STOCKHOLM/MADRID Troubled Scandinavian airline SAS said on Thursday it had signed a preliminary deal to sell a majority stake in its loss-making Spanair unit to a Spanish investor group, the latest step in a multi-pronged turnaround effort.
NEW YORK Customer satisfaction with airlines in the United States has fallen to its lowest level since 2001, according to a survey published on Tuesday.
The University of Michigan's American Customer Satisfaction Index found that the airline industry scored a mere 62 on a 100-point scale for the first quarter of 2008.
Thousands of flight cancellations for safety checks have battered some airlines' reputations with customers this year.
And faced with the soaring cost of jet fuel, airlines are raising ticket prices, overbooking flights and charging extra fees, the survey said.
US Airways Group Inc LCC.N and UAL Corp's UAUA.O United Airlines, which have recently been in merger talks, received the lowest scores in the poll: 54 and 56, respectively.
Continental Airlines (CAL.N) fell 10 percent to 62 in the poll, a score that matches its all-time low, and Northwest Airlines NWA.N, which has agreed to be acquired by Delta Air Lines Inc (DAL.N), fell 7 percent to 57, its lowest score since 2001.
"It's more of the same -- and it's getting worse," said Claes Fornell, founder of the survey, in an interview.
"There is very little choice, which explains how you can get away with scores in the 50s. Those are not sustainable on any type of competitive level -- they are lower than the Internal Revenue Service," Fornell added.
Southwest Airlines (LUV.N) leads the industry in customer satisfaction for a 15th straight year, improving 4 percent to 79 points, the survey said.
Delta Air Lines, up 2 percent to 60, and AMR Corp's AMR.N American Airlines, up 3 percent to 62, were the only other major airlines to post gains in customer satisfaction.
But the pollsters stressed the survey covered the first quarter of the year only and did not take into account many flight cancellations in April.
Record fuel prices and a weakening U.S. economy have stalled the airline industry's modest recovery from the 2001-2006 downturn.
Oil prices CLc1, directly related to jet fuel costs, remain around $127 a barrel.
Six smaller airlines have filed for bankruptcy in the past five months.
Asked if mergers could help improve customer satisfaction, Fornell said: "It could happen, but only if there are enough costs savings and economies of scale so there are some resources (left) over to take care of passengers -- but so far we haven't seen it in mergers and acquisitions."
David Castelveter, a spokesman for the chief trade group of major U.S. airlines, the Air Transport Association (ATA), said the survey was a disappointment but not a surprise.
"We are working very hard to find ways to improve the service we provide to our customers, especially given the fact we are going to pay about $18 billion more for fuel in 2008 than we did in 2007," said Castelveter.
The ATA said last week that about 2.7 million fewer passengers will travel with major U.S. airlines this summer due partly to high fuel prices, the weakening economy and capacity cuts.
The ATA forecast that 211.5 million passengers will fly from June 1 through Aug. 31, down 2.7 million, or more than 1 percent, from the 214.2 million who traveled during the same months of 2007.
Castelveter said the root of complaints from airline passengers is delays.
"Until this government begins the transformation to the modern technology to improve the air traffic control system, we are going to continue to have delays," said Castelveter.
"And when we have delays, there is a ripple effect. Flights misconnect, bags don't make their connections, passengers are upset, complaints rise. We don't want any of that."
(Editing by Phil Berlowitz)
Pentair, Ingersoll warn conditions worsening
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