately want to either buy it themselves or become loyal enough customers to have a chance at upgrades. So it’s not just the food that creates loyalty, but predeparture beverages create future buyers.

  We’re the only carrier in the Western World, as far as I’m aware at least, that offers a hot breakfast in business class on every single flight – even a 45 minute flight between Toronto and Ottawa. If you think about it, cold Canadian winter, a 6 a.m. flight you’re getting up at 4 a.m. you’re rushing to the airport. It’s not so inviting outside. Customers love settling into a nice cup of coffee or tea and warm breakfast, and it makes a big difference.

  
  Japan Airlines Business Class, Tokyo – Shanghai

• Pre-order meals are data.

  Pre-order meals allows an airline to a/b test the order entrees appear, descriptions, when people order prior to flight in order to improve menu design and catering operations.

• The right way to look at net promoter score is to separate out whether the customer’s journey operated on time or not. If not, did the customer feel taken care of? If the flight was on-time, Nasr says “wifi, food and beverage, and the nature of the service we’re providing particularly the flight attendants” are the drivers of satisfaction. You can’t just look at on-time or not on-time, you want to know what matters to customers once they’re on-time.

  
  ANA Ramen

  
  Etihad First Class Salmon Biryani

Nasr tells a story about his time at Continental Airlines. People hated the food, but satisfaction plummeted when they didn’t offer it. Even food that customers are unhappy with drives satisfaction.

Continental Airlines, right? Clean safe reliable air transportation, pillows and blankets, meals at mealtime. That was the value proposition. Extremely clear, extremely effective at market. The airline operated with a RASM premium all the way until consolidation and everything else that happened more broadly in the industry. The biggest single source of complaints was the food in economy. It was the #1 source of complaints. When we cut food, customer satisfaction plummeted. That tells you something right there.

Singapore Airlines sweats all the small details, not just the mechanical ones. They built a model Airbus A380 using manila envelopes and the seats inside the plane even reclined. Tag line: “It’s the small details that make giants in the sky.”

Singapore Airlines Dim Sum

Singapore Airlines Lobster Thermidor

It’s an ethic that was emphasized in the Walter Isaacson biography of Steve Jobs, a belief (probably imbued as a young child by his father) that the internal workings nobody sees have to be just as high quality as everything on the surface.

It’s no wonder that both Singapore Airlines and Apple are iconic brands. They go to great lengths, invest in the details, and that shows up across their entire product. You can dig beneath the surface and find deep quality. There’s no good enough or doing what American Airlines Chief Operating Officer David Seymour admits was their approach with the carrier’s domestic product – they just “tape[d] it out.”

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