C-P Analysis for Air Travel

By Jesse W. Brogan President

The Management Upgrade Shop

Air-travel providers suffer

from a lack of understanding

of their own product!

A bold statement, but can it be supported? The answer is found through applying the pairing principle.

This pairing principle is both simple and elegant. It is a fundamental truth for understanding general business relations. A product only has value as it earns business income; and only a product that is delivered to a customer earns income. In the same sense, a customer that receives from the business, but returns no value, provides no supportive value to the business. Products and customers are naturally paired, and such pairs must be approached as value-units.

Air-travel customers (travelers) pay for a transportation service. The service begins at the entrance of an airport, and ends only at a like exit.

The immediate complaint (that this is not what the airline is able to provide) simply presents the lack of understanding. The product, as accepted by the customer, is a transportation service. Customers pay one price to receive one service. The Airline is collecting payment for the transportation service, and is accordingly accepted by its customers as having some responsibility for delivering the service. The inability of the airline to provide the whole service does not make it less the product for which airline customers are paying.

The key is payment for a service. The only ones collecting payment for transporting travelers and their personal property are the airlines! Our airline businesses are not effectively seeing to the whole product these customers receive for what they pay.

Applying the pairing principle yields is a very different direction of analysis than is common today. That difference comes from application of management engineering.

Engineering adds a new level of performance orientation to business management. It is the consistent and effective application of the principles of industrial engineering to the efforts that gain performance through an organization. The result is performance management in terms of the health and welfare of the larger organization. A side benefit is putting senior managers into more-effective charge over organizational performance.

The necessary first step of professional efficiency work is establishment of the functional customers and products of the organization.

An airline’s functional customer is determined by identifying the value that comes into an air-carrier organization, and finding the decision makers who determine to provide the business with its income. In this case, it is the traveler, someone who wants to get themselves and minor personal property from where they are to somewhere else.

The functional product is determined by two tests. The first is that the functional customer must receive products from the air carrier. The second is that the functional customer values what is received so that he or she is willing to provide funding or resources to the air carrier. In the case of the traveler, it is rapid, safe and comfortable transport for self and a reasonable amount of personal property to a desired and remote location.

Value is determined by the primary sales characteristics of the product. People fly because it is rapid and reasonably safe, and because it is not uncomfortable.

Without this understanding, a situation has developed that puts the entire airline business in stress. Instead of striving to provide the customer with the product that the customer values, the airline has carved out one piece of the service, and attempts to provide that one piece as if it was independently valuable.

Air terminals are not owned by the airlines. Time spent getting through local air terminals, and getting through remote terminals, now rivals the time spent in air travel. This terminal-time is important for defining the quality of service, especially when rapidity of travel is one of the key customer values. The customer is getting second-rate service because the air travel businesses are not addressing the whole product for which their functional customers pay.

The key to understanding a direction for major improvement is the functional product, the transportation service. The airlines have rightfully accepted that customers are affected by the quality of the travel experience. What they have not mastered is that the travel experience doesn’t begin when the customer gets on the plane. It begins when the travelers enters the air-transportation premises.

Roads, parking facilities and terminals are also part of the transportation experience provided; and only the parking lots separately collect money from travelers to assure their services. Other facility-based operations have little economic incentive to heighten the traveler’s quality of experience. Once the terminal is constructed, it is largely turned over to the airlines which operate their traveler services within it.

RULE: Every minute spent waiting for others to be served

is equivalent to a minute spent in flight.

The airlines already know this rule, and curb-side check-ins have become common. Loading low-mobility people onto a plane first, and loading a plane from back-to-front have become common, allowing people to board more rapidly.

What good does it do to save three minutes loading a plane

after the traveler has to wait in line forty minutes

just to go through a five minute security procedure?

A half hour spent standing in line at a ticket counter is equivalent to a half hour standing besides your luggage on the flight. An hour spent inching forward to a security processing area is equivalent to an hour spent standing in the aisle of the airplane. The price is the same whether travelers are waiting for five minutes or an hour. Only the value of service changes.

Basic engineering logic is unforgiving; the customer receives greater value for his payment if passage through the terminal is swift and uneventful.

There are two types of idle time. The first is necessary waiting time; as when a customer arrives at the loading site before the plane does. This is a necessary cost assumed by the customer, and there will be no complaints unless the plane is late. The second is time spent waiting for service. This is a necessary cost that can be minimized by the way things are accomplished.

There are two directions for handling the dichotomy of vision between the airline and the customer. The first is the separation of products in the mind of the customer. This is partly possible through separating out costs and having customers “pay” a separately-identified terminal-services charge that is passed 100% to the terminal authority as part of the transaction that purchases tickets. The second is to assume responsibility for terminal services and take personal care to maximize the service to the customer who is paying the whole cost.

I would personally recommend the second option, assuming total service control, as this allows maximizing the satisfaction of the customer with airline travel as a whole. It is better to take charge than to accept outside managers being authority over part of the services being individually received by your customers.

In this option, the airlines would assume the responsibility for handling customers from the moment they enter the terminal, and maybe even before this event. Getting the passengers to the plane on time would be handled in the same fashion as getting the plane to destination on time. It would be a scheduling challenge.

I would look to establish a target and control time for a scheduled trip through ticketing, clearance, and transport to the loading point – and a similar target and control time for scheduled trip from a landed plane back to the outer limits of airline service.

Having process and control times for all three major service efforts arranges both performance management and exception management. Whenever any queue gets to the point where the control time will be exceeded, it could be a planned supervisory responsibility to get it back down. If handling the exceptin requires more resources, they can be shifted to the point of need, or the supervisor can step in to temporarily meet the need. If there is any general failure in having enough resources, then there is a service failure that should be an exception issue at higher management levels – probably indicating a general need for additional resources or deeper process change in order to assure planned services. The plans or resources will then have to be adjusted to maximize the value of service provided to earn customer dollars.

Possibilities seem rather obvious for moving the whole service more rapidly. These include electronic check-in and serial servicing. Harness machinery to do what machines do best, and utilize people to do what people have to do – including all out-of-cycle applications. The bulk of all services should flow, including check-in, security clearance, and boarding.

Consider, for example, using programmable magnetic-strip tickets that also become the boarding pass and luggage claim (like those cards now in common use for unlocking motel doors). This is a proven technology that should be available to support the servicing of air-traffic customers.

It would also seem very possible to do some security process before the passenger even enters the terminal. Once there, service can be provided in a continuous process

In the present, batch ticketing/check-in process is based on maximizing personal services to the customer who is in front of the counter. One or two travelers receive the full and complete attention of a service rep while others wait in line. A greater value should be associated with “invisible service” (as where water is available when you turn the tap). This is a service that works so well that there is little need for personal service-representative involvement unless the same is required by law or is necessary to identify exceptions. This would maximize service to travelers. A serialized process can be designed to handle all regular check-in services, and directly exhaust the customers into the secured area of the terminal.

I would look at the possibility of processing visitors for access separately from customers – they are inherently different! Customer processing should include complete security clearance for passengers, with sufficient personnel and equipment to keep up with new arrival travelers most of the time. The time waiting in moving lines should be minimized, and replaced with time in static queues.

I would look at the possibility for some sort of internal bus service for getting all non-exception passengers quickly and efficiently to more remote loading gates. Even in a comfortable facility, a long walk is not expected to add value to the customer.

On the handling of arriving customers, I would look for two general services. The one would be to get travelers reunited with their baggage. The other would be to those who are ready to leave the airport and go on to their local destination.

NOTE: Disney World has had a good deal of experience in the design of systems for moving people within a facility, both through queue control for batch processing, and through use of equipment to add to the transportation experience that the organization provides to its customers.

In short, if the airline is going to take money for the service provided by the airport authority, then it should assure the quality of the service that the airport is providing to those who pay for air transportation through the airline.

If the airline decides to address its own security, this will have to be accomplished in full agreement with Federal agencies now attempting to provide this service. Negotiation will be required, and should be entered as swiftly as possible.

There is no ultimate performance responsibility that rests on the Federal Government. The Government does not warrant that it will prevent any would-be terrorist from getting on a plane. It has no responsibility that it could fail as to airline customers. To the contrary, the safe transport of customers to destinations is the central business of an airline; it is how this business earns its income.

Each airline has a primary stake in the security process, and has the capacity to do the screening as long as it can get the appropriate resources. If those resources are not being used by another Federal contractor, they will be available for the Airline’s use if it becomes the contractor. If the airline is willing to do the screening, there seems little reason that it should not contract with the Federal Agency to provide that service to its customers, possibly using the same Government equipment and contracts that are being used by third-party contractors and government employees. The airline has a performance interest in assuring both the level of security and the time and effort expended in assuring it.

The airline has a primary stake in personnel and baggage transportation activities within the terminal. Responsibility may have to be shared among airlines, but it involves work that can impact greatly on the service the airline customer receives for his or her payment. Airline companies need to assume control over these functions and provide what their customers pay to receive. Only by this can they assure the larger performance.

Note: This is not an impossible level of change. One recent example is the IBM Corporation. It changed from having a complete-automation service as its product for its automation customers, into becoming a major provider of selected high quality services. This involved major changes in dealing with both customers and competitors. Many former competitors became partners in providing services that IBM decided to drop from their services list. Their entire sales approach had to be modified.

If the ossified administrative leadership at IBM was able to accomplish this level of change, then surely the leadership in a highly mobile part of our economy can take the bull by the horns and assume more control over its delivery of services to its customers.

Perhaps the greatest challenge will be cooperative agreements among airlines for the purpose of providing common terminal services. This will involve some delicate dealings where competition is maintained in some aspects of the transportation business and cooperation is maintained in others.

For more information on management engineering, visit the management engineering website at http://jessebrogan.home.att.net.

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