Image: Southwest Airlines
Matt York  /  Associated Press
Rank No. 1: On-time flights score: 14; canceled flights score: 15; reports of mishandled baggage per 1,000 passengers score: 9; complaints per 100,000 enplanements score: 15; J.D. Power and Associates customer satisfaction ranking score: 9; asset-to-liability ratio score: 2; and overall score: 93.
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updated 10/10/2008 11:37:57 AM ET 2008-10-10T15:37:57

When it comes to air travel, consumers probably expect this to be true. After all, budget carriers aren't always considered smooth-running operations offering a consistent level of service. But according to our analysis of the nation's 10 major airlines, discount carriers actually rank first in reliability.

Southwest Airlines, the no-frills discount carrier, handily beat the competition in most of the categories we judged. JetBlue, also considered a discount airline despite its plush leather seats and individual television sets, ranked third just behind Continental Airlines. Fourth place went to AirTran, another budget carrier.

Alaska Airlines, Northwest Airlines, American Airlines and Delta Air Lines were solidly average performers. United Airlines and US Airways landed at the bottom of the list.

Methodology
To judge reliability in the airline industry, particularly at a time when carriers are responding to oil prices by slashing capacity and raising prices, we looked at six different factors for 10 major airlines. (Frontier Airlines a budget carrier, was omitted because we could not obtain certain figures for each year.)

We collected five years' worth of data relating to on-time arrival, cancellations, complaints and mishandled baggage from the Aviation Consumer Protection Division of the Department of Transportation. Delays and cancellations, the factors most likely to ruin a flier's day, were given double weight.

To better gauge the overall flying experience, we included J.D. Power and Associates' consumer satisfaction rankings from 2005 to 2008. These surveys reach more than 9,000 travelers annually and ask participants to rate factors like cost and fees, in-flight services and check-in.

Finally, because solvency is critical during these uncertain times, we considered an airline's asset-to-liability ratio for the latest quarter.

The results
When all of these figures were combined, the discount airlines consistently rose to the top. For each of the years we studied, Southwest's flights were punctual more than 80 percent of the time; the average was 76.8 percent. Alaska Airlines gave the most dismal performance, with only 74.6 percent on-time flights.

In terms of canceled flights, Southwest reigns yet again. The carrier canceled an average of 0.65 percent of its flights over the five-year period, compared with the worst airline, American, which canceled an average of 2.4 percent.

AirTran, another budget carrier, had the fewest reports of mishandled baggage — a contentious issue now that airlines are charging as much as $50 to check regular-sized luggage. In 2007, AirTran had about four reports of mishandled baggage per 1,000 customers. The worst-ranking airline, US Airways, had 8.5.

While consistency in these categories is important, customer service is an equally powerful factor. Sam Thanawalla, director of the global hospitality and travel practice at J.D. Power and Associates, argues that reliability means "delivering on the promises." This includes getting passengers to their destination in a timely fashion, but also cultivating a workforce that puts the consumer first and can resolve problems or complications quickly.

Thanawalla says that JetBlue and Southwest, along with Continental, have excelled at this approach. Consumers have routinely rewarded these airlines with high rankings in annual J.D. Power satisfaction surveys.

Long-term reliability
While the budget carriers currently have a "reliability" edge over their competition, the industry is transforming swiftly under the pressure of oil prices, and long-term reputations hinge on how companies respond now.

Image: JetBlue Airlines
Mark Lennihan  /  Associated Press
Rank No. 3: JetBlue Airways: On-time flights score: 9; canceled flights score: 10; reports of mishandled baggage per 1,000 passengers score: 10; complaints per 100,000 enplanements score: 15; J.D. Power and Associates customer satisfaction ranking score: 12; asset-to-liability ratio score: 2; and overall score: 77.
William Swelbar, research engineer at Massachusetts Institute of Technology's International Center for Air Transportation, views the change as invigorating for the troubled industry. This year alone, 30 airlines around the world declared bankruptcy, and major airlines posted record losses.

Swelbar's hope is that airlines will restructure their business plans for long-term stability instead of building them around cheap oil. This means cutting capacity and charging customers for services that were once free; even the budget airlines have begun charging as much as $30 for seats with extra leg room.

"That's the sensitive part of all of this," he says. "It's going to move the consumer's expectation needle."

But, he says, consumers have been on the winning side of a deregulated airline industry for the past 30 years. When adjusted for inflation, airfares are now 50 percent cheaper than before deregulation.

"Consumers have won big on price," he says, "but they've paid on the reliability side."

Swelbar envisions a day when the increased fees will reflect an actual premium of service, not just desperation to break even or turn a small profit.

"Any call to arms for the industry to look at itself and begin to put the consumer first," he says, "would be a terrific first step."

© 2012 Forbes.com

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