aside AIRLINE MERGERS ADDING UP TO A DECLINE IN CUSTOMER SERVICE, PART 1

airline mergers020113-airlines-v3bFor those who have read the last couple of blogs, it should become obvious that I am very disappointed with my customer service experience on a 1/9/16 American Airlines flight from Miami to Costa Rica and back. And it was not just the surprise $25.00 checked bag fee for International travel. It started with the passengers being confined within the plane on the tarmac for at least an hour by which we all were rewarded with a glass of water. It did not impress me when a very pregnant woman requested a blanket because she was cold and a pillow for her aching back. The attendant responded that neither was available on the plane. Then a fellow passenger mentioned that she was upset because she was debited a $25.00 checked baggage fee on her CITI card which advertises that this fee would be waived when she used it. The return flight was uneventful but traipsing through American’s Miami International Airport maize was a nightmare which took almost three hours. If I had my way, I would have American Airlines executives disguise themselves as coach cabin passengers so that they could fully experience how their customers feel while being treated like cattle.

It is my hypothesis that the airline mergers from twelve major carriers down to four is having a negative impact on the consumer in regards to increase in fares and fees; routing to less populated areas; purchase of newer planes; quality maintenance; baggage handling; and concern for their clients.

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Please note that on the above graph, those airlines with better customer service evaluations like Continental and Southwest Airlines did not suffer with a history of bankruptcy filings.

I noticed that Jet Blue which has a better reputation regarding customer service is not mentioned in the above graph and this airline is rated #1 in the low cost airline category by the 2015 JD Power survey results and Alaska Airlines was rated #1 out of the more traditional airlines category. The #2 rated airlines for both categories are Southwest and Delta Airlines. The good news is that Jet Blue and Southwest airlines are expanding  into the international markets of Mexico, Central America and the Caribbean. And neither charge fees for the first checked baggage for any of their international flights, originating from the U.S.

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The following information is from the 2015 J.D. Power airline ratings regarding customer satisfaction surveys:

“Overall satisfaction among passengers who select an airline because of its reputation or customer service averages 812 (on a 1,000-point scale). Among those who selected the airline because of its reputation, 54 percent indicate they “definitely will” fly with that airline again and 65 percent indicate they “definitely will” recommend the airline to family and friends. Among those who selected the airline because of its customer service, 54 percent indicate they “definitely will” fly with that airline again and 66 percent indicate they “definitely will” recommend the airline to family and friends.In contrast, satisfaction among passengers who select an airline based on lower price averages 732, and only 29 percent of those passengers indicate they “definitely will” fly with that airline again, yet 37 percent “definitely will” will recommend it to others.“Many airlines realize that they are not in a commodity business and that hospitality and service go a long way in differentiating them from the other airlines,” said Rick Garlick, global travel and hospitality practice lead at J.D. Power. “Hospitality and service impact loyalty and return on investment with a high percentage of loyal passengers who are better advocates for the airline.” –

Garlick noted that airlines with a solid reputation tend to have passengers who are more forgiving of operational performance. “When the airline provides good service, passengers are generally less critical when there is a departure delay or a late arrival,” said Garlick.”(This is like an insurance policy for when a public relations negative event occurs.)

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Key Findings (From JD Power’s Press Releases: May 13, 2015 Airlines: A Transportation or Hospitality Business?)

“Overall passenger satisfaction with major North America airlines increases to 717 in 2015, up from 712 in 2014. The most notable drivers of the overall increase are satisfaction with flight crew (+9 points), in-flight services (+6) and costs and fees (+4).Overall passenger satisfaction with traditional carriers improves to 691 in 2015 from 683 in 2014, while overall satisfaction with low-cost carriers is 766 in 2015, up from 763 in 2014.Among generational groups,[1] satisfaction is highest among Gen Y (727) and Pre-Boomer (725) passengers. Satisfaction is lowest among Boomer (714) and Gen X (719) passengers.Among the two-thirds of passengers who check baggage for their flight, 52 percent indicate they had to wait 15 minutes or longer to receive their baggage, among whom satisfaction is 711, compared with 751 among those who experience a shorter wait time.Satisfaction among passengers who pay for checked baggage has improved steadily during the past five years to 700 in 2015 from 637 in 2011.Overall satisfaction among passengers who hold status in an airline loyalty/rewards program is 737, compared with 724 among those with a general airline loyalty/rewards program membership and 696 among passengers with no membership at all.Study Rankings Traditional Carrier Rankings Alaska Airlines ranks highest in the traditional carrier segment for an eighth consecutive year, with an index score of 719. Alaska Airlines performs particularly well in all seven factors of the study. Delta Air Lines ranks second (709), improving in all seven factors, and American Airlines ranks third (700).’

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Low-Cost Carrier Rankings

“JetBlue Airways ranks highest in the low-cost carrier segment for a 10th consecutive year, with a score of 801. This also marks the 11th consecutive year JetBlue has ranked highest in the study. JetBlue improves in all seven factors year over year, most notably in reservation (+29) and boarding /deplaning/ baggage (+22). Southwest Airlines ranks second (781), improving in the boarding/deplaning/baggage, check-in, flight crew and in-flight services factors.”

“The 2015 North America Airline Satisfaction Study measures passenger satisfaction among both business and leisure passengers of major carriers in North America. The study is based on responses from 11,354 passengers who flew on a major North American airline between March 2014 and March 2015. The study was fielded between April 2014 and March 2015.”

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Wikipedia Data:

  • Continental Airlines
    • 1934 – Begins as Varney Speed Lines
    • 1982 – Acquired by Texas International / Merges, retains Continental name
    • 1987 – merges with People Express, Frontier, and New York Air
    • 1987 – Acquires PBA and Britt Airways from People Express merger / creates Continental Express
    • 2010-2012 – Merged with United Airlines, kept United name.

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  • Delta Airlines
    • 1924 – Started as Huff Daland Dusters
    • 1928 – Huff Daland Dusters was purchased by C.E. Woolman and renamed Delta Air Service after the Mississippi Delta
    • 1953 – Purchased the Chicago and Southern Air Lines, and flew under the name Delta C&S for the next two years
    • 1972 – Purchased Northeast Airlines
    • 1984 – Established the Delta Connection (ASA, Comair, Skywest, …)
    • 1987 – Merged with Western Airlines
    • 1991 – Purchase of Pan Am’s European routes, and acquired Pan Am’s shuttle, forming what is today Delta Shuttle
    • 1996 – Delta Express began service, ended November 2003
    • 2003 – Song began service, ended May 2006
    • 2008-2010 – Merged with Northwest Airlines, was world’s largest carrier at time of merger, kept Delta name

"Free safety demonstration on board the flight?"

  • Northwest Airlines
    • 1916 – Founded by Col. Lewis Patenaude, under the name Northwest Airways
    • 1927 – Began flying passengers
    • 1949 – With its new routes to the far east, re-branded itself as Northwest Orient Airlines
    • 1986 – Purchased Republic Airlines, and dropped the word Orient
    • 2008-2010 – Merged with Delta. Became world’s largest airline by passenger traffic in 2008 under the Delta name.
  • Southwest Airlines
  • 1985 – Acquired Muse Air
  • 1993 – Acquired Morris Air
  • 2008 – Acquired certain assets of bankrupt ATA Airlines
  • 2010 – Acquired AirTran

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United Airlines

  • 1931 – Purchased National Air Transport
  • 1931 – Purchased Pacific Air Transport
  • 1931 – Purchased Varney Airlines
  • 1961 – Merged with Capital Airlines
  • 1985 – Purchased Pan Am’s entire Pacific Division
  • 1991 – Purchased Pan Am routes to London Heathrow Airport
  • 2012 – Merged with Continental Airlines. Was the world’s largest carrier at the time of merger. Kept United name.

US Airways

  • 1938 – Started as All American Aviation Company, renamed All American Airlines and then Allegheny Airlines
  • 1957 – Changed name to Allegheny Airlines
  • 1968 – Purchased Lake Central Airlines
  • 1972 – Purchased Mohawk Airlines
  • 1979 – Changed name to US Air
  • 1988 – Purchased Pacific Southwest Airlines
  • 1989 – Purchased Piedmont Airlines
  • 1992 – Operates former Trump Shuttle for banks, renamed by banks as Shuttle, Inc, dba US Air Shuttle
  • 1997 – Changed name to US Airways
  • 1997 – Purchased former Trump Shuttle, now Shuttle, Inc from Banks, dba US Airways Shuttle
  • 1998 – Launches low-fare carrier MetroJet
  • 2000 – Merges US Airways Shuttle into US Airways
  • 2001 – Dissolves low-fare carrier MetroJet
  • 2005 – Merged with America West, keeping the US Airways brand
  • 2013-2015 – Merged with American Airlines, kept American Airlines name

UPDATE 2/3/16: I emailed this blog to the same three American Airline Executives as I did in the prior blog.

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8 comments

  1. Your post is well written and an important post to read. I notice that even though fuel prices have gone down airline fares and and costly add ons continue, this is wrong. I will drive before I will fly thanks to their greed.

    • That is one option. I and my friend plan are planning to travel light in the future with just carry-on luggage.. Customer service seems to an oxymoron when it comes to some of the major airline carriers.

      Thanks for your comments.

  2. I just get frustrated with too many businesses being so focused on the bottom line; decent earnings for their stockholders; and their own high CEO salaries to where pleasing their clients is an incidental, bothersome but a necessary, pesky consideration. In addition, their frontline employees in too many cases, have to deal with stagnant wages.These companies forget to be good citizens.

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