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US Airways: On Time Yet Unloved

Stocks in this article: DAL JBLU LCC LUV

CHARLOTTE, N.C. ( TheStreet) -- Airlines believe that the principal way to please customers is to operate on time, which tends to alleviate most of the problems of air travel, particularly missed connections and mishandled bags.

But this year, the formula seems to have failed for US Airways (LCC) which, despite years of work to improve its on-time performance, finished last among a dozen airlines in a customer satisfaction survey by J.D. Power. In 2008, US Airways leaped from worst to first among the six major hub and spoke carriers in operational metrics measured by the U.S. Transportation Department, and its operational performance has generally been good, if not first among its peers, ever since then.

The airline industry is afflicted with an historic inability to keep its customers happy, primarily because it is both blessed and cursed with the daily task of connecting millions of passengers in hubs, where operational performance depends largely on two uncontrollable factors: weather and an antiquated air traffic control system.

But the release of two consumer satisfaction surveys this month -- J.D. Power's last week and the American Customer Satisfaction Index on Tuesday -- shows airline passengers to have remained unsatisfied, relative to other industries, even as on-time performance has generally improved. The major reason is the advent of fees for checked baggage, which have become a major irritant as well as a key to profitability for a long unprofitable industry. US Airways scored last in the former survey and middle of the pack in the other.

"Checked baggage fees are a customer sore point and have a notable impact, with satisfaction averaging 85 points lower among passengers who pay to check bags," said J.D. Power, in a prepared statement. The firm noted that JetBlue (JBLU) and Southwest (LUV), the two carriers with the highest satisfaction index, do not charge passengers to check the first bag.

Meanwhile, ACSI found that "customer satisfaction with the airline industry matches its best level in a decade." But airlines remain among the bottom three of the 47 industries ACSI tracks, grouped with subscription TV service and "the fast-fading newspaper industry." In the information age, it seems, credible information lacks appeal. Airline flaws, meanwhile, are "high ticket prices, growing fees and poor service," the firm said.

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