Immediately after the merger announcement that Southwest was forging its way into Atlanta, Delta’s breadbasket, via its acquisition of Atlanta-centric AirTran, TruPrice conducted a week-long analysis of airline fees and declared without reservation that Delta’s fee model could leave it vulnerable to passenger migration to the fee-stingy Southwest.
Now, according to this story, there is even further evidence that the Atlanta-based behemoth may be more vulnerable to loyalty slippage than even our fee analysis might have concluded. For just as TruPrice declared Southwest the resounding winner in the Clash of the Titans regarding baggage fees, so does the story paint a further warning for Delta as that carrier had the largest drop in passenger satisfaction in the American Customer Satisfaction Index. According to the Air Travel Consumer Reports, Delta was number one in delays for major airlines (78 percent of flights arriving on time in the 12-month period ending August 2010) and first in consumer complaints (averaging 2.23 per 100,000 enplanements in 2010).
To be sure, Delta’s drop could arguably be a collateral effect of its merger with Northwest – whose pre-merger J.D. Power and Associates customer satisfaction ratings foretold a drop in customer satisfaction ratings for Delta. Let’s also not underestimate the draw on Delta’s quality rankings caused by Comair and historically miserable Atlantic Southeast (ASA). (Both of these carriers are intentionally branded to look like Delta and often referred to erroneously by the media as Delta itself.)
Ultimately, however the results are parsed, Delta will have little choice but to hyperfocus on its customer satisfaction ratings. For out there lurking is the menacing machine that is Southwest. With no regional carriers to dilute its customer service delivery, the lowest fees in the industry in most categories, the lowest customer complaint ratio, and now an ever larger network with its acquisition of AirTran, this will be Delta’s biggest challenge ever to its operations in Atlanta.
Having gone through the exercise of picking the best possible leaders from both Delta and Northwest as a result of their recently-concluded merger, without doubt, Delta has the assets, tools, and people to rise to the challenge. But make no mistake, unlike US Airways who tried to buy Delta in 2006 but then abruptly went away, Southwest is in Atlanta to stay.
Stay tuned. This should get interesting.