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Old 11th Aug 2014, 22:59
  #1586 (permalink)  
VH-Cheer Up
 
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Location: Melbourne
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The Seven Bells: Another superbly analytical post by Kharon.

I know the CP ("Harry") is not necessarily a seasoned business strategist, but something about the implication of the cost pressures being higher in an LCC than in other types of operation chills me to the marrow.

If the LCC achieves lower cost only by pressurising staff to cut costs eventually that will lead to tears. Cost cutting inevitably leads to corner cutting.

The whole LCC model is supposedly based on a different, less-expensive-to-deliver value proposition. Deconstructed fares, everything extra for the customer involves a surcharge, lower cost = lower service expectation. Bring your own lunch, no interline, carry-on only, pay for entertainment. And don't forget, where the whole LCC thing started, costs were avoided massively by flying between secondary airports, which really doesn't work in Australia because most of the secondary airports cannot accept high density jet aircraft.

Other LCC features were single type - now eschewed by some, e.g. Ezy, Virgin (Virgin is clearly no longer an LCC). Longstanding LCCs that have maintained the single-minded business focus, and have never missed a beat on profitability nor, to the best of my knowledge, never had a systemic safety issue, are probably limited to two carriers, SWA and RYR. (Happy to hear more nominations).

Safety is not a luxury to be added on to the price of a ticket by those who wish to pay a safety surcharge. It's the expectation of every passenger on every airline the price of the ticket provides adequate margins to ensure safe delivery to their destination.

If the Tiger LCC business model works in practice only by exerting a higher level of pressure on staff, all staff, then the model is doomed to fail. You cannot be the cheapest while still providing the same level of service without making sacrifices elsewhere. It's all the more worrying if those sacrifices are invisible to the customer, because that may mean they are deeply rooted in the culture and management practice.

When the pressure becomes high enough, the weakest part of the pressure vessel will provide relief. That will usually be unexpected, virtually instantaneous, and possibly catastrophic.

There's a story about the Apollo astronauts sitting on the launchpad, awaiting blast-off. Once they had completed all their checks they had little they could do except to contemplate they are sitting on top of a massive fuel tank, in the knowledge every supplier of the million-plus components keeping them alive was selected on the basis of providing the cheapest quote.

Gagging the flight crew from occasional animated rebuke of the ground crew is merely window dressing. Some kaizen-style analysis of the organisational pressure-buildup might be highly enlightening. And the outcomes could be so much better for all concerned if done outside the auspices of a formal accident investigation.

I'll leave you with a song:

Pressure pushing down on me
Pressing down on you no man ask for
Under pressure - that burns a building down
Splits a family in two
Puts people on streets
It's the terror of knowing
What this world is about
Watching some good friends
Screaming let me out
Pray tomorrow - gets me higher
Pressure on people - people on streets
Chippin' around - kick my brains around the floor
There are the days it never rains but it pours
People on streets - people on streets
It's the terror of knowing
What this world is about
Watching some good friends
Screaming let me out
Pray tomorrow - gets me higher
Pressure on people - people on streets
Turned away from it all like a blind man
Sat on a fence but it don't work
Keep coming up with love but it's so slashed and torn
Why - why - why
Love
Insanity laughs under pressure we're cracking
Can't we give ourselves one more chance
Why can't we give love one more chance
Why can't we give love
Cause love's such an old fashioned word
and love dares you to care for
The people on the edge of the night
And love dares you to change our way of
Caring about ourselves
This is our last dance
This is our last dance
This is ourselves
Under pressure
Under pressure
Pressure
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