On-Time Performance Lags As Air Traffic Returns

The U.S. Department of Transportation yesterday issued its latest Air Travel Consumer Report showing a noticeable drop in the airline industry's on-time performance. At the same time, aggregate mishandled baggage and denied boarding ratios increased. These deteriorating metrics coincide with substantial traffic and capacity increases at most of the nation's carriers.

In the first half of 2004, major airlines increased traffic levels between 8 percent and 13 percent year over year. According to DOT, every major with the exception of America West Airlines clocked worse on-time performance in May, month over month and year over year.

United Airlines seems to typify the two trends. It reported first-half traffic growth of 13.4 percent--the largest of any major carrier--and said its June load factor of 86 percent was the highest monthly figure it ever has recorded. On-time performance in May, however, was 10.8 points below April and 11.1 points below last May--in both cases marking the industry's steepest declines. Continental Airlines' on-time performance in May also nearly was 11 points below last year. Its first-half traffic increase was 12.9 percent, trailing only United among major carriers. The industry as a whole had an on-time performance in May of 77.6 percent, down more than five points from April and more than seven points from last year.

While mounting passenger levels is a primary factor, it is not the only one, according to SideStep consumer advocate Terry Trippler. "There will be air traffic control problems as long as the legacy airlines keep buying regional jets and insist on running hourly service on busy city pairs," he said. "The RJs will backfire on them."

Indeed, major airlines increasingly are deploying regional jets on routes between their hubs and bigger spoke airports, and even between two hubs, rather than only to secondary and tertiary markets. That strategy increases flight operations at busier airports already facing air traffic control congestion. Last month, the Federal Aviation Administration said nine of the nation's 35 largest airports were operating above pre-Sept. 11, 2001, levels. By year-end, that number is expected to increase to 15, including seven of the 10 largest airports.

Meanwhile, airlines in May also had worse mishandled baggage ratios. The industry total was 4.13 reports per 1,000 passengers, up from 3.65 one year earlier. Those majors with the largest increases included Alaska, American, Continental, Northwest and US Airways. As for involuntary denied boardings, the industry ratio for January-March was 1.07 per 10,000 passengers, up from 0.90 during the comparable time period last year. Alaska, Delta and Southwest were the major carriers with the biggest ratios, higher than last year in each case.

The airlines did improve in one DOT-measured customer service metric: passenger complaints. The industry's aggregate ratio in May was 0.54 complaints per 100,000 enplaned passengers, down from 0.70 one year earlier. Interestingly, three of the only four carriers with higher complaint ratios than last year were low-cost carriers: ATA, JetBlue and Southwest. The fourth was US Airways.