Airlines Turn the Corner

Good news in the airline industry is about as rare as getting a tasty meal on one of the airlines' planes. But this week the carriers found out that passenger satisfaction is actually on the rise -- for the first time in four years.

According to a J.D. Power and Associates annual survey, "customer satisfaction with airlines in North America has increased notably, with 10 of 12 airlines improving from 2009."

JetBlue (Nasdaq: JBLU  ) ranked the highest in the low-cost category for the fifth year in a row, followed by Southwest (NYSE: LUV  ) . Orlando-based AirTran (NYSE: AAI  ) , meanwhile, had a disappointing showing, coming in under the segment's average score.

In the traditional network carrier category, Alaska Airlines topped the list for the third straight year. Continental (NYSE: CAL  ) , American Airlines (NYSE: AMR  ) also finished with above average scores while Delta, Air Canada, United (Nasdaq: UAUA  ) , and US Airways (NYSE: LCC  ) rounded out the rankings.

In perhaps the least surprising statement I've ever read, J.D. Power noted that customers assigned a middle seat were far less happy than their counterparts at each elbow. Also high on the obvious meter: Passengers not charged for the first checked bag were far happier than those who were.

These ratings are important to most of the carriers. JetBlue, for example, explicitly states in its 10-K that customer satisfaction is part of its brand and is used extensively in its marketing:

We believe we have created a widely recognized brand that differentiates us from our competitors and identifies us as a safe, reliable, value-added airline focused on customer service and which provides a high quality travel experience. Similarly, we believe customer awareness of our brand has contributed to the success of our marketing efforts, and enables us to market ourselves as a preferred marketing partner with companies across many different industries.

This being the airline industry, however, there is a dark lining to the silver cloud. J.D. Powers' Stuart Greif says a lot of the things that helped improved satisfaction this year, such as a greater percentage of on-time flights, is related to fewer passengers flying.

Oh, well. This hated and berated industry will still take any good news it can get.

Fool analyst Rex Moore just flew in from Texas, and boy, are his arms tired. He owns no companies mentioned in this article. Southwest Airlines is a Motley Fool Stock Advisor pick. The Motley Fool has a disclosure policy.


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