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Airlines in March: Less Punctual and More Complaints

Zacks

The month of March was not a very good one for fliers as far as punctuality is concerned. In fact, the Air Travel Consumer Report unveiled by the U.S. Department of Transportation also suggests that most U.S. carriers were less punctual in reaching their destinations in Mar 2017, both on a year-over-year and month-on-month basis. Notably, the picture was gloomy for the month with respect to cancellation rates as well.

Punctuality Statistics

According to the report, 79.9% flights operated by U.S. carriers touched down on time. This represents a marked deterioration from the comparable figures of 81.5% and 82.6% recorded in Mar 2016 and Feb 2017, respectively.

Delta Air Lines, Inc. DAL secured the top spot with 86.9% of its flights arriving on time during March. It was followed by Hawaiian Airlines, which is owned by Hawaiian Holdings Inc. HA, United Airlines, whose parent company is United Continental Holdings UAL and American Airlines Group AAL as the next three companies to record on-time arrival rates of 84.7%, 81% and 80.2%, respectively. A total of twelve carriers were considered in the report.

We note that the Atlanta, GA-based Delta had secured the top position in Feb 2017 too, with an on-time arrival rate of 89.5%. Delta was followed by American Airlines with 85.2% of its flights arriving on time in the same month.


Disappointing Performers

According to the report, Virgin America, acquired by Alaska Air Group ALK, emerged as the least punctual U.S. airline with only 65.5% of its flights arriving on time during the month. In fact, its brand name is likely to disappear in 2019.

Low-cost carrier JetBlue Airways JBLU was the second from below recording an on-time arrival rate of 70.8%. Florida-based low-cost carrier, Spirit Airlines SAVE occupied the third-lowest spot, recording on-time arrival rate of 75%.

Cancellations Rise but Complaints Fall

The findings also showed that the number of cancellations increased during Mar 2017. The rate of cancelled scheduled domestic flights increased to 1.8%, comparing unfavourably to the figures of 1% and 1.5% in Mar 2016 and Feb 2017, respectively. In fact, Hawaiian Airlines emerged as the topper with respect to this metric with only 0.3% of its flights being cancelled in the same month.

JetBlue Airways was the worst performer in this respect with 3.9% of its flights cancelled during the month. Moreover, the report stated that none of the domestic or international flights had tarmac delays exceeding the permitted duration of three hours and four hours, respectively.

But the brighter aspect of the report came with respect to the significant month-on-month decrease in the number of consumer complaints about airline service filed with the government. Evidently, in Mar 2017, 1,132 complaints were filed, which represents a 20.7% decrease over the preceding month. Spirit Airlines was the worst performer in this respect, while ExpressJet topped the list with the lowest complaint rate.

Bumping Rate Flat

According to the report, the bumping (passengers denied boarding) rate was flat at 0.62 per 1000 passengers in the first quarter of 2017 (January to March) on a year-over-year basis. We note that the issue has been inviting attention lately, courtesy the forced evacuation of a passenger from a United Airlines Flight on Apr 9.

Apart from United Continental, the likes of American Airlines and Spirit Airlines also grabbed headlines due to unfavourable customer- related issues.

Price Performance

The above incidents, which have not been captured in the report, have been responsible for airline stocks struggling of late. This is further exemplified by the chart below which shows that shares of the legacy carriers, Delta, American Airlines and United Continental have lagged the Zacks categorized Transportation-Airline industry over the last three months.

While shares of Delta and American Airlines have lost 3.2% and 1.2% in the period, respectively, the United Continental stock gained 4.4%. Meanwhile, the industry gained 13% over the last three months.

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