Those of us in the airline blog world seem to write a decent amount about on-board products provided by airlines (some more than others, certainly; and some taking more photos than others; and some taking many, many, many more photos than others). But it occurred to me this morning after reading this story which suggested less than 10% of travelers on wi-fi equipped planes actually use the service that on-board product barely matters, if at all.
There, I said it. Sure, those with a first class fetish (FCF) love that they’re given a $12 glass of champagne with a mediocre meal in exchange for cashing in an extra 60,000 frequent flyer miles, but if we’ve learned anything over the years it’s that airline success has little-to-nothing to do with the product they offer (in the US, at least).
The two most consistently profitable airlines over the past years – Allegiant and Spirit – offer an in-flight product that would be generously described as non-existent. Many travelers would suggest that Virgin America offers the best coach product in the sky, and they have yet to turn a profit.
Among legacy carriers, Northwest (prior to their Delta merger) offered the least-amenity-filled in-fight product and their financials looked roughly as miserable as other airlines offering some level of frills on newer planes.
The best example of this is American’s ill-fated “More Room in Coach” initiative, which offered exactly what every single coach passenger complained about: legroom. Those same passengers then refused to pay any premium whatsoever, and American ripped the seats out.
jetBlue did differentiate themselves with TV (along with consistent great service), but they were unable to grow and keep the same service level consistently, and hence they ended up in a financial situation more akin to what we see from legacy carriers.
First class? US airlines have upgraded their wares while at the same time showing a massive decrease in premium class bookings, coupled with discounting at the front of the plane in ways we’ve never seen before.
Airlines are a commodity business. They can market themselves as if they are not; and they can offer amenities to try to differentiate themselves, but in the end, people care only about 2 things: 1) fare; 2) frequent flyer program. Don’t discount the frequent flyer program – it is a major decision factor for travelers (ask Virgin America…or Eos). Everything else the airlines offer – wi-fi, TV, food, massage, whatever – have zero value to consumers in coach. In first class, the only real value offered is some amount of additional legroom (certainly domestically, and for the large part internationally). Domestic first class fares are pretty much the same, regardless of the quality of the first class product. Internationally there is some difference in some markets, but not much (if any). One major benefit for the airlines, though, is that people are willing to burn an extra 60,000 miles for that glass of $12 champagne. That’s not too shabby for the airline.
That all said, you can get on a plane in New York, and show up 8 hours later in Dakar. And regardless of the food they serve on that plane, it’s still pretty amazing that in the blink of an eye, you can be in Africa. For all the fetishism around onboard product, the real onboard product – going anywhere you want in the world for less than $1200 – is pretty hard to beat.