How can the nation’s best airline also be the worst?

By | September 18th, 2007

Unless you’re an airline insider, you probably didn’t bother to notice yesterday’s second quarter airline financial data released by the government. But if you did — and if you’ve spent any amount of time on a plane this year — you’ll probably find yourself asking this question: How can the nation’s most profitable network airline also be the one customers complain about the most?

I’m talking about US Airways, which has the highest passenger revenue yield, measured in cents per mile, of any network airline (turn to table 14 for details). The airline made 14.5 cents for every mile flown, which is better than any of the low-cost carriers and getting into regional carrier territory.

At the same time, US Airways is the most complained-about airline in America. The latest DOT report card says it received 267 complaints for the month of July, or about 5 complaints per 100,000 passengers. Any way you look at it (in terms of numbers or complaints-to-enplanements) US Airways is far and away the most griped-about carrier.

It’s what I like to call a profit paradox. How can an industry that treats its customers so poorly do so well?

So let’s talk solutions.

US Airways has hired Robert Isom at its customer-service guru and chief operating officer, and it recently unveiled a customer service initiative. That’s a good start. (If you’re a customer with a complaint, you can find out how to contact Isom and his customer service team here.)

There are passengers who feel as if self-regulation isn’t the answer. That more has to be done. If you want to meet some folks who feel that way, stop in at tomorrow’s stand-in sponsored by the Coalition for an Airline Passengers Bill of Rights in Washington.

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I want to believe that new laws can help. But have a look at how EU Regulation 261 has been implemented, and it becomes clear that whatever laws are written, airlines will find a way around them.

Case in point: A recent US Airways flight from Barcelona to Philadelphia which was delayed by mechanical problems. Passenger Josefina Gonzalez wrote to the airline asking for compensation under EU 261, which says that travelers must be paid in the event of a delay. US Airways, like many other airlines serving Europe, apparently believes there’s an exclusion for mechanical delays, which pretty much means it will never have to pay a penny in compensation to anyone.

It made its argument in a letter to Gonzalez:

As the safety of our passengers and crew is our number one priority, we will not operate an aircraft that compromises this objective. A thorough investigation of this incident revealed the flight was grounded because of a spoiler test failure on the previous flight . There is no indication this malfunction existed prior to the previous flight. Moreover, the aircraft had undergone all regular and required maintenance.

For this reason, we will not be compensating you under EU Regulation 261/2004. As an international carrier, we are bound by the terms and provisions of EU Regulation 261/2004. Article 5(3) of the regulation specifically releases carriers from the obligation to pay compensation for delayed or cancelled flights caused by extraordinary events, which could not have been avoided, even if all measures had been taken. As the circumstances surrounding this flight cancellation were neither reasonably forseeable nor reasonably preventable, no compensation is due under the Regulation.

Paragraph 12 of EU 261 defines an “extraordinary” circumstance as on that “could not have been avoided if all reasonable measures had been taken.”

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How clever. And that’s not the work of a maverick customer-service agent, either. US Airways appears to take this position routinely.

All of which brings us back to my the original question. How can the worst airline also be the best?

Is it unfettered capitalism? A few good lawyers? Or is this just the future of air travel?

Maybe it’s all of the above.

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