PeoplExpress Starts Operations June 30, 2014

PeoplExpress is a strange concoction. I paid a bit of attention to it a couple years ago because Newport News is about 20 miles from where I live. The more attention I paid, the less interested I became. Rather than a brave aviation experiment, PeoplExpress seems more of a case study in failed business planning and development practices.

Here are but a few:

The essential marketing strategy for the company has never been clear, apart from reliance upon what I refer to as the “Doctrine of Cheap Things.” This being that, if you sell something cheap enough, some people will buy it, regardless of whether it adds any real value. The on-line travel seller’s market is also filled with such outfits.

There are frequent references to the company’s customer-friendly intentions, and a “cheap with a smile” attitude, but no one has ever explained how precisely this is going to work. Delivering the same or a similar set of miserable customer services as most every other aviation company, but doing it with a better attitude, seems to be an amazingly shallow strategy. If the company is somehow expecting service enhancements, it’s never been clear what these might be, how they will be affordable within a “cheaper is better” business model, and why this approach might be sustainable.

As many others more qualified that I have remarked, the company’s fleet and operations strategy simply doesn’t make sense. In this context, that which doesn’t make sense usually doesn’t work either. There are exceedingly rare exceptions, but that’s a poor way to plan a business.

The business planning failures are even more striking, especially when you consider them in the context that they do contain some partial logic–but you have to have been there to appreciate it.

PeoplExpress appears to have been contrived by a very small group of people who shared some basic assumptions. None of these appear to have been validated either by the marketplace (one assumes that the service launch in a few days will be part of that exercise), or by adequate research and planning.

One is that there remains some value and goodwill in the PeoplExpress name. I’ve never met, or even heard of, anyone apart from the management team who believes this. Most travel industry people old enough to remember People Express Airlines have the opposite, or at least conflicted, recollections.

Another is that Newport News is a logical place to base an airline.

In a way, it is. Some commentators have remarked that there is no logic in trying to complete with a perfectly adequate and well-served airport in Norfolk. There is–but only if you live here.

I never fly from Norfolk–never. I’ll drive to Richmond, which is somewhat further (and just as well-served), or occasionally to Washington, which is a lot further. The reason is that there is no good way to get to or from Norfolk International from this part of the Virginia Peninsula. It can take 30 minutes, or three hours. There’s no way to predict and it’s a miserable trip on a good day. That route is notorious in local thought and urban mythology. If there were such things as trolls, local people would be assuring you that they are found in abundance underneath the bridge that forms part of the route that you have to travel.

If you’ve ever spent an hour in a car stuck in traffic in a tunnel underneath the Chesapeake Bay, you’ll understand what I mean.

However true that may be, it’s an inadequate business strategy. It’s usually a fatal mistake to base strategy on what you personally find appealing–unless you’ve been able to prove that large numbers of other people happen to agree with you.

The 200,000 or so people in the direct service area for Newport News on this side of the water will probably agree that more service from Newport News / Williamsburg International is a good idea. The million or so people on the other side probably will not. No one has convincingly tested either of these assumptions, by the way.

Early on, PeoplExpress tried to get support from Norfolk to establish its base there–the idea was rebuffed. The company’s first business office was in Norfolk.

Newport News is a delightful airport to use because almost nobody uses it. As soon as it becomes busy, it is a far less attractive facility.

All this is why there is a market for good consultants. By that I mean equally aviation and business experts who will look at situations objectively and tell you the truth. There are far too few of these.

PeoplExpress is an idea that is so flawed in concept and execution that it’s impossible to rationalize how it even might succeed.

What Would A Proof of Open Booking Look Like?

One can spend considerable time and energy developing specific and detailed reviews of flawed theories and business proposals. Although appreciative comments and note are often the result, it’s important to recognize that this isn’t how business strategies should be developed.

The burden of proof rests with the proponents of new strategies and theories to use adequate and appropriate reasoning, and specific proofs to show that these are valid–not with everyone else to show why they are not.

Open Booking, as presently announced, is an ill-conceived business strategy that rests upon faulty logic, inadequate data, poor research, and a suspension of belief in how the real world operates. Its proponents have, or should have, certain obligations to correct these errors and show how Open Booking then remains a valid business premise.

Absent a much improved business case, the travel community is justified in rejecting Open Booking’s imaginary benefits without further argument. The disinclination of others to spend time refuting unsupported theories gives them no credence whatever.

Here’s a concise outline of how Open Booking must be proven. It’s not unrealistic and doesn’t assume more that a correct application of available evidence.

I’ve also attached a “conclusion” as to how likely we are to ever see any of these points addressed.

1)    Assume the Burden of Proof

Advocates of any theory, business or otherwise, carry the burden of proof which requires them to adequate demonstrate why their ideas are valid.

Statements about Open Booking such as “travelers are booking directly with suppliers and often times spending less money than if they go through a managed program,” or “there have been studies that have validated this but unfortunately, the status quo has swept them under the rug” are irrelevant commentary and establish nothing.
When you make such claims, it’s your job to substantiate them. Produce your evidence or abandon your claims.

Conclusion: The Burden of Proof is troublesome and inconvenient. It’s much more fun to make random, unsupported claims and suggest that people who disbelieve you should know better. The logical basis for Open Booking is so shaky that were unlikely to see a rush to defend it with more that opinion and speculation.

2)    Clearly and Comprehensively State the Proposition

Any business theory requires a detailed, comprehensive statement of what it is and how its proponents expect it to work. For Open Booking, that means more than the vague statements about how everyone is doing it so the result is therefore inevitable. The business proposition needs to be positively defended in order to be valid. Simply because flaws can be identified in the travel management process does nothing to advance the cause of Open Booking–there are other equally choices available.

The case for Open Booking also needs to consider business operations in the real world in detail and discuss how Open Booking affects each of them. A few short PowerPoint presentations do little to advance this discussion.

Conclusion: Building a correct business case is a lot of work, and Open Booking is a moving target that seems to evolve along a new line as soon as someone points out its shortcomings. It’s unlikely that anyone will expend the effort to improve this picture.

3)    Define Specific, Unambiguous Proofs That Your Assertions Are Correct

Once you’ve explained the business case for Open Booking, show us the clear proof-points that demonstrate the theory is valid and worth the effort. Not travelers are booking directly with suppliers and often times spending less money than if they go through a managed program” but how much, how often, under what conditions, and to what degree does this have to be so to offset costs and business risks?

Conclusion: If Open Booking could be substantiated in this way, someone would have tried to do so by now. The fact that proofs and evidence are abandoned in favor of opinion and anecdote is itself a demonstration of Open Booking’s failure.

4)    Use Objective, Comprehensive, Accurate, and Scientifically Correct Data

Forget self-selected surveys, tiny samples, biased questions, and the general lack of controls that infests almost all travel industry research. Produce data that can be defended, use it to establish your proofs, and then your Open Booking business proposition might have some validity.

Conclusion: Almost all travel research is useless and contrived to establish the preconceptions its authors want to perpetuate. This is unlikely to change anytime soon. As best (and this is conceding a great deal) the data in support of Open Booking are ambiguous.

Open Booking’s proofs and research should be straightforward and, if correct, should silence critics when accompanies by a comprehensive business proposition. It’s time this evidence is forthcoming.

5)    Comprehensively Describe How You Did Your Research

What precisely was your sampling methodology? How are your conclusions sustained by the raw data? What is an alternate interpretation of the data and how do you answer that interpretation? What would researchers have to do to replicate your research? Who sponsored your research and what are their and your predispositions?

Conclusion: Real research is transparent, fully explained and disclosed, and replicable. Spurious research sustains one-time conclusions or hides behind a proprietary cloak. This type of transparency and disclosure is very rare in the travel industry and non-existent as concerns Open Booking.

6)    State What You Cannot Yet Prove and How This Affects Your Conclusions

Scientific research acknowledges its shortcomings and identifies what cannot yet be proven as well as what can. It also admits areas where future evidence might disprove the theory. The quality of your interpretation of the evidence in support of your claims is as important as what that evidence specifically shows.

Open Booking lacks a real statement of its comprehensive business case, real proof-points that are offered to establish its validity, scientific evidence sufficient to establish the vague claims made in behalf of it, and a rational analysis of its very real deficiencies.

Conclusion: Open Booking’s proponents are no more likely to improve their process or develop their evidence in this area than they are in any other. Remember, if you are an advocate of Open Booking, you have the responsibility to develop and present your adequate evidence before anyone is obliged to give your ideas credence.

It’s not up to me or anyone else to disprove Open Booking–the burden rests with you. The six areas discussed here should be a minimum expectation.