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American Airlines' Mitchell: We want to give passengers "what they value most"
Q: What can air travelers do to get the best possible customer experience from an airline like American?
Mitchell: Our goal is to provide travelers the best possible experience, and it begins long before someone steps inside an American Airlines plane. We strive to ensure that our tools, processes and interactions make it easy for someone to choose American -- whether it's booking online at aa.com or redeeming AAdvantage miles with our new flexible awards booking tool or making a call into our reservations system. And once in our care, the American Airlines team is committed to doing everything within its power to offer travelers the best customer service.
We take this very seriously. More than 200 employee-led teams across our network over the past two years have been working to identify issues and develop solutions within six key issues customers care about: delays and delay management, gate interactions and the boarding experience, on-board interaction, cabin interior condition, baggage handling and baggage resolution.
Q: Is it possible to run a profitable airline and have happy customers? Or does an airline have to choose one over the other?
Mitchell: We believe that customer satisfaction is a critical part of the path to profitability. American is committed to enhancing the customer experience, and we believe that will help turn our company around financially.
Although the economic environment remains challenging, we continue to look for new ways to improve operations to provide passengers the best experience possible. For example, we know on-time performance in the form of predictable and reliable schedules is important to our passengers. Some aspects that affect on-time performance -- such as bad weather -- we cannot control. But American is focused on those things we can control.
We implemented new procedures last year, including adding time to our schedule, re-adjusting flight plans to increase speed, pairing pilots and flight attendants with specific aircraft and deploying new technologies to help speed our customers through the airport. The enhancements were made with one simple goal -- get our passengers to their destinations on-time, with as few hassles as possible. And while we do not control bad weather and delays because of air traffic control issues, we are seeing that the new system we have built is helping us to navigate a better airline when these events occur.
Q: What should customers expect from an airline like American?
Mitchell: They should expect that American will deliver on its promise to offer safe, dependable, on-time service. American is continuing to invest prudently in the airline, even during these difficult economic times to help us deliver on this promise more consistently. In addition to many technology investments to provide better tools for our employees and customers, we also began taking delivery of 76 Boeing 737 aircraft that will help us keep customers loyal to American while helping the company reduce costs.
Customers should also expect that American will continue to lead the industry in making booking travel easier. American recently introduced ''One-Way Flex Awards'' -- this gives our 63 million AAdvantage members more options to redeem travel. They new technology provides customers the ability to use miles on a one-way basis at half the round-trip mileage requirement and to combine different types of award travel on a single ticket.
Q: What should they not expect?
Mitchell: Travelers should not expect airlines to be able to account for bad weather or airport delays caused by congested airports or outdated air traffic control system in every instance. However, we continue to invest in new technologies that will help us better navigate through these issues and speed up recovery when they occur.
Q: American Airlines created your position in 2007. If I recall, the idea was to demonstrate American's commitment to a better overall customer experience by adding a new leadership position within the company. How is the customer experience better today than it was when you started?
Mitchell: The customer experience has improved on many levels. I am fortunate to work every day with a dedicated team of employees from various backgrounds, including information technology, maintenance, flight and customer service, to support our frontline employees where the customer experience activities ultimately take place. Our role is to track results, identify best practices, and work across various functions and organizations to facilitate and ensure activities are successfully carried out.
By all measures, we have been successful. For example, in year-over-year comparisons between December 2007 and December 2008, American has seen complaints across all six issue areas decline by more than 28 percent and a marked improvement in customer experience ratings in five of the six customer service issue areas.
Q: Last year, American Airlines implemented a new customer blueprint that focused on delivering the basics, including safety, dependability, cabin cleanliness, baggage handling, courtesy and professionalism. Why was such a blueprint necessary?
Mitchell: The customer blueprint was born out of our need to formalize how we wanted to differentiate the travel experience for our customers and was based on feedback from the many different work groups involved in improving our customer experience scores. It also provides the basis for our roadmap and to establish priorities for our many customer initiatives.
It is tangible and visual, and it serves as a good reminder for all of us to keep the customer experience first and to remember to give our customers what they value most.
Q: The latest American Customer Satisfaction Index has just been released, and your airline scored a 60, which is down more than 3 percentage points from last year. What accounted for that drop, in your opinion?
Mitchell: I can't account for the Customer Satisfaction Index, but I can tell you that American's internal customer satisfaction surveys -- from cabin cleanliness to handling baggage to onboard interactions with our flight attendants and delay management -- show marked improvements from a year ago. And the benchmarks we measure ourselves against indicate otherwise as well. In fact, in mid-May, American paid out $14 million to approximately 72,000 frontline employees for meeting customer service and operational goals during the first quarter of 2009.
Q: It's been a year since American Airlines added a $15 fee for the first checked bag. From a customer service perspective, how is that working out?
Mitchell: Customer acceptance on domestic bag fees has gone well. Even in the earliest days a year ago, the process went more smoothly than many expected. Since then, customers have come to understand -- and we believe, accept -- the process and the concept of paying for the optional services that you choose.
Selling food onboard is another similar example. Basically, those who use it, pay for it. Those who choose not to pay for it, don't. That would include approximately 50 percent of American's domestic travelers who do not check a bag and therefore do not pay a fee.
Incidentally, that percentage of carry-on travelers has not changed -- it is about the same as before the fee was implemented. We have seen a decline in the number of second checked bags. Also, premium travelers are exempt from the charges. That includes top-tier AAdvantage members, full-fare travelers, as well as those traveling on military fares.
When it comes down to it, approximately 25 percent of American's domestic travelers actually pay the first checked bag fee -- that means about 75 percent do not.
Q: In Gerard Arpey's recent remarks at your shareholders meeting, he said the key to American's a la carte pricing initiative's effectiveness is that it gives customers the ability to customize their travel experience as they see fit, according to what they value most. What are the customers you interact with telling you about a la carte prices?
Mitchell: The fact is airlines' costs continue to outpace fare increases and have not produced the type of returns necessary to sustain a healthy business. The key to our unbundled -- or a la carte -- pricing initiative is that it gives customers the ability to customize their travel experience as they see fit, according to what they value most.
As an industry leader, American recognized that the industry needed to balance revenue with giving value to our customers. We began offering unbundled services such as buy-on-board food in 2004, and continued to lead this trend on the bag fee front in 2008, with the rest of the industry following.
We recently enhanced our buy-on-board food service in the coach cabin, selling Boston Market sandwiches and salads on some longer flights. We have assembled a team as well to focus on maximizing the customer value proposition across all the optional services we have available. This team is working diligently across our many channels to understand how to offer each of these in a way that customers get the value for what they choose to purchase.
Q: I want to stay on the subject of prices for a second. Transparency seems to be a big buzzword in the travel industry. Some online travel agencies have starting quoting total prices for certain items, like hotel and car rental rates. Do you believe your customers would benefit from having fares quoted that included all taxes and mandatory fees?
Mitchell: While total price may sound like a simple concept, in practice it is not. If one or two airlines were to choose to do that while others did not, their prices at first blush would appear to be more costly than those advertised or offered by competitors. Most Internet Web sites and computer reservation systems show the lowest prices first. Those who follow the industry know that it takes only a very small difference in price on any given route to drive customers away.
The bottom line is that the absolute full price, including any additional taxes or fees that are not already within the base fare, are fully disclosed to the shopper before they ever have to push the purchase button. They do see the bottom-line price before purchasing and that is the most important fact here. Full price before you buy.
Q: There's a debate raging in Washington over passenger rights at the moment. I think it's fair to say the airline industry has resisted most of these proposed new rules. Do you envision any scenario under which the defeat of the latest passenger rights legislation might lead to a better customer service experience?
Mitchell: We believe that the issue of how passengers are treated on flights when delayed on the ramp has been addressed by each carrier individually. Our goal at American is to ensure our customers and their belongings get to their desired destinations safely and on time. In the event of bad weather, we'll always make the safe decision. As I mentioned earlier, we have implemented a host of new initiatives designed to enhance the customer experience, especially when planes are uncontrollably delayed at airports due to bad weather.
Read more of Elliott's interviews on his travel blog.