The Brancatelli File
BY JOE BRANCATELLI
September 16, 1997 -- As virtually the only working journalist in America paid to voice his opinion about the state of business travel, I am nevertheless acutely aware of my other responsibility to you: to deliver useful information and pertinent data that allow you to form your own opinions about life on the road.
Sometimes, however, the information I believe I am honor-bound to present is so fundamentally at odds with what I am convinced is the truth that I cannot reconcile the two. This is one such instance.
Several weeks ago, I wrote a column that the Minneapolis Star Tribune and other observers called a "scathing" indictment of Northwest Airlines.
On Friday evening, I spent an hour on the phone with two senior Northwest executives and a Northwest public-relations official. It may surprise you to learn that they did not question the accuracy of my report or even attempt to dissuade me from forfeiting my WorldPerks Gold credentials and stop flying Northwest.
But here is where my duty to present you with information and my responsibility to tell you what I believe is the truth go careening off in different directions.
So let me first present, as accurately as I can, bullet points of information provided to me by Northwest executive vice presidents Mike Levine and Ray Vecci.
Vecci said there "was no firm date" when Northwest management would declare the airline "fixed," but explained that improvements, repairs, and upgrades are ongoing. Levine said Northwest had "only gotten better in the last three or four weeks." More importantly, he said, "I would argue that the worst is past."
- At least six times, Levine and Vecci said they understood Northwest had done a poor job in recent months.
- "I don't want to defend a performance that I can't defend," said Vecci, who joined Northwest earlier this year with the mandate to improve customer service. Levine said Northwest is "having a problem with service delivery." The management "was not indifferent" to Northwest's problems and knew "that some of our customers are pissed," but Levine insisted that "we don't see people walking away" from the airline.
- Vecci said Northwest's management was working "with a sense of urgency" to correct the airline's recent reliability failings.
- They say the airline has upgraded its fleet of domestic DC-9s, replaced key line managers, and dramatically increased maintenance and repairs. More de-icing trucks have been purchased and new vendors hired to help Northwest manage winter conditions at its hubs in Minneapolis and Detroit. Moreover, said Vecci, Northwest has "lowered utilization of the whole fleet" to decrease mechanical problems, reduce cancellations, and eliminate late departures. The result? Levine said Northwest now operates about 98 percent of its scheduled flights and improved its on-time operation during the last month.
- Northwest's in-flight and frequent-flyer services are being improved to mitigate what Levine admitted were "a lot of complaints."
- First-class meal service was upgraded in July, said Levine, and the snack service "has been beefed up." Northwest's domestic fleet has been reconfigured so that 16 percent of the seats are now in first class, which improves the chance of travelers using their WorldPerks upgrade privileges. Several WorldClubs have been expanded and new clubs opened.
- Northwest's problematic Detroit hub--where Vecci admitted "there were people waiting in lines going out the doors" for check-in--is getting special attention. New check-in counters have been opened in the last week and Detroit's WorldClubs are being expanded. Northwest has earmarked "$60 million for improvements" in the next three years, Vecci said.
- Lastly, Levine and Vecci believe business travelers will notice the improvement in Northwest.
Now let me tell you what I believe to be the truth: I don't think these guys get it.
Let me offer a few bullet points of my own.
Not once in our hour-long conversation did Levine or Vecci volunteer an apology for the service Northwest has provided. They admitted to the problems, took responsibility for the foul-ups, but never made the simple gesture of saying they were sorry.
- The guys who broke the airline are the guys who now say they are going to fix it. With the exception of Vecci, who gets a pass because he can still be considered a new hire, we're being asked to believe that the key executives who allowed Northwest to slide into disrepair are now committed to repairing the damage. If they were so concerned about the product they delivered, why run the airline into the ditch in the first place?
- I think Northwest's executives are deluding themselves about what the numbers tell them. Levine adamantly insisted that he sees no sign of defections among high-yield business travelers. If that's true, why did Northwest's profit slide 33 percent in the most recent fiscal quarter while other carriers were racking up record results? Why did its load factor on international scheduled service drop 1.2 points in August? Why is its revenue yield per passenger mile down 4.8 percent in the first half of the year? All these are signs that high-yield business travelers are looking for alternatives--and finding them.
- Northwest executives do not seem to understand that their premium-class product, most especially their international product, no longer measures up. Fly Japan Airlines in its Seasons business class and you'll get new cabins, private limo service and huge discounts at some of Tokyo's priciest hotels. Fly first class on Northwest's former code-share partner, Asiana, and you'll get a seat that reclines 180 degrees, privacy partitions and a concierge to hand-carry your bags. Fly United in a premium class and you get access to shower suites and valets to shine your shoes and press your clothes. Northwest has nothing comparable.
- For that matter, Northwest is still unable to comprehend that high-yield passengers flying eight or 12 or even 14 hours should be able to eat when they want to eat, not when Northwest management decides they should eat. Every one of Northwest's major competitors on both the transAtlantic and transPacific routes offers this simple "executive meal" option. It costs almost nothing to provide, yet Northwest still can't figure out how to do it--or even that it should.
- Northwest says it has improved in the last three or four weeks, but the only publicly available evidence says it continues to be in a free fall. According to the Transportation Department's most recent Air Travel Consumer Report, Northwest ranks eighth out of ten in systemwide on-time performance for the most recent 12 months (August 1996 to July 1997). During the month of July, Northwest's on-time performance was below the industry-wide average at 21 of the 26 airports where it reported data.
- Most damning of all is Northwest's performance on DOT's "consumer complaint report." For two months running, Northwest is the most complained about airline in the nation. And in July, Northwest alone accounted for almost one of every five complaints that the DOT received about U.S. carriers.
- Lastly, there are what I suppose can only be called the "touchy feely" things. When I asked Levine why his airline racked up one in every five customer complaints logged by DOT, he dismissed the numbers as "insignificant." Not once in our conversation did these executives say they expected Northwest to be the nation's best airline. Their measuring stick? They repeatedly said Northwest strove to be "as good as anyone" or "competitive." I've found that airlines that want to be as good as anyone or competitive rarely turn out to be either.
In fact, when I asked why they hadn't discussed Northwest's service problems with their best customers or even bothered to explain all the measures they say they are taking to improve the airline, Levine said it was a public relations "strategy decision." As of Friday night, Northwest had no plans to inform their most frequent flyers about anything we've discussed here.
And then there is last week's almost incomprehensible 5 percent increase on walk-up fares, a targeted price hike aimed directly at must-fly business travelers. Want to know who raised fares first?
In the show-me-the-money world of business travel, I think we've just reached the bottom line.
This column originally appeared at thetrip.com.
Copyright © 1993-2005 by Joe Brancatelli. All rights reserved.