Pyrrhic “Pobeda” or a Business Case for Customer Centricity in a Low-cost Airline

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A few days ago a flight attendant of a Russian low-cost airline “Pobeda” had the police take into custody a young family of 3, who had refused to follow the airline rules on board.  The baby was crying non-stop, the parents spotted an empty row of upgrade-only seats and decided to move there, despite the demands of the flight attendant, who pointed out that the passengers had to either pay for the upgrade, or return to their original non-upgrade seats in different locations of the plane. When the parents refused to pay, but remained in the wrong seats disobeying the direct orders even from the commander, the flight attendant promised them problems and delivered them to the authorities upon arrival. “Pobeda” (meaning “victory” in Russian) was hers.
 
The Russian internet is rather torn about the accident. Militant family supporters blame the flight attendant for being so stuck up and sacrificing the peace on board and the young family to the stupid rules (Russians are not so keen on those anyway). Cheap air travel zealots remind everyone that fixed seating in a low-coster is an affordable upgrade (300 roubles aka 4.5 euros per passenger) and in the family situation – a highly recommended one; and that not disoveying orders of the flight crew on board is indeed a criminal offence. The young mother, who expected neither such reaction from the airline, nor the social media storm it created, explains on her Facebook page that she “would have paid ten times more for upgraded seats”, but at the time she was purchasing, the system just did not work. The airline, which is a “daughter” of the main Russian airline Aeroflot, seems to fall short of Aeroflot’s recent improvements in customer handling, and insists that the flight attendant was in her right. However they also were not prepared for the storm of negativity: seems like the “victory” turned out to be a Pyrrhic one – they are losing more than gaining.
 
And up until now, there doesn’t seem to be any kind of morally correct yet legally approved solution for the situation. Neither there is a recommendation for the future. While I am not the one to advise about safety on board (although a mother with a baby bumping around the aircraft during taxiing doesn’t seem particularly safe to me *). But I can pose a (research) question: can we look for a solution in the business side of doing things rather than in the emotionally coloured legal and moral ones? After all, even Michael O’Leary, the notorious CEO of Ryanair, after 20 years of not giving a damn about the customers, has finally admitted: “If I’d only known that being nice to customers was going to be so good for my business I would have done it years ago”.
 
Did you notice the “good for business” stress in the quote? This is not as much about the necessity to be nice, as it is about the opportunity to make more money.
 
I would probably try to calculate a business case for both scenarios.
 
Scenario 1: the flight attendant allows the family to sit in the “wrong” seats without consequences. 
 
On the minus side:
  • Loss of hard cash in the amount of 9 euros – as recorded in the financials
  • Potential creation of more unsafe situations on board by passengers following the example of the family
  • Potential loss of cash due to passengers demanding extras while not paying for them because of word of mouth about the incident (these two KPIs are hard, but would have to be in-company financial data anyway, plus some kind of WoM measurement… also I would look into probabilities of both)
 
On the plus side:
  • A happy family and a planeful of peaceful passengers who don’t like to hear baby screams, but do like when even tough companies show some sort of human side. A simple CSAT question after the flight would be enough to tell that.
  • A positive output for the company image due to positive word of mouth coming from these people. Would need a combination of NPS (or another recommendation score), and some brand tracking questions to see these results.
  • Consequently, a rise in the passenger retention and new customer acquisition – both from the passengers and from their peers (company’s own data would prove whether the same customers would have purchased more tickets in the future, and the local brand tracking would not hurt either)
 
Scenario 2: the flight attendant calls the police on the upgrade seat criminals **.
 
On the minus side:
  • Annoyed family and very annoyed passengers; poor WoM
  • Poor PR and social media increasing poor WoM and therefore making a dent in the already poor company image
  • Falling customer acquisition and retention 
 
Same set of data can be used to assess the financial consequences here as the positive sides of Scenario 1.
 
On the plus side:
  • No upgrade seat rule broken, now or ever again. Potentially even a drop in all other rules being broken (if a company is that serious about the seats, imagine what they would do if you, god forbid, ask to turn down the air conditioner). This is a pretty big one. Not sure I know the right KPI for that. Anyone?
 
I would love to make these calculations. Yet it is my educated guess that not allowing the situation would probably be the most efficient solution. Having the system that actually works. Giving the ground crew those extra 30 seconds to assess the situation and ask whether the family would still want to pay for sitting all together. Sending a “10 tips on how to make your flight with the baby less stressful for yourself and other passengers” memo when someone books a ticket for an underage. Making the seat upgrade an opt-out if the person is buying X tickets for the same flight (a buyer would have to refuse the fixed location instead of choosing for it). Giving the flight attendants a small budget – say, 1000 roubles per flight – to spend on such upgrades if that seems necessary at a time. Something tells me the investment is going to be big, but the financial outcome will be bigger. 
 
Do I have the right data for these calculations? I don’t. But does the airline – any airline, in fact – have this data at hand? I think they do; I really do hope so. In any case: if you are someone sitting on this data, please let me know, my analytical department would love to get the business answer to this human issue. Or would that be a human answer to the business issue?
 
* babies are pretty dangerous creatures, believe me
** telling you, they can be very dangerous perpetrators