Virgin America is America’s best airline again. For how long is anybody’s guess.
The airline captured top honors for the fourth year in a row in the closely-watched Airline Quality Rating, the industry’s annual report card. It was followed by JetBlue Airways (JBLU) and Delta Air Lines (DAL).
But it’s a bittersweet win for Virgin. The announcement coincides with today’s news that Alaska Airlines will acquire Virgin America for $2.6 billion. It remains to be seen what will happen to Virgin’s brand and legendary service culture. Even Richard Branson, the founder of Virgin Atlantic, lamented the move. “There was sadly nothing I could do to stop it,” he wrote.
Overall industry performance improved slightly after a down year in 2014, according to the researchers from Wichita State University and Embry-Riddle Aeronautical University. Six of 13 U.S. airlines evaluated improved in 2015 while six declined. Spirit, which is new to the list, came in dead last.
Winners and losers
This year’s results suggest smaller airlines have upped their game when it comes to customer satisfaction while large, dominant carriers feel no need to prioritize their service because of their commanding market share.
|3||Delta Air Lines||3|
Source: 2015 Airline Quality Rating.
Delta, Alaska and Southwest held steady for the year. United edged up one notch but American tumbled three places. American is the world’s largest airline and United is the third-largest carrier in the United States. In other words, while several smaller carriers actively vied for top customer service honors, the bigger players didn’t really bother to show up for the competition.
Rounding out the bottom were regional carriers and discount airline Frontier and Spirit, which draw more than their fair share of complaints because of their fees and “take-it-or-leave-it” service culture.
The researchers culled Department of Transportation data to generate a helpful list of the best and worst airlines. Some highlights:
Best and worst on-time performance. Hawaiian Airlines had the best on-time performance (88.4 percent) for 2015, and Spirit had the worst (69.0 percent). All told, 9 airlines improved their on-time arrival performance in 2015. Four of the 13 airlines rated had an on-time arrival percentage of better than 80 percent. On-time performance for the industry in 2015 was 79.9 percent, compared to 76.2 percent in 2014.
Fewer airlines are overbooking or losing luggage JetBlue and Hawaiian are clearly the industry leaders in avoiding so-called involuntary denied boarding incidents (commonly known as “bumping”) with a rate of 0.02 and 0.03 per 10,000 passengers, respectively. Bumping happens when airlines overbook their flights. Envoy (2.35), ExpressJet (1.86) and SkyWest (1.78) had the highest involuntary denied boarding rates per 10,000 passengers. Again, 9 airlines improved their denied boardings rate in 2015. Virgin America had the best baggage handling rate (0.84 mishandled bags per 1,000 passengers) of all airlines, and Envoy Air had the worst baggage handling rate (8.52 mishandled bags per 1,000 passengers). Eight airlines had improved mishandled baggage rates in 2015.
The airline with fewest consumer complaints. Alaska had the lowest consumer complaint rate (0.50 per 100,000 passengers) of all airlines. Spirit had the highest consumer complaint rate (11.73 per 100,000 passengers). Complaints to the DOT represent only a fraction of actual consumer grievances, but are thought to be a bellwether for an airline’s customer service reputation. Customer complaints per 100,000 passengers increased from 1.38 in 2014 to 1.90 in 2015. The majority of complaints (73%) to the Department of Transportation were for flight problems (36.1%), baggage (13.4%), reservations, ticketing and boarding (11.8%) and customer service (11.3%).
What it means
Alaska’s acquisition of Virgin makes the Seattle-based carrier the standard-bearer for excellent customer service. Alaska is ranked relatively highly, coming in second in Fortune’s “best in business travel” list last year. But a merger reduces competition and makes it easier for an airline to compete for the title of “best of the worst” among domestic carriers. Already, the industry is engaged in a ruthless game of cutting fares, reducing service and rebuilding its business model based on fees. So, in order to retain its top ranking, Alaska now must do little more than ensure it is not as bad as the other airlines, who are busy racing to the bottom.