Last week saw Aer Lingus finally resolve its three week old dispute with the trade union Impact which had centred on cabin crew rosters. As ever in these kinds of disputes, one very important stakeholder namely the customer appears to have been forgotten. The effects of such inside-out thinking will become all the more obvious during 2011.
Throughout the dispute, Aer Lingus cancelled an average of around 20 flights per day. As a result some 22,000 passengers had their flight cancelled. That is, 22,000 personal and business customers who couldn’t make their commitments because of the Aer Lingus dispute. For a service company, this demonstrates a shocking lack of understanding of the nature of service quality. There are five key elements to service quality namely reliability, tangibles, assurance, responsiveness and empathy. The most critical of these is reliability because it is its absence that causes dissatisfied customers (its presence merely meets customer expectations). And generating dissatisfied customers at a rate of approximately 1,000 per day does not make any business sense. If you are lucky they complain and stick with you, but most simply say nothing and just take their business elsewhere. Of all the things that Aer Lingus could have done, cancelling flights should have been its last option.
But this is not the first time that one could raise serious questions about Aer Lingus’ marketing strategy. The fact that their nemesis Micheal O’Leary proudly touted many times in the media that he was standing four square behind the company on this one should have caused the management in Aer Lingus to seriously reflect on whether their course of action was wise. With their passenger numbers down by 17% year on year for January – the big winner was Ryanair as Aer Lingus customers – now no longer able to trust their airline to deliver, switched their business elsewhere. But O’Leary has had Aer Lingus playing by his rules for years and very few companies win by playing the other guy’s game. Add to that the fact that the dispute will have had a negative effect on the Aer Lingus cabin crew, the prospects for improvements in service quality (that might differentiate them from Ryanair) are not very good either. Inside out thinking might give you some efficiencies but real strategy starts with the customer!