Wednesday, May 10, 2017

Budget airlines continue to top major customer satisfaction study

Low-cost carriers continue to lead U.S. airlines in the J.D. Power 2017 North America Airline Satisfaction Study as overall satisfaction with the nation’s airline industry continues to increase.

According to responses submitted by more than 11 thousand business and leisure travelers between March 2016 and March 2017, Southwest Airlines (NYSE:LUV) ranked No. 1 for the first time, with a score of 807 out of a possible 1,000 points, and performed well in all seven factors measured. JetBlue Airways (NASDAQ:JBLU) ranked second with a score of 803, improving in six of the seven factors.

However, as with the American Customer Satisfaction Index released in April, low-cost carriers also brought up the rear. Frontier, (NASDAQ:FRNT) with a score of 663 was the lowest-rated airline.

Rankings of 'traditional' carriers
Among traditional carriers, Alaska Airlines (NYSE:ALK) ranked highest for the tenth consecutive year with a score of 765 while Delta Air Lines (NYSE:DAL) ranked the highest of the nation’s Big Three carriers, second among traditional airlines and fourth overall, with a score of 758. “Traditional carriers” are defined as airlines that operate multi-cabin aircraft and use multiple airport hubs.

According to the study, overall customer satisfaction with airlines has reached its highest level ever, continuing a trend that now stretches five consecutive years. Lower fares, better on-time performance, fewer lost bags and the lowest bump rate ever recorded contributed to steady improvement in customer satisfaction, the company said in a news release announcing the results of the study.

“It’s impossible to think about airline customer satisfaction without replaying the recent images of a passenger being dragged from a seat, but our data shows that, as a whole, the airline industry has been making marked improvements in customer satisfaction across a variety of metrics, from ticket cost to flight crew,” Michael Taylor, travel practice lead at J.D. Power, said. “As recent events remind us, however, airlines have significant room for improvement. Airlines still rank among the bottom tier of most service industries tracked by J.D. Power, far lower than North American rental car companies or hotels.”

The study, which is now in its 13th year, measures passenger satisfaction with North American airline carriers based on performance in seven factors. In order of importance, they are cost & fees; in-flight services; aircraft; boarding/deplaning/baggage; flight crew; check-in; and reservation.

Some of the key findings of the 2017 study:
  • Overall satisfaction continues to climb. Overall satisfaction with the airline industry in 2017 increases by a significant 30 points to 756, continuing a trend of steady performance increases that began in 2013. Both traditional and low-cost carriers have shown improvement, with the traditional carriers continuing to close the satisfaction gap with low-cost carriers. 
  • Lower costs, fewer problems, satisfaction with crews drive improvement. The average North American airfare fell 8.5 percent in 2016, helping to drive satisfaction levels in the cost and fees factor in the study to the highest level since 2006. Improved on-time performance, fewer lost bags, historically low bump rates and high scores for flight crews also contribute to the overall increase in airline customer satisfaction. 
  • Social media is feedback tool of choice. Among business travelers, 21 percent posted a comment about their airline experience on social media, while 8 percent of leisure travelers did the same. It is worth noting that nearly three-fourths of social media comments are described as “positive” by those posting. The most commonly used social media platforms are Facebook (81 percent) and Twitter (41 percent). When an airline responds to any social media post—whether it’s positive or negative—there is a noteworthy 121-point lift in passenger satisfaction. 
  • “Ladies and gentlemen, the overhead bins are full…” After a slight dip in 2016, passenger problems with overhead storage has become more common, with 14 percent of passengers in 2017 reporting this as an issue on their flight. Satisfaction among flyers having difficulty with overhead storage is 82 points lower than among those who don’t have difficulty. The problem is inversely related to age, as travelers in younger generations are more likely to experience a problem with overhead storage than are older travelers. 
  • Bumping occurs infrequently—but significantly affects satisfaction. Although instances of denial of boarding and re-booking to another flight (bumping) have reached historic lows in frequency, they have the greatest negative influence on overall satisfaction. However, when there are delays, such as those caused by weather or mechanical issues, satisfaction levels fall by 101 points when a traditional carrier is delayed and by 59 points when a low-cost carrier is delayed. 
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