By the beginning of 2001, the airline industry was
Service and safety
quality in US
airlines: pre- and
post-September 11th
Dawna L. Rhoades and
Blaise P. Waguespack Jr
The authors
Dawna L. Rhoades and Blaise P. Waguespack Jr are based at
College of Business, Embry-Riddle Aeronautical University,
Daytona Beach, Florida, USA.
Keywords
Quality, Airlines, Service operations, Air safety
Abstract
Although the terrorist attacks on 11 September 2001 can be
blamed for a number of problems currently plaguing the US
airline industry, their effect on the service and safety quality of
post-9/11 airlines is mixed. This study places current industry
quality in historical context by examining trends in both areas
beginning in 1987. The findings indicate that the service quality
improved among major US carriers for the period 1987-1993 but
began to deteriorate after this date, although it did not return to
1987 levels. Service quality again improves in 2001 and reaches
its best level ever in 2002 as post-9/11 changes appear to have
improved on-time performance, reduced overbooking, and
lowered customer complaints. Two factors identified as
important in service and safety quality, maintenance spending
and load factor, were also explored. Results indicate that both
service and safety quality improve as the level of maintenance
spending increases.
Electronic access
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available at
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The current issue and full text archive of this journal is
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www.emeraldinsight.com/0960-4529.htm
Managing Service Quality
Volume 14 · Number 4 · 2004 · pp. 307–316
q Emerald Group Publishing Limited · ISSN 0960-4529
DOI 10.1108/09604520410546842
307
already feeling the effects of one of its historical
enemies, economic recession. Economic recession
exposes overcapacity in the market leading to
declines in prices as carriers scramble to fill seats
and retain market share. Financially weak (or
bankrupt) carriers create further downward price
pressure in their attempts to generate revenue
(Wolf, 1995). The last economic recession in
1990-1991 combined with another perennial
enemy of aviation, war (in this case, the Gulf War
of the early 1990s was to blame), to produce US
aviation industry losses of $10 billion (Rosen,
1995). For US airlines who were already expected
to lose $3 billion in 2001, the terrorist attacks of
11th September were particularly devastating (Air
Transport Association, 2002). While the overall
costs of 9/11 may never be fully measured,
industry losses in the US alone have been
calculated at US $17.7 billion (Air Transport
Association, 2003).
As in the early decade of 1990s, war, first in
Afghanistan and then Iraq, has recently prevented
passenger traffic levels from rising, particularly
across the Atlantic. To add insult to injury, severe
acute respiratory syndrome (SARS), has resulted
in devastating declines in travel to Asia. Even
months after the initial outbreak in Hong Kong,
carriers such as Cathay Pacific were reporting
passenger levels at only half of their pre-SARS
levels (Asia Pacific Airline Daily, 2003). This
combination of historic enemies and new threats
has left the airline industry reeling and led to
intensive outside scrutiny and internal
self-analysis.
In retrospect, the US airline industry in the year
2000 appeared to be a victim of its own success.
Record levels of passenger traffic threatened to
strain the US aviation system beyond its limits and
a rising tide of consumer complaints had many
groups calling for some form of industry
re-regulation. Airline consumer complaints
reported to the department of transportation for
2000 were 20 percent higher than the numbers for
1999. Although the labor dispute between the
United Airlines and their pilots is partly to blame
for June 2000 becoming the worst month for flight
delays since 1991 with only 66.3 percent of flights
arriving on-time, the rate of almost all measures of
airline quality rose in 2000 (Bowen and Headley,
2001; Department of Transportation, 2001). The
2000 increase followed a disastrous 1999 when
customer complaints to the department of
transportation doubled. Pressure mounted as the
US Congress considered a series of bills aimed at
“protecting consumers” (US House of
Representatives, 1999).
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
To address this issue and avoid legislation, 14
US airlines agreed to adopt a 12-point plan called
customers first. The plan which went into effect in
December 1999 promised to inform passengers of
the lowest fares available, notify passengers of
cancellations and flight delays, increase baggage
liability limits, provide essential needs to
passengers waiting on delayed planes, and respond
quickly to customer complaints. Kenneth Mead,
Inspector General for the Department of
Transportation, noted that the plan was in fact
more about customer communication than quality
assurance. At the request of US Senator John
McCain, Chairman of the Senate Commerce
Committee, Mead recently conducted an audit of
the airline’s participating in the customer’s first
agreement to determine how well they were
fulfilling their promises. The inspector general
found that while there had been some investment
in new technology and revised operating policies,
these efforts still did not address what Mead
considered the three drivers of complaints: flight
delays, long lines, and crowded planes (Office of
Inspector General, 2000).
It is not surprising that Congress and many state
legislatures are again inundated with calls for some
form of re-regulation of the airline industry,
including a proposal by the Aviation Consumer
Action Project for a Truth in Scheduling
Regulation and a mandatory 3 percent reserve of
flight crews. Other calls for action include a
proposal by House Appropriations Chairman
David Adkins to punish airlines who sell tickets
and fail to arrive on-time and Senator Harry Reid’s
Air Traveler Treatment Act (Associated Press, 2000;
The Washington Post, 2000; US Newswire, 2000).
Amidst this backdrop of consumer
dissatisfaction, the events of 2001 and beyond
need to be examined to place them in the context
of the industry overall. Thus, the purpose of this
paper is three-fold. First, we will examine airline
quality from a historical perspective, looking at
both service and safety levels for the major US
carriers. Second, we will examine the relationship
between maintenance spending, load factors, and
service/safety quality. Third, we will discuss future
US trends in light of recent events.
Airline quality in historical perspective
Prior to 1978, the Civil Aeronautics Board (CAB)
and its precursor, the Civil Aeronautics Authority,
regulated not only fares and routes for interstate
travel but also maintained minimum established
standards for service quality as well. Safety quality
became the responsibility of the Federal Aviation
Agency (at present the Federal Aviation
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Volume 14 · Number 4 · 2004 · 307–316
Administration, 2000) beginning in 1958. A series
of studies conducted in the late 1960s and early
1970s concluded that the economic regulation
forced carriers to compete based on service quality
rather than price and had resulted in fares that
were often 50 percent higher than comparable
intrastate routes. Critics also argued that
regulation forced carriers to accept uneconomical
load factors on many long-haul flights and
prevented them from establishing economies of
scale that would help lower costs (Caves, 1962;
Jordon, 1970). Deregulation was based on the
contestable market theory that suggested that
government promoted contests for markets, even
though large firm size and/or limited number of
competitors existed (Baumol et al., 1982). The
theory argued that impediments to entry and exit
were the primary source of market inefficiencies
and resulted in a high-price/high-service product.
Deregulation was expected to increase
productivity in labor and service delivery as well
as create diversity in price-service options
(Bailey, 1986).
There is little argument that deregulation has
increased pricing options and shifted competition
away from service to price (Woerth, 1995). The
financial crisis of the early 1980s led to a wave of
industry consolidation while the crisis in the early
1990s saw the development of complex holding
structures and the expansion of non-airline
services (Rosen, 1995). As average fares declined,
airlines sought ways to cut costs. These efforts
helped some of the major US carriers become most
cost competitive in the world (Oum and Yu, 1998).
The effect on airline quality is less clear. While the
CAB’s Office of the Consumer Advocate did
compile summaries of consumer complaints, the
authors have located only one such annual
summary for the year 1976 (Office of the
Consumer Advocate, 1976). It is therefore not
possible to directly compare pre- and post-
deregulation airline quality although the general
consensus is that it has declined significantly.
There are several ways to track and/or measure
post-deregulation airline quality. The first method
is through surveys conducted by such
organizations as Frequent Flyer or Conte Nast
who typically questions a cross-section of airline
frequent flyers to rank airlines on key issues of
customer satisfaction. While these surveys are a
source of valuable information, it is difficult to
compare across surveys and across years within the
same survey to gain a historical picture of the trend
in airline quality since the quality categories vary
from year to year. In general, these surveys report
that overall airline satisfaction is driven by ten
factors: on-time performance, airport check-in,
schedule/flight accommodations, seating comfort,
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
gate location, aircraft interior, flight attendants,
post-flight services, food service, and frequent flyer
programs (Glab, 1998). Quality awards include
the so-called Triple Crown and the Grand Slam.
The Triple Crown award was created by
Southwest Airlines in 1992 and is based on figures
obtained from the Department of Transportation
records. It ranks carriers in on-time performance,
baggage handling, and customer complaints. The
Grand Slam, created by continental airlines, adds
bumped passengers to the Triple Crown list. It
should be noted that southwest has won the Triple
Crown 5 years in a row while continental has
placed first in the Grand Slam. Critics have
charged that the Triple Crown and the Grand
Slam have more to do with marketing than airline
quality (Carlos, 1997).
The Department of Transportation began
publishing the data on which both awards are
based in 1987. Air travel consumer report (ASQ)
contains an airline-by-airline listing of consumer
complaints for all airlines with ten or more
complaints in a given year. The report also
summarizes the on-time performance, mishandled
baggage reports, and denied boardings for all
major US carriers. In 1991, the first airline quality
rating report was issued by the Aviation Institute at
the University of Nebraska at Omaha. The AQR is
a weighted measure of 19 factors, including safety
indicators, service factors (taken mainly from the
air travel consumer report, and financial
performance measures. The AQR, which has
reported a negative industry quality average for
every year beginning with 1991, has been criticized
on several counts. First, there is the issue of the
assigned factor weightings. These weightings were
established through a survey of “65 airline industry
experts” who rated the factors on a ten-point scale
of importance. Second, the factors were assigned
either a positive or negative value based on a
consumer’s perception of quality. This results in a
negative weighting for load factor and has aroused
criticism from airlines who value high load factors
for financial reasons. The authors of the AQR
defend this weighting in particular, arguing that
the index takes a consumer perspective and that
consumers prefer flights with lower occupancy
(Further issues surrounding load factor will be
discussed later). The AQR has also been criticized
for not addressing key consumer interests such as
seat comfort and low fares (Perkins, 1998). While
the data available from the department of
transportation does not address fares, the data
does indirectly address many of the issues
identified as “keys to customer satisfaction”.
However, it is difficult to sort out the effects of any
given set of factors in the overall AQR ratings.
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In order to gain a better understanding of the
issues involved in airline quality, we have sought to
extend the examination of airline quality back to
1987, separate out service and safety quality issues,
evaluate statistically significant differences in
quality, and analyze the impact of maintenance
cost and load factors on airline quality. Our prior
research has found an overall improvement in
service quality since 1987 with the major carriers
converging on a service standard better than the
original 1987 figures. Given the convergence in
service standards, the differences in quality
rankings for all but the top and bottom quartiles
are statistically insignificant. Safety quality rates
(per departure) for the major carriers were far
better than service quality rates and showed no
relationship to service quality rankings. These
findings were found to differ substantially from
those for regional carriers. As a group, regional
carriers displayed greater variation in service and
safety quality and posted worse overall rates in
both categories. There was also a strong
correlation between the service and safety rankings
for regional carriers (Rhoades and Waguespack,
1999, 2000a, b; Rhoades et al., 1998).
The relationship between maintenance
spending and safety quality has been a contentious
one. The CAB expressed the fear of many when it
said that “in the absence of countervailing
measures, removal of entry and price controls
would be likely to degrade safety” (US Civil
Aeronautics Board, 1975). A related deregulation
concern was the relationship between airline
profitability and safety. In both cases, critics have
been concerned that the need to reduce costs to
achieve profitability in a deregulated market would
result in lower maintenance spending and less
safety quality. Research on this area is mixed.
While one researcher has reported that carriers
who spend a higher percentage of their total
expenses on maintenance had lower accident rates,
other studies have found no relationship (Globe,
1986; Graham and Bowes, 1979; Panzar and
Savage, 1989; Rose, 1989, 1990). To date, no
study has examined the relationship between
maintenance costs and total service quality.
However, it is clearly possible that the level
of maintenance spending could effect the level
of flight problem complaints, on-time
percentages, etc.
Load factor is the percentage of available
aircraft seating capacity that is sold and utilized.
An airline annual report will cite a breakeven load
factor that is the average point at which flight costs
match the revenue earned. An airline that is failing
to meet its breakeven load factors is losing money;
load factor is a key indicator of financial stability
and profitability. For this reason, low load factors
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
should be negatively related to safety quality. The
relationship to service quality is somewhat more
complex. As the authors of the airline quality
report argue that low load factors should be
preferred by consumers who favor less crowding
on the airplane. It also takes longer to board a full
plane, a factor that may affect the departure times.
Still, at some point low load factors should begin to
have a negative affect on service quality because of
their relationship to profitability.
Current study: methods and results
The first goal of this study was to update our earlier
studies focusing on the ten US carriers currently
designated as major carriers (gross revenues over
$1 billion). Service quality data were collected
from the Department of Transportation’s air travel
consumer report 1987-2002. This data include
on-time performance, mishandled baggage,
involuntary denied boardings, and customer
complaints. Safety data were collected from the
Federal Aviation Administration (2000) and the
National Transportation Safety Board. This data
included accidents, incidents, near mid-air
collisions, and pilot deviations.
Information on departures was collected from
the Bureau of Transportation Statistics and the Air
Carrier Traffic Statistics monthly. This publication
was also the source for airline load factors. The air
carrier financial statistics quarterly provided data
on airline maintenance costs.
Quality rates were calculated for the industry
overall and by category for each of the major
carriers. The total service quality rate represents
the sum of the following data – percent of late
flights, total consumer complaints, total
involuntary denied boardings, and total
mishandled baggage divided by total yearly
departures for that airline. The safety rate was
calculated as the sum of the following: total
accidents, total incidents, total near mid-air
collisions, and total pilot deviations per year
divided by total yearly departures for that airline.
In a real sense, our rates are a measure of disquality
and can be interpreted as the number of quality
problems per departure. Maintenance costs were
also normalized by departure and represent the
maintenance spending in dollars per departure.
Table I reports the total quality rates for the ten
major airlines. As the industry average shows,
there was an overall improvement in total quality
from 1987 to 1993 when the average reached a low
of 39 quality problems per 100 departures. After
1993, the average began to rise but has not
returned to 1987 levels. The average dropped
again in 2001 and reached its lowest level since the
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Volume 14 · Number 4 · 2004 · 307–316
publication of the air travel consumer report in
2002. The confidence levels indicate that for any
given year, the total quality levels of all but 3-4
carriers were statistically indistinguishable.
Individually, there are some exceptions to the
trend in quality improvement, most notably
United Airlines. A look at the raw numbers
indicates three areas that are particularly troubling
for an airline like United-delayed flights,
mishandled baggage, and customer complaints.
While labor problems contributed to a dismal of
48.3 percent on-time rate in June 2000, United’s
overall on-time percent for 1999 was 74.7 which
was slightly below the industry average of 76.6.
However, their on-time average at selected airports
was far worse. United posted an on-time
percentage at Chicago O’Hare, a key hub, of only
66.9. Additionally, in 1999 United filed 20 percent
more mishandled baggage reports than competitor
Delta who actually enplaned more passengers.
Finally, United’s customer complaints more than
doubled between 1998 and 1999. The two largest
categories were flight problems and customer
service.
Table II reports the total safety quality for the
major airlines. These results are far more
encouraging. The level of safety quality is much
better in terms of departures than the service
quality levels. In 1999, for example, there were
43 service quality problems per 100 departures
but only seven safety problems per 100,000
departures. This safety rate has improved to six
problems per 100,000 departures over the last
3 years.
Table III reports the results of our analysis
regarding the relationship between maintenance
expenditures and the overall service and safety
quality indexes. Since our measures actually
measure disquality, we would expect a negative
relationship between maintenance costs per
departure and both service and safety quality. In
other words, as maintenance costs per departure
increases, the level of reported service and safety
problems per departure should decrease. This
relationship holds true for all airlines in terms of
safety quality. The R2 indicates the amount of
variance explained in a given relationship. The
variance explained by maintenance costs per
departure on safety quality is very low for three
carriers (Alaska, America West, and TWA). It
should be noted that two of these carriers, Alaska
and America West, have recently been cited for
poor maintenance practices and record keeping. In
other words, spending alone does not guarantee
improved safety. The expected negative
relationship between maintenance spending and
service quality also holds true for all but two
carriers (TWA and United) and service quality.
 Service and safety quality in US airlines Managing Service Quality
Dawna L. Rhoades and Blaise P. Waguespack Jr Volume 14 · Number 4 · 2004 · 307–316

Table I Total quality rates for major airlines

Airlines 1987 1988 1989 1990 1991 1992 1993 1994
Alaska 0.4793 0.3907 0.3799 0.3810 0.3048 0.3535 0.3054 0.3269
America West 0.6631 0.6654 0.5399 0.6910 0.5054 0.3549 0.3693 0.3991
American 0.8078 0.6497 0.5851 0.5444 0.3799 0.4424 0.4149 0.3664
Continental 0.6017 0.4785 0.4945 0.4192 0.3905 0.4781 0.4482 0.4649
Delta 0.6252 0.5970 0.5710 0.5006 0.4435 0.4858 0.4634 0.4364
Northwest 0.6457 0.6240 0.5508 0.5281 0.4072 0.4157 0.4072 0.4239
Southwest 0.8212 0.4943 0.3621 0.3030 0.3070 0.3063 0.3003 0.3395
TWA 0.5218 0.4374 0.6046 0.6177 0.4927 0.5427 0.3353 0.4134
United 0.4928 0.4990 0.6029 0.5605 0.5095 0.5097 0.5241 0.4882
US Airways 1.0052 0.8152 0.5770 0.3924 0.3414 0.4003 0.3596 0.4057
Industry average
Quality by year 0.6664 0.5651 0.5278 0.4938 0.4082 0.4289 0.3928 0.4064
Confidence interval
Upper limit 0.7859 0.6568 0.5900 0.5789 0.4639 0.4836 0.4445 0.4432
Lower limit 0.5469 0.4734 0.4636 0.4087 0.3525 0.3743 0.3410 0.3696

Airlines 1995 1996 1997 1998 1999 2000 2001 2002

Alaska 0.3908 0.5184 0.5113 0.5175 0.4174 0.2603 0.2164 0.1924
America West 0.4296 0.4148 0.2943 0.3411 0.4087 0.6144 0.3932 0.3594
American 0.3965 0.4430 0.3843 0.3614 0.4162 0.4481 0.3573 0.3699
Continental 0.3320 0.2949 0.2799 0.3116 0.3507 0.4435 0.3681 0.2770
Delta 0.4657 0.5235 0.4534 0.4443 0.4758 0.4847 0.4035 0.3826
Northwest 0.4637 0.4034 0.4571 0.5216 0.3879 0.4326 0.3345 0.3662
Southwest 0.3362 0.3110 0.2838 0.3446 0.3366 0.4167 0.3845 0.2861
TWA 0.4703 0.4674 0.4234 0.4626 0.4756 0.5804 – –
United 0.4650 0.6169 0.5958 0.7507 0.6745 0.6242 0.4737 0.3709
US Airways 0.3520 0.3949 0.3236 0.3277 0.3955 0.3697 0.2941 0.2460
Industry average
Quality by year 0.4102 0.4388 0.4007 0.4383 0.4339 0.4675 0.3584 0.2280
Confidence interval
Upper limit 0.4504 0.5091 0.4771 0.5348 0.5024 0.5488 0.4142 0.3692
Lower limit 0.3700 0.3686 0.3243 0.3418 0.3654 0.3861 0.3025 0.2642

For most carriers, the magnitude of the
relationship between maintenance costs and
service and safety quality is very similar. Once
again, spending does not insure improved quality.
Discussion
Overall, the service quality of US major carriers
has improved since the data became public in
1987, reaching an industry-level best performance
in 2002 (Table I). It is ironic that the best service
quality performance of these carriers has been
during the two key periods of financial distress,
1991-1993 and 2001 to the present. It should be
noted that while service quality did decline in the
years immediately prior to 2001, the overall
average service quality rate was still below 1987
figures and although the industry as a whole posted
higher levels of service difficulty, the problems
were not equally spread throughout the industry.
Among the majors, United has shown the most
consistent and dramatic increase in service-related
311
difficulties. Unfortunately, as the largest carrier in
terms of revenue passenger miles their plight has
cast a shadow over the entire industry.
There are several possible explanations for the
improvement of service quality rates beginning in
2001. First, all the major US carriers, with the
exception of southwest, have taken action to
reduce capacity. This includes retiring older
aircraft and reducing flight schedules. Older
aircraft tend to have more mechanical problems,
higher maintenance costs, and a lower perceived
level of interior quality. Second, passenger load
factors for all carriers fell for 2001 and are only
beginning to rise to earlier levels for many carriers.
This not only makes flights less crowded from a
consumer perspective, but should reduce the time
required to board aircraft. This also means that
there are simply fewer to complain about service
quality. The existence of fewer passengers and
fewer flights has improved the overall on-time
performance of these carriers by alleviating
capacity restraint problems at major airports. It
should be noted that approximately 670 million
 Service and safety quality in US airlines Managing Service Quality
Dawna L. Rhoades and Blaise P. Waguespack Jr Volume 14 · Number 4 · 2004 · 307–316

Table II Total safety rate for major airlines

Airlines 1987 1988 1989 1990 1991 1992 1993 1994
Alaska 0.000086 0.000233 0.000158 0.000090 0.000125 0.000119 0.000045 0.000082
America West 0.000073 0.000047 0.000088 0.000080 0.000092 0.000093 0.000022 0.000081
American 0.000143 0.000132 0.000137 0.000108 0.000158 0.000113 0.000108 0.000094
Continental 0.000155 0.000166 0.000161 0.000168 0.000116 0.000101 0.000163 0.000100
Delta 0.000138 0.000133 0.000143 0.000150 0.000134 0.000111 0.000111 0.000074
Northwest 0.000193 0.000182 0.000145 0.000112 0.000100 0.000118 0.000076 0.000064
Southwest 0.000053 0.000047 0.000066 0.000077 0.000058 0.000052 0.000034 0.000029
TWA 0.000324 0.000332 0.000164 0.000155 0.000120 0.000084 0.000098 0.000036
United 0.000131 0.000148 0.000156 0.000135 0.000146 0.000114 0.000087 0.000049
US Airways 0.000124 0.000113 0.000096 0.000128 0.000116 0.000097 0.000059 0.000054
Industry average
Safety by year 0.000142 0.000153 0.000132 0.000120 0.000117 0.000099 0.000080 0.000066
Confidence interval
Upper limit 0.000197 0.000214 0.000157 0.000143 0.000137 0.000113 0.000111 0.000083
Lower limit 0.000088 0.000093 0.000106 0.000097 0.000096 0.000085 0.000050 0.000049

Airlines 1995 1996 1997 1998 1999 2000 2001 2002

Alaska 0.000090 0.000045 0.000063 0.000066 0.000082 0.000066 0.000059 0.000057

America West 0.000061 0.000053 0.000052 0.000039 0.000100 0.000065 0.000067 0.000040
American 0.000084 0.000089 0.000082 0.000082 0.000061 0.000070 0.000064 0.000065
Continental 0.000109 0.000088 0.000130 0.000113 0.000097 0.000076 0.000066 0.000080
Delta 0.000074 0.000096 0.000087 0.000081 0.000048 0.000058 0.000061 0.000053
Northwest 0.000074 0.000079 0.000053 0.000072 0.000060 0.000055 0.000054 0.000065
Southwest 0.000042 0.000035 0.000032 0.000048 0.000032 0.000030 0.000034 0.000034
TWA 0.000050 0.000077 0.000093 0.000054 0.000056 0.000040 – –
United 0.000072 0.000062 0.000065 0.000072 0.000083 0.000069 0.000058 0.000075
US Airways 0.000065 0.000069 0.000068 0.000057 0.000055 0.000044 0.000026 0.000013
Industry average
Safety by year 0.000072 0.000069 0.000072 0.000068 0.000068 0.000057 0.000054 0.000054
Confidence interval
Upper limit 0.000086 0.000084 0.000092 0.000084 0.000083 0.000068 0.000065 0.000070
Lower limit 0.000058 0.000055 0.000053 0.000053 0.000052 0.000046 0.000043 0.000037

Table III Maintenance expenditures and service and safety quality control systems faced with too much traffic for
2 existing capacity. In a July 2000 report, the office
Correlation (and R ) with maintenance expenditures
of inspector general estimated that 74 percent of
Safety Service
Airline r R2 r R2 delays were the result of unscheduled
maintenance, baggage handling problems,
Alaska 20.101 0.010 20.391 0.153 boarding delays, slow fueling, and late-arriving
America West 20.028 0.001 20.629* 0.396 crews (Holstein et al., 2000). A final explanation
American 20.770** 0.593 20.659* 0.434
for the improvements in the service quality rate
Continental 20.461 0.213 20.425 0.212
may be a 9/11 effect on complaints; consumers
Delta 20.832** 0.692 20.801** 0.641
may either be less likely to complain amidst the
Northwest 20.725** 0.526 20.435 0.189
Southwest 20.550 0.303 20.485 0.235
heightened concerns over safety and the obvious
TWA 20.229 0.052 0.601 0.361 distress of air carriers or they may be shifting some
United 20.688** 0.473 0.689 0.475 of the blame for perceived problems to the newly
US Airways 20.722** 0.521 20.484 0.234 created transportation safety administration.
Notes: *p , 0.05; and **p , 0.01
Another key finding of this study is the
relationship between maintenance costs and
service and safety quality (Table III). Consistently,
passengers boarded a US airline in 2000. This is the level of safety-related problems went down as
more than twice the number who flew 20 years maintenance spending went up. Rhoades et al.
back. Rising passenger levels coupled with (2003) have reported that maintenance spending
inadequate airport infrastructure (runways, gates, per mile flown has been increasing slightly since
etc) exacerbated problems with the air traffic 1997. This does appear to be reflected in an
312
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
improved safety quality level reported here.
This study also found a relatively strong
relationship between maintenance costs per
departure and safety problems per departures for
all but three carriers (Alaska, America West, and
TWA). We are not suggesting that airlines “throw
more money” at maintenance. As our results show,
money alone is not enough; Alaska Airlines and
America West have both been cited for problems
with their maintenance procedures. Without
proper maintenance procedures, personnel
training, and record keeping, additional
maintenance spending will not improve airline
safety. Maintenance spending is also related to
service quality. Once again, we find that increasing
maintenance costs per departures reduces the level
of service problems experienced by consumers.
However, as with safety quality, money alone is not
the answer. Southwest has consistently ranked at
the top in terms of overall basic service quality
while spending “peanuts”.
No study is without its limitations. Perhaps, the
most obvious limitation of the current study is
geographic; in an era of increasing liberalization, it
focuses solely on the major US carriers.
Unfortunately, the data to replicate this study with
international carriers simply do not exist in any
public, accessible form. While it is possible to find
data on airline accidents by year and international
carrier, there is no public source for incidents,
near-midair collisions, and pilot deviations. Data
on service quality features such as on-time
percentage, consumer complaints, denied
boardings, etc. are also not publicly available for
carriers outside the US. In November 2000, the
European Commission released a consultation
paper that indicated their intention to “propose
legislation to establish the publication of indicators
on service quality on a mandatory basis by
imposing obligation on operators to provide
reliable data to build up statistics” (p. 2). This
community air passenger report would contain the
same type of information as the US department of
transportation’s air traveler consumer report.
When it is implemented and available, this data
could be used to compare with the data contained
in this study. There are currently no plans in other
regions of the world to make this type of data
available to consumers. A second limitation relates
to the nature of the data itself. The Department of
Transportation data does not specifically address
amenities such as food, seat comfort, seat pitch,
and frequent flyer plan. Its categories are designed
to capture basic service issues such as flight
schedule, flight problems, baggage handling,
refunds, etc. While airline surveys such as the one
conducted by J.D. Powers do address these issues,
it does not rank carriers based on performance
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Volume 14 · Number 4 · 2004 · 307–316
(or even report all carrier performance by
category) nor does it consistently use categories
across years. Thus, the information is no
appropriate for a longitudinal study of airline
quality.
These limitations point to several fruitful areas
of future research including comparisons across
regions as well as comparisons between the
traditional carriers and the new breed of low cost
carrier on issues of basic service. Studies would
also be helpful in predicting the maximum system
load in US air transportation; if reductions in
flights and schedules improved on-time
performance and reduced delayed and cancelled
flights, then models could be developed to predict
the maximum level that the overall system is
capable of handling. From there, it would be
possible to predict the effects of new technology on
the system.
Managerial implications
The results of this study have implications for
managers at all levels of the air transportation
system. A system is composed of distinct, but
interconnected elements that both affect and are
affected by changes in other elements of the
system. Peter Senge, author of The Fifth Discipline:
The Art and Practice of the Learning Organization,
has suggested that the purpose of systems thinking
is “to make the full patterns clearer, and to help us
see how to change them effectively” (p. 7). Since
the air transportation “system” is actually a
complex interaction of systems and players, there
are a number of “quality” problems that require
intervention and study at the highest level of
national and international decision-making. A July
2000 report from the Department of
Transportation’s Office of Inspector General
concluded that “urgent attention is required [on]
the absence of a system for collecting causal data
and reporting a reasonably complete picture of the
causes of delays and cancellations” (Stefani,
2000). Likewise, the European Commission has
recognized the need to analyze the source of delays
with its creation of the Central Office for Delay
Analysis (CODA). These high-level governmental
efforts are vital to improving this critical area of
customer dissatisfaction. Another area requiring
high-level attention is inadequate and aging
infrastructure. The failure to invest in upgrading
air traffic control systems, runways, passenger
terminals, and other associated elements of the air
transportation system has been blamed for many
of the existing inefficiencies (European
Commission-Directorate-General for Energy and
Transport, 2000; Wolf, 1995). In many nations,
special taxes or charges are levied on airlines or
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
other aviation firms with the intent of using the
monies raised to make infrastructure
improvements that benefit all stakeholders in the
system, however, these funds are often either not
used at all or used poorly (Wolf, 1995). While
there have been calls to privatize the air traffic
system in the United States and increase the
number of privatized airports, these efforts have
not been well received in the US and privatization
in US air transportation lags behind many other
regions of the world. Since the air transportation
system is in many ways a public good, private firms
are very reluctant to spend their own funds for
infrastructure improvements that would benefit
other players in the system as well. Therefore,
governmental involvement in funding is essential,
although there are certainly valid reasons to involve
other stakeholders in decisions concerning where
funds are spent. These same high-level decision
makers can also help improve the quality of service
by recognizing that “the availability of information
on the quality of services is essential to support and
drive the choices of passengers, particularly in
respect to services of public nature, such as air
transport. It is therefore necessary to improve
public confidence by giving to passengers a clear
indication about the real performance of the
system so that they are aware of what they can
expect when they buy a ticket for flying”
(European Commission-Directorate-General for
Energy and Transport, 2000, p. 3).
In parallel with these high-level efforts, there are
a number of actions that individual airlines can
pursue to improve customer satisfaction. For
traditional carriers, one key question is whether the
business class passenger who has often provided
upto 60 percent of their revenues will return in their
former numbers or flock to the growing number of
low cost, value carriers (Haddad and Zellner, 2002;
Velocci, 2002; Woodyard, 2003). In an effort to
compete with their low-cost rivals, traditional
carriers are exploring old and new ways to reduce
costs; from the old tactic of re-negotiating labor
contracts to looking into technology. The re-
negotiation of labor contracts and aircraft leases are
usually only successful in the most extreme cases of
crisis, i.e. bankruptcy. In part, this is a reflection of
the very contentious labor relations that have
historically existed in the airline industry. While
technology holds the promise of reducing some
costs, airline investment in technology began to
decline in the early 1990s in response to the
financial crisis mentioned earlier and many carriers
will find it difficult to make such investments in the
current downturn (Zellner and Woellert, 2000).
Nevertheless, the Internet is becoming a major new
channel in the airline distribution system, creating
a new standard for service and opening up new
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avenues for improving service; JetBlue has recently
begun allowing passengers to select seat
assignments online and print boarding passes
(Zellner, 2003). Such changes are a radical
departure from the traditional airline distribution
system. At one time, airline systems were designed
to be separate. Thus, an airline had a reservation
system separate from its telephone-based arrival
and departure service, separate from the systems
carrying information to the airport tower, ticket
agents, and gate agents. Technology offers the
possibility to have all these systems linked
seamlessly and in real time. This linkage would
allow all parties to receive timely and accurate
information. Wi-Fi technology in airports could
allow passengers to use cell phones to check the
status of flights, upgrades, etc. Other technological
solutions are being applied and/or proposed to
improve check-in and baggage handling. Delta is
one of a number of carriers conducting tests on
systems to allow e-ticket passengers with carry-on
bags to check-in by phone or use airport kiosks to
purchase and print their own tickets and bag tags.
Customer service agents with handheld computers
are also being utilized to speed check-in procedures
on traditional lines. Common use terminal
equipment (CUTE) and common use kiosks at
airports will reduce congestion and improve
check-in efficiency. Baggage handling can also be
improved through bar-coding; bar-coding luggage
can be used for sorting at the originating airport as
well as for tracking purposes (Costello, 2000).
While technology and money are vital to the
long-term improvement of airline quality, there are
more mundane, although perhaps no less difficult,
actions that can be taken by the airlines to improve
quality. Prior to 9/11, airline schedules were
particularly troublesome at major airports. Action
by the major carriers to move leisure flights to
off-peak times, add ground time to scheduled
flights and reduce the number of daily flights has
improved on-time performance and reduced
congestion. Unfortunately, the intensely
competitive airline industry has found it difficult
to withdraw from the “schedule war” and risk
conceding market share to rivals. The conventional
wisdom of the airline industry has long been based
on a belief in the S-curve theory which posits that
increases (decreases) of marginal flights result in
greater-than-proportional gain (loss) in market
share (O’Connor, 2001). Any cutback in schedule
flies in the face of this wisdom, but without
infrastructure improvements the system cannot
cope with the pre-9/11 traffic levels without a
significant increase in delays.
Another battle that remains to be fought
involves changing customer expectations. Like any
business, airlines have the option of choosing
 Service and safety quality in US airlines
Dawna L. Rhoades and Blaise P. Waguespack Jr
basically one of three strategies – cost leadership,
differentiation or focus (Shaw, 1999). As noted
earlier, the events of 9/11 have accelerated the
growth and expansion of low-cost carriers while
traditional carriers struggle to stop declines in
passenger traffic (Bond, 2003; Haddad, 2003).
Even with the severe, bankruptcy imposed costs
cuts of airlines like United and US Airways,
traditional carriers have not brought costs down to
the level of airlines like Southwest, JetBlue, and
Spirit Airlines, therefore, competing on price is not
likely to be a successful, long-term strategy. While
carriers have attempted to brand both their
individual carrier and their alliance, the risk still
remains that “the flight will be reduced to a
commodity status, and that the individual choice
of airlines will be factored out of the buying
process” (Fraser, 1996, p. 61).
Quality like beauty is in the eye of the beholder;
it is a matter of perception. The current perception
is that airlines simply do not care about quality. In
fact, if quality is defined as meeting and/or
exceeding customer expectations, then airlines
have often exceeded our worst expectations. Like a
ball moving downhill, the tendency is to keep
rolling down at an ever increasing speed until
something or someone stops it; airlines need to
take positive and visible action to change customer
perceptions before Congress steps into stop
consumer perceived declines in airline quality.
American Airlines campaign to remove seats and
increase legroom was a visible and generally well-
received step toward changing perceptions, but
this effort has fallen by the wayside in American’s
effort to stave-off bankruptcy. Research suggests
that consumers judge service quality based on five
broad dimensions: reliability, responsiveness,
assurance, empathy, and tangibles. The most
important of these dimensions is reliability or the
ability to perform as promised in a dependable and
reliable manner. This is a basic service not frills.
Southwest has demonstrated an ability to deliver
consistent, basic service and remains one of the
best carriers in terms of their level of customer
complaints. Delivering reliable service is difficult
without a clear understanding of the design of the
service system itself. A service map not only
outlines the process involved in delivery but also
identifies processes that are visible to customers
and those that are not. The map also focuses on
identifying fail points in the system that require
special attention such as redesign, staff training,
etc. Mistakes happen and this is where
responsiveness (willingness to help), assurance
(employee knowledge and courtesy), and empathy
(caring, individualized attention) come into play.
The ability to recover from a service failure can be
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critical to keeping and/or restoring customer
confidence (Berry et al., 1994).
Conclusion
The ability of the US airline industry to return to
financial health and prevent rising quality
problems will undoubtedly be an uphill struggle.
There is no single solution to the problem of airline
quality. Quality is not only a matter of perception
and definition, it is a matter of mindset. Southwest
Airlines is an excellent example of an airline with a
clearly defined sense of “quality” and a reputation
for delivering on their quality promises. The
Southwest definition focuses on achieving basic
service reliability with friendly, caring employees.
Developing both of these ingredients takes time.
Like the US automobile industry that suffered
through over two decades of competition from
Japanese carmakers with a perceived higher
standard of quality, US airlines will have to
struggle to reverse current consumer perceptions.
If the international airline industry continues to
liberalize its entry and ownership requirements,
US airlines may find themselves facing
competitors with higher perceived quality. The
entry of such international carriers as Singapore
Airlines and Virgin Atlantic could further damage
the customer perception of US airline quality.
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