Service in the Skies: High-Class, Low-Class, and No-Class

Executive Summary

The case describes the challenges faced by airlines and airline passengers due to airline misbehaviors. Recent research indicates that air rage is on the rise in the past decades, despite tightened security. Individual safety of the customers, service quality and competitiveness of those airline companies are affected due to service disruptions caused by unruly passengers. Airlines, government agencies, and other organizations are concerned about the threat of air rage. Measures to overcome these problems must be developed as soon as possible.

In this paper of case study, the author is supposed to be the CEO of the Southwest Airlines Co., the largest airline in the United States, based on domestic passengers carried. The purpose of this study is to critically decide the solutions to air rage problem when applying decision making model- The Bounded Rational Model. Also in the following sections, from the perspective of the CEO, strategic measures and future direction of the airline are designed and analyzed.

Introduction

Southwest Airlines Co. (NYSE: LUV) is a major U.S. airline and the world’s largest low-cost carrier, headquartered in Dallas, Texas. It was established in 1967 and adopted its current name in 1971. The airline has more than 46,000 employees as of August 2012 and operates more than 3,400 flights per day. As of June 5, 2011, it carries the most domestic passengers of any U.S. airline (Gross, 2007). Southwest is known throughout the aviation industry as a ‘low-cost carrier’ because of its unique business model. The model includes flying one aircraft type, the Boeing 737, on high-density routes throughout the United States.

The operation performance of the airline appears to be decent. However, the problem of air rage poses a huge threat to the airline management. Common solutions to the problem must be found by not only government and law enforcement agencies, but also by the airline itself, who plays the most important role in solving the problem. From the perspective of the CEO of Southwest Airlines, how to make the reasonable decisions is a matter of primary importance.

Methodology

In this case study, the decision making model- The Bounded Rational Model (Simon, 1979) is applying. It can be seen that when trying to make the decisions to solve the air rage problem, rationality of ourselves is limited by the information we have, the cognitive limitations of our minds, and the finite amount of time we have to make the decision. Therefore, The Bounded Rational Model is appropriate.

Moreover, in this study, we lack the ability and resources to arrive at the optimal solution, thus we instead apply our rationality only after having greatly simplified the choices available. The purpose of this study is to seek the satisfactory solution rather than the optimal one. And it is not a process of mathematical modeling of decision making.

Decision Making Process

1. Identify the problem
It can be seen from the case that air rage, defined as ’the aberrant, abusive, or abnormal behavior of passengers either on aircraft or in airports’, is on the rise in the past decades. The problem of misbehavior of those unruly passengers poses a threat to the management of airlines. ‘Passengers are creating a growing number of critical incidents and potential disaster by threatening crews, pilots, and the general well-being of everyone on board.’

Air rage can have serious security implications, especially if the offender tries to interfere with the aircraft’s navigation and flight controls, or attempts to depressurize the cabin such as opening a door or breaking a window (Dahlberg, 2001). Air rage events have increased markedly since the September 11 attacks. Explanation for that trend has been established: heightened anguish for one’s safety, increased irritation with invasive security, or other unremarkable causations.

Under the circumstances, measures to overcome these problems must be developed as soon as possible. The CEO of Southwest Airlines is making decisions to solve the air rage problem. How to increase satisfaction level of customers, how to control the air rage incidents, how to cooperate with government agencies, and how to compete with other major competitors should be focused on in the decision making process.

2. Set the objective

After proceeding further, researches indicate that there are lots of different perspectives towards the problem of air rage. From the perspective of airline management, they try to give higher levels of customer service, with the aim of increasing satisfaction level, decreasing anxiety of passengers and getting more profitable. As for the airline front-line employee, they often complain about the inconsiderate, unruly and dangerous behavior of the customers. From the perspective of customers, the rise in air rage incidents is related to the low-level services of the airline, which attribute to their higher anxiety about their air travel. And customers always complain about airline’s lack of planning for unexpected inconveniences (i.e., delayed flights, lost luggage, etc.), thus satisfactory level of the flight may be the key factor to solve the problem of air rage.

Moreover, the mission of Southwest Airlines is ‘dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit’ (Myung, 2008). Indeed, Southwest proudly proclaims, ‘We are a company of People, not planes. That is what distinguishes us from other airlines and other companies.’

When integrating those different perspectives with the mission of the company, we can set the objectives: overcome the problem of air rage; maintain high-quality services; satisfy employees’ needs; maintain profitability and competitiveness.

3. List alternatives

A. Improve service performance on cabin
Southwest Airline can focus on improvements of cabin service, such as providing more comfortable seats, better in-flight food and better entertainment facilities etc. More specifically, Southwest can decrease the number of seats and provide more space for every single seat in economic class.

B. Improve airport service (such as luggage handling system) Airports are using increasingly sophisticated technology to streamline every aspect of baggage handling processes. They invest to round up the high-tech baggage handling trends which are simplifying this troublesome task for airlines and their customers. What’s more, Southwest’s ground operations can design a plan for ground crews to do some improvement of working efficiency, such as reduce the time to off-load passengers and baggage, refuel the plane, clean the cabin and restock the galley, and do the necessary preflight check and paperwork.

C. Raise public awareness of the alarming rise in air rage

Southwest Airline can focus on how to raise customers’ awareness of the consequences of air rage. For example, the trainer can use role-playing and body language awareness to teach conflict management to its crews and then deliver the training video to passengers. Also Southwest Airline can send warning letters to passengers when they get the boarding pass at the airport.

4. Analyze alternatives
A. Analysis of Solution A

After the improvement of service on cabin, the satisfaction level of customers would certainly increase. However, the cost of the ticket would go up sharply due to improvement of cabin service. Southwest Airlines is categorized as a Low Fare/No Frills airline (Chen, 2002). Southwest’s business level strategy is to be the cheapest and most efficient operator in specific domestic regional markets, while continuing to provide its customers with a high level of convenience and service. Essentially, Southwest’s advantage is that it is low-cost. If Southwest decrease the number of seats and provide more space for every seat in economic class, the cost of the ticket would go up, which may go against the Low Fare strategy of Southwest. Moreover, service items such as cabin facility and cabin food may not be very critical.

B. Analysis of Solution B

For most of the passengers, the quality of luggage service is important. If the airlines invest on technology to streamline every aspect of baggage handling processes, the customers would decrease their anxiety of luggage incidents. However, this plan comes with a higher cost, which may go against the Low Fare strategy of Southwest. What’s more, consumer survey indicates that most passengers have fewer complaints on ground services. It does not mean that the service items are not important, as most of such services may have reached an acceptable target level. In other words, airlines cannot make much more improvements on these issues even they are willing to put more efforts.

C. Analysis of Solution C

To raise customers’ awareness can effectively reduce the air rage incidents. Airlines can send a letter to passengers to warn them of the consequences of their possible unruly actions. Compared to solution A and B, this solution does not increase much costs, and it accords with the Low Fare strategy. Therefore, alternative C is the “good enough” solution in the Bounded Rational Model framework.

5. Select alternatives

A decision maker is said to exhibit bounded rationality when they consider fewer options than are actually available, or when they choose an option that is not ‘the best overall’ but is best within the current circumstances (Camerer, 1998). After the analysis of the three alternatives A, B and C, it can be seen that although Solution A and B is beneficial, they run against the strategy of Southwest Airlines- No Frills strategy. More specifically, Southwest Airline has already had good customer records of cabin service and airport service and the company cannot make more improvements on these issues even they are willing to put more efforts. However, Solution C has the inherent advantage of cost saving. What’s more, the implement of Solution C accords with the overall objective of the decision making: overcome the problem of air rage; maintain high-quality services; satisfy employees’ needs; maintain profitability and competitiveness. To sum up, Solution C is the “good enough” choice.

Recommendations

Nowadays, air rage has caused increasing concern when it poses a threat to aircrews and the general well-being of passengers on board. How to develop measures to overcome the problem brings the challenge to airlines managers in decision making. Under the circumstance, the solutions and recommendations have been designed from the perspective of the CEO of Southwest Airline. After the analysis above, Southwest Airline is supposed to take action to raise customers’ awareness of the fact that air rage may have serious consequences. Southwest should also design an emergency mechanism and teach aircrews the methods of conflict management in case of emergency. Only the aircrews and customers cooperate effectively can the problem of air rage be solved.

Moreover, Southwest airlines’ strategy- Low Fare or No Frills proves to be successful in the past (Bennett, 1993). Southwest has the lowest operating cost structure in the domestic airline industry and consistently offer the lowest and simplest fares. Southwest airlines captured the potential low-fare market, avoiding the confliction with other airlines. Southwest also has one of the best overall customer service records (Richard, 1996). Therefore, in the long run, Southwest’s persistent strategy is to provide low fare and, at the same time, offer high-quality services.

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