UA-NYC

I can pretty much guarantee you it's not going to get any better w/outsourced employees...

Akulashark

Outsourcing customer service to an organization that has no vested interest in your success, sounds like Harvard Business School to me.

rankourabu

Especially if its all outsourced to Air Canada staff

mahasamatman

It's pretty easy for a Canadian to get a TN visa to work in the U.S. But I doubt (m)any of them would be willing to move.

gglave

http://www.cbc.ca/news/canada/calgar...cuts-1.2546258

milepig

Will this be another case where the company who gets the contract will simply hire back the same people at a lower wage?

TA

I don't know if anyone else would like to take a look from a "macro" perspective, but my outside observer's sense is this:

When you have an industry that is structurally disadvantaged by overcompetition, customers who have beat the ticket prices down by several factors of where the fares should be, and are hostage to high and long-term capital equipment costs and inflexible variable costs, what can we expect to observe but belt-tightening at every possible piece of the chain? Until they cut something that really eats into their revenue. But for an industry that's very commoditized, there aren't very many aspects of operations that by themselves, are un-substitute-able for an inferior component, which a customer would leave over.

There is little point / insight to complain that airlines respond to the system that has been created for them as any logical player would. If you want a better airline transport infrastructure to be created, you need to look at the rules by which the industry is operating.

Not to say that if we paid higher fares, it would guarantee "in-sourced" labor or better customer service, but it is pretty well guaranteed that paying lower fares has contributed to the opposite. And of course there would be other rules you'd have to put in place to incentivize companies to provide good service as a differentiating (and financially rewarding) factor, and not just take the higher fares for nothing in return.

I doubt there is a good way out of this situation aside from the slow and somewhat haphazard consolidation (which in the end, seems to produce a lot less sustainable value than probably they aim for), short of re-regulating the frequencies and number of competitors per route.

In general, I find it of very little insight (aside from observational amusement) to gripe about things that shouldn't have surprised you to begin with.

mduell

This is huge. Despite the industry regulation, the demand side for the airlines is pretty competitive in most areas/cities. On the other hand all the major suppliers are monopolistic -
Fuel: cartel
In-flight labor: union
Ground labor: union
Aircraft: duopoly
Airports: monopoly at least at each airport, and sometimes for everything in a region

Makes for a very tough profit environment, which is why the net profits for the whole industry are near zero on any long term scale. Some do airlines better for a time only as others do worse.

entropy

Who the heck do you think SETS the fares? Joe Blow doesn't go to united.com and put in I'll pay $39 one way for SFO-EWR, and not a penny more. UA is the one that sets the pricing and rules.

TA

I would suggest reading some introductory webpages on how prices are set in a marketplace in bulk. We're not talking about individual negotiated transactions obviously.

ACYYZ/SD

Not for long. AC's LHR employees have been put on notice and about to be replaced by an outsourced ground handler as Star Carriers move under one roof at T-2. United is safe for now, but won't be far behind.

Daze

I put a personal rule in place to incentivize UA...I no longer fly them.

Obviously as an individual that means nothing, but I do see a trend of people leaving UA. Kettles complain more about UA than the veteran regular flyers on FT. UA seems to be determined---far more than the other carriers---to find out how much they can get away with and still deliver acceptable financial results.

Daze

KansasMike

While I understand your frustration, in-sourcing/out-sourcing has nothing to do with "capitalism."

entropy

Really? They offer no real option to pay more, be it $20, or $50, or $100. Micro works well, macro works well, but economic theory doesn't work well when it comes to airlines.

Since we're talking about Canadian airports here, Air Canada has decided that people don't care if they're miserable or not (or don't know better anyways). Thus the AC 'Rouge' product. On the other hand, on 'real' AC flights, they actually stock more than enough meals for F, and then sell the remaining ones in Y, the people who know about this snap them up before the meal service even starts, but its a nice 'win-win': the airline gets paid for meals, and they have enough to keep people up front happy with choice, and people in back with a decent meal.

goodeats21

I didn't know that. On first glance, seems like a great solution. Also, if United were to do it, would be another benefit to sitting in E+ (first crack as some better meals).

This all assumes Intl flights. I think the Domestic First meals have been so cut that Economy Buy-on-board would be the better option if you are paying for it...