Last updated: 12:03 PM ET, Wed July 20 2016

Are US Legacy Carriers Finally Getting Better?

Airlines & Airports | Josh Lew | July 20, 2016

Are US Legacy Carriers Finally Getting Better?

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Are American carriers improving? New in-flight offerings, rising quality ratings and better on-time performance seem to suggest that major U.S.-based carriers are focused on creating a better product, and they are succeeding on some levels.

Better, but still not the best

Do they still lag behind the world’s best carriers? Yes.

According to the most recent ratings from research firm Skytrax, Delta is the US legacy carrier with the best product overall. However, it came in in 35th place in the worldwide rankings. Top international airlines from Europe (Air France, Lufthansa), East Asia (EVA, Singapore Air and Cathay Pacific) and the Middle East (Qatar, Etihad and Emirates) all finished well ahead of Delta, while its legacy peers, United and American, finished well back in the pack at numbers 68 and 77, respectively. 

Many people put a lot of stock in the Skytrax ratings because they are based on worldwide passenger surveys. Though Delta finished behind its international competitors, it did improve from 45th place last year, one of the biggest year-on-year improvements in the entire survey. American Airlines has also improved by 12 spots over the past two surveys. These jumps pretty much encapsulates where U.S. airlines currently sit in terms of quality: they are still lagging behind the industry leaders, but they are getting better. 

Quality matters

One of the complaints included in a recent letter from American Airlines pilots to CEO Doug Parker was about how they were tired of apologizing to passengers for AA’s “embarrassing" product. Parker responded by saying that improvement after the merger with US Airways would take time and that changes would have to take place from the ground up. 

The bad news is that even CEOs like Doug Parker and United’s Oscar Munoz admit that changes will take time. The good news is that they seem to agree that focusing on the fundamentals is a necessary first step. Their goal is to make lasting improvements, not to provide quick fixes. 

Baby steps

Earlier this year, American and United both announced that they were offering free snacks on domestic flights. Delta already did this, but the other two airlines had stopped. This was a very small improvement, but it showed that legacy carriers were taking steps to improve in comparison to low cost carriers (who charge for everything) and they were aware that providing certain extra services for all passengers would improve their image. 

Delta Airlines has also shown that getting better at the fundamentals is possible. Once one of the industry’s least punctual airlines, Delta now sits near the top of the on-time rankings month after month. It had the fewest cancellations of any U.S. carrier in May, and more than 88 percent of its flights arrived on time (within 15 minutes of scheduled arrival time) during that month. 

Making employees happy

All three legacy carriers are in the process of giving their employees new contracts. United’s pilots received a record deal earlier this year, and the airline recently agreed to a new contract with its flight attendants. American Airlines has also negotiated new contracts with many of its employees. 

United CEO Oscar Munoz has said that having good employee relations is a fundamental building block for his airline. Getting them to buy into what the airline is doing is an important part of getting them to provide good customer service to fliers. 

READMORE: American Airlines CEO Promises Big Changes Ahead

Reinvesting profits

Another promising trend is that airlines seem to be reinvesting some of their profits from 2015. American Airlines has been improving its airport lounges, and also has launched a major project in partnership with OTG to improve the terminals at its hubs in Houston and Philadelphia with renovations and free iPads for waiting fliers. 

Delta has been segmenting its cabins by adding premium economy class (Comfort +) and also offering no frills economy fares. United has made one of the biggest moves of all, launching a new business class (Polaris) on its wide-body aircraft and also improving the economy class seating on new planes. 

Competing on quality, not price

The improvements will probably come faster if airlines continue to make profits in the coming years. However, legacy carriers seem to have realized that adding value to the in-flight experience and getting the fundamentals right will help them compete not only against international heavyweights, but also against low cost carriers, who might be able to match them on price, but who cannot approach them in terms of quality. 

U.S. airlines are not quite on par with the world’s best international airlines in terms of overall quality. But they do seem to be improving and they seem to understand that sustainable improvements are going to serve them better than quick fixes.   

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