For years other airlines have ridiculed Southwest Airlines, Co. (NYSE:LUV), suggesting in their ads that the Dallas-based airline treats it passengers like cattle because it foregoes certain “frills” like assigned seating and free meals.
But it’s Southwest that leads many customer satisfaction surveys, and it did so again this year – rising 2 points to score 81 in the latest American Customers Satisfaction Index. Unfortunately, it’s an honor earned in an industry that ranks below the federal government’s 65.4 score when it comes to customers satisfaction. That’s sad for airline stocks and air carriers like Southwest, United Continental Holdings, Inc. (NYSE:UAL) has bought it. Delta Airlines, Inc. (NYSE:DAL), US Airways (NYSE:LCC) and others given the chaos in Washington, D.C. and that the federal government services have been hobbled by a recession.
Continental Airlines, which is a distant second, could muster no more than a score of 64 score in customer satisfaction, plunging 10% from last year now that United Airlines parent United Continental Holdings, Inc. (NYSE:UAL) has bought it. Delta Airlines, Inc. (NYSE:DAL), meanwhile, earned the industry’s lowest score with 56 points.
Why such low marks for the other airlines? Apparently, it’s their policy on checked baggage. Most charge for any checked bag, while Southwest allows its passengers to check two free of charge. That’s not to say Southwest doesn’t charge extra for some services and getting passengers to pay it. It turns out that Southwest customers would rather check their bags for free and pay extra to board early in hopes of getting a better seat.
But don’t expect the survey results or Southwest’s continued profits over the last 40 years to persuade other airlines to ditch their baggage fees. Carriers like Delta, United Airlines and American Airlines’ parent AMR Corp. (NYSE:AMR) have come to depend on the fees they charge for checked bags, meals other upgrades to the tune of $22 billion last year to help keep them in business.
Still, it’s kind of ironic that the higher priced airlines that bragged about their assigned seating, early boarding privileges, and free meals now offer passengers less amenities in their ticket price than Southwest, an airline that began as a no frills alternative to their service.
Who’s laughing now?
As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.