Zulu Airline Systems’ Post

In 1970s, Southwest Airlines set out to challenge the giants of the airline industry. Today, it’s a $26 billion company and the largest low-cost carrier in the world. This is day 3 of “20 stories of successful brands with a challenger mindset” And here’s Southwest Airlines’ story: 1️⃣ The problem: In the early 1970s, Southwest Airlines entered the highly competitive airline market. The market was dominated by established giants with deep pockets. But Southwest had a different vision. They wanted to make flying accessible to everyone by offering low-cost, frequent flights with a fun and friendly experience. It wasn't going to be easy. Competing with big airlines was a daunting task. But this is how they planned to stand out - Low costs, unique customer experience, and efficient operations. 2️⃣ Challenger mindset shift they adopted: They pioneered the low-cost carrier model, focusing on short, frequent flights with minimal frills. They minimized maintenance costs and improved operational efficiency. Their emphasis on fun, friendly service and transparent pricing built a loyal customer base. Southwest's culture of "fun-LUVing" encouraged employees to engage with passengers in a friendly, humorous manner, turning flights into enjoyable experiences It also streamlined operations, reducing turnaround times and maximizing aircraft usage. Their innovative ticketing strategy, such as the "Wanna Get Away" fares, provided affordable options without compromising on service quality. Their approach was bold and different. And it paid off. Southwest quickly gained a loyal following. And in just a few years, they became the largest low-cost carrier in the world. 3️⃣ Our insights: As a marketeer, I understand that the only way to see such growth in an ultra-competitive market is through a Challenger mindset. They challenged the status quo, stayed authentic, understood what the consumer wants, and made bold moves. Many legacy brands these days are unable to do it. They have a legacy, but they’re not able to keep it because they aren’t as agile as young D2C brands. I feel it’s a big problem and this is what I help them solve through Curry Nation. Adopt a challenger mindset, make bold moves, and your consumers will love you for it!

Update @437pm PST: I received a call from an Southwest Airlines executive team service agent who apologized on behalf of Bob Jordan and the executive team. He told me that the loyalty of frequent business travelers like myself and numerous others is very important to them and the changes being formulated and proposed are being made taking us into consideration. It sounds as if they are aware that they didn't do a great job communicating especially to there most loyal customers. The team member was very nice, courteous, and apologetic. EARLIER MESSAGE Dear Southwest Airlines, I don't know how I feel about your publicly announced changes today, but I do believe that the lack of communication and engagement with your most loyal customers is a miss. I am one of your "loyal" customers earning A-List Preferred and Companion Pass multiple years in a row, and I carry the top-end Rapid Rewards Priority Credit Card. I spend thousands of dollars with you annually. This change has me on edge, and it could have been averted by making me 'feel' that my business was important to you. Why do I feel this way? -I didn't receive any surveys to ask my opinion. -No reassurance that my loyalty will receive any priority or importance. -No email announcing this change. -No app alert letting me know of this change. Seriously, is my loyalty only worth hearing a major change through the media? I have to consider if my money has more value elsewhere, like a mainline where I would receive first-class upgrades and better than basic economy internationally. At least, they would have been the first to tell me of a major change. How would you feel about this change and potential miss? Sincerely, #loyaltydoesntmatter #alistpreferred #companionpass #swa #nomoreluv #luv #southwestair #noluv

Ready to explore the next factor that determined our World’s Best Airline Rewards Programs list? Let’s go! https://bit.ly/3zu4rhk 5️⃣ Expanded availability on own airline (7.5% weight) This is a binary score. A program either offers expanded availability to members of the loyalty program or it does not. You might be wondering, what does this mean, and why does it matter? Let Tiffany explain. #pointme 🧮 How we ranked the top airline loyalty programs of 2024 ✈️ We used a mix of quantitative and qualitative data to evaluate aspects of each program as of August 1, 2024. Categories are weighted based on their impact on the everyday traveler. For 2024, a maximum of 100 points were possible for each program based on the following factors: 1️⃣ Ease of earning miles (25% weight) 2️⃣ Redemption rates (20% weight) 3️⃣ Availability on partner airlines (15% weight) 4️⃣ Ease of booking (12.5% weight) 5️⃣ Expanded availability on own airline (7.5% weight) 6️⃣ Routing rules (5% weight) 7️⃣ Ability to hold awards (5% weight) 8️⃣ Customer service quality (5% weight) 9️⃣ Change fees/policies (5% weight) 🔟 Non-factors

Southwest Airlines is changing But this evokes mixed feelings The airline has announced big changes for boarding flights and fliers who want premium seating. SWA will soon assign seats on flights and sell some with extra legroom. It’s made it under pressure to boost profits. We’ve already discussed it in mid-June. It’s been expected. But as I read The WSJ article on the topic this morning, a few thoughts crossed my mind. [1] If a company is in trouble, it needs a new strategy. But ditching open seating is not a strategy. [2] How can it help the company? It does what any other airline does. Quote: “Southwest Chief Executive Bob Jordan declined to estimate exactly how much extra revenue the airline’s new initiatives will bring in.” Some superfans love open seating. The company can attract some new customers but can lose those fans. It looks like a questionable and risky initiative. [3] How can a company know so little about its customers? Quote: “The airline said it surveyed thousands of customers to understand what they want and what they would be willing to pay for. It found that 80% favored assigned seats—an overwhelming share that Jordan said took him by surprise.” [4] Why the only indicators mentioned in the article are revenue, gross margin, profits, and stock price? What about customer satisfaction, loyalty, and the power of the brand? [5] What about long-term, strategic moves? Even if sticking to the open seats policy was a mistake, fixing a problem can't be a strategy because it doesn't create a new, additional value for customers. What are your thoughts? Please share your opinions in the comments. –– Want tips on flipping your strategic thinking? Check out my podcast Strategic Seeing in the Featured section of my profile

The 'spirit' has left the low-cost carrier building. It seems the days of budget, low-cost airlines are numbered. Changes in their business models are sweeping the industry. From the addition of business class and bundled fares, Spirit has now joined the crowd with premium fares. In the past, airlines would cram as many seats as possible onto already packed flights at the expense of customer legroom. And let's not overlook the increasingly expensive food items that consist of pre-packaged crackers and packets. Then we had low-cost carriers like Sprint. Known for its notoriously tight legroom, uncomfortable seats, and endless add-on charges, which for many customers was perfectly fine for keeping airfare cheap, Spirit is undergoing a major transformation, more or less similar to what its competitor Frontier has done. The days of selling everyone a $9 or $49 fare and charging separately for baggage, seat selection, snacks, and drinks onboard are basically over. Sprint's new bundles are more like the traditional airline menus we've become accustomed to. Everything is pre-bundled with seat selection and checked bags, wifi, snacks, etc. all for a pre-set price based on the options. The new reality has the carriers hitting the hyperstream. The post-pandemic travel surge has dealt a significant blow to budget airlines as consumers prioritize comfort and amenities. That means the bare-bones business model or low-cost carriers is becoming obsolete. And, we could see the writing in the foggy window. Low-cost carriers have been losing money for years struggling to keep up with its upper-crust traditional air carriers like United and Delta. Even Southwest has adopted more premium pricing, while ditching its open-seating model. The shift in Spirit's business model as well as other low-cost carriers will impact budget-conscious travelers. While the airline will remain a more affordable option compared to legacy carriers, passengers can expect to pay more for tickets. Yep, it's basic economy for everyone https://lnkd.in/gVxjW2HC #spiritairlines #airlines #travel #vacation #airports #consumers #airtravel

Embedded in this article is a great video report on the evolution of #airline #loyaltyprograms by Alison Sider, the #aviationjournalist for The Wall Street Journal. Good to see Bob Crandall, the "father" of loyalty programs interviewed and I think we all share his FOC -- Fear of Coach. I loved the reason for unbundling -- to have passengers only pay for what they use. Made me LOL! You think we actually buy that, Scott Chandler? Yeah, you are doing us such a favor by charging us for baggage so that you make billions more on us. Ditto seat choice. Give me a break. While it covered the devaluation of points, it did not cover that the "capture" is more expensive. For instance, Hilton won't count stays that are not booked on their site for points but their site is much more expensive than other booking platforms. Capital One is the same thing. Rich folks may not care but I do. I'd like someone to do a study on the "cost" of booking on their platforms. How much more expensive are #flights, #hotels on these sites than what you can find on the open market? Are points really they "bargain" they are thought to be. I've always thought not because the issuers, airlines and hotels have all the power to do what they want to maximize profits...because they can. While we all play the loyalty game, the question is whether we are really being smart with our money, especially when a lot of these cards have membership fees and a ton of high interest. Oh, yeah, did I mention that the flights offered on these sites often require two stops to get where you want to go? 2 Stops? Really? Do you think that is a better offer of service? Jay Sorensen

Smaller airlines (<15M passengers boarded) just need a little #airline #distribution help, not consulting overkill! We're here to help. Today we are introducing Garner Express, a "light" version of our airline distribution services tailored to the needs of smaller airlines. It features a more focused product at an inexpensive price point to help these airlines quickly set and execute their distribution strategies. It's packed with value: 1. A 2-month Initial Assessment which informs you of industry trends, compares your channel mix and costs to your competitors, quantifies the high-level financial opportunity, and provides a qualitative evaluation of your strategic options. 2. End-to-end contract negotiation support -- either led by the Garner team or supported behind the scenes -- for your most important distribution contracts. 3. A year of access to the Garner Flow data product for competitive benchmarking, including quarterly reviews with Cory Garner. When purchased as a bundle, the Initial Assessment costs USD $30,000 and contract negotiation support costs USD $20,000 per contract. The Garner Flow subscription is included in the price of the Initial Assessment. If your airline needs contract negotiation support only, the a la carte price is USD $25,000 per contract. If your airline has a major distribution contract expiring between now and the end of 2025, the time to act is now! Please reach out directly to Cory Garner on LinkedIn to get started. Finally, a little extra bonus for current and former airline clients of Garner or Cory Garner: we will offer your airline a one-year subscription (or extension) to the Garner Flow for USD $5,000 (a 75% discount!) for successfully referring a new Garner Express client! Distribution change is for everyone, including the world's smaller airlines!

United Airlines recently announced major changes to its MileagePlus Premier program. These adjustments reflect broader trends in the airline industry as carriers focus on maximizing revenue from frequent flyer programs. Given these changes, how should travelers adjust their strategies to get the best value from their MileagePlus points? Are there alternative redemption options that offer more value than flights?

U.S. airlines' reliance on fees for additional revenue is under the spotlight, with a Senate subcommittee report revealing over $12 billion collected in seat selection fees between 2018 and 2023. This adds to the $25 billion in checked-baggage fees during the same period, highlighting how ancillary charges have become integral to airline profitability. The report’s allegation that Spirit and Frontier incentivized gate agents to enforce carry-on bag fees raises ethical concerns about fee transparency. Meanwhile, premium seating charges for spots closer to the front or by windows and aisles—often without added comfort—are a point of frustration for many travelers.