From First to Worst: Ranking the 10 Major Airlines for On-Time Performance in 2016

By Sean Williams Industries Fool.com

Image source: Getty Images.

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The U.S. airline industry is flying high in more ways than one.

According to the U.S. Department of Transportation, the airline industry hit a never-before-seen milestone in 2016: It crossed the 800-million-passenger mark. To be more precise, U.S. airlines carried a record 823 million passengers last year, 719 million of which were on domestic flights, with the remainder made up of international passengers. That's up 3.1% from the 798 million carried in 2015, and marks a roughly 17% increase from the 704 million passengers carried in 2009.

On top of transporting more passengers than ever, airlines also mishandled fewer bags than ever (2.7 bags per 1,000 passengers), bumped fewer passengers than the previous record low (0.62 per 10,000 passengers), and cancelled a record-low 1.17% of domestic flights.

Yet these improvements could all be for naught if airlines aren't able to get their passengers to their destinations on time. While customer loyalty matters to some degree across many industries and sectors, airlines in particular are counting on a pleasant customer experience (which includes an on-time arrival) to drive repeat business. With 2017 looking as if it could be another record year for air travel, on-time arrivals have arguably never been more important.

So, which airlines are the best at getting their passengers to their destinations on time? To answer that we'll turn to FlightStats, which has examined the on-time performance for airlines in each of the past eight years. FlightStats' data, which considers an arrival within 15 minutes of the scheduled arrival time to be "on time," has allowed us an in-depth look at where the top 10 major North American airlines rank, from first to worst.

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Image source: Pixabay.

1. Alaska Air: 87% on-time arrival

Leading the way in on-time performance in 2016 was Alaska Air Group (ALK), and by a comfortable margin at that. It may come as a surprise to some, but this is the seventh consecutive year that Alaska has been the top dog in terms of on-time performance. President and Chief Operating Officer Ben Minicucci, after Alaska won its sixth consecutive award from FlightStats last year, pointed to his company's employees and its steadfastness in putting the needs of customers first as the reasons behind its success.

A tip of the cap may also be deserved for Seattle-Tacoma International Airport, which serves as Alaska Air's largest hub. In a separate on-time performance report from air travel analytics company OAG, SeaTac, as it's better known, ranked sixth in on-time performance among the major airports serving more than 20 million departing passengers annually.

Image source: Delta Air Lines.

2. Delta Air Lines: 85.17% on-time arrival

Alaska Airlines may have taken the top spot, but Delta Air Lines (DAL) deserves its own crown considering that it boasts more than five times as many seats as Alaska (220.5 million versus 42.03 million) and it was able to deliver an on-time performance of more than 85%.

Delta's focus lately, other than giving Alaska a run for its money by expanding in Seattle, has been on reducing domestic flight cancellations, which appears to have had a positive impact on performance as well.Delta reported in January that it went 241 days in 2016 without cancelling a mainline flight anywhere in the world, which beat its own industry record by a whopping 80 days. Delta's reliability could become an important asset that draws in repeat business.

Image source: WestJet.

3. WestJet: 82.73% on-time arrival

Though it's the third smallest of the 10 major airlines ranked by flights in 2016, Canada's WestJet (WJAFF) dazzled with an on-time performance that neared 83%. What's more, based on FlightStats' data, WestJet had the lowest average arrival delay among the 10 major North American airlines -- 46.4 minutes.

There's also reason to believe that WestJet could improve its on-time performance in the years to come. Though it's primarily focused on domestic Canadian flights, WestJet has faced challenges incorporating new planes on new routes. These "teething pains," as CEO Gregg Saretsky referred to them last summer, are similar to what it experienced when it launched its WestJet Encore brand. Given time, WestJet's international on-time reliability could thrive.

Image source: Southwest Airlines.

4. Southwest Airlines: 81.89% on-time arrival

It wasn't that long ago that Southwest Airlines (LUV), home of the free-flying bags, was dead last in on-time performance. In 2013, Southwest thought it would be a good idea to significantly expand its schedules on existing routes, which crushed on-time performance. A few years later, and after some prudent pruning of its schedules, Southwest is back in the middle of the pack with an on-time arrival of nearly 82%.

Like many of the domestic majors, Southwest is being considerably more cautious with its expansion plans in 2017. Crude oil prices, and thus jet fuel prices, are much higher than they were last year, and Southwest wants to avoid a repeat of 2013, if possible.

Image source: Pixabay.

5. United Airlines: 81.83% on-time arrival

Despite landing in the middle of the pack in terms of on-time performance, United Airlines, which is part of United Continental Holdings (UAL), has made significant strides in improving its reliability. Just this past September, the airline reported that its on-time results for the summer travel season were its best ever, especially during the July 4 travel period.

A press release from United Airlines pointed to a number of recent initiatives that are paying off. These include scheduling adjustments, a move to equip more employees with mobile technologies to better serve customers, and improved employee teamwork. United expects to add $300 million in value by 2018, according to the release, by running a more reliable airline.

Image source: American Airlines.

6. American Airlines: 80.16% on-time arrival

A sixth-place ranking and a better-than-80% on-time arrival rate seems like something of a godsend for American Airlines Group (AAL), which has faced no shortage of struggles in recent memory.

According to travel industry data company Skift, American has three big issues that are hampering its reliability. First, it's still contending with post-merger woes tied to US Airways. Merging the computer systems for both airlines is taking an exceptionally long time, and since flight crews can only fly aircraft with systems that belonged to their airline prior to the merger, it's led to inefficient crew assignments.

American is also attempting to rapidly expand at Los Angeles International Airport, but the airline simply doesn't have enough gates there to accommodate an upgrade in capacity. This has created some clear hiccups in its on-time performance.

Last, weather at its hubs has also been a factor affecting the airline's timeliness.

Image source: Pixabay.

7. Frontier Airlines: 77.44% on-time arrival

Ultra-low-cost airline Frontier, which offered the second-fewest flights (99,302) of the top 10 major North American airlines in 2016, came in toward the bottom with a 77.44% on-time arrival rate.

Until this past summer, Frontier had delivered numerous months of 80%-plus on-time arrival rates, which is pretty impressive for an airline whose main hook is its ultra-low ticket prices. What did its on-time arrival rate in, company spokesman Jim Faulkner told the Denver Post, were staffing issues at Swissport, the company's ramp services contractor at Denver International Airport (DIA), its main hub. Frontier hired Simplicity USA in May 2016 to manage customer service, ramp work, and baggage handling at DIA, so it hopes to put its recent dip in on-time performance in the rearview mirror.

Image source: Virgin America.

8. Virgin America: 77.33% on-time arrival

Virgin America, which was acquired by Alaska Airlines in December for $2.6 billion, surprisingly came in eighth in on-time performance in 2016.

Why is it surprising? According to the annual Airline Quality Rating report released in 2016 from Wichita State University and Embry-Riddle Aeronautical University, based on scores from the U.S. Department of Transportation (DOT), Virgin America ranked as the top airline for the fourth year in a row. On-time arrival is one of the many factors examined by the DOT scores. While the airline's integration with Alaska could temporarily hinder the latter's on-time performance rates, Virgin America has historically stood out for its reliability, which should be a good thing for Alaska Air.

Image source: JetBlue Airways.

9. JetBlue Airways: 76.33% on-time arrival

Another surprise is JetBlue Airways (JBLU), which sits just 0.03 percentage points away from being the lowest-ranked of the 10 major airlines listed by FlightStats in terms of on-time arrival rate.

JetBlue has recently and consistently been subpar in terms of on-time performance relative to its larger peers. Some of the blame might go to its main hub, John F. Kennedy International Airport (JFK), which is among the busiest in the United States. An analysis this past summer from the Bureau of Transportation Statistics of America's top 29 airports listed JFK as the fourth-worstwhen it comes to delays.

Then again, JetBlue is certainly doing something right. It's topped J.D. Power's 2016 North America Airline Satisfaction Study for 12 straight years, meaning other factors, such as its in-flight services and lower baggage fees relative to its peers, are clearly playing a role in keeping its customers happy.

Image source: Air Canada.

10. Air Canada: 76.30% on-time arrival

Bringing up the caboose among the North American majors with an on-time performance of 76.30% in 2016 is Air Canada (ACDVF).

The blame for Air Canada's low ranking may lie with its primary hubs. According to the data provided by FlightStats, Air Canada's 81% on-time departure rate was better than those of JetBlue, Virgin America, Frontier, and Southwest, but the airline loses nearly 5 percentage points when it comes to on-time arrivals. This could imply growing congestion at its serviced routes, signaling that it may need to boost capacity or add more routes to assuage this problem.

While there's no guarantee, Air Canada's lagging on-time performance could result in lost customers if it doesn't improve.

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Sean Williams has no position in any stocks mentioned. The Motley Fool recommends JetBlue Airways. The Motley Fool has a disclosure policy.

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