Thursday, August 23, 2012

Just the Regs, Ma'am

There's an amazing statistic recently reported that shows an industry made a 99.3% improvement in customer service problem. The airline industry reduced the number of tarmac delays in the US, longer than 3 hours, from 586 (Jan.-June 2009) to 4--that's right only 4--in the first half of this year. They went from nearly 100 per month to less than 1 per month. They went from 6 per month to this new low in just one year.

Tarmac delays are when the passengers are on the plane and the plane is on the tarmac. How did the airline industry reduce these events? Did they make significant improvements in gate traffic flow? Did they improve airplane maintenance? Did they just cancel flights instead of delaying them after passengers were boarded? Would they have achieved all this voluntarily? Perhaps.

2011 was the first full year that a new regulation was in place to limit the delays or face stiff fines.

Could the marketplace have driven improvement? Doubtful. With 28,000 flights per day, there might be 3 flights with a long tarmac delay, using the 2009 stat. That means 0.01% of your customers might be inconvenienced. What business would drive 99% improvement on a problem that only affects 1 out of every 10,000 customers? If your barista screws up your latte, but the other 9,999 are really good, I doubt management is going to put the barista through re-training to get his defect rate to 1 out of 100,000 customers. Would you?

I'm sure the airlines put some things in place to reduce the problem, but it wasn't because 0.01% of their customers started picketing or changing air carriers. They did it to avoid the fines levied by the Transportation Department, and the horrible publicity that occurs when some egregious events occur--like passengers that have experienced 7-9 hour tarmac delays.

Oh, by the way, on-time percentage is at an 18-year high for the 15 largest airlines. Likewise, cancellations are at an 18-year low. Maybe the fines helped drive the right kind of procedural and policy improvements that made the airlines more effective.

I really don't like regulations, but in this case, it seems to have done what it's supposed to do with regard to the overall passenger experience. However, I'm not sure it was necessary. More publicity may have been enough to drive the improvement--probably not as much nor as fast, however. After all, it was just a 0.01% problem.

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