TRADITIONAL AIRLINES HAVE LONG SOUGHT to gain competitive advantages through their cabin interiors. Many marketing departments within these airline organizations seek to create an ambiance to lure customers away from competitors. But does the airline economy class customer care? A 2008 study entitled "Passengers Speak Up About What's Worth Paying For" surveyed 735 airline passengers. Although 85% disliked paying "a la carte" fees, 53% stated they would prefer the cheapest base ticket fare available in order to pick and pay for extra services, such as premium seat selection. And only 19% stated they would pay extra for a premium seat selection, such as an exit row or roomier seats. The respondents also stated by a 10-1 margin that schedules and routes are ultimately more important than available amenities and service quality.
It seems to us many airlines have incorrectly assumed that economy class customers want unique, highly stylized cabin interiors. Judging by Southwest Airlines' chronic profitability in a highly competitive environment, economy-class passengers want clean and tidy but not highly unique or luxurious interior cabins.
In some cases, select airlines believe that unique interiors save on cost. The cost reduction is realized by better designed and lighter seats, cabins and galleys. More than 5,000 kg. of composite material is used inside a medium-haul aircraft type. On a usage level of 5,000 hr., a reduction of 10% of the interior weight would lead to a significant reduction of CO2 emissions and fuel consumption.
But adopting lighter materials creates many unintended consequences because of safety regulations and reengineering efforts. Major aviation regulators worldwide require multiple tests that are becoming increasingly more rigorous. To manufacture high-tech composite materials that are robust yet flexible and durable yet light calls for various process steps. Even minor changes in fit, form or function of interior parts require a time-intensive recalibration effort of the thermoforming machines. These changes create process steps that can lead to higher-than-expected costs and long lead times. Sooner or later the carrier will be charged for these additional costs.
The quality of the delivery from the supplier is also important. Delays in delivery because of quality issues associated with production holdups or the long grounding time of an aircraft during an overhaul event can also increase costs and even cause loss of revenue due to delayed fleet upgrades. On the carrier side, interior programs often include such aspects as marketing and product management, service engineering and purchasing. The supplier's program manager is responsible for driving the entire process, which includes identification of basic requirements, development of product specifications, sub-supplier selection and contract development. As a result, the supplier's program manager needs to be highly structured, cross-functional and near perfect in every step of the process. Complex production programs require plenty of organization and supply chain visibility, inventory monitoring, quality checkpoints in the production process and master data quality. Inevitably, the supplier's program manager is set up to fail.
Yet, as we suggest earlier, one way to reduce cost is to deliver exactly what the economy passenger desires: A clean and tidy but not a highly unique or luxurious interior cabin. In doing so, we propose that airlines continue upgrading their interiors to meet their customers' needs.
What the airlines require of their cabin interior suppliers must change. Since empirical evidence suggests that highly tailored interior cabins do not increase profitability, airlines should adopt a promising approach: Harmonized and standardized rather than customized interiors. Some are already walking down this aisle.
The above article, abridged and edited for clarity, is from a white paper published by TMG-IMC, an aviation consulting firm where Francisco Aguilera Iborra is president and Sal Mistry is senior consultant. The paper is accessible via www.TMG-IMC.com or 001+972-719-7931.