The Brancatelli File

joe LOST


December 5, 2006 -- By any rational business standard, John Goldener is exactly the kind of frequent flyer that US Airways can almost never lose. By every logical business measure, John Goldener is also the kind of premium-class passenger that US Airways should never want to lose.

A pediatrician turned international executive recruiter, Goldener flies from Philadelphia, where US Air maintains a huge hub. His travel--about 150,000 miles a year covering 10 roundtrips to Paris, a pair of roundtrips to Honolulu and frequent trips to the West Coast--largely overlaps the US Airways network. He earned Chairman's Preferred status, the highest level of US Airways' frequent flyer program, for three years running. His top-level status in 2007 is already secure. All he ever asked from US Airways was on-time flights, the Chairman's Preferred perks he earned and a business-class bed on his transatlantic travel.

But since we're talking about the Big Six here, you've probably already guessed that US Airways has, in fact, lost John Goldener as a customer. His story is unique. But like all tales of life on the road, it illuminates how quickly a major carrier will abandon customers when it suits its corporate ego or its marketing strategy of the moment.

Goldener's disenchantment began when US Airways cut its twice-daily Paris flights back to one. It escalated when he heard that the carrier--alone among major international airlines--is slashing the size of its business class and will soon pull 12 seats from its current 42-seat cabins. Then, about two months ago, US Airways stopped giving Chairman's Preferred flyers upgrades to the coveted first row. In US Airways' unique cabin layout on its Airbus A330s, the six seats in Row 1 convert to beds while the other 36 Envoy business-class seats are armchairs. To secure a Row 1 bed, Chairman's Preferred flyers must now pay a $300 premium each way above the business-class fare.

"The net result," Goldener wrote in an E-mail to me on the day before Thanksgiving, "is that it is increasingly difficult to buy an Envoy class ticket to Europe. There is practically no way I can buy a first row [bed] because they seem to be sold out months in advance."

Goldener's tolerance for US Airways ended after a disastrous roundtrip to Paris last month. En route to Philadelphia Airport, he was informed of a six-hour departure delay. To make his meetings in Europe, he accepted a coach seat on a Munich flight and was told he would not receive a refund on his business-class ticket. The return leg, a week later, was worse. Three separate mechanical snafus led to an hours-long delay, the captain declaring the plane unflyable and, finally, cancellation of the flight. Most of the travelers on the aborted flight ended up spending two nights in Paris waiting for US Airways to get them home. Goldener got out only one day late because he recognized that something was seriously amiss and called the Chairman's Preferred desk in the United States and made alternate arrangements.

When he E-mailed me, Goldener was shopping for a new carrier and looking for my help in making a choice. But like most flyers at a fortress hub, his non-US Airways options weren't great. They involved connections and compromises, splitting loyalty among several carriers and lost time.

I called Goldener and urged him to stick with US Airways. I also told him that I'd forward his detailed, persuasive E-mail to someone at US Airways.

On Thanksgiving morning, I sent Goldener's E-mail to someone high in the executive ranks at US Airways. "You or someone in super-elite customer service might want to reach out to this traveler and do what it takes to save his business," I wrote.

I heard back within minutes. She'd take care of it, she said. I headed off to Thanksgiving dinner thinking that everyone would live and fly relatively happily ever after.

Imagine my surprise when I got back to my desk on the afternoon after Thanksgiving and found a new E-mail from Goldener.

"Someone named AJ who identified herself as an administrative assistant to [US Airways president Scott] Kirby and [chief executive Douglas] Parker called," he began. Goldener said she explained that "the airline has been transforming itself into a discounted economy airline and that they were not courting business passengers. She told me that Mr. Kirby had heard the same complaints from other Chairman's Preferred members, but was not planning on changing direction. She hoped I would reconsider, but basically said 'good luck'."

A couple of days later, Goldener got a call from Travis Christ, the airline's vice president of marketing.

"He was slick, but he wasn't trying to take care of me as a customer." Goldener told me. "He kept telling me he was trying to be Costco while all the other airlines were trying to be Nordstrom's. I kept reminding him that he charges the same as Air France. But Air France has beds in business class. If I want a bed from US Airways now, I have to pay more than it costs on Air France. How's that Costco?"

Goldener also told me three things that I had trouble believing: Christ said that Goldener should be willing to pay more to fly US Airways because US Airways offers more flights from Philadelphia. Goldener said that Christ never asked him what US Airways could do to keep his business. "And we both agreed that [US Airways] did not work for me anymore."

I called Christ myself and he confirmed what Goldener told me about their conversation. And he added another fillip: Christ suggested that Goldener should appreciate that he'd been called by the vice president of marketing of an airline. "I know a lot of Chairman's Preferred members would consider that a tangible benefit," Christ said.

Christ's assertions led me to check in with Art Pushkin, a sales manager in the digital-imaging business, a 7-year Chairman's Preferred member and co-chair of the executive board of FFOCUS, an organization of US Airways frequent flyers.

"That's absolutely unbelievable. It makes no sense," Pushkin said about Christ's contention that US Airways travelers should be willing to pay more. "I don't know any FFOCUS members who'd agree with Christ on that."

And Pushkin was suspicious of Christ's comment that he was doing something special by talking to Goldener or Chairman's Preferred members. "A good marketer makes himself available to talk to his best customers," Pushkin said. "It's part of the job description."

What about Christ's decision not to ask Goldener what it would take to keep his business? "I can't believe he didn't ask," Pushkin said. "It's beyond comprehension. Every marketer knows the cost of retaining a customer is cheaper than replacing him."

I then took it upon myself to ask Goldener the question that Christ wouldn't. What would it take to keep him a US Airways customer?

"The ideal would have been that [Christ] would flag my account so that every time I bought a business-class ticket to Paris, I would be upgraded to the beds in the first row. I just wanted him to restore the perk I always had," Goldener said.

I suggested that Christ, who wouldn't even ask the question and was prepared to let him walk, might find that price too high. Would three upgrades do it, I asked Goldener. "That would have been fine. If he had offered me two, I would have stayed."

I E-mailed Christ with Goldener's comments and wondered if he thought two upgrades were a palatable, even cheap, price to pay to hold on to a Chairman's Preferred member.

Christ thought otherwise. "We don't arbitrarily give our product away and we think that we offer a good product for a fair price," he replied by E-mail. "We also are OK with the fact that we can't be all things to all people."

Faced with an airline that is prepared to let him walk away, Goldener will do just that. He called United and Delta and both carriers offered him immediate elite frequent flyer status if he switches to one of them in 2007.

I've told him that I think Delta and its SkyTeam partner Air France will probably work fine. He'll be able to fly from Philadelphia to Paris nonstop on Air France in business class and get a bed every time. The Air France flights will earn Delta SkyMiles and will count toward his Delta elite-level status, too. The Hawaii flights will be an easy connection over Delta's Salt Lake City hub; that's probably better than connecting over a United Airlines hub, which is what Goldener did when he was flying US Airways. Delta's West Coast flights require a connection over Salt Lake City, too. That's not as good as flying nonstop with US Airways.

I spoke to Goldener one more time this afternoon. He said he'd just received an unsolicited form letter from US Airways that explained the Paris-Philadelphia fiasco last month was not covered under the European Community's tough delayed-flight compensation rules. A $400 travel voucher was included as a good-will gesture.

"I sat down this morning and tried to put my feelings aside and tried to make the case for staying with US Airways," Goldener said. "But this guy [Christ] was so arrogant that I have to switch carriers."

Copyright 1993-2006 by Joe Brancatelli. All rights reserved.