The Skift Airline Innovation Report is our weekly newsletter on the business of airline innovation. We look closely at the technological, financial, and design trends at airlines and airports.
Brian Sumers writes and curates the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.
Delta Air Lines likes to brag about its customer satisfaction scores, reporting earlier this month its domestic score tripled over the past decade, reaching an all-time high in September.
What about American Airlines?
On its fourth-quarter earnings call last week, it had less to boast about. In response to an analyst question, President Robert Isom admitted American’s “likelihood to recommend” score, as measured internally, decreased year-over-year for the “first time in a number of years.” The scores measure how likely a customer is to tell a friend, colleague, or relative to fly American.
I expected Isom might say something about Project Oasis, American’s plan to add seats to narrow-body aircraft to improve unit costs. All airlines are adding seats, but American is going further than some competitors, and customers have complained about reduced seat pitch and tiny bathrooms.
But Isom, former chief operating officer at American and US Airways, told analysts American doesn’t have a product issue. Instead, he blamed operations. “We know the biggest point of concern and issue with our customers,” Isom said. “They want a reliable airline. They want to be certain they get what they pay for.”
It is true on-time performance drives customer satisfaction. Delta is the most operationally sound of the major U.S. carriers and that boosts its scores. But is reliability American’s only issue? Or is there more? What do you think?
Stories of the Week
American Airlines Has a Customer Satisfaction Problem: Isom said customer satisfaction may be declining because the airline has not been as reliable as it should be. But he said the airline’s product earns high marks from customers.
Aviation Complications Likely Spurred Move to Reopen U.S. Government: Let’s say the aviation industry hadn’t been affected by the government shutdown. Would President Trump have moved to reopen the government? Maybe not. I think we can credit aviation for forcing the government to reopen last week. What about you?
Southwest CEO: We Won’t Introduce Basic Economy: Gary Kelly has said this before, and I don’t doubt him. He has worked at Southwest for more than three decades, and he sees himself as keeper of its brand, so he’s willing to forgo some revenue. Kelly has no plans to retire, but I wonder if his successor will see things the same way. Skift’s Dennis Schaal has more details on Southwest’s earnings call.
Ex-United President Is Selected as CEO to Lead IndiGo Into a New Era: I can confirm the whereabouts of former United President Rono Dutta, who led the airline from 1999 to 2002. As a former Chicago resident, I remember this as the period when United claimed it was “rising” in TV commercials. Dutta disappeared for a while, but he’s back to run IndiGo, the Indian airline. Skift’s Raini Hamdi, in Singapore, has the scoop.
Alaska Airlines Works Fast to Erase Memories of Virgin America: This was no merger of equals — Alaska was bigger and made it clear it was the acquirer — so it’s not surprising Alaska is working fast to retire everything about Virgin America. Soon, all of Virgin America’s jets will be repainted. Soon after, all interiors will be retrofitted. Goodbye, white leather seats.
British Airways Rules Out Further Norwegian Offer: Is this the end of the story? Skift’s Patrick Whyte said he’s “willing to bet that this one still has more twists and turns to come.” He’s probably right.
The Inside Story of an Activist Investor’s Fight for Travelport: Few companies other than activist investor Elliott Management expressed a serious interest in acquiring Travelport, Skift Travel Tech Editor Sean O’Neill writes. But O’Neill calls the deal price “underwhelming,” suggesting it is a signal some things haven’t been going the company’s way. You should click on this story if only to see the Travelport-supplied image of all the top executives looking like, well, superheroes.
Private Equity Takes Over Switchfly in a Bet on Travel Loyalty Tech: Switchfly, a travel tech firm specializing in loyalty and e-commerce upselling, has been taken over by private equity firms Golub Capital and L Capital. This story includes another stellar photo of executives looking smug.
American Airlines Opens Premium Economy Award Booking to Fill a Gap: You can now book premium economy award tickets on American Airlines, as our Grant Martin reports.
Skift Senior Aviation Business Editor Brian Sumers [email@example.com] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.