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It turns out that beating passengers up and dragging them off a flight actually *doesn’t* help an airline’s profitability. Go figure. I never would have guessed that.
A recent study shows that there is definitely a correlation between an airline’s profitability and the return on its stock price. If you treat passengers well, your stock price performs well. You treat customers poorly, your stock price underperforms.
Short term win, long term loss
The study did conclude that while there may be short term gains when an airline makes adjustments that may seem like they will increase revenue, the reality is that they aren’t. People are willing to put up with a lot while flying, given that most people’s number one concern is the price of a ticket. But if you cram them in a cabin with 29″ of pitch, treat them badly, and fee them to death, they might eventually decide to find someone else to meet their air travel needs.
The main takeaway is that airlines that consistently meet customer expectations and provide great service are doing the best from a stock price perspective. Southwest has been profitable for 44 straight years and ranks highly among the customer satisfaction leaders.
United, take note. Don’t beat up your passengers. And don’t break guitars.