Highest customer satisfaction
Alaska Air Group (ALK) tops the list in customer satisfaction, which is evident from its eighth consecutive JD Power award for customer service and its 14th consecutive Diamond Award for maintenance, training, and excellence.
These rankings were made possible by the company’s constant focus on listening to consumer needs, as well as making ongoing improvements in its products and services. Alaska Air Group correctly identified that customer satisfaction doesn’t lie in any technical parameter such as the engine make or fuselage material. Passengers assess an airline by their comfort and flying experience while aboard the airline, as well as the amenities provided for the ticket price.
Employees are key to improved customer satisfaction
In a service-oriented industry, Alaska Air Group understands that its employees hold the key to customer satisfaction. The quality of service provided by the employees and their productivity directly affects the quality of the passengers’ travel experience.
Alaska Air Group provides its employees with ongoing training to improve employee productivity and interaction with the passengers. The airline also has a profit-sharing plan in place that encourages the employees’ direct contribution to the airline’s efficient operation, as well as to stay with the company and become an experienced employee. In the current quarter, the company launched its Beyond Service customer service training initiative for all its employees who interact with the airline’s passengers.
New on-board products launched
Alaska Air Group launched its Preferred Seating option, which allows customers to select bulkhead and exit row seating 24 hours in advance of the flight. The new service provides priority boarding and a complimentary drink. It also launched a new in-flight entertainment system. The company also provides flight attendants with new mobile devices, which help them have more personalized interaction with the passengers.
During 2Q15, the company also allowed its Free First Checked Bag program to become a permanent feature of the Alaska Airlines Visa Signature affinity credit card. The company’s loyalty program generated $175 million in cash, and its active mileage plan member roster grew by 15% in the second quarter.
Maintaining strong operational edge
Alaska Air Group also held the top spot in the US Department of Transportation on-time performance rankings among the eight largest US airlines for the 12 months ending May 2015. These airlines include JetBlue Airways (JBLU), United Continental (UAL), Delta Air Lines (DAL), and American Airlines (AAL). Alaska Air Group enjoys one of the industry’s best on-time performance records and maintains a lower-than-average block time.
Investors can gain exposure to airline stocks through the iShares Transportation Average ETF (IYT). IYT holds ~16.85% in airline stocks.