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Entries in charging for checking bags (1)

Thursday
Jun122008

Identifying the World’s (the US’s) Best

For the last 4 weeks, I have been preparing presentations, traveling to give presentations; only to fly home and do it again. And in that circle of overcommit, the blog received less than my full attention. I often thought about writing, but what to say? So, as I sit on another flight home with not a presentation due until a week from Tuesday, I get to play Caves Valley tomorrow in Baltimore. With a caddy in tow and good friends to catch up with, I look forward to playing one of the best golf venues in the Washington Metro area.

Speaking of golf, it is US Open Week. Play teed off at Torrey Pines on the South Course this morning. I had played Torrey many times before its recent refurbishment. Finally I played the redo last September and it is hard. Really hard. From the tees the tournament will be played at, the course is really long. The US Open is that one golf tournament played each year where the best in the world shoot scores (relative to their averages) and struggle like we do playing a nassau on the weekends. When asked why the United States Golf Association sets up Open courses so difficult, I believe it was David Fay that said: “we are not trying to embarrass the world’s best golfers, just identify them.”

The Open and Oil

My question today: is oil trying to embarrass the US and global industries, or just trying to identify the survivors?

I think the latter as the industry is being forced to try things not previously imagined: like charging for the first bag. American was the first to announce the idea and finally today someone (United) announced it would match – oh I mean follow American’s lead. And then in true lemming fashion, US Airways quickly announced its similar intention. I really do not like this idea at all. I understand it, but I don’t have to like it. The boarding process is already a goat rodeo and now we are going to herd cats at the same time.

I am fine with the second bag and I will just have to live with the cost of toting my golf clubs around the country and world to play the game because that is what I really love to do. I am fine with premium seating charges for the most part. I am fine with buying food on board. I am fine with fuel surcharges. But I would be most fine if the true cost of the trip ... fuel and other direct operating costs ... indirect operating costs ... and some reasonable rate of return ... could be reflected in the single price of a ticket. But transparency within each of the distribution channels, that just is not going to work ... I guess.

But what happens when the bag(s) the passenger paid to check do not arrive at the same time or the same destination? Passengers are angry when they do not arrive on time and we know that the traveling public has not paid the full cost for the service received since the beginning of time. So now they will pay for what will surely be perceived as an expected service. How will the air travel consumer’s expectations be affected by all of this? Will the industry deliver the service sold and thus fulfill the value proposition that is imbedded in the consumer’s purchase of other goods and services?

Just as the USGA says it is not looking to embarrass, there will be certain carriers in the industry that will be embarrassed by their inability to deliver. The value proposition needle is moving. Those that are embarrassed will have little to no chance of being identified as the world’s best as they will have played themselves out of contention in the first round.