Airline notes: Biggest Philly carriers have lowest customer ratings; Judge quashes American-Jet Blue East Coast alliance

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High demand, limited supply, and soaring airfares have helped airlines book record revenues, but a golden age of enhanced revenues is coming at the expense of customer satisfaction. That’s according to the J.D. Power 2023 North America Airline Satisfaction Study released this month.

The ratings were dismal for the two largest carriers flying out of Philadelphia International Airport.

American Airlines ranked at or near the bottom in customer satisfaction in first/business class travel and economy fare flights. Frontier ranked at the bottom among economy carriers.

“If yield management were the only metric airlines needed to be successful in the long term, this would be a banner year for the industry because they are operating at peak economic efficiency,” said Michael Taylor, travel intelligence lead at J.D. Power. “From the customer perspective, however, that means planes are crowded, tickets are expensive, and flight availability is constrained. While these drawbacks have not yet put a dent in leisure travel demand if this trend continues, travelers will reach a breaking point and some airline brands may be damaged.”

Southwest Airlines, which has a limited flight schedule out of Philly, topped the economy fare ranking, with Jet Blue tops in first/business class. Southwest is the dominant carrier at Baltimore-Washington Marshall, an airport that attracts Delaware passengers. Southwest’s top rating came despite a Christmas holiday service meltdown that led to massive losses and thousands of stranded passengers.

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The two newest carriers on the scene, Breeze and Avelo, were not part of the ratings. Avelo services Wilmington Airport (ILG).

Takeaways

  • Overall passenger satisfaction declines, driven largely by the cost of airfares.
  • First-class passengers buck the trend: While overall satisfaction is down, passengers in the first/business segment have had a decidedly more positive experience.
  • Low-cost carriers feel the pinch: Annual declines in passenger satisfaction are most pronounced in the economy/basic economy segment, where price-conscious passengers have found fewer airfare bargains this year.
  • One thing everyone can agree onOne of the few areas showing improvement across all segments this year is food and beverage, up 12 points overall from 2022.
  • JetBlue Airways ranks highest in customer satisfaction in the first/business segment for a second consecutive year, scoring 893. Delta Air Lines (865) ranks second, and United Airlines (848) ranks third.
  • Delta Air Lines ranks highest in customer satisfaction in the premium economy segment, scoring 848. JetBlue Airways (840) ranks second, and Alaska Airlines (823) ranks third.
  • For background info, click here.

Jet Blue-American cartel alliance gets bad news

A federal judge has quashed the East Coast alliance between Jet Blue and American Airlines. The U.S. Justice Department had sued to block the alliance due to American’s status as the nation’s largest airline and the potential for monopoly behavior.

The alliance aided American which has trimmed short-haul East Coast flights. For Jet Blue, the arrangement reduced potentially brutal competition with American on a few routes.

The two airlines could appeal the ruling, which may mark the end of airlines facing few antitrust hurdles. The result is four megacarriers, with pricing power and smaller fry fighting for market niches.

Jet Blue is in the small fry category and wants to merge with low-fare carrier Spirit. That deal faces an uphill fight with antitrust folks.

In Philadelphia, the arrangement keeps Jet Blue from ramping up its flights or adding service to Boston since both carriers serve the busy airports. There are options. Delta offers lower-cost service with cramped regional jets. Low-fare carrier Frontier, not wishing to be squashed by the alliance, limits flights to fewer than seven days a week.

By contrast, at Baltimore-Washington, 80 miles south, Southwest’s fares are comparable or in some cases lower.

More than a decade ago, Southwest rolled out cheaper short-haul flights from Philly, but ran into a buzzsaw when USAirways, now American, slashed fares. Southwest pivoted and found more profitable routes elsewhere. Fares soared to places like Pittsburgh. The fares is now over $400 round-trip on American

US Airways had earlier learned a hard lesson when Southwest ran it out of BWI on the strength of its lower fares.

While Philly remains a hub for American, some service has shifted to Charlotte, a city where there is less competition.

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