US airlines have the numbers – but not the credibility

Corporate feuds in the airline industry bring out the best of the public relations community.

At the height of the bitter battle between Virgin Atlantic and British Airways over “dirty tricks” in the 1990s, one spin doctor at Virgin took issue with BA’s self-description as “the world’s favourite airline”.

“It’s rather like calling the M25 the world’s favourite motorway”, he quipped. Given that the M25 was then, and I believe is still now, a congested, dangerous highway motorists are forced in their complaining millions to use to escape the horrors of central London traffic, his point was well made.

Many passengers flew BA, he conceded, but only out of necessity and not for choice or pleasure.

That little PR quip came back to mind when I read the latest international traffic figures from Iata which showed Delta Air Lines of the US as the biggest carrier ranked according to passenger numbers. Some 129.4 million passengers flew Delta in 2014, a few thousand ahead of another American carrier, Southwest.

With United and American in fourth and fifth place, the only non-US carrier in the top five was China Southern, with 100 million passengers.

Note that the Arabian Gulf carriers, accused by the Americans of trying to take over the world, do not figure in the top 10.

The reason for the US airlines’ impressive showing in the rankings, is, of course, the fact that they dominate their domestic industry. Americans fly more miles than any other people on Earth, and if you can stitch up that market you’re more or less assured top spot in the passenger leagues.

The four big US carriers have 80 per cent of the domestic market, so it’s a slam-dunk. Rather like the way the M25 is always certain of a big consumer market for early morning rush hour.

But take a look at the separate Iata table for international passengers and a completely different picture emerges. Ryanair is the clear market leader with 86 million passengers, followed some way behind by its no-frills competitor easyJet.

The reason for their success is simple: they offer the lowest fares possible and cater for the mass travel market out of Europe. You might knock the standards of service, but you cannot knock the fares. They are the Greyhound buses of the skies.

Next in the league tables for international passengers comes Lufthansa, mainly because it dominates German aviation, and German passengers increasingly dominate short-haul Europe and medium-haul from the continent.

Next comes Emirates with 47 million, followed by a posse of Europeans, then United and Delta, in ninth and 10th.

The clear lesson is this: when international passengers have a choice they will go for virtually anybody rather than American carriers, on whatever grounds: price, schedule or service.

The Iata figures rounded off a miserable few weeks of PR for the American airlines. First, Tim Clark, the president of Emirates airline, socked it to them in Washington DC with his "line-by-line rebuttal" of accusations over "open skies" abuse. Even the American journalists I spoke to in DC thought he had clearly won the argument.

Then came the news that the US department of justice was to investigate four of the big US carriers (including the “troika” throwing accusations towards the Gulf) for alleged price-fixing in their domestic market. That was a real blow to their cause.

Then there was the computer outage at United, which grounded all US flights for the best part of a day; and lastly the launch of a class action lawsuit by a group of American airline passengers alleging that the biggest had conspired to maintain ticket prices at artificially high levels.

Of course, it is not all about PR. The American airlines are enjoying historically high levels of profitability and they have huge resources to fight lawsuits and hire lobbyists for the battles coming up.

But there is an air about them of an industry on the cusp of crisis. In the court of public opinion, and in the opinion of passengers voting with their feet whenever they have the opportunity, they are already a tarnished brand.

Follow The National's Business section on Twitter