Too clever for their customers’ good

air nz

28 Jun Too clever for their customers’ good

As a consultant I am always on the lookout for interesting examples of what businesses do.

Over the years Air Zealand has wandered in and out of favour with me. I am old enough to remember the bad old days of ‘firm but fair’ service when you had to put up with bus shelter quality terminals.

Then they woke up when competition arrived. Working on the Ansett New Zealand account was a dream in terms of service innovation and culture. They ran rings around Air New Zealand.

But eventually the national carrier caught up and unfortunately Ansett was squeezed out of the market. It was interesting to see a lot of the in-flight service touches that Air New Zealand had introduced due to the competition also disappeared.

Rob Fyfe did an amazing job turning Air New Zealand around during his tenure. At a cultural level the business started to really believe in itself. A new-found confidence gave birth to new product, service and network innovation.

Air New Zealand is very clever with its pricing. By having variable pricing it has the ability to compete as both a full service (high margin) operator as well as a low cost (tight margin) operator at the same time for all seats on all flights. They manage prices very well according to the loading for each plane at any particular point in time; optimising passenger number and margin.

However, in my view they are getting too clever for their own good. Recently, the Commerce Commission forced Air New Zealand to change their ‘opt-out’ policy of automatically signing passengers up┬áto the purchase of flight insurance. They were essentially charging passengers by stealth for something they did not consciously choose.

More recently I had a bad experience with Air New Zealand’s ‘too clever’ pricing strategy. I fly with them very regularly, and happened to be purchasing tickets for a flight online. It took about two minutes to go from selecting the flights I wanted to hitting the pay button. However, when I went to pay a notice informed me that those fares were no longer available. When I started again I found that the exact same tickets were still available, although at a price of $150 more than they were a minute earlier!

While it is acceptable for them to vary their prices over time, surely they should be locked in place once you select them and for the duration of the booking process.

This happened in the Wellington Koru lounge and I was compelled to complain. The lady at the desk was friendly but said she could do nothing about it. She said she would register my complaint and someone who would get back to me.

I am still waiting….and I still feel cheated.

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