A Conversation with Tim Hoeksema, Chairman, President and Chief the Executive Officer, Pilot Midwest Airlines
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A MAGAZINE FOR AIRLINE EXECUTIVES 2008 Issue No. 1 2008 I ssue N o. 1 o. T a k i n g y o u r a i r l i n e t o new heights A Conversation with Tim Hoeksema, chairman, president and chief the executive officer, pilot Midwest Airlines. pg. 36 Special Section www.sabreairlinesolutions.com I NSIDE Airline Mergers Airlines are scrutinized for affects and Consolidation 26 on the environment Etihad doubles its revenue from 44 2006 to 2007 Focus On The Customer Carriers can become true customer- 62 centric businesses 60 perspective time. Last year, airlines around the world were hit with service delays and schedule disruptions that left thousands of passen- gers outraged. In the United States alone, last year’s on-time performance was only 73.4 percent for the 20 airlines reporting with the U.S. DOT, down from 75.4 percent the previous year. It’s not all bad news though. While there’s plenty of room for carriers around the world to improve their customer sat- isfaction ratings, many airlines have taken monumental steps to ensure their customers come back time and time again. Milwaukee, Wisconsin-based Midwest Airlines, for example, provides spacious, with Tom Klein all-leather seating and offers fresh-baked chocolate chip cookies to its passengers Group President, Sabre Airline Solutions/Sabre Travel Network during flight, making them feel at home. The carrier is also well known for the excep- tional, personalized service its staff offers remember a time when companies undoubt- with the tools and technology necessary to customers, earning it a reputation of “The edly put their customers first. Familiar mottos provide top-quality service across the board. best care in the air.” Isuch as “The customer comes first” or But even technology-challenged airlines find There are several airlines like Midwest “The customer’s always right” signified a ways to satisfy their customers. And, today, that are taking special care to ensure their customer’s importance and value. that must be a primary goal — making most, customers are not only satisfied, but that That was the overarching attitude if not all, customers happy. they always remain true to their carrier a couple of decades ago. But with the For some, it seems nearly impos- of choice. It’s a fairly simple philosophy fast-paced world in which we live coupled sible to please that many people, but it’s — take good care of your customers, and with a grave need to expand the business, not. According to London-based Skytrax, they’ll take good care of you. cut costs, grow revenues and keep a con- the world’s leading quality advisors in the In our special section, we examine stant eye on the bottom line, often times airline and airport industries, six airlines several aspects of customer centricity. We the customer doesn’t always come first. currently hold Skytrax’s five-star ranking, discuss how airlines can focus more on their In fact, many customers seldom get the part of its “Star Ranking” program that was customers and how they can measure their true respect, treatment or satisfaction they introduced in 2000 and grades quality levels effectiveness. We look at how one airline is deserve and expect. Instead, many busi- of more than 400 airlines. leveraging social media to open numerous nesses mistakenly assume that customers Asiana Airlines, Cathay Pacific Airways, lines of communication with customers. are as loyal today as they ever were … Kingfisher Airlines, Malaysia Airlines, Qatar We discuss how airlines are investing in that they’ll always be there … no matter Airways and Singapore Airlines are the advanced analytics to retain profitable cus- what. But nowhere is that less true than in only six carriers in the world that have tomers. And we talk about how airlines can the airline industry, where customers have received top recognition for exceptional work together to ensure the best solutions countless choices and demand superior quality. Skytrax rates a variety of areas, in the industry are being developed. service. A bad experience, no matter how such as long-haul business- and first-class Every decision we make has a direct seemingly minute, has the potential to push service, staff grooming and presentation, impact on our customers … and our bottom the customer straight into the hands of the assistance for families and children, check- line. And those who have a close eye on competition. in services, Internet/WiFi options, service their customers have the greatest chance Speaking as a consumer, custom- efficiency, staff enthusiasm and attitude, of achieving long-term success. ers not only want exactly what they pay dining options and food quality, washroom/ We hope you enjoy this issue, and we for, they want exceptional service as well. aircraft cleanliness, seat comfort, prior- look forward to visiting with you again in the That’s not to say they expect business ity boarding processes, personalization of coming months. personnel to drop everything, bow down service, in-flight entertainment, and consis- and treat them like royalty. It’s as simple as tency among staff. Wishing you smooth skies … recognizing each customer as a respected Even though these six airlines have individual. Not just a paying customer, but earned exemplary status, they must main- Tom as a human being who, by nature, deserves tain these service levels year after year to that level of respect. retain customers and continue to grow and It doesn’t seem like a tall order, but succeed. it can be. Half the battle is hiring service This is just one example of what it personnel who understand the concept takes for airlines to be aligned with their that customers must be treated exception- customers. Aside from service excellence ally well or they simply won’t come back. at every touch point, one of the biggest The other half of the battle is that airlines aspects of achieving customer satisfaction or their personnel aren’t always equipped is getting travelers to their destinations on contents 56 profile industry special section 8 36 62 Checkmate The Pilot Customers Come First Open-skies agreement between Midwest Airlines has earned Airlines around the world can the United States and European the reputation of “the best care become truly customer centric Union generates a new level of in the air” for its exceptional using the right combination of global competition. customer service. staff, technology, processes and data. 14 Little Models 44 World’s Fastest-Growing Take Big Steps Airline 65 Some low-cost carriers have tried Etihad Airways is considered Delta Meets “Change” to acquire their nation’s flag carrier the fastest-growing airline after Delta Air Lines’ “Change” — a rare twist to traditional airline doubling its revenue from 2006 campaign enables customers to consolidation. to 2007 and achieving record communicate directly with the passenger growth last year. airline using a variety of social 18 media to improve the end-to-end In Control 50 Staying Power travel experience. A fully integrated system Alaska Airlines has served a operations control center is at the loyal customer base for more than 68 core of an airline’s operation. 75 years and intends to do so for at What Customers Want least another 75 years. Advanced analytics to better 23 understand customer behaviors Blending Models and preferences will substantially Many low-cost carriers have impact airlines’ revenue implemented the best attributes management and inventory control of their network counterparts to processes. expand market reach and grow their customer base. 73 Great Minds Think Alike 26 A “customer community” “Green”er Skies approach enables airlines to pool Airlines continue to be resources and help create the chastised for their impact on the precise solutions they need to environment, despite myriad succeed. efforts to improve. 28 The Barbarians Are Still At The Gates Private equity firms continue to target carriers that have untapped or strong potential to grow revenues. 50 34 Balancing Act 59 Come Rain Or Shine 53 Southwest Airlines offers The low-fare business model several new features, such as is being challenged differently, gate improvements and in-flight based on economic issues, such amenities, to enhance customer as rising fuel costs, facing every service. region of the world. 56 Virgin America’s Passionate Start Virgin America places great emphasis on its use of technology and passenger- comfort amenities to ensure its customers enjoy the best possible travel experience. ascend contents regional products company 94 76 82 88 97 The Highest Peak Prime Partners The Test Of Time Bursting At The Seams Sabre Airline Solutions, with Partnering with the best solutions Chinese carriers, like most airlines The U.S. Federal Aviation launch partner British Airways, provider presents a long-term in the industry, face on-time Administration is implementing introduces the industry’s leading relationship that should be built performance challenges due to modern technology and processes movement control software. on common goals and a numerous flight delays. to support the country’s command for service excellence. exceptional airline industry growth 80 91 rate, help reduce flight delays and Raising Revenues 85 Faster, Smaller, Cheaper enhance safety. Fully integrated, state-of-the-art Best Of Both Worlds The strong entrance of very revenue management solutions An airline’s computing systems light jets could be of significant 99 yield significant results for less- must provide high performance, concern to carriers serving Middle East On The Rise restricted fare structures found reliability and the flexibility to business travelers. More than 600 aircraft orders, in non-traditional, hybrid airline change with today’s business double-digit annual traffic growth models. needs. 94 Mexico’s Major and new airports on the horizon Modifications has the Middle East exceeding all Mexico’s airline industry has airline industry expectations.