Very openly spoken I think there is only one opportunity to make people more productive per "cost Euro": The remuneration per flight hour has to be reduced.
There are different ways for doing so. But I am convinced that there is something like a natural productivity barrier in air travel and service business. :-:
Actually there are two ways to make people more productive: reduce their cost (personnel expense) or increase their value (sales revenue).
If you rationalize too much and the contact to the customer is minimized the customer has no time to realize that this is a high-level product and not just another low cost carrier clone.
I agree this is a definite danger if your survival depends on charging a premium for your product.
I remember an example of a company in the coffee business that for a long time has been displayed as the one and only blueprint for successful business: After increasing the procutivity by new machines and thus reducing the customer wait times the turnover was down.
Simply due to the fact that a specific preparation time is an intrinsic value for the customer experience.
The share regained after the previous experience was reinstalled.
Hmmm...the notion that there is intrinsic value in the customer experience...that might be a clue...but I suspect different customers value different things or at least the same things have different values: how do we reconcile that?
Edit & Forgotten argument:
IMHO all partners have to pay a contribution during a restructuring or a modernization phase: The passengers paying their contribution every day due to the introduction of the NEK (30 inch) seats instead of the former 32-34 space between the rows.
I suppose the passengers will pay only up to the marginal cost of alternate choices. That means the carrier either needs to eliminate competition to extract a monopoly rent (i.e. the customer pays because s/he doesn't have a choice), or provide a value proposition that is at least a good as the next best travel service option (like flying AF via CDG
).
The employees pay for their lack of productivity, but their productivity might be limited either by the absolute level their skills, or by their ability to apply their skills. The first one can be addressed by both the employee and the employer. The second more by the employer.
The company can pay only up to the point where investors start putting their capital somewhere else where it means a better return. That situation is very much in control of company management.
In short, like
gum's argument, but I would rephrase it: instead of saying all of the "partners" have to "pay", I would argue that unless all of the "partners" (corporate investors, employees, customers) benefit from the strategy, it will not be sustainable.