Angry Skies: The Unintended Consequences of Airline Industry Deregulation, Over-Regulation, & Lack of Common-Sense Regulation

(This article originally appeared in LinkedIn Pulse on April 23, 2017)

This week it’s American Airlines. A viral video of a distraught mother and what appears to be an overzealous flight attendant in a disagreement over a baby stroller. To make things worse, an apparent vigilante passenger tries to intervene and nearly ends up in all out brawl, while the plane’s captain and another flight attendant try to intervene.

 

Airplanes are configured for rage,” says Margaret King, director for The Center for Cultural Studies & Analysis, a consumer-research organization based in Philadelphia. “Designers just didn’t do the math on the personal space as part of the human factors involved on board.” (USA Today)

Last week, United Airline’s removal of Dr. Dao on an overbooked flight created a media storm, which cost the company not only in brand perception but in lost revenue and market capitalization (about 4% the day after the video’s release). I actually feel bad for both United and Dr. Dao but I believe when you look at the series of macro-level factors on the airlines, airline employees, and the traveling public it is almost understandable.

Deregulation helps create new airlines catalyzes competition

The airline industry was carrying more than 100M in the 1950’s and more than 200M by the 1960’s. The federal government was struggling to keep pace and in 1978 the airline industry was deregulated. This was meant to ultimately reduce ticket prices and entry controls holding sway over new airline hopefuls.

While many “new” airlines entered the market, most of them didn’t survive, and as you can see from the most recent Burea of Transporation Statistics data, the top four carriers, American, Southwest, Delta, and United own nearly seventy percent of the market (68.6%).

While deregulation was supposed to decrease barriers to entry and open competition, the list of failed airlines is longer than the security lines at the airport. Many of these most of us have never heard of. Some of these up-and-comers lasted less than a year. Some were well known like, Braniff, Ted, Eastern, and Texas Air.

While barriers to entry were decreased for new airlines and ticket prices dropped, not everything about airline deregulation has driven a great customer experience. To stay competitive while reducing prices, airlines often removed “frills” from the price of standard tickets, often reduced the size of their employee base, crammed more people on to flights, reduced spacing between rows, and in general, have forsaken the customer experience for profits.

This provides a less-than-optimal experience for both the flight crew and passengers. This chronic focus on profit, while great for stockholders, can’t create a high-level of employee engagement with flight crews and for sure affect perceptions and actual experiences of passengers.

Post 9/11: More regulations

The tragic 9/11 terrorist attacks rightly drove the need for more regulations, more passenger screening, more lines, more disgruntled fliers and robotic TSA staff. Each new terror attempt or dangerous technology (e.g., the shoe bomber, the underwear bomber, and Samsung Galaxy Note fires) brings new screening rules and guidelines, which seem to be interpreted differently depending on the airport one departs from. This creates frustration for TSA screeners as well as the flying public.

Lack of Common-Sense Regulations

In the current airline ecosystem, the airlines seem to have “absolute power.” They legally can overbook flights, suspend routes, cram you in a row with no leg room, create schedules with nearly impossible gate connection times, and basically own the soul of the passenger from the time they cross the threshold of the aircraft door until they exit on arrival. Airlines are businesses, I get it. They have to be profitable but isn’t it just a little short sighted to disavow the passenger’s flying experience?

Take a look at a sampling of 50 airline incidents from 2016 compiled by the NASA Aviation Safety Reporting System. Many of the incidents are caused by passengers but a fair amount of them are flight-crew related. The nut of this for me is that all of these macro-level events and realities and lack of common sense regulations are making everyone (passengers, flight crews, security screeners, gate agents, etc.) more stressed.

All of these money-generating ideas create angst for flight crews and passengers alike:

  • Cramming passengers together in rows and seats with barely enough room
  • Overbooking flights
  • Charging for everything, in-flight entertainment, meals, drinks, better seats, exit rows, and checked luggage. (I am waiting for the day when passengers have to swipe a credit card on the lavatory door to gain entry.)
  • Hawking airline credit cards. I actually feel sorry for the flight attendants who have to do this schlepping for the airlines. They wander up and down the aisles during the aircraft’s descent like zombies hoping for signatures on applications.

There is hope

I don’t think the skies have to continue to be angry. My hope is that with the crescendo of some of these recent airline incidents that the industry will work closely with passenger consumer groups to work on the customer experience. I believe that while some of these changes may create costs for the industry in the short-term, all companies know the lifetime value of a happy customer can be immense. And, I know the industry can flex, as evidenced by recent changes to allow fliers to use their small electronic devices during take-off and landing.

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