Aerospace & Defense

America's Best and Worst Airlines

Paul Ausick

6. United Airlines
> 2014 ACSI score: 60
> Total additional fees: $935
> Market share: 15.6%
> Revenue: $38.28 billion
> Net income: $571 million

The merger between legacy carriers United and Continental closed in October 2010, and the combined company continues to have issues with the unions and the reservations system. The largest flight attendants’ union, for example, has threatened legal action over an involuntary furlough proposal and a plan to move some flight attendants from United to Continental. In a recent study by U.S. PIRG Education Fund, United ranked third in customer complaints behind Spirit and Frontier. Among the six carriers, it ranks fourth highest for additional fees. United’s market share has dipped from 16% in 2012 to 15.6%.

5. U.S. Airways
> 2014 ACSI score: 66
> Total additional fees: $985
> Market share: 8.5%
> Revenue: $26.74 billion
> Net income: $1.83 billion loss

The merger between U.S. Airways and American has not really had much chance to take hold yet. On its own, U.S. Airways’ ACSI score rose two points in the latest survey. The revenue figure for last year is also a bit misleading. If you combine the two airlines revenues for 2013, the total is $35.5 billion, up 4.7% from 2012’s combined total, and now the best in the airline industry. Of the legacy carriers, U.S. Airways claimed the smallest market share. U.S. Airways, like the other legacy airlines, sports added fees right around $1,000, nearly double the level of JetBlue and about triple the level of Southwest.

4. American Airlines
> 2014 ACSI score: 66
> Total additional fees: $1,093
> Market share: 12.7%
> Revenue: $26.74 billion (2013 pro forma)
> Net income: $1.83 billion loss

The bankruptcy of American Airlines’ former parent, AMR Corp., led to the completion of the latest round of mergers among the legacy carriers. American, United and Delta, along with non-legacy Southwest, now combine for nearly 70% of the U.S. domestic market. The company’s fees add up to the highest total among these carriers. American’s market share slipped a bit from 15.9% in 2012, but the addition of U.S. Airways’ 8.5% share more than makes up for the slight loss.

3. Delta Air Lines
> 2014 ACSI score: 71
> Total additional fees: $969
> Market share: 16.3%
> Revenue: $37.77 billion (2013)
> Net income: $10.54 billion

Delta’s market share did not change from 2012, remaining at 16.3%, the highest among all the carriers. The company’s added fees were the second lowest among the legacy group, and its 2013 revenues put it second behind United and ahead of American. Delta’s massive net income is the result of an $8 billion income tax benefit, but even so the company posted $2.5 billion in profit last year, up by $1.5 billion from the previous year. It has the highest ACSI score among the legacy carriers, and its total fees are third highest among the six carriers.

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2. Southwest Airlines
> 2014 ACSI score: 78
> Total additional fees: $338
> Market share: 15.7%
> Revenue: $17.7 billion (2013)
> Net income: $754 million

Southwest’s additional fees are the lowest in the entire industry, more than 40% lower than JetBlue’s. The airline has no fees for checked bags (up to two) and the lowest per-bag fee for more than two bags. The company’s CEO has hinted that fees may be coming, but so far nothing has changed. Southwest’s market share grew from 15.1% in 2012 to 15.7%. The airline has also had its own issues trying to absorb AirTran, but its customers are sticking with it, very likely because of Southwest’s low fares and fees.

1. JetBlue
> 2014 ACSI score: 79
> Total additional fees: $595
> Market share: 5.1%
> Revenue: $5.44 billion (2013)
> Net income: $168 million

JetBlue is the smallest of the six carriers named in the ACSI survey, and its size is both a benefit and a curse. Its market share is essentially flat with a year ago, and the company started offering premium seating (at premium pricing) on some of its coast-to-coast flights last year. Just last week, brand research firm Brand Keys named JetBlue the top airline in its Customer Loyalty Engagement Index. Low fares and the second lowest fee schedule have a lot of appeal to customers and may forgive a multitude of sins. Just ask the folks at JetBlue or Southwest.

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