An airline may not control the alleys around their gates at the airport. They certainly don’t manage air traffic control. They can’t control the weather. American Airlines focuses on ‘D0’ — departing exactly on time — on the theory that an on-time departure is the most controllable thing they can do which ties to an on-time arrival.
Now that former American Airlines President Scott Kirby is President at United, the approach is coming to United.
Departing on time only has a limited relationship with arriving on time, and incentivizing the former hardly guarantees the latter. Indeed a 200 year old transportation story is apt.
In the late 1800s England regularly sent convicts to Australia. The voyage by sea was not easy: An average of 12 percent of prisoners died on the way. Many in England found this alarming and sought to reduce the mortality rate. They tried many things, but nothing worked.
Nothing worked, that is, until the economists got involved. It turns out there was a simple problem with how the English were sending their prisoners to Australia: They were paying the captains of ships based on the number of prisoners that boarded the ships. This system was changed to one in which captains were paid based on the number of prisoners who departed their ships alive. Overnight the mortality rate fell from an average of 12 percent to about 1 percent.
Incentives matter. And using the right incentives tiered towards you goals matter.
Put another way, you get what you measure. If the only thing you measure is D0, you get D0 and nothing else.
The problem with D0 isn’t that on-time departures aren’t valuable, it’s that incentivizing on time departures (with both a positive and negative approach) is creating customer service problems because they’re doing it wrong.
Instead of supporting gate agents with the resources they need to perform all their duties and make sure planes get out, they pressure existing gate agents and tell them all that matters — to the exclusion of everything else — is D0.
And at American this laser-like focus on pushing back exactly on time, with consequences based solely on that metric, has meant flustered gate agents who:
- begin boarding before scheduled time (frustrating crew, and passengers who turn up on time to find overhead bin space gone)
- have an excuse not to process upgrade and standby lists correctly
- do not come onboard to move passengers up from economy to first when a check-in passenger doesn’t show.
And yet American Airlines has had below average on-time performance so they’re incurring costs in terms of employee morale and customer good will without even arriving on time.