Last week I flew on Kingfisher from Bangalore to Trivandrum. Not, I might add, a regular commute for me.
As the airline industry is in such a mess here in the US, it was interesting to experience an airline in India. Especially interesting to experience an airline that spun off from a beer company.
Emerging economy airlines have not always been a great experience, as anyone who has flown within China or Russia can attest. What was interesting for me was two things. First, the quality and attitude of personnel on the plane was consistently impressive. Second, the CEO's commitment to a quality experience (communicated in both print and video) felt sincere. Now, who knows for sure, but so many times, the pronouncements of "customer first" from airline execs just don't feel like they have any emotional commitment. Or perhaps we are just too jaded.
However, speaking as a jaded passenger, I got the distinct impression that this guy meant it. Certainly the front line staff seemed to buy into the idea.
Other than an interesting anecdote, what's the point of this? I believe that superior customer execution will reshape the airline industry but not in favor of the existing domestic carriers. International airlines will gradually eat up the profitable business flying passengers globally, leaving the US carriers to fight for a commoditized and increasingly miserable domestic market.
It's already happening. The most profitable airlines in the world have not been US based, but are overseas operators such as Singapore Air. Funny coincidence, they are also the airlines with the best reputation for service and the highest NPS. Kingfisher, and others, will soon by flying into the US and taking passengers away from incumbents on international long haul.
But is it a level playing field? Don't the overseas competitors have advantages that enable them to execute better? Clearly they have the same aircraft - Boeing or Airbus product, and they buy the same Jet fuel. The only differences they might enjoy would come from staff, or competitive pressure in their choice of routes.
Clearly, they have the edge in staff. In global competition, a positive attitude at lower pay scales in India will beat poor attitude with high cost in the US. This does not auger well for employees of the US carriers. But the US carriers would no doubt argue that difference in local competitive conditions favor these overseas firms.
I disagree. The US domestic market is riddled with non-competitive elements that favor the large US carriers.From the scandalously obvious such as the Wright Amendment to the lack of genuine open skies deals and restrictions on foreign ownership, the game is rigged in favor of incumbents. The biggest anti-competitive factor is the lock on gates. A recent approach in New York could be the biggest game changer in that regard, as they consider auctioning off their gates at major airports. The ferocious opposition of the major airlines should be a good indicator that they are on the right track.
All this speaks to why the airline industry does not behave like an industry with it's cost structure and model should; common cost basis meaning differentiation around customer experience. NPS is not always a leading indicator of growth in non-competitive industries and we should think of the US as only partially competitive. Globally, things may ultimately provide different - competition, better customer experience, best NPS wins.