The airline industry has been going through a difficult time; COVID shutdowns, Staff shortages, Inflation, weather and FAA system outages.  Some airlines tried to recover from COVID too quickly and have then had to rollback planned/scheduled expansions.  The result is misery for passengers, who can expect long lines, packed flights, less space on board and much higher prices.  Delays and cancellations are rampant, as massive staffing shortages make domestic airlines unequipped to deal with disruptions such as weather events.

Some failures of note:

• December 26, 2022: Southwest disruption with 11,000 flights cancelled.

• January 11, 2023: FAA computer outage – 10,000 flights delayed or cancelled:
  • Southwest 49%
  • American 48%
  • United 40%
  • Delta 38%
  • JetBlue 33%

• June 24-27, 2023: 31,850 flights (a third of all flights nationwide) were delayed (of which 6,346 were cancelled outright) due to severe storm activity.

Additionally, there was the battle for Spirit Airlines between Frontier and JetBlue, which was eventually won by JetBlue. However, the DOJ then blocked the acquisition on March 7, 2023, leaving Spirit in limbo.  While JetBlue ended its alliance with American Airlines in July in a bid to protect the purchase of Spirit from legal challenges, the saga remains unresolved.

Commentators anticipated that airline preferences would change, in particular predicting Southwest would suffer due to the issues outlined above.

That is not what our data shows.  Southwest has gained preference among Americans! The following analysis is based on data collected through the MSW TBSM tracking service among 1000 consumers in early 2022 and another 1000 consumers in the first half of 2023.

Part of Southwest’s Brand Preference gain can be explained by higher awareness.  Southwest gained about 1.5 percentage-points, rising from 93.6% in 2022 to 95.0% in 2023.  The second reason is due to performance: Southwest had a very low level of complaints across 2022, very few lengthy tarmac delays or mishandled baggage. And the third reason is Inflation. American incomes have been squeezed, which is why we also see an increase in Brand Preference for Spirit Airlines.

 

Domestic Airlines Brand Preference: 2022 vs 2023

Specifically, Spirit improved its Brand Preference from 3.4% to 3.9% on the back of higher awareness, also up about 1.5 percentage-points from 85.6% to 87.2%.  Proving yet again that no publicity is bad publicity as long as the name is spelled correctly.

In addition, consumers have changed what they are looking for.  Ticket prices have always been an important factor affecting flight choice.  This was mentioned by 42% in 2022 and increased significantly to 54% in 2023, reflecting the impact of inflation and tighter household budgets. Fully 29% say it is the most important factor; up 5 percentage-points from 2022.

 

Important Factors/Primary Factor in Choosing Airline: 2022 versus 2023

Price can only go so far.  TBSM also recorded significant increases in the number of people looking for convenience and choosing flights because they trust the airline based on its safety record.  Notably, people attach much less importance to the availability of first class and an airline club/lounge.  The last two are substantially more important to frequent travelers.

There is a strong correlation between airline preference and passenger numbers, as reported by the Bureau of Transportation.

 

Brand Preference vs Actual Passenger Numbers

However, for a variety of reasons people do not always fly on their preferred airline.

Nearly three-quarters of people who say that they prefer Southwest or American flew on that airline the last time they took a flight, while less than 60% of those that prefer JetBlue or United flew their preferred airline on their last trip.  Across the entire industry only 60% of flights were accommodated on people’s preferred airline.

 

Percentage of Those Who Prefer Each Airline Flying It Last Time

People who flew an airline other than their preferred carrier said they did so for different reasons, but one-third of those who switched did so because of price.

 

Reasons For Switching from Your Preferred Airline

41% switched because they didn’t like the schedule or their preferred seat choice was not available.

18% were influenced to try a different airline.

The three legacy carriers face similar reasons why people didn’t fly them last time.  But the legacy carriers have some differences versus Southwest.

 

Reasons for Switching: Legacy vs. Southwest

While pricing pressure is real across the entire industry, it is more so the case with the legacy carriers versus Southwest, with the legacy carriers losing business for being too expensive at almost double the rate of Southwest.

On the other hand, scheduling limitations are much more a concern for Southwest than for the legacy carriers.  “Didn’t fly to destination” was the most often cited reason why those who prefer Southwest used a different airline.  This is much less of an issue with legacy carriers, which have associated regional carriers which allow them to reach many more markets.

Those who prefer legacy carriers are more likely to want to try a different experience; while those who prefer Southwest are more likely to be influenced by a companion into using a different airline (perhaps because the companion doesn’t want to fly with a discount carrier).

Loyalty differs across the different airlines. We previously viewed behavioral loyalty, i.e., did people who prefer the airline fly it last time (Southwest and American led on this metric).  The alternative approach is to examine the Brand Relationship and attitudinal loyalty.  Delta has more people who feel attitudinally loyal to it.

 

Delta Airlines: Brand Relationships

 

One in seven flyers (14%) say that they feel attitudinally loyal to Delta.  This means that these people will choose Delta if all else is equal – schedule, equipment, prices.  Delta has the BEST on time delivery record of any US airline; 82% of flights arrive on time.  Plus, it has fewer cancelled flights or involuntary bumps between classes than any other airline.

 

Attitudinal Loyalty Toward Domestic Airlines

Nearly half of all flyers in the USA do not feel loyal to any airline.

United is the weakest of the three legacy carriers. Only 7% of Americans feel loyal to it, and this is an improvement on its 2022 performance when 6% were loyal.

Delta’s loyal group has increased from 12% in 2022 to 14% in 2023.

American’s loyal group increased from 10% to 11%, and Southwest, even with the massive system outage, managed to creep up from 11% to 12%. JetBlue held steady at 5%.

Across the industry, the number of flyers who feel loyal to one carrier or another has increased from 53% to 56%.

 

Brand Relationship Profiles for Select Domestic Airlines

 

Delta and American have the strongest brand relationships in the US:

• Delta and American lead in trial, with 66% of those aware of each airline having flown on it.
• American leads in terms of retention, with 68% of those with experience with the airline continuing to fly with it.
• Delta leads in terms of loyalty, with 35% of those who currently fly Delta saying that they are loyal. Southwest is a strong second, with 32% of current users being loyal.

The logic for JetBlue’s attempted purchase of Spirit Airlines is very clear.

For more information about the airline industry or your brand’s category contact MSW.

The MSW TBSM tracking service measures Brand Preference as one component of the survey.  Brand Preference was collected for approximately twenty major Fast Casual Restaurant brands in both Q1 2022 (among 1000 demographically and geographically balanced respondents) and Q1 2023 (among 500 similarly balanced respondents).  This week’s chart examines the five fast casual options that saw statistically significant trends in brand preference, both positive and negative, between the two time periods.

• Brand Preference is the gold-standard metric for assessing a brand’s strength in the hearts and minds of consumers.  In fact, independent studies conducted by the Marketing Accountability Standards Board (MASB) found that preference fit sales and market share results better than any other metric studied.  This strong relationship between preference and sales has also been demonstrated in the Fast Casual Restaurant category (r = +0.94).
• An analysis presented by Placer in mid 2022 indicated that after a strong 2021, the fast casual segment was seeing visitation trends drop off as inflation caused consumers to trade down to QSR.  A November 2022 poll by Decision Analyst reported 59% of Americans were eating out less and confirmed the trend of trade down to fast food outlets.
• Against this backdrop, TBSM brand preference trends over the past year show that the option that gained the most in the past year was the “your favorite other brand” option.  While this result could represent an increase in variety seeking among restaurant goers in general, it could also reflect the aforementioned slide in the fast casual segment overall.

• The one brand with the most impressive growth in brand preference over the past year is Jersey Mike’s Subs.  The 2.0 percentage-point growth in preference is particularly striking due to the brand starting at a relatively low level of 4.2% in Q1 of 2022.  This growth corresponds with in-market data from Earnest Insights which shows that Jersey Mike’s sales more than doubled between January of 2020 and August of 2022, a result that made them the growth leader in the fast casual industry.
  • While Jersey Mike’s preference was already strong among the Age 55+ segment, the chain’s growth in preference over the last year was fueled by increases among the younger age groups, particularly age 35 to 54.
  • Very strong preference growth for Jersey Mike’s was also seen among those respondents from the southern U.S.
• While not quite statistically significant, preference increases of around 2 percentage-points were realized by the two largest players in the fast casual space, Chipotle and Panera Bread.
  • Chipotle recently reported strong growth in 2022, with overall revenue increasing by 14.4% – including 8.0% growth in comparable restaurant sales.
  • Sales data for the past year is not readily available for privately held Panera Bread.  But much has been made of the development of its digital channel which now accounts for 50% of sales, and its growth into urban markets with redesigned, smaller locations.
• Brands that saw a statistically significant weakening in brand preference include Zaxby’s, Noodles & Company and Qdoba.
• Noodles & Company experienced a difficult 2022 with a reported net loss of $3.3 million.
• Qdoba and Zaxby’s are privately held and so recent financial information is limited.
  • However, Qdoba has been sold several times over the years, most recently in October 2022, and the chain has seen minimal growth in the number of locations over the past 5+ years.
  • While Zaxby’s has been growing outside its original stronghold in the southeastern U.S., perhaps the fierce competition in the chicken restaurant space and inflationary pressures have caused a bit of a bump in the road for the brand.
• While not statistically significant, Jimmy John’s saw a 2 percentage-point drop in brand preference, suggesting that Jersey Mike’s success might be eating into its more established rival’s store of brand preference to some extent.

The MSW TBSM tracking service collects a variety of metrics across a wide range of categories. Throughout 2022, we published Charts of the Week using data drawn from the TBSM survey.  Six different categories and multiple measures within each category have been explored.  The categories were:

• Subscription Streaming Video Services
• Cryptocurrency Exchanges
• Domestic Airlines
• Meal Kit Services
• Body Moisturizers
• Fast Casual Restaurants

To illustrate the utility of some of the metrics available from the TBSM service, we will review some of the charts published over the past year.

One core question included in the TBSM survey is Brand Franchise. This question efficiently gauges the relationship of consumers with the major competitors in a particular category. The results can be used to quantify a wide range of concepts, such as awareness, consideration, usage, loyalty, conversion ratios, etc. One interesting analysis we like to focus on in our Charts of the Week is cross brand consideration – that is the overlap in consideration among brands. This analysis allows us to create a consideration map which helps to reveal which brands are closest competitors, the composition of market niches and brands that may be perceived as unique versus the competition. An example is the Airline Cross Brand Consideration chart which shows the overlap among the three traditional major airline brands, the close proximity of the two ultra-discount carriers, but the greater dispersion among the three discount airlines.

 

 

Another portion of the TBSM survey focuses on product characteristics that play a role in decision making when choosing a brand in a particular category. Respondents may identify multiple characteristics that are important to them and which one of those characteristics are most important. This information can be crossed with other metrics such as demographics, usage levels or brand relationship status to generate important insights. One example Chart of the Week from the Body Moisturizer category shows how skin rejuvenation is particularly important to the 55+ age group, among other insights.

 

 

Trends in important characteristics can also be informative. One interesting example comes from the Cryptocurrency Exchange category. We compared characteristics of primary importance before and after the high profile Crypto Super Bowl advertisements. The only item to gain, with an increase of 4 percentage points, was “From a Brand I Trust”. This seemed to indicate that the advertising and associated hype had a positive effect on branding in the category.

 

 

TBSM also collects information on the level of category usage. This information can provide insight into the most important consumers in a category – those who use, and hence purchase, in the category the most. An example Chart of the Week from the Fast Casual Restaurants category reveals that these all-important heavy users tend to be male, age 18 to 34, higher income and have children in the household.

 

 

Finally, TBSM also captures Brand Preference as one component of the survey. Brand Preference is the gold-standard metric for assessing a brand’s strength in the hearts and minds of consumers. In fact, independent studies conducted by the Marketing Accountability Standards Board (MASB) have found that preference proved to be a better fit to market share than any other standard research question examined. Brand preference has been adopted as the cornerstone of all MSW research systems due to this strong relationship with market share. Several of our Charts of the Week illustrate the utility of brand preference in different applications.

First, results from the Fast Casual Restaurants category illustrates the utility of brand preference as a proxy for market share and hence an unparalleled measure of brand strength. As the following scatterplot shows, the brand preference penetration metric is strongly related to systemwide domestic sales levels for Fast Casual Restaurants (as published by Nation’s Restaurant News), with an overall correlation of +0.93.

 

 

Next, changes in brand preference are reflective of actual changes in business results for a brand. An example Chart of the Week illustrating this application is drawn from the Subscription Streaming Video Services category. In March of 2021, ViacomCBS expanded its CBS All Access service and rebranded it as Paramount+. In the extremely competitive and dynamic online video streaming services category, Paramount+ saw a 67% gain in brand preference in 2021 versus CBS All Access preference in the pre-pandemic time-period (last quarter of 2019). While ViacomCBS doesn’t separately report Paramount+ subscriber numbers, total ViacomCBS subscribers (which also includes Showtime and other services) jumped to 47 million in Q3 2021 versus 17.9 million in Q3 2020 and 10.4 million in Q3 2019. According to ViacomCBS, this surge in subscriptions was driven by strong growth in Paramount+ sign-ups.

 

 

In addition, brand preference can detect changes in brand strength attributable to marketing activity. This is illustrated by returning to the example of the effects of the 2022 Super Bowl advertising on brand preference for Cryptocurrency Exchanges. All four brands that advertised in the Super Bowl saw at least some level of positive movement in brand preference. FTX was the winner with a jump in brand preference of 2.6 percentage points.

 

 

Finally, brand preference levels can be examined by target groups, defined by dimensions such as demographics or usage level, to understand where a brand’s (and their competitors’) strengths lie. An example from our Chart of the Week series shows brand preference by usage level in the Domestic Airlines category. One insight from this chart is that discount airline Southwest has by far the highest preference level among light users. On the other hand, the brand’s preference level among heavy users is exceeded not only by the three traditional major airlines, but also by fellow discount brands JetBlue and Alaska.

 

 

These are but some of the many applications of the data provided by the TBSM tracking service. We look forward to sharing more such insights in the coming year. In the meantime, have a Happy New Year!

Read also

• Fast Casual Dining Restaurants: Change in Brand Preference
• Super Bowl – Super Price Tag: Is Super Bowl Advertising Worth It?
• Spin the Wheel of Fortune