Spokane Journal of Business

Airlines notch second-best year in performance review

Industry earns improved marks in handling bags, on-time performance

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Airline performance in 2012 was the second highest in the 23 years that researchers with Wichita State University and Purdue University have tracked the industry.

The performance of the nation's leading carriers last year was nearly identical to record-year 2011, according to the 23rd annual national Airline Quality Rating released in April.

Of the 14 carriers rated for performance both in 2011 and 2012, seven airlines improved, and five declined. Two are new to the rankings, including the overall No. 1 performing airline Virgin America.

The industry improved in two of the four elements included in the quality rating, on-time performance and baggage handling. Involuntary denied boardings and the customer complaint rate were higher in 2012, compared with the previous year.

Dean Headley, associate professor of marketing at the W. Frank Barton School of Business at Wichita State University, says the quality rating reflects commendable efforts by the airline industry to serve customers in a capacity-limited air travel system.

"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 says. "During 2012, the industry improved the mishandled baggage rate by 8 percent, suggesting that most airlines are working hard to accommodate customers. Still, nearly a third of the customer complaints for 2012 were for flight problems, such as unplanned schedule changes, delays, and cancellations."

Headley adds, "When you look at the past 13 years, you find that the airline industry performs most efficiently when the system isn't stressed by high passenger volume and high number of airplanes in the air. Every time there are more planes in the sky and more people flying, airline performance suffers."

The challenge, he says, is whether airline performance quality improvements can be maintained as more people fly.

Brent Bowen, professor and head of the aviation technology department at Purdue University, says, "Further airline consolidation will continue to reduce the number of air carriers ranked."

Past data suggest that the combining of two large air carrier operations often results in subsequent decreases in rankings, Bowen says.

"We will be carefully watching to see if two highly rated carriers, such as former No. 1 AirTran and Southwest, will reverse this trend," he says.

Below is the numerical ranking of the nation's leading 14 airlines, according to the Airline Quality Rating, with the previous year's ranking in parentheses: 1. Virgin America (new to the ranking this year); 2. JetBlue (3); 3. AirTran (1); 4. Delta (6); 5. Hawaiian (2); 6. Alaska (5); 7. Frontier (4); 8. Southwest (7); 9. US Airways (8); 10. American (10); 11. American Eagle (15); 12. SkyWest (9); 13. ExpressJet (not rated in 2011); and 14. United (12).

The rankings changed most noticeably for American Eagle Airlines, up to 11 from 15. Virgin America came into the rankings as the top rated airline. JetBlue and AirTran both maintained their top-tier positions for 2012.

Hawaiian Airlines had the best on-time performance, at 93 percent, for 2012, and ExpressJet and American had the worst, at 77 percent.

Eight airlines improved their on-time arrival performance in 2012. Nine of the 14 airlines rated had an on-time arrival percentage of better than 80 percent. The on-time rate for the industry in 2012 was 81.8 percent, compared with 80 percent in 2011.

In involuntary denied boardings, industry performance was worse in 2012, at 0.97 per 10,000 passengers, than it was in 2011 (0.78).

JetBlue had the lowest involuntary denied boardings at 0.01 per 10,000 passengers. SkyWest had the highest involuntary denied boarding rate at 2.32 per 10,000 passengers.

Overall, five airlines improved their denied boardings rate in 2012. American Eagle recorded the greatest improvement, and SkyWest had the largest decline. JetBlue and Virgin American are the industry leaders in avoiding denied boarding incidents, data suggest.

In mishandled baggage performance, the rate for the industry decreased to 3.07 per 1,000 passengers in 2012 from 3.35 in 2011.

Virgin America had the best baggage handling rate (0.87 mishandled bags per 1,000 passengers) of all airlines, and American Eagle had the worst baggage handling rate (5.80 mishandled bags per 1,000 passengers) of all the airlines.

Seven of 14 airlines improved their mishandled baggage performance.

Customer complaints per 100,000 passengers increased from 1.19 in 2011 to 1.43 in 2012.

Southwest again had the lowest consumer complaint rate (0.25 per 100,000 passengers) of all airlines. United had the highest consumer complaint rate (4.24 per 100,000 passengers) of all airlines rated.

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