Airlines Slip in Customer Satisfaction

A new survey says the quality of customer service at the nation's major airlines declined in the past year, apparently due to personnel cuts and more crowded airplanes.

Overall, the airline industry has lower customer satisfaction than any industry surveyed except for the cable TV and satellite industry according to the American Customer Satisfaction Index, produced by the University of Michigan's Ross School of Business and its partners.

The 14-year-old survey measures product and service quality at airlines, utilities, mail and package delivery providers, hospitals, hotels, fast food restaurants and TV and telecommunications companies. For each company, 200 customers were contacted during a random telephone survey during the first quarter.

Industries are graded on a 100-point scale. In 2007, the index reached an overall score of 75.2, its highest ever. But the airline industry was at 63, down three points from 2006.

The decline was led by United(UAUA Quote - Cramer on UAUA - Stock Picks), which fell 11% to 56 points. Second worst was Delta(DAL Quote - Cramer on DAL - Stock Picks), which fell 8% to 59. Both carriers shed thousands of employees in bankruptcy reorganizations.

Southwest(LUV Quote - Cramer on LUV - Stock Picks) led all carriers, with a ranking of 76. Continental(CAL Quote - Cramer on CAL - Stock Picks) had 69. US Airways(LCC Quote - Cramer on LCC - Stock Picks) and Northwest(NWACQ Quote - Cramer on NWACQ - Stock Picks) both scored 61. American(AMR Quote - Cramer on AMR - Stock Picks) scored 60.

"When you are talking about service, you are talking about personnel or technology that can replace personnel," says David Van Amburg, ACSI managing director, adding that crowded airplanes also contribute to the perception of low quality.