MIAMI – Customer satisfaction with America’s airlines increased by 4.2% in 2016 according to ratings from the American Customer Satisfaction Index (ACSI). Of the nine airlines measured, seven saw an increase year-over-year (YOY) in their ACSI score while two, ultra low-cost carriers (ULCCs) Spirit Airlines and Frontier Airlines, saw their ratings decline by 2% and 5% respectively.
JetBlue was the nation’s leading carrier per this metric once again in 2016, moving out of a tie with Southwest in 2015 to sole possession of first place with a score of 82/100. Southwest remained in second place at 80/100 while Spirit came in last at 61/100.
Overall, the U.S. airline industry scored a 75/100 for the 12 months ending March 31, 2017, up from 72/100 for the 12 months ending March 31, 2016. The full ratings can be seen in the table below:
Yes, the US airlines are getting better at customer service
Despite the recent surge of breathless editorials about re-regulating the airline industry and insipid whining about the air travel experience, there is a clear upwards trend in ACSI’s data since 2013. This is particularly for true the legacies and the ULCCs.
Over the five-year period from 2013 to 2017, the average rating for U.S. airlines improved by 7%, and it would have been higher if not for slight declines at JetBlue and Southwest. The full data is presented in the chart below:
In truth the legacies and the ULCCs have implemented several substantial enhancements to their product in recent years, ranging from improved operations and on-time performance to upgraded seats and in-flight entertainment & connectivity (IFEC).
To cite an example that may seem mundane; 80-90% of U.S. airline flights now come equipped with WiFi, essentially flights on all but the oldest planes. A substantial portion of those flights with WiFi are actually getting system upgrades that will allow for WiFi fast enough to stream video (a-la JetBlue’s Fly-Fi).
To a U.S. consumer, this seems mundane. But even the slower WiFi isn’t standard for most airlines around the world (about 30-40% of flights in developed and middle-income countries [excluding the U.S.] have WiFi). And the trend of improvement in a variety of customer experience benchmarks continued in 2017, as illustrated by the chart below.
Some of that chart may come from the soft bigotry of low expectations – there is a genuine argument to be made that in absolute terms the US airlines do lag behind their Asian and European peers across several of the criteria above, but it’s not as much of a gulf as it was before, and there are some of those areas where foreign airlines are actually worse.
For example in terms of seat comfort, U.S. airlines are actually close to the cutting edge for business class with all-aisle access and IFEC features, and the added legroom economy seats such as United’s Economy Plus and American’s Main Cabin Extra are actually a huge plus point for passengers.
Most Asian carriers don’t offer added legroom seats, whereas even American ULCCs have a few on every plane. And as far as the European carriers – Economy Plus and Main Cabin Extra actually offer better legroom and similar seat width to European short haul business class cabins.
People really don’t like the ULCC experience
The ULCCs posted some of the worst results in the survey, representing three of the four lowest ranked airlines. Allegiant actually saw a big boost in its ranking but it was still relatively low at 71, and Spirit and Frontier saw YOY declines against already low base scores of 62 and 66 respectively.
Obviously, these airlines frequently have to make service tradeoffs in order to keep their costs and their fares down, and by virtue of these carriers having the most distributed a-la-carte pricing model, there is probably going to be a cap on how high their ACSI scores can actually go.
People really don’t like being nickeled and dimed, even if they are willing to put up with it for lower fares, but Frontier and Spirit can and should do more to improve their operational quality, both by investing in better technology and processes and by bringing down utilization slightly to build more slack. Allegiant’s operations are relatively better off, and you see that in their higher score (even if the company’s pilots would disagree).
You get the industry that you pay for
The truth of the matter, which to ACSI’s infinite credit it points out right in the press release, is that for the vast majority of customers, the only thing that matters to them is finding the lowest fare. As the ACSI press release notes:
In contrast to many other industries, the financial return on customer satisfaction for airlines is not very high… Much of the increase in passenger satisfaction appears to be driven by price. Some of the largest legacy airlines now compete better with the discount carriers.
At the end of the day price, and to a lesser extent schedule and operational quality are the primary drivers of consumer behavior. High-quality customer and in-flight service just isn’t something that passengers are willing to pay for. The highest margin carriers in the U.S. airline industry (who have delivered some of the best margins in the history of the global airline industry) are ranked 6th, 8th, and 9th. ACSI hit the nail on the head – financial returns are not tied to customer service.
Airlines are just like any other business – they make business and product decisions based on the feedback of customer dollars. Customers voted in favor of higher quality operations by giving more business to companies like Delta and less to companies like United, and the airlines responded to that. Today American and United have built operations that rival Delta’s and even JetBlue and Southwest have taken steps to catch up.
But Virgin America could never gain real traction despite universally being regarded as America’s best airline product overall. Even after it turned profitable earlier this decade, its margins lagged far behind peer carriers like JetBlue or Alaska, which puts the lie to the notion that these ACSI rankings truly matter when it comes to assessing the financial success of an airline.