Struggling to Gain Altitude: American’s Efforts to Improve Service Haven’t Brought Rise in Rankings
By Trebor Banstetter, Fort Worth Star-Telegram, Texas
May 8–In 2004, American Airlines launched a broad slate of initiatives in an effort to improve its lagging customer service and the travel experience on the world’s largest airline.
Three years later, American remains mired near the bottom of most customer-service rankings, and its performance has worsened since its 2004 efforts, which included an increased focus on delayed flights, enhancements for frequent fliers and small touches like reminding employees to refer to passengers by name.
According to data released Monday by the U.S. Department of Transportation, American was in the bottom third among large U.S. carriers in on-time performance, baggage handling and customer complaints during the first three months of the year.
The results are mirrored in American’s passenger surveys. According to company documents obtained by the Star-Telegram, passengers ranked American eighth in January and ninth in February, of the 10 largest airlines when it comes to the overall travel experience. During the past year, the airline broke into the top five once, in November.
Dan Garton, American’s executive vice president of marketing, acknowledged that the airline has had difficulty climbing out of the cellar.
“We see these as challenges we need to rise to,” he said. Much of the airline’s recent problems can be attributed to bad weather, he said, but added that “we have to learn to provide better service in bad conditions.”
American is hardly alone. The entire industry showed significant declines in service during the first quarter of the year, according to the Transportation Department, amid bad weather and heavy passenger loads that snarled operations. Even industry leader Southwest Airlines, which continues to do better than most of its peers, has seen declines in some areas as it has grown.
Spurred by a group of travelers who were stuck on delayed airplanes for hours in recent months, Congress is considering legislation that would mandate a minimal level of service.
And many consumers have vented their frustrations on Internet sites and blogs about maddening delays, lost luggage and short trips that turned into marathons of waiting.
“The service stinks,” one first-class American Airlines passenger wrote recently on airlinequality.com, a popular travel site where customers report on airline service. “AA food is awful, planes are old and in shameful condition … and the in-flight entertainment (on 757s anyway) consists of tired CBS programming.”
For American, the stakes are particularly high. The airline is increasingly catering to premium business travelers who pay more for tickets than most consumers. That group is sensitive to the quality of service, and will often pay more for better service on a competing airline.
“For a lot of passengers, the fare trumps everything,” said Chris McGinnis, a travel consultant based in San Francisco who publishes the travel newsletter The Ticket.
“But those business travelers are a lot more concerned about service,” particularly delays and cancellations, he said.
In a conference with top managers and executives last fall, Garton gave a presentation that warned that American’s customer experience is “not best in class” and that it was emerging as a “significant vulnerability.”
But he stressed that the situation isn’t fatal, and represents an opportunity to bolster service and the company’s financial results.
“We are completely determined to improve,” he said during a recent interview at American’s Fort Worth headquarters.
He described a host of projects, some new and some under way, that he hopes will nudge the airline’s ranking upward. But he warned that nothing would instantly vault American to the top.
“We’re not interested in quick fixes, because they tend to be very expensive and they don’t hold up” over time, he said.
Some of the plans include:
Upgrades to American’s Internet site that will make it easier and faster to book tickets and frequent-flier rewards.
Improvements to the airline’s automated phone system that will allow passengers to get information more quickly, and re-accommodate delayed passengers faster.
New procedures to locate lost bags and inform passengers when they’ll be returned.
Updates to airplane cabins, including new seats, new in-flight entertainment and additional services like food sales.
Costly improvements to airport facilities in cities like New York, Chicago and Miami, and renovations of Admiral’s Clubs worldwide.
In addition, Garton said, hundreds of employees are involved in the airline’s “Customer Experience Leadership Project,” which aims to improve service at all levels.
“We can’t do this unless everyone is involved,” he said, ranging from executives to flight attendants to gate agents.
Henry Harteveldt, an airline and travel analyst with Forrester Research, said the service issue “isn’t unique to American,” and he noted that other carriers, particularly those in bankruptcy, have struggled in recent years. Still, he said, a reputation for poor service can be difficult to overcome once it’s cemented with consumers.
“People will feel like an airline isn’t showing much respect for them and their time,” he said.
Executives at rival Southwest are facing their own service challenges, albeit from a more advantageous position. The airline has crafted a reputation for good service over the past 30 years despite its lack of amenities like first-class cabins and in-flight entertainment.
Colleen Barrett, president of the Dallas-based airline, said getting employees involved with customers is the key.
“Our employees are extremely hands-on. It’s something that’s drilled into them from Day 1,” she said.
Southwest saw its on-time performance slip slightly during the first quarter, although it had the best record of the large airlines. And although it had the smallest rate of customer complaints, it nonetheless experienced an increase of almost 60 percent in complaints lodged against the airline.
Barrett said the carrier has an ongoing program of measuring its performance and is working to improve efficiency, even as it flies more passengers than ever before.
“We’ve always tried to under-promise and over-deliver,” she said. “We think the important thing is our people, not our technology.”
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Trebor Banstetter, 817-390-7064 tbanstetter@star-telegram.com
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Copyright (c) 2007, Fort Worth Star-Telegram, Texas
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