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Jim tells three business stories from a 30,000 foot perspective.

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Class is in session

Each year millions of students sit in university classrooms, listening to professors explain the inner workings of businesses. Yet as I recently completed 11 flight segments on 5 airlines traveling through 4 countries and 7 airports, I noticed that an airplane is an interesting microcosm for business.

At its most basic level, it’s simple. Everyone gets on an aircraft in one place, and several hours later you arrive at a new one. As comedian Louis C.K. muses, this alone should be miraculous – “You’re sitting in a chair in the sky!”

However, as these three stories indicate, the experience can vary dramatically.

Economy: From Zero to Crazy

Our first story starts in the cheap seats, on an 8-hour trip to Japan. I struck up a conversation with the man next to me, who seemed nice enough. Our flight attendant looked like she was pulled directly from a marketing campaign – young, poised, professional, impeccably dressed, with flawless skin enhanced by cover model makeup.

As she began the safety speech, the man continued talking. Loudly. Yes, we’ve all seen this demo countless times, but something didn’t sit right as the man showed little respect as he chatted with increasing volume.

Six uneventful hours passed. And then the man started yelling. It began with him muttering loudly to himself, then the anger was aimed at the children behind him, and soon it was for the entire plane to hear. Evidently the kids had been kicking his seat, and he’d had it. Just like that, he went from zero to crazy.

Our flight attendant ran up to address the problem, speaking to him politely and quietly. “I can’t even hear you!” the man screamed, as we waited agonizing minutes while she located another seat for him. When the child’s father stepped up to defend his kids, I thought a serious brawl was about to occur mid-flight.

For the rest of the flight, I thought about the incident from a business perspective. At what point does “the customer is always right” end? If this were a flight to New York, and the flight attendant was a 15-year veteran raised in the Bronx, would they have handled it the same way? How would the man have reacted if he was told, “Sir, if you don’t shut your mouth, apologize to the frightened mom, and sit down immediately, I will have you arrested upon landing.”

All businesses deal with difficult customers. Is there a tipping point when a client just isn’t worth it? How can you train employees to deal with a similar situation?

Premium Economy: A tough sell?

As we move up a level, we delve more into the economics of flying. In recent years, airlines have introduced a level of seating between economy and business class, with each airline giving its own name, such as Plus, Comfort, or Select.

For a majority of travelers, the be all and end all factor will always be price. Airlines have taken advantage of this, continually cutting back perks. Reduced legroom? Baggage fees? No meals? People are willing to look past all of this as long as they get where they want at the lowest possible cost.

However, slowly but surely, airlines are trying to find the tipping point that will get people to fork over more money for extra amenities. It almost feels like the evolution of ecommerce, when online retailers discovered the power of the phrase “free shipping” to get customers to buy more.

In Predictably Irrational, author Dan Ariely explained it’s not good enough to offer “cheap shipping” – either use the allure of free shipping and make up the cost somewhere else, or pass on the full shipping charges to the customer.

So what will be the “free shipping” of the airline industry?

Is Economy Plus really worth the price?

3” more legroom? At 5’10” that’s not enough for me to get out my wallet, but maybe someone that is 6’4” might think differently.

Priority boarding? If you’re arriving at the destination at the same time, is it really worth $50 to get on the plane 5 minutes before everyone else?

Upgraded meals and drinks? Go ahead, try and find someone in coach that will tell you that “upgraded airplane food” is worth a major dollar investment.

Enhanced in-flight entertainment? My friend and I boarded our flight with a laptop, iPad, iPhone, magazines, and books. Between us we had enough movies, music, podcasts, and reading material to last us a week – content that we chose for $3 or $4 on iTunes, vs. what was forced on us. In this age of technology, it’s going to be difficult for airlines to stay ahead of the average techie.

But therein lies the opportunity for the “killer feature.”

As people are increasingly attached to their electronic devices, the most appealing upgrade might be WiFi access plus a power adapter.

Yes, many airlines are offering this now, but can you really count on it? Think about the last time you used the free WiFi in an airport, hotel lobby, or coffee shop. Were you fully satisfied there?

Tell you what. How about this offer to the airlines: I’ll pay an extra $75 for your WiFi connection and a power outlet on a long flight, but if it fails to work at any point or isn’t powerful enough to do streaming video, I get my money back. Deal?

So is premium economy working? I’m drawing from a limited sample size, but it always seems these seats are available when booking a flight, the section was nearly empty on the flight out, and they’ve yet to come up with a price/benefit scenario that appeals to me or any of my friends.

What’s interesting is how the airline approached these seats on my return flight. The flight attendant got on the public address system not once, but twice. They started with a sales pitch, stating that the seats had more legroom, at a cost of $130. Then the announcement started to border on antagonistic, as they made it very, very clear that these were NOT seats that anyone could just sit in because they were open. Honestly, it felt that they were seconds away from saying, “So don’t even THINK about sitting here, OK?”

Business/First class: A bridge too far?

By far the most disheartening part of being an economy passenger is the slow walk out of the cabin after successive 6+ hour flights. As you jostle with other passengers and stretch your aching back, you catch a glimpse at what might have been.

The business class seats are grouped in twos, with no middle seats to be found. Each individual pod is like a personal cocoon, as you start to notice the features: they have a place to put up your feet… the TVs are bigger… those seats look like they recline nearly horizontal. Wait, are those TWO armrests between each person? Hold on, are those slippers!?!?

The ultimate mind game is when the first class cabin is upstairs, leaving you to only imagine what goes on at that level.

I’m wondering how many average travelers have even sat in one of those premium pods. Why don’t airlines have demo units at airports so that people can see what they’re missing? As someone that goes to the auto show every year, I love watching someone slide behind the wheel of a $100,000 sports car and say, “I’m going to own one of these one day.”

Let’s say there are 4 unsold business class seats open for a flight. Yes, these often go to membership members, but what if there was some kind of phone-based bidding system where passengers could enter what they’d pay to get them? Wouldn’t that add some excitement to things? If someone bid, won, and had a great experience, would they be more likely to buy a business class ticket in the future?

Finally, what if for every flight, one person was randomly selected from economy and instantly upgraded to first class like they do at sporting events? Put aside the logistics: anger from the passengers that paid $15,000, sitting random people next to CEOs, and what to do when you’re traveling with your spouse and 3 kids and you get chosen.

Imagine a scenario where the entire section is already seated, and the flight attendant comes back and slowly reads the winning seat:

And the winner…
Thirty… (Most of the plane groans, 10 rows perk up)
Seven… (9 people in that row gasp)

I’m pretty sure that person would go from zero to crazy.

Sponsor Message: Freshbooks Fresh Take of the Week:

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Yes, some of the fans are disappointed in the lack of whiz-bang features in the new iPhone 5 after all this time, and Samsung is certainly taking a shot at Apple in their ads, but the bottom line is, as an overall product the iPhone just works. It’s a complete package and a great overall product, even if it doesn’t have the ability to teleport you to another space/time continuum yet.

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Sponsor Message: Amari Hotels.

The Amari hotel chain is a group of 13 full service hotels and resorts covering the leisure and business markets in Thailand. In full disclosure, they have been kind enough to sponsor part of my stay there, and now I can report, they are amazing.

The Amari Vogue is in the beach town of Krabi, and I can honestly say it was one of the coolest places I’ve ever been. I’ll have a full review next week.

I also stayed at the Amari Watergate in Bangkok, and the service there was 5 star. I even got to meet the General Manager, and will have coverage of the restaurants, spa, and room there.

I posted last week’s podcast while working remotely at the Amari Vogue hotel in Krabi, Thailand. Pretty nice “remote office,” right?

Learn more at Amari.com.

Sponsor Message: dusitD2 Hotels.

Meanwhile in Thailand’s second largest city, Chiang Mai, I stayed at the dusitD2 hotel. The service there was also top of the line, I had breakfast with one of their managers, and wait until I show you the daily brunch layout they offer. We’re talking American breakfast options, traditional Thai food, great coffee, 5 kinds of fruit, and bottomless smoothies.

Much like the city of Chiang Mai, they blend a great mix of older, traditional Thai culture with a modern twist. I’ll have a review and tons of photos for them next week, and you can check them out at dusit.com

Full disclosure: They have been kind enough to sponsor my stay in Chiang Mai, Thailand, and I will be doing a review of my trip with photos and videos at the end of September.

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