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Delta Air Lines, Inc. Inches Toward the No. 1 Ranking for Quality

By Adam Levine-Weinberg – Apr 10, 2018 at 6:35AM

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After nearly reaching the head of the pack in the 2017 Airline Quality Rating report, Delta Air Lines moved even closer to top-ranked Alaska Airlines in the 2018 study.

Last year, Alaska Air (ALK -3.46%) subsidiary Alaska Airlines jumped four places to take the top spot in the annual Airline Quality Rating report. Its score of negative 0.39 just edged out Delta Air Lines' (DAL -2.86%) score of negative 0.40. (Numbers closer to zero indicate better performance.) Alaska Airlines took over the No. 1 spot from Virgin America, a former rival that its parent company had just acquired.

Alaska Airlines retained its No. 1 ranking in the 2018 Airline Quality Rating report, which was released this week. However, Delta Air Lines crept even closer to its Seattle-based rival. Indeed, Delta appears to be on pace to overtake Alaska Airlines in the 2019 report.

A rendering of an Alaska Airlines plane flying over clouds

Alaska Airlines topped the Airline Quality Rating rankings again this year. Image source: Alaska Airlines.

What the Airline Quality Rating study measures

The annual Airline Quality Rating report is in its 28th year. Researchers at Embry-Riddle Aeronautical University and Wichita State University compile official data from the 12 largest U.S. airlines related to four different quality criteria. The scores reflect a weighted average of the airlines' performances across these four metrics.

The four criteria measured in this study are (1) the percentage of flights arriving on time, (2) the percentage of passengers involuntarily "bumped" from their flights, (3) the percentage of mishandled (i.e., lost) bags, and (4) the percentage of customers who filed official complaints with the U.S. Department of Transportation. These four factors were selected because they represent objective measures of quality, and every large airline is obliged to report them publicly.

Alaska Airlines pulls off another victory

Alaska Airlines' score deteriorated slightly on a year-over-year basis in the 2018 Airline Quality Rating report (which covers the 2017 calendar year), falling back to negative 0.437 from negative 0.39. Delta also saw a modest reversal in this year's report, scoring negative 0.442, compared to negative 0.40 a year earlier. The scores were so close this year that the authors had to include an extra decimal place to determine a winner.

In the 2017 report, Alaska Airlines outperformed Delta in terms of on-time arrivals, baggage handling, and customer complaints. This more than offset its significantly higher rate of involuntary denied boardings.

In this year's study, Delta leapfrogged Alaska Airlines in on-time performance and maintained its advantage in terms of involuntary denied boardings. Meanwhile, the two carriers' baggage performance was virtually identical. The sole reason for Alaska's victory was a sharp spike in customer complaints at Delta, from 0.68 per 100,000 passengers to 0.92 per 100,000 passengers.

Why Delta is the clear favorite for the 2019 report

Delta Air Lines may have come up short this year, but it has a good chance to reach the top spot in the 2019 Airline Quality Rating study for two reasons.

First, Delta's 2017 results were skewed by a poor April performance. The carrier's largest hub in Atlanta was hit by an unprecedented multiday wave of severe thunderstorms, which forced Delta to cancel thousands of flights.

The result was a reduction in on-time performance, and a severe increase in the mishandled-bag rate and the number of customer complaints. Excluding the month of April, Delta would have scored negative 0.39 in this year's Airline Quality Rating report, giving it a clear victory over Alaska. Delta's subpar April score of negative 1.14 prevented it from reaching the top spot.

A Delta Air Lines plane landing on a runway

But for a bad April, Delta would have surpassed Alaska in this year's report. Image source: Delta Air Lines.

Second, Alaska Air will retire the Virgin America brand later this month. As a result, all of the company's mainline operations will be reported under the Alaska Airlines brand going forward. Virgin America took a big step backward in this year's report, falling to seventh place in the rankings, with a score of negative 0.76, down from negative 0.50 a year earlier. Had Alaska Air's two brands been treated as a single airline for the 2018 Airline Quality Rating study, Delta Air Lines would have seized the top spot by a comfortable margin.

To be fair, Alaska Air's management has been working to improve performance at the former Virgin America operation. These efforts have already started to bear fruit: Virgin America's monthly scores were much better in the second half of 2017 than in the first half of the year.

Even so, Delta Air Lines would have outscored a combined Alaska Airlines-Virgin America operation in every single month during the second half of 2017. Barring a sharp trend change at either Alaska or Delta -- or a stunning improvement by another airline -- Delta is likely to reach the top spot when the 2019 Airline Quality Rating study is released next spring.

Adam Levine-Weinberg owns shares of Alaska Air Group and Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
$28.19 (-2.86%) $0.83
Alaska Air Group, Inc. Stock Quote
Alaska Air Group, Inc.
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