The grip U.S. airlines have on travelers' wallets has gotten tighter as carriers have cut domestic capacity due to the high cost of fuel. Above, a lone traveler walks through the deserted baggage claim area for American Airlines at O'Hare International Airport in Chicago.
Increased costs, lessening service
An annual survey finds that customers are giving airlines the worst grades for service since 2001
FORT WORTH, Texas » On a recent rainy day at Dallas-Fort Worth International Airport, a suitcase bound for Colorado Springs, Colo., lay on the ground outside a terminal under a maze of American Airlines conveyor belts that ferry bags to and from nearby planes.
A field representative for the airline who was showing a reporter the long route checked bags take put the suitcase on a belt where it was supposed to be. He said it likely fell off a belt or a baggage handler's vehicle.
The airlines have been imposing new fees, raising fares, reducing flights and, in some cases, cutting out free snacks in coach. But several big and small airlines alike have struggled relative to the industry in terms of baggage handling, on-time performance and other customer service metrics.
An annual University of Michigan survey released in May found customers giving airlines the worst grades since 2001.
With the slow travel season now upon them, airlines face the dual challenges of increasing revenue to cover heavy fuel costs while also improving their product to give air travelers a return on their added investment.
"We realize that in order for us to regain that brand recognition and the customer loyalty that we used to own in the '80s and '90s, we ought to do something very dramatic and different," said Mark Mitchell, American's managing director of customer experience.
Delta Air Lines Inc.'s regional subsidiary Comair had the worst on-time performance in July among airlines surveyed by the Department of Transportation. From January through July, American Airlines' on-time arrival rate was the lowest among U.S. carriers, while UAL Corp.'s United Airlines' was second-lowest. Comair had the highest mishandled baggage rate in July, while the highest number of consumer complaints received by the DOT that month were about Delta. Comair's on-time performance from January through July ranked 17th out of 19 airlines, while Delta's ranked eighth.
Executives blame weather, congestion in the Northeast and air traffic control issues for some of the problems, but they also acknowledge company specific problems. They say there have been improvements since the latest DOT figures were released.
American, a unit of Fort Worth-based AMR Corp., is keeping planes on the ground longer in some cities before turning them for their next flight so that if something goes wrong, there is extra time to board passengers and baggage. It plans to block a limited number of seats from being sold on flights in key markets this Thanksgiving to give it flexibility in re-accommodating customers on planes that would otherwise be full.
The carrier also is refurbishing the interiors of its Boeing 757s, upgrading business class seats on international flights, adding leather headrests to coach seats on MD-80s and testing Wi-Fi service on some aircraft.
And to make it easier and quicker to locate mishandled bags, American is equipping personnel with automated handheld bag tag scanners.
"There are huge costs when you have inconvenienced your customers," said Dan Garton, American's executive vice president of marketing.
Dorothy Boydston, a 48-year-old electrician from Hawaii, knows what Garton means.
On a recent trip from Santa Barbara, Calif., to Denver to see her daughter, Boydston had to spend a night at a Phoenix hotel at her own expense because she missed her US Airways connecting flight after, she said, an airline employee wrote the wrong gate number on her ticket. That came after she had to pay $15 to check a bag she tried to carry on the plane to Phoenix, when the airline told her there was no room in the overhead bins.
The next morning, she was still at Phoenix Sky Harbor International Airport, on standby for another flight to Denver.
"I could have rented a car for what it's costing me," she said.
Airline executives are unapologetic about the need to raise more revenue through fee and fare increases to cover their hefty fuel bills. They also say that certain offerings that were free to everyone before are still free for premium passengers like elite frequent-fliers and those people who travel in first class or business class.
Delta, the only one of the six legacy carriers not charging a fee for a first checked bag, is using technology and infrastructure upgrades to improve its baggage handling. It is about halfway through a $100 million capital project at its Atlanta hub that includes upgrading conveyor belts and sorting systems. It also has invested $10 million this year to roll out more wireless bag scanners so it can keep better track of where bags are in the transfer process.