• by Tanya Gazdik , June 21, 2011

Overall consumer satisfaction with the airline industry is down and Delta Air Lines, fresh off of its merger with Northwest, plunged in satisfaction, according to the report from the American Customer Satisfaction Index.

Customer satisfaction results for five industries show improvement for dining and lodging, but a downturn for air travel, according to the report, which covers satisfaction with the quality of products and services provided by airlines, hotels, full-service restaurants, fast food, and express delivery and mail services.

The overall airline industry drops 2% to 65 on ACSI's 100-point scale, lowest among 47 industries measured by ACSI (tied with newspapers). Southwest scores 81 to lead the industry yet again -- its 18th straight year at the top. Its policy of "no baggage or change fees" is paying dividends in satisfaction, according to the report.

Continental is Southwest's nearest competitor, but trails by 17 points (21%). Continental plunges 10% to 64, as satisfaction is clearly negatively impacted by its merger with United. United, for its part, improves 2% to tie US Airways at 61. American Airlines was unchanged at 63.

Mergers typically have a negative effect on passenger satisfaction, writes Claes Fornell, founder of the ACSI and author of "The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference," in its release. Another case in point is Delta. A year after absorbing Northwest, Delta dives 10% to a low score of 56, putting them at the bottom of the industry and even lower than the cable companies.

In 2005, US Airways fell 8% to an industry low following its merger with America West, and now Delta falters in the same way," Fornell says. "Past experience points to more customer satisfaction challenges ahead for United and raises the question of whether Southwest can escape customer satisfaction problems from its acquisition of Air Tran in May," Fornell said in a release.

Guest satisfaction with hotels rises 2.7% to a score of 77. Lower rates and more perks have enhanced customers' views of value for money. The aggregate of smaller brands make the most progress, up 4% to an ACSI score of 77. The industry is having more success with leisure travelers, as their satisfaction improves 1% to 77 compared to a 1% drop to 75 for business travelers.

"Although guest satisfaction has benefited from lower rates and various perks, there has been no effect on customer loyalty and repeat business," Fornell said. "Price-induced satisfaction tends to make people shop around for the best deal rather than promote loyalty."

Hilton leads, unchanged at 80, with both Marriott (-1%) and Starwood (+3%) close behind at 79. Hyatt comes next at 77 (-3%). Budget brands occupy the next tier below the industry average, with Intercontinental (Holiday Inns) down 3% to tie Best Western at 76. Choice Hotels follows, unchanged at 74, while Wyndham Worldwide (Ramada, Super 8, Days Inn) makes the biggest gain -- up 4% to 73 -- but this is still not enough to pull Wyndham out of the industry basement.

Customer satisfaction with full-service restaurants rose 1.2% to an ACSI score of 82, while fast food climbs 5.3% to 79. Pizza dominates burgers in fast food. Pizza Hut climbs into the lead with a 4% improvement to an ACSI score of 81. Little Caesar and Starbucks, both up 3% to 80, are not far behind. Papa John's is next, down 1% to 79, followed by Domino's Pizza with an unchanged score of 77 for a third straight year.

Wendy's tops burger satisfaction and holds its ground at 77, followed by Taco Bell (+ 3%) at 76. KFC (unchanged) and Burger King (+1%) are tied at 75. McDonald's makes the largest improvement of all companies, jumping 8% to a score of 72, but remains in last place among fast food chains.

Darden-owned chains Olive Garden (-2%) and Red Lobster (-1%) lead the restaurant category at 82, with Outback Steakhouse is right on their heels, up 1% to 81. Only Chili's Grill & Bar remains a bit behind, up 1% to 79.

Customer satisfaction with express mail services used by consumers who pay to ship and receive packages inches up for a second straight year, gaining 1.2% to an ACSI score of 84. FedEx led the industry for more than a decade, but this year UPS moves into the number-one position with a 4% gain to 85. FedEx dips 2% to 83. The U.S. Postal Service gains 3% for its express delivery services, but its score of 79 keeps the USPS well behind both UPS and FedEx. Customer satisfaction with the Postal Service's regular mail delivery also improves over last year, up 4% to match its former high point of 74.

The ACSI, based in Ann Arbor, Mich., evaluates 225 companies in 45 industries and government agencies.