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OM in the News: Measures of Airline Quality

January 23, 2016

airlinesAs airlines shrink personal space in cabins, they are also finding other ways to aggravate travelers: Flight delays, cancellations, lost baggage and complaints all increased last year. U.S. airlines canceled nearly 66,000 more flights and the percentage of canceled flights jumped to 2.7% from 1.9% the previous year. The number of complaints filed with the DOT shot up 26% last year.  Although airlines have been investing in new technology to help boost reliability, the U.S. air transportation is still fragile. A few disruptions triggered airline meltdowns, and old equipment is failing more often under increased passenger loads: Southwest says its baggage belts suffered a lot of breakdowns that left luggage in huge piles. Airlines lost or delayed more than 2.1 million bags, a 17% increase over the same period a year earlier.

In The Wall Street Journal’s annual scorecard of airline service (Jan. 14, 2016), which tracks 7 different key measures of airline performance, Alaska Airlines and Virgin America, perennial good performers, placed at the top of rankings. Alaska has invested in satellite based technology that helps it keep flying in fog and other bad weather. Its customer surveys onboard planes helped reduce complaints, and a 20-minute delivery time guarantee on getting bags to carousels has forced improved baggage handling. (We feature Alaska in our upcoming video case series that is available this spring).

Virgin America credits a generous employee incentive program that offers a 3% bonus for high scores in customer satisfaction surveys, aircraft operations and safety, and on-time performance. United and American occupied the bottom two rungs of the scorecard for the 4th straight year. This month, though, United will be rolling out new software for gate agents to better set the time to close the door to a departing flight. Flight attendants will also get hand-held computers that let them report broken parts inside cabins easily.

Classroom discussion questions:

1. What tools in Chapter 6 can the airlines use to measure and improve quality?

2. Why do you think Alaska and Virgin America rank high so often?

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