More Americans depend on commercial flight, but fewer happy with it

by Neil McCabe Washington Examiner - Updated: December 19, 2013 at 9:36 pm • Published: December 19, 2013 | 9:20 pm 0

Americans are flying to more places, more often, than at any time in the country's history, but they are more unhappy about the commercial airline experience than they have been in decades.

According to the 2013 edition of the annual American Customer Satisfaction Index survey, the commercial airline industry gets a D+ rating - 69 percent of passengers interviewed said they were satisfied by the service they received. That compares to 72 percent in 1994, the first year the survey measured airline customer satisfaction.

The 2013 survey, which was released in June and was based on interviews with hundreds of commercial air travelers, gave the highest grades to two non-traditional "no frills" carriers, JetBlue at 83 percent and Southwest at 82 percent.

Among traditional full-service commercial airlines, Delta scored highest, but fell considerably behind JetBlue and Southwest at 68 percent, followed by American Airlines at 65 percent, US Airways at 64 percent and United at 62 percent.

There are numerous factors to explain the decline in customer satisfaction, including intractable employee unions, staggering pension and health care obligations, extraordinarily high recurring capital equipment expenditures and, since the Sept. 11, 2001, terrorist attacks, heavy security costs.

Experts disagree on which factors are most responsible, but the bottom line is that commercial air travel today is often a frustrating, hectic experience that long ago lost the romance associated with the industry's early years.

Air travelers must cope with jam-packed jetliners, extra fees for baggage, frequent departure and arrival delays, and long tedious lines for security inspections by the Transportation Security Administration.

Further aggravating the flying experience is the industry's accelerating concentration around "large-hub" facilities.

These are the 29 airports serving major population centers like Denver, Atlanta and Dallas where passengers typically have a comparatively wide selection of non-stop flights at competitive fares.

But passengers in medium- and small-hub cities like Colorado Springs, Oklahoma City and Portland - which make up the majority of major locations served by commercial airlines - must cope with fares that tend to be higher, make do with fewer direct connections and endure lengthy layovers between connecting flights that make driving an hour or more to fly out of a larger facility more inviting.

In addition, many of the medium- and small-hub airports were expanded in the early years of deregulation at heavy cost to municipal governments hoping to use them as economic growth magnets.

So more people are flying commercially than ever before but much of the promise of the 1978 Airline Deregulation Act that ended the reign of the New Deal-era Civil Aviation Board remains as elusive as ever.

The CAB was a classic agent of centralized government regulation.

The board treated commercial air travel as a public utility like telephone service. Profitable long-distance routes subsidized short-haul service in a fare system that prevented ruinous price wars and substituted competition on the basis of amenities.

Championed by Cornell economist Alfred E. Kahn, the last CAB commissioner, deregulation supposedly freed the airline industry from central command-and-control management to unleash the free-market forces that in other industries led to improved service, lower costs and bigger profits.

Deregulation was the vision, but federal regulators never really took their thumbs off the scales, they just moved their offices from CAB to other government agencies, most notably the Federal Aviation Administration for regulating day-to-day operations, the National Labor Relations Board for labor-management relations, and the Anti-Trust Division of the Department of Justice and Securities and Exchange Commission for mergers and acquisitions.

In addition, the taxpayer-supported Import-Export Bank stepped up support for purchases of American-made commercial aircraft by foreign airlines under highly favorable terms.

As competitors like Lockheed and McDonnell-Douglas either merged with rivals or were bought out by Boeing, the U.S. Export-Import Bank became a virtual extension of the latter's marketing efforts.

Nearly 83 percent of Ex-Im's loan guarantees went to Boeing last year, according to the bank's 2012 annual report.

Federal levies on air travel didn't go away, either. Depending on the destination, as many as 17 separate taxes are collected on an airline ticket, including the Flight Segment Tax, Passenger Ticket Tax, Frequent Flier Tax and the September 11th Fee, according to the Airlines for America trade association.

As a result, as much as 20 percent of a $300 ticket goes to federal taxes, according to the association.

Problems with Kahn's "deregulation" didn't take long to appear.

Braniff International Airways, which had been founded in Oklahoma City in 1930, was the first major victim.

The airline that flourished under CAB with celebrity designer interiors, fuselages painted by famous modern artists and edgy advertising campaigns created by the real Mad Men on Madison Avenue floundered in the new era.

Braniff grounded its fleet in 1982 after a chain of events that included a threatened pilots' strike, the 1981 strike by federal air traffic controllers and problems created before deregulation when regulators forced the airline to move its base of operations from Dallas' Love Field to the Dallas-Forth Worth International Airport.

Braniff's decline and fall was just the first of many that would follow.

Tomorrow: Tough to be a city left out of the large-hub club.

-

Neil McCabe is a Washington-based journalist who covers national politics and public policy issues.

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