U. of Michigan Airline Survey Pans Industry

Updated from 2:34 p.m. EDT

CHARLOTTE, N.C. -- The airline industry's on-time performance in 2007 was the second worst on record and, not surprisingly, a new survey shows that passengers were not pleased.

The American Customer Satisfaction Index rates customer satisfaction with products and services. The airline industry's score was a 62, barely above the historic low of 61 in 2001, and the lowest among 43 ranked industries.

The all-time low ranking followed the posting of a 2000 on-time arrival rate of 72.5%, the worst in the 11 years for which Department of Transportation statistics are available. The 2008 ranking, the second lowest, follows a year when airlines posted a 73.4% on-time arrival rate, also the second lowest.

So in general, the ACSI, produced by the University of Michigan Ross School of Business, confirms a basic truism of the airline business: Nothing is more important, operationally, than to run an on-time airline.

In the survey, Southwest(LUV Quote - Cramer on LUV - Stock Picks) was at the top with a 79. Unlike the six other ranked carriers, Southwest does not operate a hub system, an intricate dance that each day requires hundreds of airplanes to repeatedly arrive nearly simultaneously at hub airports, and it generally does not operate at the most congested airports. Southwest ranked third in on-time arrivals in 2007.

US Airways(LCC Quote - Cramer on LCC - Stock Picks) had the lowest ranking, a 54. United(UAUA Quote - Cramer on UAUA - Stock Picks) was the next lowest with a 56.

Meanwhile, in 2007, US Airways had the worst on-time performance among 20 ranked airlines. However, the carrier appears to have solved its operational problems. In March, it ranked first among the 10 largest carriers in on-time performance, its third No. 1 ranking in four months. It also ranked first in the first quarter, with an on-time rate of 78.3%.

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