U. of Michigan Airline Survey Pans Industry

Southwest ranks first, but the airline industry ranks lowest of 43 industries in a customer satisfaction survey.
By Ted Reed ,

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) - Get Report

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)

had the lowest ranking, a 54.

United

(UAUA)

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%.

During most of 2007, US Airways suffered from a botched effort to move to a single reservations system following the 2005 merger with America West, and from performance deficits in Philadelphia, where it had rapidly ramped up international flying. But late in the year, it began to improve.

In a sense, US Airways was lucky, because its operational problems were of its own making, and it could fix them.

Most of the problems that plague airline operations involve weather combined with an antiquated air traffic control system. These factors caused delays that lead to late arrivals, missed connections and lost baggage. So far, Congress has been unwilling to allocate the money needed to upgrade to satellite-based technology that would manage the system and guide airplanes, cutting both delays and fuel burn.

"Your cars use GPS; Our airplanes do not," writes Richard Anderson, CEO of

Delta

(DAL) - Get Report

, in the current issue of the carrier's inflight magazine.

"In my office at Delta, I inherited the desk of C.E. Woolman, Delta's founding president," Anderson says. "The desk contains an employee handbook, dated 1946, that includes a description of the basic air traffic control system in place at that time. Incredibly, it's the same system we still use in the United States for navigating airspace today, more than 60 years later."

Delta ranked first among the network carriers in 2007 with a 76.9% ontime performance. Its ACSI rating improved by 1.7 points to 60.

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