What Makes Traveling With LUV Good

In healthy, dynamic markets, buyers purchase products they want from sellers not only in terms of price, but also quality — which is an important factor we tend to miss.

The following story should give you some perspective:

I recently flew on Southwest Airlines (NYSE: LUV) to St. Louis. My flight was scheduled to leave at 8:55 a.m. It showed as on-time when I checked my bag, about 90 minutes ahead of departure. However, by the time I got to the gate, the flight showed a delay of 15 minutes.

No problem.

Then at 8:30 a.m., the gate agent came across the PA system and told us the flight was delayed because of mechanical issues, and wouldn’t leave before 10:30 a.m. She went on to explain the plane was still on the ground in Ft. Lauderdale, and until it actually departed that city, we wouldn’t have a true estimate of our own departure.

That’s when people got nervous about their connections and other plans. My own plans were flexible, so I simply used the extra time to work from the airport.

The gate agent updated us every 30 minutes. We didn’t take off until 1:55 p.m.

But about two hours before takeoff, something magical happened…

The gate agent apologized to us for the delay, then called up every single passenger and gave them a voucher worth $100 for travel on Southwest. I was stunned.

I’ve traveled quite a bit, using just about every domestic airline, and I’ve never had one be as proactive as Southwest was that day. That’s what I mean by having quality in the markets.

Then there’s…

Lousy Markets, Lousy Quality

Interestingly, I flew on American Airlines during that same trip, and had yet another delay. Unsurprisingly, the experience was totally different…

My flight showed as on-time two hours ahead of departure, but when I returned the rental car, the flight status had changed to “canceled.” I received no phone call, no email, and no text.

I’ve been an American Airlines AAdvantage member for more than a decade, so it’s not like they couldn’t find me.

I called the 1-800-number, and was told that the flight was canceled due to inclement weather. Apparently, there was a storm approaching the airport, but it had not yet arrived, so canceling the flight two hours ahead of takeoff was questionable.

The agent wanted to book me on a US Airways flight that left seven hours later and had a connection.

“No thanks!”

I asked to be booked on a different airline, and amazingly, she was able to find me a seat — the last seat, of course — on the next direct flight on American out of Dallas at 1 p.m.

So far, so good.

As I waited, I watched many flights get delayed, and several showed on the board as canceled. And yet, our flight continued to show as on-time. I worked the time away as best I could, all the while keeping an eye on the flight schedules.

At noon, I gathered my things and made my way to the gate area. The flight still showed an on-time departure.

At 12:20, the gate agent announced: “Obviously with weather, this flight was not going to leave on time. The rough estimate for departure is 4:10.”

It wasn’t obvious to me, nor to any of the other people who looked very annoyed as they approached the desk.

I asked the gate agent why the flight showed on-time for the last three hours if the delay was so obvious. She told me that they, as agents, were not informed of any changes to the flight schedule until the boards changed, and that’s how the system worked, so it wasn’t anyone’s fault.

I pointed out that someone, a real person, had updated the flight board, and could have done so much sooner if such a change was so obvious. This would have allowed me and many other travelers to adjust our schedules if we chose. Instead, we were given wrong information for hours, thereby stripping us of the knowledge necessary to make an informed decision.

She wasn’t amused. Neither was I.

The difference between the experience on Southwest and American highlights the vast expanse between old providers and new providers.

Now, Southwest is not exactly a new airline, but it does have a new approach to clients. It was started in the 1970s by Herb Kelleher (an interesting story on its own), and its entire focus is on the customer experience in the low-cost travel segment.

Given that most families and businesses have been searching for ways to cut costs for many years, this group includes almost everyone.

American is still focused on the model of yesterday, which is stratifying clients by economic segment. There’s executive platinum, platinum, gold, one-world advantage, advantage, and priority, along with first class and extended legroom.

By the time “non-special” fliers are allowed on the plane, there are only six people left in the gate area and every overhead bin has been filled. This doesn’t make anyone feel special, it just annoys most people on the flight.

As for getting on at the front of the line, that’s a nice touch, but the seats available for awards travel have been cut so dramatically as to make it not worth it. Unless, of course, you like flying in the middle of row 28, and can leave at 5:50 a.m. or 9:15 p.m., and you don’t mind an “overnight” flight.

The economic climate isn’t going to improve anytime soon. Typical American families will be watching their pennies for years to come while younger consumers deal with more modest starting salaries and larger student-loan debt burdens.

The lesson to learn here is customer service that speaks to our limited resources of time and cash will win the day, and our business.

I don’t see the old carriers going under anytime soon. They’ve already filed for bankruptcy to get rid of pension liabilities and debt. Instead, I see American and other airlines struggling to keep up with the bookings and earnings of airlines like Southwest. Hopefully, this will eventually lead to better customer service across the board, but I doubt it.

There’s an old bumper sticker that reads: “Fly Southwest, Herb Needs the Money.” They should make a new one that reads: “The Best Reason to Fly Southwest is a Recent Trip on Any of the Old Carriers.”

These two examples provide a small glimpse into the broader scope of the economy and markets — quality is just as important as quantity. Markets are supposed to promote an overall economic well-being, and without quality services and products, markets will be deficient in prosperity.

Rodney

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About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.