On the Money

United's PR woes notwithstanding, here's why flying on an airplane is better than ever

Flight turbulence
Flight turbulence

As United Airlines tries to contain the brand damage it sustained from forcibly ejecting a passenger several days ago, airlines overall have scored record high quality ratings.

A recent Airline Quality Rating study found that the industry is losing fewer bags—and bumping fewer passengers—while arriving on time more frequently.

Overall, the airline quality ranking also found on-time performance was 81.4 percent, up from 79.9 percent from last year. The report, from Embry-Riddle and Wichita State Universities, was released just this week, and has rated the largest U.S. airlines annually for the past 27 years.

Alaska Airlines topped the list of 12 best air carriers, while Delta came in second and Virgin America landed third; JetBlue, Hawaiian and Southwest came in 4th, 5th and 6th respectively. Meanwhile, the embattled United touched down in eighth place, the same spot it held last year.

"It's not exactly at the top of the heap," Seth Kaplan, managing partner of Airline Weekly, told CNBC's "On The Money" in an interview. "Even in more mundane ways as an airline in terms of being punctual and not losing bags," United scores comparatively low, he added.

United's viral video notwithstanding, the annual survey showed the chance of being bumped actually dropped by 18 percent. However, the study says that does not include those who traded their seat for a travel voucher or cash.

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'Very rare'

In spite of the outrage that's battered United over the last week, Kaplan explained that when you buy an airline ticket you're actually not guaranteed a seat. "There are a lot of rights airlines retain including the right to 'involuntarily deny' you boarding," he told CNBC. That's the situation faced by passenger Dr. David Dao, who was forcibly removed by Chicago aviation police after refusing to give up his set to a United Airline employee.

Kaplan said such situations are "very rare," but are usually done in a more orderly way.

"Basically, they're going to try to get volunteer" to give up their seat, Kaplan said. "We've all been there: They start offering maybe $250 $300, if they don't get enough people $600, $800."

Kaplan told CNBC that airfares are lower because the system allows airlines to "hold a few seats for last minute business travelers, who will pay high fares." He said the most people who are denied boarding are happy about it because "the person who paid $200 is usually happy because they got a voucher" worth more than what they paid for their ticket."

After the backlash against United, speculation has surfaced that regulators could move to change the overbooking system. Kaplan, however, suggested that might not be the most favorable course of action—for carriers or fliers.

"Airlines wouldn't want regulation, they want the flexibility" they have now, Kaplan told CNBC. "The system generally works for both airlines and passengers, Kaplan added, "the market takes care of itself."
Kaplan pointed out that overall, flying is safer and more reliable at a lower cost. According to Airlines for America, the average cost of a round trip domestic flight is just $264.99. Adjusted for inflation, back in 1979, the average cost was $442.96.

"More people are flying and they're paying less than ever" he said.

On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.