Should Safety-Focused Travelers Avoid Southwest Airlines?
While many travelers may choose an airline based on fare prices or brand loyalty, safety-conscious travelers have a new tool to help in their selection of a carrier. AirlineRatings.com has launched the world’s first country and airline safety comparison tool.
The safety rating system is based on the recognized and approved industry and country audits of the airlines themselves and the country’s regulators. Travelers can select airlines to compare from the more than 400 that the site rates (accounting for 97% of world travel) or select a country and compare all its airlines.
But a look at the U.S.-based airlines shows a limit to the usefulness of the tool for those travelers: almost all the major American carriers have received the same full marks rating. Two exceptions stand out though: Southwest Airlines Co. (NYSE: LUV) and Spirit Airlines Inc. (NASDAQ: SAVE). Both low-cost carriers lack International Air Transport Association Operational Safety Audit (IOSA) certification. That could be because they failed the biannual audit — or that they chose not to participate, as this audit is not mandatory.
Southwest still may be worth considering for travelers, though. In terms of customer service, Southwest topped all its peers in a 24/7 Wall St. Customer Service Hall of Fame and Hall of Shame analysis. Southwest ranked 30th, compared with American Airlines Group Inc. (NASDAQ: AAL) at number 68, Delta Air Lines Inc. (NYSE: DAL) at 122 and United Continental Holdings Inc. (NYSE: UAL) at 146. Spirit Airlines came in at number 150.
The analysis said of Southwest in particular:
> Overall rank: 30th
> Pct. “excellent” ratings: 35.96%
> Pct. “poor” ratings: 4.63%
> Revenue last fiscal year: $20.43 billion
Southwest’s on-time arrival percentage was 74.9% in July and its cancellation rate was 0.7%, or 852 of nearly 118,000 scheduled flights. Mishandled baggage affected 3.38 customers per 1,000 travelers, or about 49,000 of the airline’s 14.44 million passengers in July.
Southwest may be worth considering for investors too. It, along with its peers, remains one of the top holdings of Warren Buffett and his portfolio managers. At last look, the Southwest Airlines stake was worth $2.67 billion, more than the stakes in American, Delta or United.
The company also shrugged off the effects of hurricanes and earthquakes to bring in better than expected third-quarter earnings and solid revenues, driven largely by record passenger revenues.