ATA wins Self Tending Mushroom Award

The Self Tending Mushroom Award, or STeMie, is given to organizations, individuals or countries that shun the obvious changes within their industries in favor of darkness and a rich diet of self-generated propaganda. This month, we award the last STeMie of the year to the Air Transport Association in the category of Travel Trends and their members, guilty by association.

The intent of the STeMie is to offer valuable examples of what not to do. Neither given in anger nor intent on slander, the STeMie serves as a means to learn something useful and perhaps even pull these mushrooms out of the dark and into the light of reality. So get your shovels ready and join me in thanking the ATA and its members for feeling the pain so that we might learn to avoid the same fate.

The Air Transport Association of America is, “the premier trade group of the principal U.S. airlines” including United, US Air, Continental, and many more. According to the ATA website, their members account for 90% of all commercial passenger and cargo air transport in the United States. According to ATA, “The association’s fundamental purpose is to foster a business and regulatory environment that ensures safe and secure air transportation and permits U.S. airlines to flourish, stimulating economic growth locally, nationally and internationally. By working with members in the technical, legal and political arenas, ATA leads industry efforts to fashion crucial policy and supports measures that enhance aviation safety, security and well-being.”

ATA and its associated members earned the coveted STeMie for a complete unwillingness to recognize growing consumer animosity over the way passengers are treated and failing to lead their industry in any way towards a market solution.

No matter the business or industry, problems will arise. It is up to the businesses and their associations to lead change to address these problems before consumers and eventually the government turn on them. ATA and its member airlines have chosen instead to ignore the problem, keep quiet and hope it will just go away. The “problem,” however, consists of their customers...and they have nowhere else to go but to the Federal Government.

The issue of a passenger bill of rights was sparked over ten years ago during the infamous snow storm of January 2-3, 1999 when Northwest Airlines left approximately eight thousand peopled stranded in aircraft on the tarmacs in Detroit for more up to 11 hours without food, water or bathroom facilities. Northwest subsequently lost a class action suit to the tune of $7.1 million USD awarded to those passengers. On the day of the award, the lawyer for the passengers stated his belief that, “I believe this settlement will encourage all airlines to be careful about the rights of airline passengers in the future.”... Apparently not. Damages paid, vouchers distributed and apology letters sent, however, were not enough as airlines did little to improve the situation over the last decade. Those same passengers have now formed the major force behind a consumer outcry for passenger rights legislation and the federal government is taking action.

Over the past decade, a number of organizations have developed in support of a passenger bill of rights. Among them are the Airline Employees Whistleblowers Association, and the Coalition for an Airline Passenger’s Bill of Rights (a.k.a FlyersRights.com). Recently, other organizations have joined the cause to advocate federal legislation including the National Business Travel Association (NBTA), the Business Travel Coalition (BTC) and the International Association For Contract & Commercial Management (IACCM). The fact that the BTC has begun to advocate a passenger bill of rights is significant.

Over these ten years congress has held many hearings and considered the issue many times. Until recently they took no action, preferring instead to let market forces and good old fashioned competition sort it out. The BTC has testified four times in front of congress in opposition to federal passenger rights legislation and in favor of the market forces approach. By all accounts, market forces should have ruled the day. Consumers treated badly by one airline would naturally go to another airline with better customer service instead. But it didn’t work out that way. The market, left to its own devices for ten years, did nothing to correct the problem.

According to a press release by the Business Travel Coalition, “While some airlines have taken limited positive steps on behalf of their customers, at the industry-level the airlines appear either unwilling or unable to fix this extended ground delay problem.” As of the time of this writing, the BTC had not yet released its soon to be published survey results but did have this much to say based on data thus far collected: “there is an evident market failure that can only be addressed by government intervention.” Such a complete and total change of heart from the one organization that was standing in vocal opposition to passenger rights legislation should be wake up call for the ATA and its member airlines.

In the meantime, a major meeting of stakeholders including senators, congressmen, industry representatives, everyday passengers, and more is scheduled for September 22nd in Washington, D.C. at the Hart Senate Office Building. Anyone can sign up to attend...anyone at all...but as of August 16th, the attendee list did not contain a single current airline executive or ATA representative.

This is not the only time ATA and its airline members have been silent. They have been virtually hiding under their desks for ten years. While consumers, organizations, senators, congressmen and the press debate and discuss, ATA and its member airlines are nowhere to be seen. No press releases, no statements, no speeches ... and no action to correct the problem that clearly has their customers up in arms.

There was such a gaping lack of discussion from ATA and their airline members that we had to ask the Air Transport Association if they had a position. The ATA representative stated that, “The Air Transport Association and its member airlines understand passengers’ frustration with long delays. However, we continue to believe that a hard-and-fast rule requiring mandatory deplaning of passengers after three hours will have substantial, unintended consequences, leading to even more inconvenience for passengers and ultimately more flight cancellations. “

At what point did sitting on the tarmac for any length of time become allowable as good customer service? At what point did it stop being an inconvenience? If the flight is stuck on the tarmac for three hours, it might be a sign that the flight is better off canceled. Behind the curtain are the airline shareholders and executives that don’t want to lose the price of the ticket when passengers are re-booked...even if that means keeping passengers on the plane in less than sanitary conditions.

Do planes sit on the tarmac for more than three hours so often? Apparently so. BTC cites the DOT’s Bureau of Transportation Statistics who found that, “for the 8 months ending May 31, 2009, 578 flights experienced extended tarmac delays of 3 hours or more”. That’s an average of 72 flights per day that spend three hours or more sitting on the tarmac. That is out of an average of 28,537 commercial airline flights per day for about one quarter of one percent of all flights. Most opponents of a passenger bill of rights cite these numbers to show the “statistical insignificance” of such delays. They question why time is being spent on such “rare” occurrences when there are so many other issues to be solved such as aging air traffic control equipment. They certainly have a point that outdated equipment affects every flight, but it is hard to call it insignificant when you are the one stranded on the tarmac.

In the past, airlines have had a very good track record in one thing and that is challenging Department of Transportation regulations so proponents of a passenger bill of rights prefer a more challenge-proof rule in the form of congressional legislation - i.e., a law. Detailed passenger rights clauses have now been written into the current FAA reauthorization legislation by both the house and the senate. This legislation (H.R. 915 and S.1451) reauthorizes (i.e. funds) the FAA to function for the next two to four years. Although the bill passed the House in May 2009, it has only in July 2009 passed out of committee in the Senate and with some changes (not related to passenger rights). By the time the Senate passes the bill, confers with the House on the various changes, and the House passes it all over again, we may be hearing jingle bells. As congress churns its gears to move the reauthorization towards completion, there is zero expectation that the passenger rights portion of the bill will be changed or removed. What that means, is that by New Year’s Day, we could very well be looking at real legislation in place for passenger rights as part of the FAA mandate.

Ask airlines and the Air Transport Association how they feel about these incidents and they will tell you how the weather was bad, or how a particular employee made a bad decision. The BTC suggests that these excuses, “miss the larger, structural leadership failure at the individual airline and industry levels.”

While their customers and even their government grows increasingly upset by their lack of customer care, ATA and their member airlines hide in silence telling themselves that it will all be OK in the end. They have taken in so many shovels full of their own watch-and-wait mentality that all they know how to do is watch the debate boil over until the government slaps them with laws to make them care about their customers.

There are a number of lessons that every organization can take from this unfortunate situation. First, in the emerging business environment, price is important but service is what distinguishes you from your competition and increases your market share. It is not good enough to have service equal to your competition; set your own high standard and stick to it. Your customers will tell you what they want if you only listen; but you cannot be afraid to hear the bad news along with the good ideas. Lastly, when your industry leadership fails to lead, don’t be shy to step up and take the role. Industry leadership is good for your company, good for your customers and good for your shareholders alike.