Travel Tuesday: Making Cuts vs. Slash & Burn

Spend Matters is pleased to present the inaugural post by our new full-time editor, Sheena Moore

When taking a domestic flight, I expect between 3-5 hours of moderate to severe discomfort, and am usually only cheered by my mid-flight ginger ale or the fact that the passenger next to me isn't snoring, crying, or throwing up.

My boyfriend and I recently decided to go to Ireland for spring break. While I'm an avid traveler, this was to be his first trip abroad, so I spent weeks extolling the joys of international flights: entire meals, with a complimentary bottle of wine! Dozens of movies to choose from! Video games in the back of each seat! Blankets and pillows for everyone, and sometimes even a special little sleep kit, with a mini toothbrush and socks and a sleep mask! Extra legroom (I'm 5'10", he's 6'4")! Imagine our dismay as we walked onto the 757 cattle car that would be our overnight vessel from Chicago to Dublin: No TVs. No sleep kits. No leg room.

Ladies and Gentlemen: the days of classy travel are over.

The recession has perhaps hit the airline industry hardest -- dozens of airlines are doing anything they can to cut costs, stay in business, and still get the hundreds of thousands of people who fly every day to the places they need to go. In light of the recent British Airways strike, however, Irish airline Aer Lingus actually did a good thing: they took preventative measures to negotiate new terms with their unions and staff before they went on strike.

According to this article in The Financial Times, Aer Lingus has definitely seen its fair share of losses: "Revenue fell 11 per cent to €1.21bn, driven by a 32 per cent drop in cargo income and a 14 per cent cut in ticket prices. Exceptional costs included €51.9m in payments to employees losing their jobs. Losses per share widened from 20.7 cents to 24.6 cents."

Despite this, they've managed to negotiate a "€97m (£80m) cost-savings plan with unions, in spite of earlier objections to the deal by cabin crew members," using measures such as voluntary redundancies, pay cuts, and the slightly ominous sounding "new working conditions." How can Aer Lingus manage such a feat, while British Airways struggles not only monetarily with its employees, but in terms of employer/employee relations as well?

The airline says, "it took a lot of independent negotiations, and a lot of talk around the table, but we presented a vision and I think the staff realized we had to change to be successful." Is it possible? Are people finally turning their heads to the fact that in a recession, things have to change, belts have to be tightened, and that you can't always get what you want?

Obviously so, as the Aer Lingus "deal amounted to cutting its cost base by 7.4 per cent, compared with the 2.6 per cent that BA is pressing for." But negotiating with employees is not the same as passing along discomfort to your customers. Maintaining a competitive edge beyond the ticket price is at least important to growing market share and even survival.

It doesn't have to mean goodbye to those mini complimentary bottles of wine, toothbrushes, and sleep masks. It's fine if airline employees can take the cuts, but rather than coping with a grumpy, cramped and hungry boyfriend, I would gladly have paid a few extra bucks on board for those little amenities that were once included in the fare. And (hint, hint long distance carriers) what about partnering with toothbrush manufacturers and wine distributors to promote their brands to an extremely captive audience?

- Sheena Moore

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