Sunday, 1 June 2008

Consumer Loyalty Switch

I received the email from RBA informing that they have achieved the e-ticketing target. So, what does that mean? Would they be able to improve their performance and sales? Because I can tell you that our loyalty to our national carrier has now been transferred to another, due to their poor service and sales strategy.

It happened about 4 weeks ago. When I received the (most) distressing news (ever in my whole life) from my sister, we wanted to fly home immediately, as in the very next day. It was on Saturday afternoon. I called RBA London and was answered by a machine saying that the office was now closed. I was shouting my heart out! This was Saturday afternoon in England! For goodness sake, why the BL**DY H*LL are you closed?!! Saturday in England is like THE day for business to make a lot of money.

Then we tried the RBA website. And guess what, the earliest travel date that I could book from their website was in the next 48 hours! I was gobsmacked! How ridiculous is this? RBA website is not some travel agent’s website trying to sell other airlines’ tickets. It is selling its own tickets, isn’t it? Why isn’t the website connected to their booking system? Honestly, I nearly fainted! Furthermore, the price it quoted me to travel in 3 days time (the earliest available seats) was double the normal ticket (about GBP1200 per person, if I’m not mistaken). Now where is the economics in that? Aren’t few cheaper seats better than empty seats? Charging higher fare for the last few seats is only justifiable and economically sound if there is no other airline travels to the same destination.

So, my husband calmed me down and suggested that I tried Singapore Airlines. Lo and behold! Within 5 minutes, the website gave me all the combinations of the travel dates that I could purchase, as early as the very next morning! And the prices…oh sweetness… (Thank You ALLAH!) were about GBP700 for an adult and about GBP500 for a child RETURN tickets inclusive of tax and services.

And YES, it was the double-decker Airbus 380. “WOW…” was the word uttered by my 2 daughters when they entered the aircraft.
And... RBA has lost in sales of 4 used-to-be loyal customers.

What I like even better is the fact that the SQ offered a straight, uninterrupted journey to/from Singapore, which is fantastic especially for my children. They get to have enough sleep. They sleep, we sleep. And therefore we wake up happy. Unlike RBA. We have to make a transit in Dubai, which honestly is the MOST annoying thing to do for travellers with children, especially the journey returning to London. Just imagine parents travelling with small children, who have to be woken up from their sleep- grumpy and tired, just to get off the aircraft and make a long walk along the Dubai airport just to board the aircraft again in 15 minutes. It is ridiculous!

And after sampling A380, with its fantastic uninterrupted, perfectly working personal screen in-flight entertainment [don’t even let me start on RBA’s in-flight entertainment! Which has to constantly be reset by the air-stewardess which results in my children getting angry and I (almost always) bang my head on the screens], my husband and I have promised ourselves that WHENEVER POSSIBLE, we will not use RBA for any long distance journey again. EVEN if there is a price difference. Because some things, such as COMFORT and peace of mind, are simply priceless.

I am no expert in airlines or even travel business but I’m sure it is all about satisfying customers. Plus the airline business is also in a perfect competition market. If RBA continues its shoddy sales strategy, funny flight route combinations and poor in-flight entertainment, I’m not surprised that it will be losing more and more of its customers.

Salaam.

10 comments:

baz said...

just to add to ths, RBA's pricing is not flexible unlike its competitors...its funny really as well as sad, if another airline in brunei can offer a price of 400 to go to a destination, surely RBA could match it??? coz airlines are based on the number of passengers it takes, just imagine payin for the same fixed overheads i.e. fuel costs, hangar parking... but yet they can actually turn away potential customers away just becoz their prices are more expensive???? yea, RBA makes no sense at all... crazy... sometimes i feel the FOC it gives to its staff is detrimental to its strategy hahahah

Anonymous said...

Hi rogueeconomist,

Absolutely, unquestionably agree with you on your points regarding the sheer disparity in the level of service between the two carriers. I have ALWAYS taken Singapore Airlines to and from London, and do not see any reason why I should pay an equal or greater amount (occasionally less, but usually equal or greater) for poorer service, less flexibility, less comfort and an interrupted journey. Sleeping on the flight and waking up an hour away from Singapore/London's brilliant! Not to mention Singapore's a fabulous place to stop for an afternoon (en route to London).

Regarding the reliability (or lack thereof) of the inflight entertainment system - it doesn't help that RBA's long distance fleet are entering their 12th year of service. The A380's been around for a few months? And SIA used to turn over their 747s once every 5 years if I'm not mistaken?

Anonymous said...

Next to Dato Tony Fernandez of AirAsia, this ex-Shell Malaysia guy (Idris Jala, a Sarawakian Iban who has miraculously turned Malaysian Airlines around) is a genius MAS should be proud of!

"Monday June 2, 6:41 PM
Mas Chalks up US$7.2 MLN Profit From Everyday Low Fare Campaign
ISTANBUL, June 2 Asia Pulse - Malaysia Airlines (MAS) (KLSE:3786) has chalked up RM23 million (US$7.2 million) profit from its Everyday Low Fare (ELF) campaign launched in May, said its chief executive officer and managing director Idris Jala.
He said the profit was taking into account the majority sales registered during the first two weeks of its domestic ELF campaign and "a little bit of ELF for Asean destinations".

"We have not taken the majority of Asean (sales number yet)," he said in a media briefing here Sunday.

Idris was here to attend The International Air Transport Associations 64th Annual General Meeting.

MAS introduced ELF campaign for domestic routes on May 5 and subsequently introduced similar campaign for Asean destinations, except for Rangoon, Myanmar and selected routes between Malaysia and China, on May 14.

To prevent dilution or cannibalisation, ELF is only offered on lean flights and stringent terms and conditions have been put in place.

"The ELF is a permanent feature in MAS but the day it doesnt work in our favour we will stop it," said Idris when asked if the national carrier would continue the ELF campaign.

Idris said MAS recorded 500 per cent increased in its internet penetration following the launching of the ELF campaign.

He said the ELF campaign had also helped MAS sales on normal fares by 10 per cent.

(BERNAMA-OANA)"

Anonymous said...

don't you forget, MAS is being subsidise as it is a national carrier. AIRASIA, unfortunately not!

so its good to read the good stuff.

Anonymous said...

rogueeconomist...please let me know the singapore website you used...I wanted to try the doubledecker too!Thanks.

ROGUE ECONOMIST said...

www.singaporeair.com
Hope that helps!

Anonymous said...

hi rogue economist,

just a couple of points, unlike the boeing 747s or airbus a380s that SIA have, RBA only has its boeing767 for its long haul operations, and because of the aircrart in use, RBA can't realistically depart BSB to Heathrow in one go without refuelling midway. thus, dubai is needed for transit unfortunately. it is an unavoidable situation, more due to the operating limits of the boeing 767 rather than the strategy of the company. im sure if RBA could avoid doing a transit, it would do so. as that would save money spent on landing fees and parking fees on stand at dubai airport. however i do fully understand your dislike having to wake up in the middle of the night esp families with small children.

To 'baba', FOC is part of the perks RBA staff gets. It can only be used once a year. if you think hard about it, it is not really as detrimental as u suggested. im sure RBA would've thought about this a long time ago. how to reward their staffs once a year without really making any dent in their strategy.

FlyBoy said...

Another one bites the dust

Anonymous said...

intrstng blog, been reading n guess time to leave few comments =)


If Brunei intends to diversify its economy, airline industry is one it should start be serious about. It's customer service/flight experience, etc is way behind other regional airlines such as SIA,MAS and Thai. It needs to seriously buck up it's service to keep as well as increase its customers in years to come.

Emirates took around 15years to be a leader in aviation, and because of that, it's aviation industry(airport, airline) helps it diversify its economy. SIA took around 20years to be where it is now.

A380s or so is not important for now, cause its the experience from buying the ticket,paying for it and inflight experience that ultimately makes happy passengers come back for more(SQ's new 777ER is as equally good as a380). And once passenger volume is high, thats where the need for bigger planes come about. Big planes with no passenger, isnt good for airlines.

Brunei can't wait till oil run dry and start to panic and push for other diversity by promoting its airline or tourism etc. Because all this reputation building and wooing customers will take years. If it intend to be a major hub n airline, It needs to start and invest now, and not lose its customers.

Just my thoughts =)

baz said...

flyboy or anon, the FOC bit was just a nip in the bud, i meant it as joke heheh, but i guess u took it seriously! lol... anyway, y cant u guys just be sales marketing smart lah, customers is more important, we try to support RBA being bruneians, but if u cant compete with SIA prices and rather hav empty flights then.... another one bites the dust, jgn talurr ani bah heheh