Happy passengers matter, even if an airline study couldn’t prove it
An International Air Transport Association study was unable to find a connection between passenger “happiness” and airline profitability. But that’s boring. So the travel news site Skift reported it as if happy passengers don’t matter. The lack of a finding, like a vacuum, sucked up the truth.
Skift’s article, by Marisa Garcia, was titled “IATA Study Finds You Can’t Run an Airline on Happy Passengers Alone.” There is so much wrong with this. First off, customer “happiness” is not really a business concept — customer experience is far more complex than this. Secondly, profit in airlines depends on everything from route selection to fuel prices to union negotiations, not just customer happiness. And finally, and most importantly, just because IATA couldn’t find a connection doesn’t mean it’s not there.
[tweetthis twitter_handles=”@jbernoff”]In research, absence of evidence is not evidence of absence. Researchers’ failures are not truth.[/tweetthis]
Yahoo News picked up the story , and Fox News appears to have ripped it off to write their own version. That’s too bad, because airlines and regulators will use this story to justify continuing to mistreat passengers. With a tiny bit of research, I found out that:
- Southwest has been profitable for 42 consecutive years, and consistently ranks first or second in Forrester’s Customer Experience Index (CXI).
- United is consistently at the bottom of the CXI, and took three years to emerge from bankruptcy after 2002.
- RyanAir, famous for abusing its customers, has changed its approach and scrapped some of its worst policies. Its CEO credits a 37% increase in profits to the changes.
As Henry Harteveldt, cofounder of Atmosphere Research Group and the travel industry’s top analyst, told me, “Happier passengers make it easier for an airline to earn a profit, but you have to have the right fundamentals in your business.”
Here’s some of what the article said, with my commentary in italics.
Happy customers alone don’t make airlines profitable, the International Air Transport Association (IATA) has found. [This is the lede, and it’s not news. Obviously happy customers alone don’t make any business profitable, or else they’d be handing out $20 bills and giving out foot massages with your groceries at the checkout.]
Tim Jasper Schaaf, Director Marketing and Sales for IATA, presented the results of a comprehensive passenger study, but could not prove any correlation between making passengers happy and keeping airlines in business. [Perhaps they should have looked more carefully, at market share or loyalty, rather than just profit, which is subject to so many other factors. If I don’t find my keys in the hall, this does not prove that the keys are lost, merely that I didn’t look in the right place, or didn’t look closely enough. (Ask my wife.)]
“You can look at it the other way around: that it doesn’t matter whether your customers are happy,” Schaaf said. “That’s not the message, but we couldn’t really prove this strongly.” [Translation: we couldn’t prove that happy customers are worthless, so don’t say that. But the article ignores Schaaf’s warning.]
[N]ews that all that work and investment [on improving the cabin experience] may not result in happy customers is bad enough. Learning that it cannot then be correlated to financial success would appear to justify the strategy of ultra-low-cost and low-cost carriers, which design their cabin products around optimum equipment utilization. [Now we’re building new false conclusions on the ones we just made up. Hedging with “would appear to” doesn’t excuse this. Low-cost is one strategy. But as Delta has shown, you can also improve loyalty by improving the mobile booking experience and doing everything possible to eliminate cancelled flights.]
The study did find a correlation between strong branding and passenger satisfaction with product. . . . [A]irlines may generate more passenger satisfaction by developing strong brands. [This is backwards. Airlines develop strong brands built on customer satisfaction. Ask Southwest, JetBlue, Emirates, or Singapore Airlines. Advertising only reinforces the reality of customer experience.]
If you’re going to write about research, you’ll inevitably pick the most interesting findings. But when there are no findings, don’t get fooled. The absence of evidence is not evidence of absence. It just means you need to look harder.