Annual Airline Quality Rating Report Shows U.S. Carriers Headed in the Wrong Direction

After years of improving grades, the annual Airline Quality Rating report for this past year reflected a marked decline in the overall performance of U.S. carriers.

The less-than-glowing evaluation of U.S. airlines detailed in the 25th annual Airline Quality Rating (AQR) reverses a trend toward overall improvement across the industry seen in recent years. The longest-running study of airline performance quality in the U.S., jointly produced by researchers at Wichita State University and Embry-Riddle Aeronautical University, reported a near-universal decline in the performance of U.S. carriers despite coming off a record-breaking performance by the airlines in the previous year’s report.

The latest AQR found that only three of the 12 major carriers evaluated improved statistically in 2014.

“Bigger isn’t always better, and the downturn in performance suggests that customer perceptions of poor outcomes are warranted,” said Dean Headley, one of the study’s co-authors, following Monday’s release of the latest AQR.

Fellow co-author Brent Bowen echoed Headley’s take on the findings. “Airline mergers and consolidations are taking a systemic toll that is bad for consumers,” said Bowen. “Performance by the airlines is slipping while they claimed this would make them better.”

Bowen notes that the trend toward consolidation doesn’t need to equate to decline in airline performance, pointing out that Delta Air Lines was one of the few airlines to show improvement in 2014. “Delta is an excellent example of a merger that declined in performance and systematically has clawed its way back to a new high level of quality performance,” Bowen said. “This shows that if an airline commits to improving their AQR rating, they can do it.”

The AQR, now in its 25th year, evaluates airlines based on the criteria of baggage handling, customer complaints, denied boardings and on-time arrivals. The study, considered among the most objective in the field, is culled from and specifically limited to “readily obtainable from published data sources for each airline.”

Virgin America was the top-ranked U.S. carrier for the third year in a row according to the latest AQR, while Hawaiian Airlines snagged the number two spot from previous runner-up jetBlue Airways. United Airlines was once again the lowest-ranked contender of the surviving legacy carriers. Although airlines like Hawaiian and Delta moved up in the rankings due to improved performance, United was only able to advance from 12th to 9th place because consolidation eliminated the number of airlines in the survey.

Of the airlines evaluated, Hawaiian had the best on-time performance in 2014 — a solid 91.9 percent. At the opposite end of the spectrum, Envoy/American Eagle fared the worst during the same period with only 68.8 percent. Only four airlines had an on-time performance of over 80 percent, and the on-time rate for the industry slipped below 77 percent.

Alaska Airlines had the lowest consumer complaint rate in 2014, while Frontier had the highest consumer complaint rate at 3.91 complaints filed per 100,000 passengers which was more than nine times that of Alaska. Industry-wide, the number of passenger complaints per 100,000 passengers increased to 1.38.

Virgin America did the best job of handling baggage with less than one mishandled bag for every 1,000 passengers and Virgin also had the fewest denied boardings of any US carrier. Delta recorded the greatest improvement in the number of denied boarding, but the overall rate of denied boarding for all airlines increased substantially from the previous year.

“With AQR performance factors in a state of overall decline, it is easy to understand why passengers and many of the airline employees they encounter are not happy and are significantly frustrated,” said Bowen. “With the high profits being realized by airlines, it is evident they are not investing in customer service and restoring employee concessions given up during the economic decline.”

Bowen says the AQR is an important tool in holding the industry accountable, stating: “The airlines have a duty to maximize service to the American public given the trust we provided them through a very low regulatory environment.”

[Photo: iStock]