It’s been a long but interesting few days here at PhoCusWright. Mostly, I’m here to meet with people and learn more about their companies, so I haven’t been attending too many of the sessions. That being said, there was one presentation I absolutely had to attend: “Customer Experience and Flying: Not an Oxymoron.” Oh yeah, and this was presented by United. I figured it would get ugly, and I was right.

Tim Simonds, Managing Director, Customer Strategy and Metrics, first gave a presentation that was entirely focused on the premium experience that United is trying to create. He used many of the buzzwords out there - they want to be “best in class” and they have a “bias for action,” and yes, he even pulled out the “purchase funnel.” Let me try to translate.

United is trying to provide an excellent premium product on its international fleet. The airline wants to really excel at delivering when the customer experiences the product, and this includes everything from the right seat/bed to little things as well . . . for the premium customer. The airline has a first class lobby at O’Hare to create a great experience on the ground, and they’ve even taken the agents that work there to the Disney Institute to give them training on customer service.

We were also shown a video with, as I jotted in my notes, “dramatic piano music and backdrops of Chicago.” This was all about the premium seat, and it made me wonder why they even bothered putting it together.

And that was that. Sounds good, right? Yeah, well if you’re flying international premium class then it is pretty good but there are a couple problems that came to mind immediately.

1. Not once was the back of the plane mentioned in the presentation
2. On time performance didn’t come up in the prepared remarks

I thought it was rather odd that these wouldn’t be discussed, but fear not, it came up immediately after the presentation was done. See, PhoCusWright has a Talkback feature where two people from the industry come in after the presentation to gang up and ask questions. This time, we had Josh Weiss, Delta’s Managing Director of delta.com and Self-Service alongside Jim Young, Frontier’s Vice President of Marketing, Sales, and Distribution (though he has a much longer history in the industry with other companies).

Apparently, Josh and I were on the same page, because he immediately addressed my first point above. He said something to the effect of, “I see a lot about the premium product but what about everyone else?”

Tim then clarified that United’s strategy is to provide a good experience for everyone and a great experience for premium passengers, but we didn’t get any details of what that might mean other than saying that good service was important.

Jim then jumped in and said that everything United appears to be doing is playing catch up. What are they doing to differentiate themselves?

Tim said that service would be the differentiator.

Josh wanted to know what else they were doing besides sending 200 people to Disney for training. What are they doing to help everyone else at the airline?

Tim said they’re having meetings with people every day and they’re really trying to make sure that management is setting them up to succeed. I’d guess few employees would say management is doing a good job of that right now, so there’s a lot of work to be done here.

On time performance did finally come up in discussion and Tim said they were making progress on that. I certainly hope so, because while the details didn’t come up on stage, I looked it up and found that they were 17th out of 19 airlines in September and they’re in 18th place for the full year. They’re also in the bottom half of the pack for lost bags (12 out of 19 in September) and they have well above the average level of complaints. So again, there’s a ton of work to do.

Josh had a good question that seemed to be almost an afterthought, but it was important that it was asked. He wanted to know what “class” the airline was trying to be in when it said it wanted to be “best in class.” Were airlines like Singapore and Lufthansa included?

Tim responded that no, they weren’t. They’re only looking at North American carriers. And then he said, “For us to say we want to be as good as foreign flag carriers is overstretching.” Ouch. So they want to be the best of the worst, apparently.

At this point, everyone started piling on. An SMS showed up on the screen that said, “All this focus on the customer but where were they in that video? I only saw a bunch of suits in downtown Chicago.” Good point.

Then an audience member noted that the magic of Disney is that they treat everyone well while United is “abandoning the back.” Tim tried to respond that you get a very different experience at the Grand Floridian then you do at Port Orleans (at DisneyWorld), but in my eyes that isn’t comparing apples to apples here. I thought about this as the session ended and we all left the room.

United (along with most legacy airlines) doesn’t understand which of its travelers are premium, so it’s pretty ridiculous for them to focus so intently on that area. It rewards its frequent fliers, but those people could have bought the cheapie fares for all their flights. Meanwhile, someone who has never flown United but buys a full fare walkup ticket won’t even get to sit in Economy Plus.

Putting it in DisneyWorld terms, you could have one traveler who goes to DisneyWorld 25 times a year, pays $80, and gets to stay in the Grand Floridian since he comes in so often. Meanwhile, you could have another customer who pays $500 for his only visit of the year and gets put in Port Orleans. That’s not how Disney treats its customers and it’s not how airlines should either. I won’t even get into the fact that even the lowest paying Disney guests are treated very well whereas United has a lot of work to do all around.

In the end, Tim took all the shots pretty well considering that his employer deserved them all, but I ended up almost feeling sorry for the guy. United has a lot of work to do, and they probably shouldn’t be giving a presentation with this title until they get all the basics in order.

Back at the Southwest Halloween contest last month, the planning group had us try to guess what the next Southwest city would be. Holly Hegeman of PlaneBusiness put down three letters - LGA. It appears that she was right. Southwest is trying to put together a deal that would secure slots at New York’s LaGuardia airport. Meanwhile, Virgin America is saying that it can’t get gates at O’Hare even though the airline already said it would be flying there. Sounds like one airline is far more determined to grow than the other.

Let’s start with Southwest. The airline has put a bid in to pay $7.5 million for ATA’s operating certificate. The only reason they appear to want this is for the LaGuardia slots to fill the giant hole in their route map. (I believe they lost their Washington/National slots long ago, so that shouldn’t be part of the package.) Now don’t freak out, Southwest employees. This isn’t yet another codeshare announcement. ATA is toast, and this is just an effort to buy the slots to be flown by Southwest airplanes.

Clearly this is a big deal, but this doesn’t mean Southwest will get in immediately. It’s always possible that someone else will put a bigger bid down for the assets, and then we could see a bidding war. (Grab some popcorn!) But even if they don’t win this round, they’re clearly stating that they plan on finally entering New York City. It’s going to happen at some point, and I’d put my bet down that Chicago/Midway will be one of the first markets. (Yep, those Delta flights on the same route would be gone in two minutes.)

They’re not going to take over New York with this initial move, but they will certainly cause a big headache for the other carriers. It’s bold, and it’s a smart move. Southwest needs to be in New York, especially if it wants to be a bigger player in the business world.

On the other side of the coin, we find Virgin America. The airline had announced plans to start flying to Chicago/O’Hare this fall, but then that was pushed back. Now a Chicago Tribune article says that Virgin America can’t find gates so it may decide soon not to go into the airport after all.

Something here doesn’t smell right. I have no doubt that they can get gates if they want them. They could always fly out of the mostly (but not entirely) international Terminal 5 since those gates are controlled by the city. Or I imagine some airline would be willing to sell them a gate or at least partial use of one. It says they’ve only spoken with United, American, and Delta. What about US Airways? I’m pretty sure those guys would sell their mothers if they could make enough money on the deal. Or what about one of the many other carriers that fly to the airport?

It sounds to me like they may want gates, but they don’t want them THAT much. Unless the Tribune article is inaccurate, it just doesn’t sound like they’re really exhausting all options here. Definitely an interesting contrast between two airlines’ efforts to get into crowded airports. One is willing to go a lot further to make it happen.

For years, Alaska has been the slut of the industry, and I don’t mean that in a bad way. The airline has set up codesharing and/or frequent flier agreements with just about everyone without committing to a single partner and that has been a solid strategy for them. Yesterday, Alaska and Delta announced that they would getting even closer, and though many will say this is the end of the “slut” strategy, in my eyes this is just an extension of the existing Northwest partnership.

Don’t get me wrong, I’ll bet that Delta would love to have Alaska alone in the Delta family, but for Alaska, this is just affirmation that they gained a benefit from the Northwest agreement and they want to extend that to the new Delta/Northwest. Here are the details:

• Reciprocal club access so members of Delta/Northwest clubs get access to Alaska’s and vice versa




• Priority seat assignments, check-in, and boarding for Platinum and Gold members in each elite program




• Expanded codesharing on more flights, including the new Delta Seattle-Beijing flight that begins next year

Ok, so what does this really mean? Well, Delta has a big hole in the west and it needs to fill it, especially since it has Pacific aspirations. Codesharing is one thing, but a closer tie-up is much more attractive for elite fliers, and that’s who these airlines want to attract, of course. So let’s look at a couple maps to show why this is good for both, thanks to the Great Circle Mapper. First, how about flights from LAX.

I’ve gone ahead and shown routes from Delta/Northwest as well as Air France/KLM in blue. You can tell it’s mostly an east-west route structure with longer hauls. This has been the case since Delta dismantled its short-lived hub in Los Angeles recently. But when you overlay Alaska in red, you can see significant north-south operations that mesh quite nicely with the existing Delta route map. Now Delta can have more feed for its longer haul flights, in particular potential new destinations in the Pacific. Now let’s look at Seattle.

It’s a similar story here but with much more power added from the Alaska route map. Delta/Northwest/Air France have a smaller presence, but it’s still east-west, long haul based. Alaska, however, while having a strong north-south network also has the ability to bring people in from all over the country to Seattle nonstop. So if Delta really wants to continue to build a Pacific presence, it needs to be able to tap into the western markets, and it has already proven it can’t build that itself. Alaska is the perfect fit for what they want to do.

So will this be the end of Alaska’s cooperation with other airlines? I highly doubt it . . . for now. There’s no reason for Alaska to end its myriad of codeshares unless Delta ends up actually buying Alaska. That wouldn’t surprise me, eventually, but I think Delta would probably like to make sure that this sort of feed will actually be worth trying to buy in the first place. This is a way for them to do that without having to lay out the cash.

Just a heads up for those who are interested. I’m at the PhoCusWright conference here in LA this week. Most of my coverage will be over on BNET, but I may put a post or two in here if I find some interesting bits.

If you’re in town for the show, come on by and find me.

What, you’ve never heard of Northwest flight 710? That’s probably because the crash happened nearly 50 years ago, on March 17, 1960 to be precise. After I left Indianapolis last week, I decided that I would avoid interstates for the drive to Phoenix, and that helped me find all kinds of excellent aviation-related stops, including a memorial for Northwest 710.

The recommendation came from a friend. He said if I went south until just before Indiana met Kentucky at the Ohio River, I could find this memorial just a few miles east of Cannelton, Indiana. It wasn’t easy to find at first, but once I got there, I found this:

The memorial is very simple, but extremely touching. In addition to the names of all the passengers and crew (including, eerily, someone with the same name as my grandfather), there is a very nice inscription. See for yourself:

This accident was one of the “whirl-mode” accidents that plagued the Lockheed Electra in its early days. The wing broke apart in mid-air and the pieces came crashing down into this spot at full speed.

If you’d like to see the location on Google Maps, enter these coordinates: 37.911041,-86.633044. I also have more pictures from my visit here.

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Delta Hints at Cincinnati’s Demise as a Hub
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October Airline Traffic Numbers
October traffic numbers are out for the airline industry, and it’s no surprise to see nearly everyone cutting capacity. That helped keep traffic strong.

There were a couple of things that happened in the last week that got me thinking that I needed to write an update on how things were going for British Airways over at London/Heathrow’s Terminal 5. First, my walkthrough of the new Indy airport had me thinking about other recent big terminal openings. And second, I found out that the Telegraph over in the UK named me one of the world’s top 25 travel blogs, and specifically called out my writings on Terminal 5. Did I mention I love the British?

Anyway, I’m sure many of you haven’t been keeping track, but I have been keeping up my chart of Heathrow terminal changes on the site.

Nearly all BA flights have moved to Terminal 5 now including a big move of long haul flights in the last couple of weeks. There are still a handful of moves coming at the end of January, but the bulk of it is done. And now that the changes are nearly complete, it sounds like it’s operating quite well too.

I’ve spoken to three different people in the last couple weeks who have flown through Heathrow’s Terminal 5 and they’ve all had nothing but good things to say about it. It sounds like after the initial problems, they’ve smoothed out quite nicely.

I’m hoping to get out there to take a look sometime next year. For now, has anyone else had good or bad experiences to share?

Delta released early details of its summer 2009 schedule, and all I can say is . . . wow. They are moving a lot of airplanes around, and they’re flying to a bunch of cities that you’ve probably never heard of. They’re clearly enjoying having a brand new fleet of Northwest airplanes to schedule, but a lot of these seem like risky moves. Then again, you know what they say. No risk, no return.

The details are all available in the press release, so I won’t bother going over them all. But here are a few thoughts.

• They’re really starting to mix the fleets faster than I thought. A Northwest 747 will fly Atlanta to Tokyo and a Northwest A330 will fly Salt Lake to Tokyo. What I want to know is where these planes are coming from. I mean, it’s not like those aircraft are sitting on the ground right now. They’re flying other routes. So what else is being pulled down?




• And speaking of Salt Lake to Tokyo, this one is very interesting in that the local market is pretty slim. Sure, they have plenty of feed from the Rockies into Salt Lake to send over to Tokyo, and now they have the Northwest hub on the other side in Tokyo as well. They might be able to pull it off through sheer connectivity, but it will be tough.




• Delta is really pushing its 757 here a lot, but I’m trying to figure out where they’re all coming from. We already saw the Pittsburgh/Raleigh-Paris flights, but now we have a bunch of Africa flying as well as some smaller European cities (Gothenburg and Valencia).




• What the heck is in Malabo, Equatorial Guinea to make that flight worthwhile? And I thought Liberia was odd.




• Sal (Cape Verde Islands) has become a mini hub for these guys with flights to Liberia, Malabo, Luanda (Angola) and Abuja (Nigeria). I flew through Sal when I was flying South African from Atlanta to Johannesburg a few years back, and there’s not much there. Since then, SAA has stopped flying there completely, so it’s interesting to see Delta move in. Of course, these flights only operate once or twice a week at most. It’s more of a fuel stop/crew rest point out of convenience and nothing else. These flights won’t be cheap.

I’m really curious to see how this all works out for them. I mean, they could end up losing a lot of money if it doesn’t. But if they’ve figured something out, it could be huge. The Asian flying in particular really shows the power of the merger (if the flights are successful). Assuming they stick, Delta will be able to point to all the naysayers and say that the merger really did create many new route opportunities. My guess is that only some of these will stick, however, but that’s ok. As long as they act quickly to cut the ones that fail, then this will still be worthwhile.

I’ve seen unleaded gas for $1.75 a gallon here in Oklahoma, a barrel of oil is hovering around $60, and jet fuel is just over $2.00 a gallon, nearly 30% less than where it was a month ago. With this plunge in fuel prices, is it time to revisit ExpressJet’s now defunct model of providing point to point service between smaller cities? I hope so.

Jim Ream and the rest of the ExpressJet crew received a lot of flack for going out on their own and starting what I called a “Southwest Express” type of model. Instead of using 137 seat planes to link larger cities as Southwest does, ExpressJet used 50 seat aircraft to link smaller cities like Ontario and Tucson or Sacramento and Colorado Springs where no service currently existed. I loved the idea, but with fuel prices climbing, the ERJ 145 became a very difficult plane to make this work. (That wasn’t their fault - they had to use those planes.)

In August 2007, the airline reported a very low 63.8% load factor during the height of peak season. A year later in August 2008, after pruning the flights that didn’t work, the airline turned in a very healthy 78.4% load factor and showed that there was demand for the service. Unfortunately with the price of oil, there was no way they could make this one work, so they shut it down.

But even with lower prices, the Embraer still isn’t the right plane for this operation. Actually, I think the 70 seat Q400 turboprop might be the perfect aircraft for it. It can handle the relatively short stage lengths with ease, and it sips fuel compared to the 50 seat jets. So who is the right airline to try this?

Horizon.

Horizon is in the middle of retiring its Q200 and CRJ-700 aircraft in favor of an all-Q400 fleet, but that transition takes time. The airline has to remarket its 70 seat jets before it can get rid of them, so it has been trying to work with Bombardier on slowing down the Q400 deliveries to coincide with their ability to ditch the 70 seat jets. So why not start taking those Q400s as planned and open some new routes in old ExpressJet cities? Fares are higher in general right now, so that will only help, though of course the weakening in demand is alarming.

But there would be several advantages for Horizon over ExpressJet here. The flights would be operated by an airline with a connection to several major frequent flier programs, unlike ExpressJet, and they could offer codesharing with major airlines as well.

I always liked the ExpressJet idea, and I’d like to think that this could now work. It’s never a great time to start to try something like this, but this doesn’t have to be a major rollout. They can just start picking and choosing the best ExpressJet routes and grow from there if it works. Come on, Horizon. Give it a shot.

Next stop on the roadtrip: Indianapolis. My main reason for being here was a visit with the in-laws, but while I was in town, I was able to arrange a tour of the brand-spanking new Indianapolis Airport that opens tonight, November 11. Ok, so it’s not actually a new airport in that the runways aren’t moving, but the new terminal completely replaces the old one, which will be knocked down. The new terminal is also in a completely different location and requires using a new exit from a different freeway. Needless to say, they’ve been promoting the heck out of this thing here in Indy before it opens for departures tomorrow (November 12) so people don’t get lost. (Arrivals after 8p tonight will come in to the new building for positioning, but departures don’t begin until tomorrow.) There’s a lot of good and some bad with this new terminal, but let’s just start with an overview map of the area and work our way through.

As you can see, the new exit is further from downtown, but it is a dedicated exit for the airport that has no stoplights along the way as is the case currently. It’s about a mile from the exit until you get to the terminal itself which sits between the two runways, so yes, it’s going to be a longer drive for most people who use the airport. The first thing you realize on your drive in is that there is PLENTY of room for expansion here. It’s almost reminiscent of Denver when you drive through flat emptiness for awhile before the terminal rises out of the ground. As you can imagine, that means there’s plenty of room for parking.

Parking is actually cheaper than it is in the old location. Daily maximum for the garage is only $16 (down from $22) and economy lots are as cheap as $7 a day. Through December, the airport is offering a free day or parking when you have at least two days. Click here for the coupon.

The terminal itself is set up very well in that traffic flows don’t cross each other often. Departing passengers will either come in on the second level at the curb or via the garage which is sort of on a level 1.5 that requires you to go up a half story for ticketing or down a half story for baggage. When you go up to ticketing, the ticket counters are on the left and right while straight ahead is the enormous, round Civic Plaza area to get to the gates. From here, you’ll see entrances to both concourses on opposite sides of the plaza surrounded by shops and restaurants. Here’s a video of the area:

The Civic Plaza is one area I just don’t understand. Sure, the open space is nice for people who are waiting for loved ones, but I can’t see the shops and restaurants doing very well. Anyone who is flying out is going to want to go through security and then relax whereas those people flying in aren’t going to want to hang out for a beer in the airport after they arrive. These shops will likely only cater to people waiting for people to arrive, so I’ll bet that they’re going to suffer. Besides, if I had to pick someone up at the airport, I’d plant myself in front of the huge picture window and just watch the planes go by, and I wouldn’t be shopping.

So, let’s get back to what matters here. There are two concourses, A and B, that can be entered from opposite sides of the Civic Plaza. It’s seems strange that A is on your right and B is on your left, but they named it this way since you drive in from the right and come upon A first. Unlike in the four concourses that exist today, these two are connected behind security so you never have to leave security unless you’re leaving the airport.

Speaking of security, they have it set up well here with plenty of room for lines, a dedicated CLEAR lane, and several gates and scanners on both sides. Over on the A side, you’ll find the gates dominated by Delta/Northwest with Continental as well. There are also two international-equipped gates on this side but obviously no international service as of yet. Over on B, you’ll find all the other airlines: Air Canada, AirTran, American, Frontier, Midwest, Southwest, United, and US Airways.

When you enter the concourses, there are three gates off to the left in B/right in A while the other 17 gates lie on the other side of each concourse for a grand total of 40, 7 more than in the current airport. In case you were wondering, there is plenty of room for expansion here as well if it’s needed.

The airport gets points for using local brands on the concourses. I’d highly recommend a stop at Shapiro’s deli over on B. I’ve been to two locations in town and they have really good food. It’s definitely the place to stop if you want to grab a sandwich for the road.

The concourses themselves are wide and airy and are filled with art. More importantly, they’re filled with a free wi-fi signal as well. On the plus side, there are laptop charging stations, but unfortunately there are no power outlets near the seats. You would think that a place designed in this day and age would have ample power outlet access throughout the seating area so people could recharge without going to some power charging location. Also, they’re taking bets here that the airlines won’t have interminably long delays. The seats have fixed armrests that make lying down impossible unless you’re Kate Moss-skinny and can squeeze underneath.

If you’re on an arriving flight, you head back towards security where they’ve actually done a good job of separating the entrance and exit so you don’t get tangled up here with opposing flows. You’ll walk back through the Civic Plaza and then head downstairs to baggage claim. There are six bag carousels with three on each side of the hall. Once you grab your bag, you can either walk out to the curb for pickup or you can head up a half level to go back through the tunnel to the parking garage.

If you need ground transportation or a rental car, you go back to the garage and then downstairs. In the old airport, you have to take a shuttle to get to rental cars, but they’ve actually put all the cars on the bottom floor of the garage in the new airport so it’s much easier.

So that’s it. Of course, the big question here is . . . how much will it raise operating costs at the airport? A brand new $1.1 billion terminal project has to be paid for somehow, and it’s going to fall on the shoulders of the airlines, as usual. Higher operating costs make it harder to maintain flights. So, I’ll be watching closely to see how much this new airport impacts the ability to keep flights at the airport. For more on this, see my BNET post on the economics of the new airport.

Links
All of my pictures and videos of the new airport
New Indianapolis Airport website with map
Indianapolis Star special section on the new airport