Airline quality report: Better service, fewer passengers

With air travel down in 2008, fewer planes were late and fewer bags were lost in airlines' best performance since 2004.

Finally, there's some good news for the weary, flying public. The nation's airlines' overall performance was the best it's been in four years.

According to the annual National Airline Quality Rating (AQR) report released today, fewer planes were late, fewer bags were lost, and fewer people got bumped from their flights in 2008.

But here's the catch: It's in large part because fewer people were flying due to the recession. And those that did fly found they had less flights to choose from, and that those flights cost more and had fewer frills than before. Indeed, the few additions to the flying experience in 2008 included new fees for checked bags and pillows.

Some airlines also added in-flight Internet service – a boon for business travelers even if it comes at extra cost.

"We're now in a time when the system is constricting and performing reasonably well," says Dean Headley, a coauthor of the report and an assistant professor of marketing at Wichita Sate University in Kansas.

"You have to hope this better performance is not just attributable to fewer people flying – that's part of it," he adds. "But you also hope the airlines are saying, 'By golly, we've got to do better.... Now that we're charging people for bags, let's not lose so many of them.'"

The improved service may make it harder for advocates to get a Passengers' Bill of Rights through Congress this year, according to some analysts. But it also represents an opportunity to make the aviation system healthier, sustainable, and more consumer-friendly in the long-term.

Top of the to-do list for Congress is the nation's archaic air traffic control system – the primary source of aviation woes, it has led to congested skies and airports and the still-large number of delays and cancellations. (Even though there were three percent fewer delays in 2008 than in 2007, according to the AQR report, almost one-quarter of all flights were still late last year.)

"This period that we're in truly presents a rare window of opportunity" for Congress to invest in a system upgrade known as the Next Generation Air Traffic Control, says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa., which represents corporate travel managers.

"Next Gen represents the intersection between transportation policy, energy policy, and environmental policy. [Y]ou get much more bang for your dollar spending it on Next Gen than many other projects," he says.

The current air traffic control system is still largely based on 1950's era radar. Next Gen will catapult it into 21st century satellite-based global positioning technology. That will allow planes to fly more direct routes, closer together so it will relieve congestion system-wide. But it will take time and money – $20 billion and at least ten years to revamp the whole system.

The new Transportation Secretary, Ray LaHood, has made jump-starting Next Gen a top priority for the FAA. But Congress will have to figure out how to pay for it. And so will the airlines which must invest in new technology as well.

Airlines could also take advantage of this time of constriction to reassess their policy of "unbundling" fees, like baggage charges, say analysts. Those unbundled fees now generate about $2 billion dollars annually for the airlines, but they've also produced customer backlash.

Airlines should not look at the fewer recent complaints as a temporary reprieve politically, says Mr. Mitchell, but "seek to address these passenger issues more genuinely."

The number of people that take to the skies is expected to drop another 8 or 9 percent this year, according to recent FAA projections, creating even less congestion. If that happens, and the airlines continue with their improved practices and behaviors, Professor Headley says, "I would have to think 2009 would be a good time to fly, although it may cost a bit more."