Originally Posted by
warrens
Investors don't care about OTP. You will see no correlation whatsoever between Delta's stock and Delta's OTP, for instance.
Frequent flyers aren't making purchasing decisions based on OTP. They're making decisions based on cost, loyalty programs, routes served, alliances, lounges, J cabin layouts, food, and so on.
Actually, Delta took action to improve its OTP around a decade ago because their view was that it had gotten so bad that it
was a factor in customer decisions. People were suffering enough extreme delays, misconnects, forced overnights, etc, that it was creating a negative reputation and ultimately hurting their financial results.
Here are some comments from
a 2013 story about DL's efforts (which also targeted a poor customer service culture).
Delta CEO Richard Anderson has been touting the importance of on-time performance and service in attracting customers and holding down costs.
How much such yardsticks matter to fliers depends on the customer, industry experts say. Many simply search for the best fares and schedules and assume service is about the same at all carriers.
An airline's most valuable customers -- business travelers who fly often and usually pay higher fares for shorter-notice, more-flexible itineraries -- are more particular about service.
"If you've got bad operational performance, your top-dollar customers are going to steer away from you," said Brad Beakley, head of consulting for Sabre Airline Solutions, which sells technology to help airlines manage operations. "It only takes one or two misconnected flights, one or two lost bags, or one or two dissatisfied customer situations, that customer is going to look for an alternative."
Price and schedule are still the two largest factors, but they aren't everything.
That being said, I don't think AC's OTP or customer service is as problematic as DL's was back then, and I doubt it's a big factor for most customers. Partly that's because it's not as bad, in absolute terms, and partly because Canada is a smaller and less competitive market than the US.