Transportation

Airlines: An Industy Where Poor Ratings Are Good

The Airline Quality Report reached its 22nd anniversary when it was issued recently. Its rankings are based on an extremely complex system, but the outcome for 2011 was easily described:

The Airline Quality Rating industry score for 2011 shows an industry that has again improved in overall quality over the previous year. As an industry, performance in 2011 was the best in the 21 year history of the Airline Quality Rating. Of the 15 carriers rated in both 2010 and 2011, ten carriers improved in Airline Quality Rating scores. Frontier had the largest improvement in overall score, while Continental and Mesa had the largest decline in AQR score for 2011.

The airline industry is one of the few in which pathetic results are presented as excellent.

AirTran Airways was rated near the top of all carriers. Its on-time performance was 84.4%. It had a mishandled baggage rate of “only 1.63 per thousand.” In what other industry would the rates of failure implied by these numbers be acceptable?

The figures for the largest airlines, which carry the bulk of the passenger traffic, were even worse. At bankrupt American Airlines, on-time arrival rates were 77.8% last year. The mishandled baggage rate was 3.55 out of a thousand.

At Delta Air Lines (NYSE: DAL), which grew substantially because of its buyout of Northwest, on-time rates were 82.3% last year. Mishandled baggage rates were 2.66 per thousand.

The airlines are a good example of how consumers, whose expectations have been beaten down by an industry, can claim excellent rates of service when they actually have none. Worse still, some passengers accept the figure about the improvement of airlines as true.

Douglas A. McIntyre

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