Continued: Customer service often lost in mergers

Of all the obstacles Northwest Airlines and Delta Air Lines would have to overcome in the event of a merger, improving and integrating customer service cultures could be the toughest.

Mediocre service is a common denominator.

They consistently rank near the bottom of customer satisfaction rankings in an industry where many passengers already bring low expectations with them to the airport. Last year, both Delta and Northwest scored worse than the Internal Revenue Service in the University of Michigan's U.S. customer satisfaction index.

Delta and Northwest would seem to have an advantage if they pair up: For years they have had a code-sharing agreement that has made the two companies familiar with booking each other's passengers and handling each other's baggage.

But a smooth integration would defy history. Most airline mergers have been characterized by long shakedown periods in which the number of mishandled bags, delayed flights, ticketing snafus and lost reservations spikes, analysts say.

"Every time people think we've hit the floor as far as airline service, a merger happens, and we're in the basement," said Kevin Mitchell, chairman of the Business Travelers Coalition.

The 1986 acquisition of Republic Airlines by Northwest was the last time a sizable merger directly affected the Twin Cities. The deal brought together about 17,000 workers from Northwest and 16,000 from Republic, and each side fought to do things its way. Less than a year after the deal, Northwest's on-time arrival rate fell to an abysmal 69 percent.

"To this day, there are people who are waiting to get their bags back" after the Northwest-Republic deal, said Terry Trippler, a Minneapolis-based airline expert. "They went off to Airline Land and never came back."

Customers of US Airways have fared little better since the Virginia-based airline merged with America West of Tempe, Ariz., in 2005. For the 12 months ended in November, US Airways logged the second-worst on-time performance of 21 airlines tracked by the U.S. Department of Transportation. Just 68.4 percent of its planes arrived on time, compared with an industry average of 73.8 percent.

"Voluntary mergers historically don't work," said airline analyst Adam Pilarski, at Avitas Inc., in Chantilly, Va. "There are almost no examples where good things happen."

Both Northwest and Delta emerged from bankruptcy protection last year, after spending much of the past three years cutting costs.

For either to succeed in a merger -- with each other or another partner -- it will take real improvements in the customer flying experience so that they can keep and attract more premium passengers who pay higher fares than those in coach, analysts agree.

Delta and Northwest have taken the first steps toward raising the bar for their service culture.

Delta in particular has issued a steady stream of service news since last spring, touting leather seats, digital entertainment systems, oversized pillows and new food and beverage options on select international flights, from mojitos and other exotic cocktails to dishes created by noted Miami chef Michelle Bernstein. It also plans to install "lie-flat seats," which fully recline, in more than 100 planes that fly internationally.

Northwest, meanwhile, upgraded its food offerings in first class this summer, offering first-class customers at least two food choices, including vegetarian meals. It also is adding 72 larger, regional jets that offer both coach and first-class eating, as well as leather seats, adjustable headrests and more overhead storage throughout the planes.

"This is about making people more frequent and routine customers," said Anthony Black, a Delta spokesman. "And you can't do that just with a television set. You've got to have great customer service from front-line employees."

But the initiatives aren't moving the needle in customer surveys yet.

Delta scored 59 out of a possible 100 in 2007 on the University of Michigan's customer satisfaction index, while Northwest scored a 61. The Michigan index surveys the views of some 2,000 consumers about airlines each year. The airline industry as a whole scored 63. Of the 19 industries tracked by the University of Michigan survey, only the satellite and cable TV industry fared worse.

Both airlines still suffer from a "bankrupt mentality" in how they treat customers, said Joe Brancatelli, editor and publisher of JoeSentMe, a nonprofit website for business travelers.

"They reached a point where it was no longer a matter of whether their service was good or bad, but whether they could fly at all," he said.

Dale Maue, an electrical engineer from Corcoran who flies to Europe and Asia regularly for business, said he's amassed more than 2 million frequent flier miles with Northwest, but that's only because other airlines don't offer the nonstop connections from Minneapolis, he said.

Maue said he would patronize a different airline if he had a choice. "I'm often appalled at how little in-flight service there is on a Northwest flight," he said. "Flight attendants rush down the aisles so they can stay off their feet."

Added Maue: "But without the competition, there's little reason for them to consider the traveler vs. their own pocketbook."

Staff writer Mike Meyers contributed to this report. Chris Serres • 612-673-4308