Another year’s worth of holiday travelers are getting ready to board their flights, resigned to the misery that air travel can be. For most U.S. flyers, quality of airline service—no matter how poor—seems to have little impact on spending. But for a small subset of frequent passengers, stellar service from Southwest Airlines actually appears to create loyalty.
United’s sales were not dragged down by deplaning incident
In addition to its below-average customer satisfaction score, United’s brand took a publicity beating after video of a bloodied David Dao being deplaned from one of its flights went viral. Outrage spread across social media, and United’s CEO was forced to issue a series of apologies. But—from a sales perspective—it was as if nothing ever happened. Second Measure observes personal debit and credit transactions (no corporate spending), and the data reveals that United's sales carried on in lockstep with the rest of the industry.
When Uber faced similar viral outrage just months earlier, its market share dropped by 4 percentage points in just one month. But at United, April market share remained unchanged—at 19 percent—followed by an increase of 1 percentage point in May. While it might be easier for most people to switch rideshare apps than boycott a major airline, not even on-board battery was enough to drive customers away from United.
Airline size lifts sales more than service
When limitations of location and price so often dictate the flights passengers choose, airlines have little incentive to cater to customers with amenities that don’t impact sales. Across the industry, market-share trends are predominantly influenced by airline size. Case in point, American Airlines has the largest reported fleet, which coincides with the highest total domestic sales.
Unlike size, customer satisfaction scores from J.D. Power don't align with sales trends. But when we look exclusively at passengers who fly regularly—those perhaps most likely to care about service and amenities—spending shows that stand-out customer care does seem to foster loyalty.
For seasoned travelers, Southwest soars above the competition
Even among habitual flyers—for our purposes, someone with four or more airline purchases over $50 this year—70 percent weren’t loyal to any particular airline. The other 30 percent flew exclusively on one airline. American Airlines was most popular, chosen by roughly a third of these loyal flyers.
It’s expected that, as the largest domestic airline, American would have the largest share of loyal passengers. But, after adjusting for the impact of market size on loyalty, American still ranked second among major competitors. We measured loyalty for each airline, where a score of 1.0 reflects loyalty proportionate to market share. Airlines scoring above 1.0 have a higher share of loyal customers than would be expected based on their market share of habitual flyers.
The resulting score for American Airlines was 1.09, showing that habitual flyers are disproportionately loyal to the nation’s largest carrier. Passengers looking for travel flexibility are likely enticed by the selection of direct flights that comes with American’s size, despite its mediocre customer satisfaction rating. Meanwhile, the smallest airline in our analysis, JetBlue, was the worst at attracting loyal customers—its loyalty score was 0.75. This likely reflects the fact that it flies to a limited number of cities, making loyalty a challenge for frequent travelers.
While size certainly matters, customer satisfaction could be the factor that tipped the scales for our highest-scoring airline. Southwest’s top customer satisfaction score coincides with top performance in passenger loyalty, at 1.11. Despite being a mid-sized carrier, habitual passengers were disproportionately loyal to Southwest, which prides itself on being the only major airline to offer all customers free checked luggage and no fees for changing flights. Southwest proves that if you can’t be the biggest, it’s still good to be the best.
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