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Transportation 2014 Airline Survey

A Clean Sweep for Delta

By Michael B. Baker / December 15, 2014 / Contact Reporter
Business Travel News on X

Delta Air Lines further solidified its status as the darling of the U.S. corporate travel industry, as the carrier earned the top score in the BTN Annual Airline Survey for the fourth year in a row. Not only did Delta earn the top score from buyers in each of the 10 categories by which airlines are rated in the survey but the carrier also has gained ground against many of its competitors since last year's survey. Delta improved its scores compared with last year in all categories, and its overall average score increased a quarter of a point year over year. Its nearest competitor trailed Delta's overall average score by more than 0.7 points.

That competitor, Southwest Airlines, also showed a marked improvement compared with the 2013 survey, in which the carrier ranked fourth. Southwest's increased score moved it past American Airlines and United Airlines to finish second this year.

As a result, both AA and United slipped a place in ranking, and the overall score for both also declined year over year, though not dramatically. Overall averages for both carriers declined less than a tenth of a point.

 [Please click here to download a pdf of BTN's 2014 Airline Survey, featuring all charts and rankings.]

As its merger with American deepens, US Airways remained at the bottom of the ratings and declined 0.21 points in its total overall average. Although that merger was completed in December 2013, BTN kept the two airlines separate in this year's survey amid the ongoing integration. The two carriers are expected to have a single operating certificate from the U.S. Federal Aviation Administration by the middle of next year.

Even with three of the five airlines declining in score year over year, buyers' sentiment toward their airline partners overall seems to have improved in the past year. Of the survey's 264 buyers with at least $500,000 annual spending in U.S.-booked air volume, 36 percent said they have seen airline customer service improve during the past 12 months, compared with 31 percent in 2013. Only 15 percent said airline customer service has worsened, a decline of 5 percentage points from the 2013 survey.

 Delta's Service Earns Admiration

Praise for Delta's customer service and flexibility were common themes among surveyed buyers' open-ended responses.

One buyer noted that Delta recently had become the company's preferred domestic carrier as "they always show extreme interest in providing the optimum customer service." Another lauded Delta's "exceptional sales rep that is supportive and knows our account, working with our onsite agents and communicating proactively." Yet another called Delta the "most partnership-friendly" of the U.S.-based airlines, with "service that has been superior to the other carriers through friendliness, customer service and the willingness to serve at least pretzels."

Sapient director of global travel and client experience Michelle DeCosta had particular praise for a program that Delta introduced in 2013, in which travelers from large corporate accounts get special recognition when checking in for flights.

"When a Sapient person checks in, it welcomes them at the kiosk, and Delta thanks Sapient for their business," DeCosta said. "People think, 'Wow, that's really cool.' "

Delta senior vice president of global sales Steve Sear said such praise was an example of the "material advantage in the marketplace" that Delta has gained through its service offerings.

"So many things can be replicated in our industry, but not customer service, and we always have had incredible relationships with our accounts," vice president of global sales Bob Somers added. "We spend a tremendous amount of time with our customers, through advisory boards and town halls, and we're always looking to get better, as we did more than 10,000 hours of training this year."

Several buyers in the survey cited the carrier's launch this year of Delta Edge, a suite of services that includes a web portal through which buyers can access reporting and manage various aspects of their relationship with Delta. One buyer noted the program "formalizes [Delta's] commitment to provide our company great service and provides us with the tools to put a metric to their partnership—no other airline comes close."

Among the legacy carriers' joint ventures, Delta's transatlantic joint venture with Air France-KLM and Alitalia also earned the top score and a healthy premium above its competitors in the survey in terms of flexibility, service and performance.

One area in which Delta earned criticism from buyers was its decision to move Delta SkyMiles next year to a revenue-based program rather than a mileage-based program, a move later followed by United. One buyer expressed concern that the switch would have "a deep impact on road warriors who are required to travel economy."

 Southwest Gains With Buyers

With its scores up year over year in all 10 categories in the survey, Southwest improved its total score 0.22 points year over year.

As has traditionally been the case in the survey, Southwest earned its highest marks in overall price value and customer service quality. For the former category, Southwest was only 0.05 points shy of Delta's score, the only category in which any other airline was in spitting distance of the airline juggernaut this year.

Southwest vice president and chief marketing officer Kevin Krone said the carrier's continued decision to allow travelers to check bags and change flights without incurring fees remains a key factor of Southwest's value score. Its no-bag-fee policy became even more of an outlier among North American airlines this year, with both WestJet and Air Canada both adding first-checked-bag fees this year and JetBlue Airways recently announcing plans to move to a tiered pricing system in which the lowest tier does not include checked baggage.

"There's a perception that people on business travel don't check luggage—but they do," Krone said. "With change fees, things are always changing in business travel, so letting the customer travel without additional change fees will drive the score."

The distribution channels category was one of the few in which Southwest scored below average and the only one in which it was outscored by the four other airlines. Even so, its score in that category improved to 3.40 compared with 3.05 in the 2013 survey.

Although Southwest has less of a presence on global distribution systems than its competitors, Krone said its direct-distribution model benefits buyers in other ways.

"The low-fare component is so critical to people, so to get business done, we have to be nontraditional," he said. "We cover 75 to 80 percent of the market, not to mention all of the corporate distribution tools, and we think that's evidenced by overall growth in corporate relationships and corporate travel."

Krone said he expects Southwest to continue to make gains in the corporate market in the coming years. The recent expiration of the Wright Amendment, which restricted Southwest's ability to fly direct to destinations outside of Texas and its bordering states from Dallas Love Field, has "definitely sparked interest in finding ways for us to grow our Dallas-based business." Additionally, Southwest is in the early stages of a multiyear move to Amadeus' Altea reservations system, which Krone said would "provide capabilities to better satisfy business travel needs, and we'll be sitting down and talking to all our accounts as those grow over time."

 Buyers Adjusting To Post-Merger AA

Financially, American Airlines has reached a strong position as it continues to iron out the creases in its merger with US Airways. Some buyers, however, still report issues adjusting to those changes.

AA's overall average score declined 0.08 points year over year, and its score dropped in all but two categories. Vice president of global sales Derek DeCross said the results were disappointing but that he "looked forward to seeing things come to light" in terms of improved buyer satisfaction as the two airlines continue to align operations and processes.

At a BTN event last month in Dallas, AA's backyard, several buyers during a discussion of airline relationships were critical of rising inflexibility and communication lapses they had seen since the merger. One buyer said he had been given a new contract accompanied by "the exact words: 'Take it or leave it,' " while another said she "couldn't even say I know who the sales team is, because the people we used to work with are not the ones interacting with us."

DeCross, however, said both of those areas have been points of focus for AA and would continue to be so next year.

"We're building upon frequent communications with our corporate customers and agency partners, and we're looking to get even better in terms of frequency and relevant content to provide to them," he said. "For our best customers and partners, we're looking at providing more flexibility and enabling them to tailor their experiences a little more."

With salesforces integrated, fare classes aligned and sales support policies and corporate agreements harmonized, DeCross added that "most of the heavy lifting is complete, so we can get back to focus on servicing customers."

One change already announced for next year is that AA plans to make live sales support for U.S. and Canadian customers available 24/7 beginning in January, complementing the carrier's 24/7 online support capabilities. DeCross also promised "major strides in customer reporting, focusing on partnership value" to be rolled out next year.

The two categories in which American improved its score this year were distribution channels and its networks, partnerships and frequencies. On the latter, DeCross noted that the newly merged AA now had daily departures more than 20 percent higher than its nearest competitor.

"If you think about our frequencies in key markets for corporate business, it's a very compelling proposition," he said. "Our fleet renewal also continues; when you look at our mainline aircraft combined with the regional jets we also are receiving, it's about two new airplanes every week through 2017."

A few buyers in the survey already had unequivocal praise for AA as well.

"American has helped us in numerous ways, like in organizing domestic group travel," according to one buyer in the survey. "It has been wonderful to work with them."

 United's Turnaround Continues

Like AA, United faltered slightly in the survey compared with last year, dropping 0.06 points in its overall score and losing ground in nine of the 10 scored categories. Even so, buyer sentiment both by United's internal measurements as well as some external evidence point to a more optimistic outlook for the carrier.

United senior vice president of worldwide sales Dave Hilfman said the results "didn't seem to be reflective of what we're hearing from the majority of corporate clients around the world. From our travel management company partners and client accounts, we're hearing that United's made significant strides in every area."

Indeed, buyers both in the survey and at BTN's Dallas event had positive feedback for United. One Dallas buyer said that United "has been the most aggressive and flexible of all our deals," while a different buyer in the survey remarked that United was "working hard to win back my traveler loyalty." Another buyer in the survey praised its status-match program for frequent-traveler status.

"[The program] has been surprisingly seamless and painless, for both the traveler managers and for the travelers seeking the status match," according to the buyer. "Generally, it was completed within one day from the time the submission was received."

Client communication was the one category in which United's score showed a marked improvement year over year, which Americas vice president of sales John Slater said has been a priority.

"We've really pushed to spend more time in front of the customer, making sure we know what their needs are," Slater said. "We're also doubling down on our ability to allow customers to have self-service for customer transactions, taking the administrative burden off salespeople so they can spend more time with customers."

Hilfman cited several other areas in which United has sought to improve its standing with corporate buyers, including the extension of Executive Desk hours for contracted accounts to 24/7, adding evergreen components to master corporate travel agreements to simplify the contracting process and loading weather waivers into Travelport's Rapid Reprice tool in order to expedite travel changes.

Many of the criticisms of United in open-ended survey questions centered on operational issues. One buyer, for example, called United "the least friendly from crew to service offerings."

Hilfman countered that United has made "significant progress" in such operational issues as baggage handling and on-time performance as well as fleet modernization and new amenities, including expanding Wi-Fi availability and offering more flatbed seating on international flights. As such, he predicted the carrier's scores would improve in next year's survey.

"We're looking forward to a successful 2015, and we have a lot of momentum," Hilfman said. "Business has been improving, and we're getting significant new victories in the corporate marketplace."

 Rating Criteria Definitions

 Flexibility in negotiating transient pricing: The airline's demonstrated ability to customize business travel program discounts and other negotiated pricing elements

 Flexibility in negotiating meetings pricing: The airline's demonstrated ability to customize meetings travel discounts and other associated negotiated pricing elements

 Flexibility in negotiating services and amenities: The airline's demonstrated ability to negotiate additional offerings for individual business travelers, including soft-dollar benefits and special treatment in-flight and at the airport

 Distribution channels: The airline's demonstrated ability to provide comprehensive published and private airfare content through preferred booking methods

 Complaint/problem resolution: The airline's demonstrated ability to respond quickly and effectively to business travel buyer and corporate traveler concerns 

 Quality of client communications: Demonstrated performance in informing business travel buyers about changes in airline management, products, programs, sales and service

Value of relationships with account managers and sales reps: Demonstrated performance in the productivity and frequency of meetings with local, regional, national and other airline representatives as well as representatives’ power to negotiate agreements, offer options and make decisions regarding price and service

 Quality of customer service: Overall perception of airline based on timeliness, reliability and cleanliness of service, support from airline personnel and communication to travelers

Networks, partnerships and frequencies: The airline's ability to provide the necessary service to the destinations organizations require

 Overall price value: The perceived worth of an airline's service levels relative to fares, fees and other charges

 Airline Survey Methodology

The 17th annual Business Travel News Airline Survey uniquely measures corporate travel buyer perceptions of airline performance in negotiating and maintaining preferred programs, delivering service and providing value. Survey categories were developed though a series of exchanges with travel buyers, corporate travel agency managers and airline sales executives to reflect the way in which corporate air travel buyers perceive each airline. Asked to grade only those airlines with which they "either negotiated a contract or booked a meaningful amount of business" in the past year, respondents ranked domestic U.S. carriers in 10 categories on a scale of one (poor) to five (excellent). BTN averaged scores in each category to create an overall score for each carrier. All categories were equally weighted.

Not every respondent rated every airline in every category. Those participating who offered no response for a particular category or airline were not included in that average rating.

BTN from mid-July to early September collected responses from travel manager and buyer members of the BTN Research Council and randomly selected subset of qualified subscribers of The BTN Group's Business Travel News and Travel Procurement publications. A total of 477 qualified respondents completed the online questionnaire, 308 of whom represented organizations that in 2013 spent at least $500,000 on airline tickets.

In an effort to restrict the survey to perceptions of those involved in managed travel programs, respondents whose organizations spent less than $500,000 in 2013 U.S.-booked air volume were excluded.

Of the 308 respondents in the final sample, 25 percent represented organization with U.S.-booked air volumes between $500,000 and $1.9 million; 35 percent represented those spending between $2 million and $1.9 million; and the remaining 41 percent represented those spending more than $12 million. 

The survey listed the largest domestic airlines as identified by the U.S. Department of Transportation, excluding regional affiliates of major carriers. Alaska Airlines, Frontier Airlines, JetBlue Airways and Virgin America elicited responses from less than 30 percent of the final survey sample and therefore were excluded from this report.

Equation Research hosted the survey and tabulated results.

 This report originally appeared in the Dec. 15, 2014, edition of Business Travel News.

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