Delta Airlines writes on their website: “Emirates Airline. Etihad Airways. Qatar Airways. These three airlines, also known as the Gulf Carriers, are state owned enterprises that are subsidized by their countries’ governments. This means that they have a constant flow of money, and they can set ticket prices as low as they want.
On March 16, 2017, three American carriers came together to send an open letter to President Trump, urging him to take notice and intervene. In addition to reaching out to the president, Delta employees have been storming the offices of House and Senate members, pressing them to tackle the unfair subsidies given to the Gulf Carriers.”
They’re essentially saying that the Gulf carriers’ success is owed to cash being pumped into them by their governments. I call BS on this, Delta and here’s why. You forget another important factor in a consumer’s decision making process: the customer treatment and experience.
If your customer service is good, people will come. If you treat people as anything more than cash cows, we will willingly come. If you treat customers like people, they will come. Price is not always the only factor in a customer’s decision making process. How we are made to feel, how businesses treat us is also a huge factor.
As an example, let’s have a look at expensive smartphones: See iPhones and Samsung’s Galaxy smartphones. Overpriced? Yes, absolutely. But the customer’s experience with the brands and their products make it acceptable for people to spend more for them when they can buy other phones that perform as well as or better than them at a fraction of the price. The same with after sales service. Can you get your phone’s screen replaced for much cheaper by third party service providers? Yes, absolutely. But you still prefer the brand’s service center due to their reliable, kind and professional customer service. See the success of Apple’s Genius Bar for a live example of how good customer treatment translates into increased brand loyalty and consequently a positive effect on the bottomline.
If you cannot provide better value than your competitors and differentiate yourself through this value proposition, you will be stuck playing the 2D game of price wars; you will be commoditized and can only compete by pricing yourself lower than your competitors and hope that they don’t undercut your already thin margins.
As someone who has flown multiple times with several airlines, I can say that Delta and the mentioned American carriers’ treatment of customers is not very pleasant.
For people still not convinced Delta’s argument is flawed, here’s a personal example: The USA’s ban on laptops to be carried in cabin bags on planes from the Middle East. Qatar Airways helped their passengers through this ban by offering to carefully pack their laptops and tablets in separate cardboard boxes, fully bubble wrapped, all the way to their destination in the USA, FOR FREE!!
Now, looking at the American carriers’ historically poor customer treatment and ridiculous charges for almost every single aspect of the flight and ticket, I’m absolutely certain these carriers would’ve caused a major issue to passengers bringing their gadgets, made them feel unwelcome and more likely than not charged a ridiculous fee to take, at best, mediocre care of their gadgets. ‘Hey, we can take your really expensive and valuable laptop, but don’t blame us if something happens to it during the flight…’.
Why would people prefer you over the other airlines when they know the others will treat them better? Do you not see the gaping hole that needs to be patched up first before complaining about other things like subsidies? Granted subsidies help, but throwing more money doesn’t address the one main reason many do not prefer you: Customer Experience.
My hope is this teaches us a valuable lesson on the importance of businesses treating their customers well. Of course there will be exceptions and of course what I’ve written about isn’t the entire problem, but it sure is an important piece of the puzzle. What are your thoughts? Let me know if you agree or disagree!