Sunday, November 20, 2011

Come Fly With Me

Travel has been on my mind lately. Aside from focusing a year long team project on tourism, I've flown back east for weddings and holidays twice in the last two months and have been traveling for work more than usual. I've never loved flying but I've always been comfortable with it.

Flying is of course crucial to our culture and our economy and since so many of us do it so often for work and play, shouldn't we all be racing to the airport to fly the friendly skies?

What happened to the domestic airline industry?
(Or, when did flying start to suck?)

The airline industry seems to be in...turbulent times. According to the national bureau of economic research, Delays and full flights had made passengers so averse to connecting flights that adding a layover to a route could reduce the number of passengers on it by almost four-fifths.

Within the last decade there have been four bankruptcies and two mergers within the major airlines. Fuel prices are high and customers are extremely price conscious and more savvy than ever with the ability to be constantly searching for the best ticket price on multiple online sites. Airlines must also take on large amounts of debt in order to finance their aircraft. All of this is translating to higher priced flights that are fully booked with less provided services than we have come to expect and more charges to things like, luggage.

If fuel prices continue to rise and customers continue to demand more for less and the ability for airlines to respond to these issues due to the long development time of new technologies and the large amounts of borrowing it takes to build a fleet of airplanes, what will the airline industry do to adapt?


And further, to play off my last post, how does a behemoth of an industry with limited variations in technology, that takes massive investment and has high regulation begin to innovate for a changing world and a disenchanted customer base?

While working on an accounting problem earlier, I learned that the airline industry is in fact considered a service industry. This of course made me think of the issues they face in whole new terms.  If I were them, I'd start here.

I've also been listening to Mr. Frank Sinatra lately so I'll leave you with this...





1 comment:

RB said...

Caleb,

The question you are asking about how this industry and companies in this industry innovate and work to adapt to a greener... future is an excellent one. How might the tools of systems thinking and design help you re-imagine this industry, and craft a transformative path forward?

Rashmir.