Purchasing and Negotiation Training

Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager

Over the past quarter century, I have logged more than two million flight miles For the past fifteen of those years, flights have ben almost exclusively on American Airlines although I know many fliers who have used the so-called “ultra-low cost” carriers. Almost all of these low cost customers are disillusioned from day one for a host of reasons. Recently, I read an Associated Press (AP) story that put some research and data behind the anecdotal complaints.

Ultra-low cost is a misnomer, as any purchasing pro knows. Any fool can get a low price but at what cost? The most well know carriers in this new genre include Spirit Airlines, Frontier Airlines, and Allegiant Air, although the latter is much smaller than the first two. All three boast of cheap fare tickets on their web sites.

The AP story suggests that cheap base fares attract customers in an industry where discomfort and inconvenience are expected. However, thee cheap seats airlines charge for soda, carryon bags, printing of boarding passes at the airport, seat selection, and no toll free number raise figurative and literal costs. As aggravating and expensive as these fees are, comfort has a higher toll.

Cheap carriers pack more passengers onto their planes because seats do not recline, making it easier to cram more seats into the same space. Consider these leg room facts and figures. Frontier’s new Airbus A321 jets will have 230 seats. Spirit packs the same plane with 218 seats, while conventional competitor American has 180 seats on its A321 Airbus planes. What price do you put on comfort?

Woody Allen is credited with the quote, “Eighty percent of success is showing up.” The low cost carriers would be wise to heed this advice, at least as far as on time ratios are concerned. Frequent flight delays cause the three ultra-low carriers to have 20 times the complaints of much larger conventional competitors like Alaska Airlines or Southwest Airlines. Spirit has the worst on time record of the 14 largest U.S. based carriers with more than a third of its flights being at least 15 minutes late. Frontier is next to last. In June 2015, Spirit’s on time record was below 50%, a fact Sprit blamed on bad weather. It would seem that every airline experienced the same weather.

A more likely explanation is that the three cheap carriers lack the equipment, personnel, and capacity to deal with less than ideal situation. It is hard to book a passenger on a later flight if you do not have one. Disparate fee structures make the conventional carriers unwilling to accommodate stranded passengers from the cheap seats. This can contribute to very long delays, even overnight accommodations and meals, which drive up the cost in out of pocket and productivity costs, neither of which is defrayed by the low cost carriers.

All of these facts and figures seem to be creating a mutually beneficial environment between the traditional and cheap airlines and their customers. The story states that traffic is jumping by double digits for the cheap seats. The diversion of customers from the traditional to the cheap keeps pressure on the traditional airlines to compete on price, to some extent, or at least to moderate any increases.

So who are these cheap seat fans? The story cites only one interview, a college student who lives in Denver but attends school in Dallas. I know infrequent leisure who have little basis of comparison who chose the ultra-lows, at least until they either accept the inconvenience or decide the price is not worth the cost.

If you are a business traveler, even if not a purchasing pro, the choice of carrier is easy to make.