Consumers give airlines thumbs down

Rise in customer satisfaction may signal end to economic slowdown, but high oil and fuel prices continue to leave their mark.

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By Kenneth Musante, staff writer

Which are you least satisfied with?
  • Airlines
  • Health Care Firms
  • Restaurants
  • Utilities

NEW YORK ( -- Following a year of choppy sentiment, consumers are finally becoming more satisfied with many industries with one notable exception: airlines.

For the first time in 12 months, the University of Michigan's American Customer Satisfaction Index registered a gain for the first quarter. According to the survery, released Tuesday, the airline industry, which has been hiking prices and packing planes to combat high fuel prices, tumbled to its lowest satisfaction level since 2001.

The index rose 0.4% to 75.2 on a 100-point scale following a decline during the last six months of 2007, suggesting consumers may be more willing to spend money in the coming months.

The same sort of curve signaled a recovery from the economic slowdown of 2000 and 2001, according to ACSI founder Claes Fornell. But this time may be different, he warns.

"Households are under pressure from falling housing prices, tight credit, and rising food and fuel costs, making it more difficult for satisfied consumers to spend more even if they want to," said Fornell in a statement.

According to some economists, the worst of the housing and credit crises may have passed, but full recovery may be a long time in coming as the prices of oil and refined fuel continue to rise.

Gas and oil keep rising. Gasoline prices hit their 12th straight record high on Monday, according to a daily survey from AAA. The price of gasoline affects consumers directly, but record diesel prices, which increase the cost of shipping goods, also trickle down.

As the price of oil continues to climb above $120, airlines have had to cope with the cost of refined jet fuel by raising ticket prices, overbooking flights, charging for extra bags, and selling "premium" seats. And customers aren't happy about it.

Continental Airlines, Inc. (CAL, Fortune 500) and US Airways Group, Inc. (LCC, Fortune 500) saw their Customer Satisfaction scores plummet more than 10%.

The four airlines at the bottom of the survey: US Airways, United Airlines, Inc. (UAUA, Fortune 500), Northwest Airlines Corp. (NWA, Fortune 500) and Delta Air Lines, Inc. (DAL, Fortune 500) are all involved in merger proceedings to allay fuel costs.

"Passenger satisfaction is dismal, and things probably won't get any better if airlines continue to charge more for less," said Fornell.

Southwest Airlines Co. (LUV, Fortune 500) remains the exception to the rule. The point-to-point carrier saw its Customer Satisfaction score rise 4%, maintaining its 15-year streak at the top of the list and keeping the overall airline industry score from falling more than 1.6%.

The score for American Airlines (AMR, Fortune 500) also rose 3% to match the industry rating, but this ACSI survey measures satisfaction in the first quarter, before the airline's rash of flight cancellations displaced more than 100,000 fliers.

The ACSI survey is conducted on a quarterly basis and measures customer satisfaction in 43 industries. To top of page

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