2/18/2011

Vueling: lack of customer value understanding

The greatest LEAN thinkers have defined it in 5 principles, as follows below:
  1. Specify what creates value from the customers perspective
  2. Identify all the steps along the process chain
  3. Make those processes flow
  4. Make only what is pulled by the customer
  5. Strive for perfection by continually removing wastes
Last year I went several times to Europe to work in a project. In one of my visits to Spain, I came to know one interesting fact by its lack of Lean, specifically the first principle (value).

In Spain, there is an airline company called Vueling, a low cost airline company for domestic flights mainly. The positioning of the company is well-defined: transport passangers with low operational cost, offering low cost tickets. That's it! I have flown once with them and comfort definitely is not part of the strategy.

That is not an issue. That is the company's strategy and it is bringing good results for them.

The problem is... In the lust of bringing more customers, the company launched a flight from Barcelona to  Lerida. You might be asking what is the problem with that? Simple! Do you know what is the distance between Barcelona and Lerida? 160 Km. Take a look at the map below.



Travelling by car would take us 2 hours to complete the journey. By train (there is a high speed one), it would take us 30 minutes, but we have got to include the transit time to the station plus check-in time... let's say 1h15 minutes approximately.

What does it mean? Who will buy an airplane ticket to travel the same distance that can be done faster and easier by either car or train? The answer to that question is: 2 people! They could only sell 2 tickets! Take a look at the press release:



According to the company, it was a marketing strategy mistake. In my opinion, they did not understand that a customer would never pay more to spend more time. Furthermore, the operational cost of Vueling is higher compared to the benefit generated. It was clearly a lack of customer value understanding. Actually, it was a lack of LEAN!

Um comentário:

  1. We don't know the exact reason for Vueling sell this ticket which is quite strange.
    But it is important to remember that in aviation, especially for small and/or regional companies, there is a practice that is the repositioning of an aircraft. This practice involves placing an aircraft in a location with higher passenger demand and often as the fleet is small, this relocation must be done with a ferry flight. But not to characterize the flight as a ferry flight, Vueling may have decided to put the route available for sale, so any tickets sold can minimize the amount spent on the flight completely empty.
    Doing a quick search on the Vueling website, I noticed that the flight Lleida - Mallorca has a very high demand, which may justify my opinion about that.
    Sorry about my english.

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