Yevhen Dykhne: Delays of Charter Flights: Ethics vs. Business

Yevhen Dykhne 26 July 2018 15:53

Delays or cancellations of charter flights are often viewed in terms of legal responsibility or its absence. Unfortunately, very few people view them in terms of business ethics.

At the beginning of the "hot season," small charter carriers are not afraid to offer 30% more flights than their fleets of two or three aircraft are actually capable of performing.

How does this work? A transport contract between an airline and tourist operators is concluded for one year, as a rule. On the one hand, competition forces airlines to offer tour operators prices that are more favorable than the prices offered by competing airlines. However, in order to lower the cost per flight hour, it is necessary to ensure that an aircraft remains in the air for as long as possible. In addition, the time for unscheduled maintenance is often not taken into account when a charter program is being drafted.

At the same time, one should be aware of the fact that carriers compete among themselves on profitability, which is no more than USD 15 per roundtrip flight.

Having won this price war, the airlines Bravo, Anda Air, FANair, and their ilk simply do not know how to cope with the orders they receive. It now boils down to the ethics of the owner and management of the airline business because Ukrainian law requires airlines not only to have replacement aircraft in case of technical malfunctions, but also to work with passengers waiting for their flights to depart when there are delays. However, carriers are not in a hurry to meet these requirements of the law because their enforcement is very liberal.

Consequently, airlines accept more work than their aircraft can actually perform. This results in cyclical delays, the results of which we are observing in large numbers at all Ukrainian airports during the summer season of this year.

The business mentality of these airlines looks like this, "We will get into a fight and see what happens. Maybe we will cancel some flights or merge several flights. Passengers will wait because they are not going anywhere. We somehow got away with it last year, and we will get away with it this year."

Small charterers are forced to accept more work than they can actually perform because they are in a race to lower the cost of their services. This is becoming a problem for passengers

Demand for charter flights is increasing as a result of the stabilization of the hryvnia national currency and the general trend towards economic growth, but it turns out that airlines with fleets of two or three aircraft were not prepared for this. We are not seeing an increase in the fleet of aircrafts or withdrawal obsolete aircraft from operation.

This approach to doing business will ultimately be bad for passengers. What needs to be done now?

1) Make provisions for an aircraft-reservation control technology

Small carriers racing to obtain flight permits only formally meet the State Aviation Service’s requirement to have reserve aircraft. In particular, these airlines make mutual aircraft reservation, but they fail to take account of each other’s flight timetables and the actual period for which their aircraft will be in the air. Therefore, when approving the flight program for a season, the regulator must determine in advance whether an airline is capable of performing all its flight combinations and whether the flight program makes provision for possible flight delays, the time necessary to perform maintenance work, and confirmation of reservations in such cases.

2) Ask passengers to make responsible choices

The operations of charter and regular carriers are fundamentally different in terms of medium- and long-term planning. A simple analogy can be made between a charter airline and a coffee house. A coffee house needs to make its product a little cheaper to compete with the neighboring coffee house and gain a larger market share. By offering a similar product at a lower price, the coffee house attracts more customers, who form a chaotic queue to buy its cheaper coffee. However, the coffee house cannot afford to hire one more employee to help reduce the queue because a new employee means new operating costs (a salary, a workplace, social welfare, etc.), which means that its coffee will become more expensive! Therefore, the owner of the coffee house decides to let customers stand in long queues if they want cheaper coffee.

In this situation, small charterers are forced to accept more work than they can actually perform because they are in a race to lower the cost of their services. In the final analysis, this is becoming a problem for passengers.

When choosing a tour package, ask yourself whether the possibility of a ruined vacation, nerves, and waiting for hours in airport terminals with your children is worth it or whether you prefer to buy coffee that is a little more expensive to avoid queues

Unlike regular airlines, charter carriers do not face strongly pronounced reputational risks. A passenger booking a tour package from a travel agent or an agent does not always know the difference between regular and charter carriers. Only a very experienced passenger is interested in finding out which airline will perform the flights in his tour package. It is even rarer for an experienced passenger to be ready to pay an additional USD 15-20 per tour to fly with an airline with a good reputation. Of course, for a family, such a difference in fees adds up to USD 100 and becomes palpable.

At the same time, in pursuit of cheapness, passengers become hostages to those unpleasant situations that we are now witnessing. Therefore, when choosing a tour package, ask yourself whether the possibility of a ruined vacation, nerves, and waiting for hours in airport terminals with your children is worth it or whether you prefer to buy coffee that is a little more expensive to avoid queues.

Airlines will begin caring about their reputation and business ethics only when passengers begin voting with their ticket purchases and airlines begin losing customers.