What's Wrong With U.S. Airlines?
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- Recently, the American Customer Satisfaction Index published its annual ranking of America's worst customer service providers. Of the seven worst, four were airlines. American Airlines (AMR) was rated seventh, Delta (DAL) was sixth, U.S. Air (LCC)was fifth and United (UAL) was the second worst company in America for customer service (Charter Communications "won"). Airline service is a far cry from what we see on the Pam Am television series. But why?
Hypothesis 1: The nature of airline travel makes customer service difficult, if not impossible.Airline travel is difficult, but good customer service is not impossible. On her first trip out of China, my 85-pound administrative assistant looked at me in terror as airline screeners told her to take off her shoes, then her jacket, then her sweater, then her belt, and then scanned her all over with a wand. Airline travel is stressful.
Yet, many airlines provide outstanding customer service. SKYTRAX rates customer satisfaction of the world's airlines. In 2011, there were no five-star U.S. carriers and, of 31 four-star carriers, only one was U.S. -- Jet Blue (a non-union U.S. airline).
Hypothesis 2: Customer service is not America's strong point.Each year, Businessweek ranks the world's best companies for customer service -- The Customer Service Elite. In this year's top 25, 24 are American-owned. America's service capabilities are extraordinary. In the travel and hospitality industry, the U.S. is home to the world's best hotel companies: Fairmont, Ritz Carlton, Marriott, Intercontinental, Westin, Hilton, Hyatt, Sheraton, etc. Yet, despite dominance in hotel service, the U.S. simply cannot compete in airline service.
Hypothesis 3: Unions have crippled the airline industry.This hypothesis has legs. Think of great organizations like Nordstrom or Disneyland. When you walk through the door, you viscerally feel a service-obsessed culture. Nearly all major U.S. carriers are unionized. Unions can survive only if there is conflict between managers and non-managers -- if the culture is toxic. Increasing toxicity is the lifeblood of unions. The Association of Flight Attendants is the world's largest flight attendant union. Its trademarked rallying cry is CHAOS (Create Havoc Around Our System).
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV