2015: In Rarefied Air According to US Bureau of Transportation statistics, the 25 US scheduled service passenger airlines, which are the basis of the Bureau’s reports, generated 2015 net profits of $25.6 billion, a 241% increase over 2014’s $7.4 billion. A savings of $16.5 billion in fuel costs, or 38% less, compared to 2014, was totally responsible for this extraordinary net-profit increase, although operating revenues declined slightly while labor costs increased 11.3%. US and foreign airlines serving the United States carried an-all time high of 895.5 million domestic and international scheduled service passengers during 2015, which was a 5.0 increase over 2014’s 853.1 million, the previous record year.

Rapid Descent During 2016 US airlines have experienced a hard landing during 2016, with a 57.8% decrease in Q3 2016 net profits, compared to Q3 2015, and a 17.7% decrease, compared to Q2 2016, although Q3 2016 was the 14th consecutive quarter of after- tax net profits. The domestic portion of Q3 2016 net profits were 54.2% less than Q3 2015 and the international portion of US scheduled service passenger airlines decreased 66.0%, compared to Q3 2015. Operating revenue from Q3 2015 to Q3 2016 declined 1.76%, with passenger fares, -2.23%; cargo, -6.19%; reservation changes, -3.21%; and the “other” category, -8.63%. Only baggage, at +8.03%, and transport-related, at +1.09%, increased.

First in the Air The top 5 global airlines by passenger kilometers traveled during 2015 were American Airlines, 358.6 billion; Delta, 337.1 billion; United Airlines, 335.4, billion; Emirates, 251.2 billion; and Air France-KLM, 235.7 billion. With American Airlines’ acquisition of US Airways during 2015, it moved from #4 to #1 in total US-based scheduled domestic and international enplanements, with a total of 146.6 million. Southwest moved to #2 from #1 with 144.58 million enplanements. The top 5 US airlines by market share, for the year ending October 2016, were American Airlines, 19.4%; Southwest Airlines, 18.3%; Delta Air Lines, 16.8%; United Air Lines, 14.5%; and JetBlue Airways, 5.5%.

More Trends Buffet Regional Airlines In its 2016 Annual Report, the Regional Airlines Association (RAA) emphasized, as it did in last year’s report, that “hundreds of airports have lost frequency and dozens of communities have lost all air service,” primarily because of a shortfall of pilots. During 2015, the average passenger trip increased again to 478 miles, which required increasing use of larger aircraft with longer ranges. Many communities are unable to service these larger aircraft. Compared to 2014, departures completed, average daily departures, passengers enplaned, fleet flying hours, revenue passenger miles and available seat miles all declined for 2015.

Greater Customer Satisfaction Is a Boon for Airlines According to the American Customer Satisfaction Index (ACSI), the airlines industry had the highest score ever for 2016, or 72. JetBlue and Southwest had the highest scores, at 80 each, while Spirit had the lowest, at 62, improving, however, from 2015’s 54. A 2015 Ipsos survey found that the more airline trips people take, the greater their satisfaction. Of those with 11 or more trips, 90% were totally satisfied. Family travelers and “road warriors” had the highest totally satisfied score of 89 each. The 2016 J.D. Power North America Airline Satisfaction Study also had the highest score, 726, for the overall industry since 2006, with the score for traditional carriers increasing 12 points to 703 and low-cost carriers scoring 775, a 9-point increase.

Flying with Technology According to SITA’s 2016 Airline IT Trends Survey, more than 50% of airlines expect to spend more on IT projects, especially cyber security. Dollars allocated for further development of mobile apps for customer service will also increase during 2017. SITA’s 2016 Passenger IT Trends Survey found that 79% of respondents would use a mobile device to receive bag update notifications; 67%, to report mishandled baggage; and 65% to receive baggage collection information. Of three primary channels for passengers’ use of technology, the largest passenger activity in each are: kiosk, 37% boarding; mobile apps, 46% on-board; and Website, 75% booking.

Advertising Strategies Regional airlines that are losing flights for various reasons could promote a discounted ticket bundle that takes local customers to the nearest regional airport with more connections, and then to their ultimate destination. Regional airlines that have scored well in the J.D. Power or similar surveys should certainly be promoting their above-average-to- superior customer service, using examples and customer testimonials in TV spots and other advertising cha Based on The Media Audit’s CrossTab report data on page 4 of the Profiler, there may be opportunities for regional airlines to cross-promote with local car dealers, restaurants and wine stores since customers of these retailers have the largest indices in the report data.

New Media Strategies Regional airlines will have to increase their investment in technologies for passenger use and post announcements as well as how-to videos on social media. Ask that customers post comments and/or videos of their experience and satisfaction with these tech tools. Consumers love to do business with companies involved with the local community. Regional airlines can post stories, especially as videos, of their company’s community support, employee volunteerism, providing free medical emergency shipments, etc. The social media influencer concept should prove to be very valuable for regional airlines. Ask the most frequent-flyers to keep and post journal entries of each trip, commenting on comfort, convenience and employees who provided excellent service.