Finally, Some Good News (We Think)

April 3, 2012
High marks for now, but capacity is limited, too.

Airlines provided customers with the best service in at least 22 years, according to the Airline Quality Rating study released yesterday.

The rate of mishandled bags, for example, dropped to 3.35 per 1,000. AirTran had the best baggage handling rate – 1.63 mishandled bags per 1,000 passengers – and American Eagle had the worst baggage handling rate – 7.32 mishandled bags per 1,000 passengers.

The study measures three other major categories – on-time performance; involuntary denied boardings; and customer complaints – and found improvement across the board.

The data, drawn from the U.S. Department of Transportation's monthly Air Travel Consumer Report, measures 15 carriers. Of this lot, 10 airlines improved, four declined and one remained the same.

The better score reflects airline industry efforts to be better in a capacity-limited air travel system, according to researcher Dean Headley, associate professor of marketing at the W. Frank Barton School of Business at Wichita State University.

"As the system adjusts to increasing demand for air travel with a limited capacity of seats available, operations must be carefully handled for things to go as planned for travelers," Headley said in a news release posted after yesterday's press conference. "During 2011, the industry lowered the involuntary denied boarding rate by nearly 30 percent, suggesting that most airlines are getting it together."

Still, more than a third of the customer complaints for 2011 were for flight problems, such as unplanned schedule changes, delays and cancellations.

The challenge will be whether airlines can maintain their high marks as more people choose to fly.

"When you look at the past 12 years, you find that the airline industry performs most efficiently when the system isn't stressed by high passenger volume and high numbers of airplanes in the air," he said at the press conference. "Every time there are more planes in the sky and more people flying, airline performance suffers."

Another factor to consider for the future is mergers.

"Further airline consolidation will continue to reduce the number of air carriers ranked in the AQR," said fellow researcher Brent Bowen, professor and head of the Department of Aviation Technology at Purdue University.

"Past AQR data suggest that the combining of two large air carrier operations often results in subsequent decreases in AQR rankings," Bowen said "We will be carefully watching to see if two highly rated carriers, such as No. 1 AirTran and No. 5 Southwest, will reverse this trend."

By the way, there's an interesting profile on Headley and Bowen and how they started what they thought would be another "obscure academic research paper." You can read that here. You can also read a pdf of the study here.