'Power Offers' In Air Travel: Should Continental Partner With The TSA?

Includes: UAL
by: Victor Cook

Continental Airlines (NYSE: CAL) should explore partnering with the U.S. Transportation Safety Administration [TSA] as part of a larger effort to increase passenger satisfaction. But they better act fast because Virgin Atlantic is way out front on this one.

In my last post, Creating 'Power Offers' in Air Travel, I suggested that Continental should take more responsibility for handling the baggage of first-class passengers. The objective of a 'Power Offer' is to create 'vibrant satisfaction' among Continental's first-class passengers.

Creating vibrant satisfaction among airline passengers is no small feat. None the less, guided by Professor J.C. Larreche's new book The Momentum Effect (plus my own air travel experiences) I proposed that Continental management create a "Certified Airtravel Valise" [CAV] program:

Whenever the carrier's first-class travel partner flies to any domestic destination, his or her CAV flies on the same plane (without inspection) and is delivered to the hotel or other venue where the passenger is staying. This saves schlepping it from baggage-handling to the taxi and on to the hotel.

On the return trip the CAV is picked up at the hotel by the carrier and loaded on the flight to his or her local airport.

Since CAL offers travel to over forty international destinations these also should be included in the delivery of a CAV service.


It's fair to say the responses to my proposal were mixed. One comment from a world-traveling physician said:

Something that's worked for me well was, if at all possible, to keep a set of clothes, toiletries, etc , (permanently) at the frequented destinations. At one point, I was 'commuting' to Tokyo from NY almost every other week. … once I got a taste of this 'distributed clothes cache' idea, it became so seductive that I have ended up with caches in San Francisco, … Chennai (India), Geneva and London. … it may also make sense to create these caches 'locally': my Chennai & Geneva caches were, for instance, built mostly from purchases in India/Switzerland.

The comment from an airline pilot took a different direction:

The airlines have absolutely zero say in creating passenger enhancements to clearing security. The TSA has been entirely intractable in permitting any changes to ease the pain & no matter how much the airlines care, the TSA will do what it wants to do… The TSA certainly is not going to automatically permit bags with no positive control to board aircraft.


At the end of my last post I concluded that it's easier to define than to execute a power offer. Here's what JC says about the difference in his book:

The principal difference between design and execution relates to where the two activities are conducted. Although design must, of course, be externally focused to be successful, the process is largely internal, where the firm has control over the variables. On the other hand, execution happens in the outside world, where unexpected reactions and events can make a mockery of the best laid plans and force rapid reengineering of offers that once appeared perfect. The first step in execution is to ensure that the design is properly implemented as originally intended, but that's only the first step (p. 134).

As I see it, there are two critically important external issues to be addressed if Continental management were to consider executing a Certified Airtravel Valise program. These are:

(1) Understand the policies of the U. S. Transportation Safety Administration with regard third party participation in the boarding process. If it can't be done, as the airline pilot suggested above, forget about it.

(2) Explore the possibility of partnering with other companies that already provide supporting services. Since our world-traveling physician found the idea so seductive, there must be companies that already provide solutions to parts of the process.

In this post I address the first issue: partnering with the TSA. Next week I'll follow-up with the second issue by exploring other supporting partnerships.


On January 10, 2008 the TSA published an extensive report on its efforts to partner with the private sector in providing enhanced air traveler services, including check-in and baggage handling. The introductory paragraphs summarize its objectives:

The Transportation Security Administration and private industry developed the Registered Traveler [RT] program to provide expedited security screening for passengers who volunteer to undergo a TSA-conducted security threat assessment [STA] in order to confirm that they do not pose or are not suspected of posing a threat to transportation or national security.

The RT program is market-driven and offered by the private sector with TSA largely playing a facilitating role. TSA is responsible for setting program standards, conducting the STA, physical screening at TSA checkpoints, and certain forms of oversight. The private sector is responsible for enrollment, verification, and related services.

Notice that physical screening at TSA checkpoints is necessary even for registered travelers: baggage cannot be boarded without TSA inspection.

Among the services the TSA is supporting in partnership with their sponsors and service providers are:

(1) dedicated or integrated check in lines and lanes;

(2) enhanced customer service for RT participants, such as divesting assistance, concierge service for luggage, and parking privileges; and

(3) discounts for service or concessions.

The RT program has been in development for several years. Yet few carriers have committed to it. The report cited only four airline participants at the time of its publication in early 2008:

Air France (operating out of Terminal 1 at JFK);
AirTran Airways (operating out of central at LGA);
British Airways (operating out of Terminal 7 at JFK);
Virgin Atlantic (operating out of Terminal B at EWR);
Virgin Atlantic (operating out of Terminal 4 at JFK).


Partnerships cost little and ancillary revenue from services that formerly were free is not the road to vibrant passenger satisfaction. Should CAL management explore partnering with the TSA to create its own Registered Traveler program? What do you think?

Correction: An earlier version of this article inaccurately mentioned the bankruptcy of ATA Airlines in reference to AirTran. This has been fixed.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it. The author has no business relationship with any company whose stock is mentioned in this article.