Led by No-Frills Carriers, Airlines Improved Service in 2011

A study shows that AirTran was No. 1 in airline quality last year.

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Maybe you can have your salted peanuts and eat them, too. According to a new study, the airline industry had its best performance in decades, and so-called discount carriers led the pack.

According to the annual Airline Quality Rating, a joint study from researchers at Wichita State and Purdue universities, 2011 marked the fourth consecutive year of performance gains for airlines. The rating looks at how the 15 largest U.S. airlines performed in four categories: on-time performance, lost or mishandled bags, customer complaints, and involuntary denied boarding—another term for getting bumped from a flight. As a whole, the U.S. airline industry improved on all four elements, reaching its highest level of performance in at least 22 years.

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"The interesting thing about this year is that virtually all the airlines improved. I think we're finally starting to see the fact that airline management is really trying to make it better for the consumer," says Brent Bowen, professor and head of Purdue's Department of Aviation Technology.

Bowen adds that, while airlines as a whole improved, carriers with the lowest cost structures ultimately came out on top. "The low-cost carriers are outperforming legacy carriers quite considerably. So you see AirTran and Frontier and Southwest and JetBlue and Alaska, they're consistently doing better than the Deltas and the Americans and the other mega, combined carriers we have now," says Bowen.

Topping this year's list is AirTran, followed in order by Hawaiian Airlines, JetBlue, Frontier, and Southwest. Hawaiian Airlines was tops in punctuality, with 92.8 percent of its flights on time, compared to an 80 percent industry average. Jet Blue bumped only 0.01 per ten thousand passengers, topping that category. AirTran did best in baggage handling, losing or mishandling only 1.63 of every 1,000 bags, and Southwest had only 0.32 complaints per 100,000 passengers.

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American Eagle came out on the bottom of the rankings, with below-average marks in all four categories, including 14th on bumped passengers, at 2.24 per 10,000, and dead last on baggage, losing or mishandling bags for 7.32 out of every 1,000 passengers.

Why are these carriers coming out on top? "I think [they did well] because of the business model that the low-cost carriers have. They're focused on productivity, and the Airline Quality Rating is a measure of actual performance," says Bowen. "That's what the low-cost carriers compete on."

In other words, the survey doesn't capture every aspect of the flying experience. Qualitative aspects, like friendly flight attendants or delicious in-flight meals, may make or break a flight for some passengers, but ranking on those things is tougher.

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But the reign of cheaper airlines may be short-lived. For one thing, Bowen points out that fierce competition between airlines is causing price differences to disappear...meaning that the line between AirTran and a larger company like Continental is getting blurrier for cost-conscious passengers.

In addition, if the past is any guide, the recent merger of Southwest Airlines and AirTran could cause service to deteriorate for those airways' passengers.

"It's just like when you put two giant banks or two giant news organizations together: They're different. They work differently. They have different systems. They have different personnel," says Bowen. "So when you combine two giant organizations, initially, [quality will] always go down. So when you put two higher-performing, low-cost carriers together, are they going to follow tradition, or are they going to break out on top?"

Twitter: @titonka