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Low-Cost Airlines Outperform Majors in Latest Rankings

Low-Cost Airlines Outperform Majors in Latest Rankings

Consumers like low fares, but good customer service too

June 15th, 2012 by Mark Huffman of ConsumerAffairs in News

Overall, the level of customer satisfaction with air travel took a dip in the latest J.D.Power and Associates North America Airline Satisfaction Study.

But when you break it down by low-fare carriers and the so-called "legacy" airlines, customers rate the little guys higher in overall satisfaction. In fact, satisfaction with low-cost carriers improved for a third consecutive year, increasing 3 index points from 2011 to average 754, while satisfaction with traditional carriers declined 4 points to 647.

"The airline industry is caught between trying to satisfy customers who demand low prices, high-quality service and comfort, and contending with the economic challenges of profitably operating an airline," said Stuart Greif, vice president and general manager of the global travel and hospitality practice at J.D. Power and Associates. "Passengers want it all, but they are not necessarily willing to pay for it all. Carriers often must make decisions for financial reasons that they know will negatively impact passenger satisfaction, and therein lies the conundrum."

Afraid to raise fares

Carriers also often feel they cannot significantly increase published fares, since consumers generally choose flights based on the lowest fare. While adding fees for checked bags have helped improve airlines' bottom lines, consumers often feel blindsided by the extra fees.

"Delta displays on the website that the first check in bag is free," Gee, of Snellsville, Ga., wrote in a ConsumerAffairs post. "Once you arrive at the airport, you are told that only American Express holders have free bags. Also I was told that if I read the fine print online I would see the details. I was very upset to be tricked into fees."

Passengers reviewing airlines at ConsumerAffairs mostly complain about service issues. Gwendolyn, of Portland, Ore., recently recounted her problems getting home from Tulsa on United.

Consumers rate United

"My flight on United Airlines was scheduled to leave early evening on April 2," she wrote in a ConsumerAffairs post. "I could get to Denver later, but I would miss my flight to PDX and have to stay overnight there. No problem, these things happen. I opted to stay in Tulsa (no offer for a hotel room was made by United staff). I was booked for an early morning flight. So I left and came back 12 hours later on for my second scheduled flight.

"When I arrived, I was told that the flight had been canceled the previous evening and that I had been notified by phone (I had not been). I was then booked for an evening flight. So I left the airport and came back 12 hours later for my third attempt to get home to PDX. This time, I made it through security before it became known that this flight too was delayed to the point that I would miss my connection. I was told to come back in the morning to try for a fourth time. I was told there was no way for me to get back to PDX that night."

The J.D. Power study measured overall customer satisfaction based on performance in seven factors: cost and fees; in-flight services; boarding/deplaning/baggage; flight crew; aircraft; check-in; and reservation.

Checked bag fees

Checked baggage fees are a customer sore point and have a notable impact, with satisfaction averaging 85 points lower among passengers who pay to check bags. For example, two carriers with the highest satisfaction scores in the study - JetBlue Airways and Southwest Airlines - do not charge passengers to check the first bag.

While the cost and fees factor is important, more than 70 percent of passenger satisfaction is driven by other parts of the overall experience. The study finds that customer service - whether personnel are perceived to be helpful or rude - play a big role in whether the passenger intends to fly with an airline again in the future.

"Despite the need for some carriers to charge unpopular fees, they can gain a competitive advantage by focusing their efforts on process efficiency and positive interactions with the staff and crew," said Jessica McGregor, senior manager of the global travel and hospitality practice at J.D. Power and Associates. "Carriers that find innovative ways to provide passengers with greater control, save them time, reduce hassles and make the airline experience more enjoyable and comfortable will reap satisfaction benefits."

Top airlines

Alaska Airlines ranks highest in the traditional network carrier segment for a fifth consecutive year, performing particularly well in four of the seven factors: boarding/deplaning/baggage; flight crew; check-in; and reservation.

JetBlue Airways ranks highest among low-cost carriers for a seventh consecutive year, performing particularly well in two factors: in-flight services and aircraft.

Southwest Airlines follows closely behind, performing particularly well in four factors: cost and fees; boarding/deplaning/baggage; check-in; and reservation. Despite Southwest performing higher in more factors than JetBlue this year, JetBlue's strong performance, broadly combined with its large advantage in aircraft and in-flight services over Southwest, has enabled JetBlue to retain its highest ranking.