Usually, businesses that offer poor customer service will also have a poor financial performance. Airlines, however, are an exception to this rule. In the USA there are only 3 industries that score lower on the American Customer Satisfaction Index (ACSI) than the airline industry.
Customer satisfaction and financial performance
Researchers at the University of Nevada in Reno find there is no link between customer satisfaction and an airline's financial performance. Although carriers tout their customer satisfaction, their low score on the ACSI suggests that reality is quite different.
Why can airlines get away with a poor service? Travel in economy class has become a kind of torture. Carriers have squeezed ever more seats in their planes. As a result, passengers now experience:
* Narrow seats (while passengers have become bigger).
* A short pitch (distance between rows) implying less legroom.
* No or a very limited food service on domestic flights (and if so, for a fee).
* An array of fees for "services" that used to be included in the ticket price.
Poor service does not hurt profitability
The Nevada researchers say this makes clear that airlines' profitability is based on logistics rather than service. Despite their poor service carriers can be quite profitable for 2 reasons.
First, there are few alternatives for flying although to a different extent in different parts of the world. Second, there is little competition. In the USA 4 airlines control 80% of the market. On important routes - like the Transatlantic - they reduced competition further by forming joint ventures. Essentially, this is how they wipe out the last traces of competition.
Passengers are also to blame
Not only airlines, but also passengers are to blame for the poor service carriers offer. Many travelers go for the lowest fare offered by low-cost carriers.
However, they often overlook the fees that come on top of those low fares. Due to the low-cost airlines' nickel-and-diming passengers may end up with a total ticket price that exceeds the fares of traditional airlines.
No vouchers please
A carrier failing to deliver may offer vouchers for service missteps. Amazingly, many travelers accept them even though cash would be worth much more. Vouchers expire after a year and force you to fly the failing carrier again.
Small wonder that a large part of the vouchers are never used. Apart from expiration another reason may be that the vouchers have been misplaced.
If passengers would no longer fly the airline that served them poorly, it would have an incentive to improve its customer service.
Related: "Airline satisfaction in USA decreasing"
Tags: customer service, customer satisfaction, lack of competition, vouchers