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.

In the world of brand data analytics, models are expected to provide consistent predictive, decision-support to grow the business.

Traditional models often fall short of delivering the full potential they promise. They lack the ability to ask the right questions, suffer from incomplete and inaccurate data, and fail to provide insights that drive the full potential of business opportunities. However, there is a solution that bridges this gap and enhances the performance of these models. Welcome to the world of MSW Enhanced Models, where the focus is on improving accuracy, understanding consumer behavior, and addressing the shortcomings of current behavioral modeling with consistently repeatable business results.

Traditional Models: Limitations and Challenges

Traditional models have their limitations, and these limitations can hinder their effectiveness in providing actionable insights. One of the major drawbacks is their failure to ask the right questions. They often focus on narrow or overly broad questions that fail to capture the nuances necessary for driving business growth. Without asking the right questions, these models miss out on valuable opportunities, leading to misguided strategies and missed opportunities.

Another challenge lies in the quality of data used in traditional models. They often rely on incomplete and transactional data without considering the behavioral root cause. This limits their perspective to top and perhaps bottom sales funnel prediction.  But even that limited, short-term, perspective may be flawed as a predictive tool.  For instance, if a model only looks at purchase data without considering the underlying motivations and preferences of consumers, it may fail to provide accurate and meaningful insights. Inaccurate or incomplete data can lead to flawed inferences and incorrect conclusions, hampering the decision-making process for businesses.

According to a study conducted by Truth{set}, a leading data quality measurement company, “big” data can be wrong up to 60% of the time. This highlights the significant challenge of relying solely on data without proper validation and verification. Such inaccuracies can have profound consequences for businesses relying on these models for decision-making, leading to misguided strategies and missed opportunities.

MSW Enhanced Models: Unlocking the Full Potential

MSW Enhanced Models offer a transformative approach to brand data analytics. These models prioritize asking the questions that truly impact business decisions. For example, instead of focusing on the number of units sold, an MSW Enhanced Model might explore questions like “What hidden factors influenced the purchasing decisions of our target audience?” or “Which specific brand attributes drive consumer preference for my brand?” By delving into the depth of consumer behavior, these models uncover the who, what, when, where, why, and with whom behind each transaction. This level of granularity enables businesses to gain a comprehensive understanding of their customers and make informed decisions.

Consistent accuracy is a fundamental pillar of MSW Enhanced Models. By integrating MSW Preference™, these models can improve the prediction of actual volume with 100% accuracy. For example, a company that implemented MSW Enhanced Models with MSW Preference™ experienced a significant boost in their predictive accuracy, allowing them to allocate resources more effectively and optimize their marketing efforts. This improved accuracy instills confidence in businesses, enabling them to rely on the insights provided by these models to drive their strategies and achieve optimal results.

Furthermore, MSW Enhanced Models address the ever-changing consumer mindset. They recognize that brand perceptions and relationships drive consumer choices. By capturing and analyzing these factors, businesses can adapt their strategies to meet evolving consumer preferences and stay ahead of the competition.  For instance, an MSW Enhanced Model can help identify shifts in consumer perceptions of a brand and provide actionable insights to realign marketing campaigns accordingly, thereby increasing brand loyalty and driving revenue growth.

Bridging the Gap with Innovative Products

MSW offers a range of innovative products that complement and enhance traditional brand data analytics models. Let’s explore some of these products:

1. Decoder™: This product acts as a guide in identifying and prioritizing the most relevant questions for a model. By measuring the who, what, when, where, why, and with whom of consumer behavior, Decoder™ ensures that businesses focus on the aspects that truly matter. For example, it can help businesses understand not only the purchase behavior but also the underlying motivations, preferences, and influencers that drive consumer decisions. By incorporating these insights, businesses can develop more targeted and effective marketing strategies.

Client Testimonial From Real Life in Use Example:

“after using Decoder to identify the KPI’s we needed to focus on and building those into our existing model, our product has achieved a wholesale rate of what I would consider directly in line with the numbers expected.  These are preliminary based on orders, but sales figures appear to be trending toward 102% of forecast.”

1. TouchPoint™: Brand activation is a crucial aspect of any marketing strategy. TouchPoint™ ensures that brand activation aligns with strategic objectives by evaluating its impact on attention, branding, brand perceptions, relationships, and preferences. For instance, by analyzing the impact of different touchpoints on brand perceptions, businesses can optimize their marketing investments to create stronger brand associations and positive customer experiences. This helps build brand loyalty and increases the likelihood of repeat purchases.

Client Testimonial From Real Life in Use Example:

“For our three main L’Oréal brands it was found that a 1-point increase in MSW Brand Preference resulted in a 0.6% sales gain at retail.  Furthermore, the MSW advertising quality measurement ranked as the 2^nd leading potential driver of incremental brand volume.”

1. Brand Strength Monitor™: Tracking performance is essential for success. Brand Strength Monitor™ provides foresight and prescriptive analytics that help identify and quantify opportunities for growth. It measures awareness, consideration, cross-consideration, reasons for behavior, and the size of each brand relationship. For example, by tracking awareness levels and reasons for behavior, businesses can identify gaps in their brand messaging and make necessary adjustments to improve customer engagement and conversion rates.

Client Testimonial From Real Life in Use Example:

“Brand Relationship Analysis™ administered within the MSW tracking solution identified leverage points directing resource allocation and ongoing ROI measurement.  Insights enabled the Benefiber brand to move from third choice in market to #1.  Brand trial and market share doubled.”

These solutions include the same unique, evidence-based, brand-building metrics that provide connective tissue across a consistently predictive, go-to-market process:

Traditional brand data analytics models often fall short of delivering actionable insights. They lack the ability to ask the right questions, rely on incomplete data, and suffer from inaccuracies. However, MSW Enhanced Models bridge this gap by focusing on impactful questions, improving accuracy, and addressing consumer behavior. With innovative products like Decoder™, TouchPoint™, and Brand Strength Monitor™, businesses can unlock the full potential of their data analytics models and make informed decisions that drive growth. The future of brand data analytics lies in enhancing existing models to deliver the results businesses need to thrive in a dynamic market.  With MSW Enhanced Models, businesses can truly optimize their strategies and stay ahead in an ever-evolving business landscape.

 

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.