Virgin America tops airline quality report
When it comes to overall performance, Virgin America remains number one, according to an annual airline quality report released Monday.
According to the survey, which evaluated the 15 biggest carriers in the U.S. based on several performance markers including the percentage of on-time flights and mishandled bags, eight carriers boosted their performance last year, six airlines took a dip and one is a newcomer to the rankings.
Virgin America was followed by JetBlue, in the number two spot for the second year in a row, and Hawaiian Airlines which moved up to third, according to the report compiled by researchers for Embry-Riddle Aeronautical University and Wichita State University's W. Frank Barton School of Business.
The industry overall was at its peak in 2013 -- hitting its highest point in 24 years -- but there were trouble spots, such as an uptick in mishandled luggage and a decline in on-time performance.
Delta Airlines, which held steady in the number four spot for the second year in a row was particularly noteworthy. The carrier merged with Northwest in 2008, and the report's co-author Brent Bowen, says that usually when two big carriers merge, data shows that the new mega-sized airline's performance declines.
But not Delta, which is holding its own against smaller, lower-cost carriers.
"It's scientifically proven whenever you combine two large airlines, especially two average performing airlines you get one worse performing airline,'' says Bowen, dean of the College of Aviation at Embry-Riddle Aeronautical University's Prescott, Arizona campus. But now "a former merged legacy carrier has bucked that trend . . . I think what this is saying is if management wants to make it happen, and wants to turn it around and knows the right formula, they can do it.''
There have been a flurry of other mergers since Delta's tie-up with Northwest, including United and Continental, Southwest and AirTran, and most recently American and US Airways, whose deal closed in December creating the biggest airline in the world.
Southwest, which has long been heralded for its steady profits and high consumer scores, hovered at number 8 in the rankings, while its merger partner AirTran took the report's biggest dip, going from third place in 2012 to number 10 last year. Some are wondering if Southwest, which is looking more like a big network carrier as it prepares to launch international service in the wake of the merger, is possibly losing its way.
"They're still not merged and they're plummeting, especially AirTran,'' Bowen says. "I think they're losing their focus. . . .Some people are concerned that AirTran which has developed a good corporate culture, (by) being absorbed by Southwest has dragged them both down.''
Other carriers to see declining performance scores were Frontier, US Airways, and American Eagle.
In late morning trading, Delta was down 17 cents, or 49% to $34.44. Southwest shares dropped 14 cents, or .61% to $23.67, while JetBlue was up 3 cents or 40% to $8.80. VirginAmerica is not publicly traded.
"I think one of the reasons why Delta has emerged on top among network airlines is they simply have invested in the systems, people and processes needed to not only run a better airline but to recover when problems occur,'' says Henry Harteveldt, an industry analyst with Atmosphere Research.
Harteveldt noted that Delta makes good use of social media, such as Twitter to help customers dealing with cancelled flights and other problems, and the airline saw its number of customer complaints decline last year.
In contrast Southwest's mishandled bag rate inched up, and fewer of its flights arrived on time.
"At one point, Southwest led the industry in terms of on-time performance, baggage reliability, and fewest number of customer complaints,'' Harteveldt says. " I think Southwest needs to take a look at how . .. if it can't win that triple crown again, at least how it can get closer to it because the airline is not delivering an acceptable experience right now.''
The airline quality rankings noted that the industry reached an overall performance peak last year, hitting its highest point in the 24-year history of the report.
"It's a combination of giving more priority to customer service, which means baggage handling, on time performance . .. . and the fact that airlines have returned to a level of acceptable profitability,'' Bowen says.
Bigger profits are allowing airlines to invest more in systems and personnel, and that can lead to more satisfied passengers. "On-time performance has a lot to do with ground personnel,'' Bowen continued. "Customer complaints (come from) how you deal with the people at the airport, not the ticket machines.''
Despite the overall uptick,the rate of mishandled baggage inched up from 3.07 per 1,000 passengers in 2012 to 3.21 per 1,000 passengers last year.
And on-time arrivals dropped to 78.4% in 2013 from 81.8% the year before. American and United were the only carriers to boost their on-time arrival rate during that period.
While bad weather, and a lack of runway space hinder flights from touching down on time, the larger issue Bowen says is the airlines "scheduling more flights than can be handled in certain time slots . .. .they're exceeding the capacity of the airports.''
And the industry is also wrestling with new regulations that are threatening to reduce the numbers of pilots and other key workers.
"With all this good news, the flying public should be informed of and alarmed about the very real pilot shortage caused by congressional mandate and the looming personnel crisis in Air Traffic Control because of arbitrarily changing hiring rules that eliminate the most qualified applicants," Bowen said in a statement.
2013 Airline Quality Ratings
2012 rankings are in parentheses
1. Virgin America (1)
2. JetBlue (2)
3. Hawaiian (5)
4. Delta (4)
5. Alaska (6)
6. Endeavor (new to the rankings this year, formerly Pinnacle)
7. US Airways (9)
8. Southwest (8)
9. American (10)
10. AirTran (3)
11. Frontier (7)
12. United (14)
13. ExpressJet (13)
14. SkyWest (12)
15. American Eagle (11)