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TheStreet Open House

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).

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