Best service ever? Airline industry sets surprising record.

A new report on the US airline industry found that, by four major measures including lost baggage and overbookings, customer service has never been better.

US airlines are providing passengers with the best service in at least 22 years, according to a study released Monday.

In the last year, the airline industry improved in four major categories: on-time performance, baggage handling, involuntary denied boardings, and customer complaints, according to the Airline Quality Rating, a joint statistical performance analysis of 15 carriers. 

This makes 2011 the best year on record since the report’s private researchers began tracking airline quality two decades ago.

“The airlines are getting their act together and seizing control of the situations in which they must perform,” said Brent Bowen, head of the Department of Aviation Technology at Purdue University and one of the authors of the study, in a press release. “But with an increasing demand for air travel, they must be careful to keep things on track.”

The data, which are drawn from the US Department of Transportation’s monthly Air Travel Consumer Report, show airlines are doing slightly better since 2010 on the four basic performance measures.

• The rate of on-time arrivals increased to 80 percent in 2011 from 79.8 percent in 2010.
• The rate of mishandled bags decreased to 3.35 per 1,000 from 3.49.
• Denied boardings improved to 0.78 per 10,000 passengers from 1.08.
• Customer complaints dropped to 1.19 per 10,000 passengers from 1.22 the year before. 

“All four elements got noticeably better, but the big improvement for us this year is the involuntary denied boardings, that is, the amount of overbooked flights,” says Dean Headley, co-author of the report and a business professor at Wichita State University. “That dropped by 30 percent. We’ve never seen that big of an improvement by the industry in previous years.” 

For the second year in a row, low-cost carrier AirTran Airways topped the list of airlines, followed by Hawaiian Airlines, JetBlue Airways, Frontier Airlines, and Alaska Airlines. Frontier had the largest improvement in overall score, while Continental Airlines and Mesa Airlines had the largest decline in AQR score for 2011. Regional carrier American Eagle performed worst of the airlines rated in the study.

The findings, which indicate four consecutive years of improved airline performance, illustrate progress the airline industry is making despite consumer perceptions to the contrary. A survey of frequent fliers conducted by Mr. Bowen and Mr. Headley shows just 11 percent of fliers think airlines are improving.

Bowen says poor customer relations and a media focus on rare but colorful employee meltdowns are to blame.

Headley says it’s just a quirk of human nature.

“Flying is not fun, but it’s a necessity, and we see the negative more than the positive in that,” Headley says. “As a group, airline consumers tend think of flying as a negative experience when they show up on time with their bags, even though that’s exactly what they paid for." 

“With a mixed bag of gains and losses across the 15 carriers rated, the gain in AQR score for the industry is a positive sign,” the report says. “The improvement trend in AQR scores since 2007 speaks well of the industry maintaining in difficult times.”

With higher fuel costs and airfares trending up, there are more planes out of service and fewer seats available, Headley says, which means there is more pressure to deliver. 

But it’s clear the industry is responding to the strain of near-record consumer travel demand, he says. US airlines employed 2.1 percent more workers in January compared with a year before, according to the Bureau of Transportation Statistics. This was the 14th consecutive month that employee levels have been higher than the same month the previous year.

This, Bowen says, is a definite sign of progress for the industry.

“The industry is becoming more productive and efficient, and you’ve got to have those bottom lines because that’s the most important thing for the consumer,” Bowen says. “Getting to their destination safely, on time, and with minimum hassles.”

“The fact is the airline industry is doing a decent job in a pretty complex system,” Headley says. “Given that we’ve seen improvements in various ways over the last four years, I can only hope that the trend stays there. If the airlines can figure out their dynamics and the public adjusts their expectations, we’re going to meet in the middle at some happy medium and thrive.”