Loyalty in Turbulence: How Cancellations and Delays Impact Airlines

Purpose of Analysis

When flights are delayed or cancelled, it’s almost never the airline’s fault (think the Crowdstrike Outage). Yet customers will still expect compensation for inconveniences like these.

But because these kinds of things happen SO often, airlines would accumulate a huge loss if they had to give refunds to every single person whose flight got cancelled because of a sudden storm or whose flight got delayed because there was unexpected air traffic. And this means most of the time, airlines maintain pretty strict “no refund” or “no compensation” policies when a flight is cancelled because of a problem out of their control.

Obviously, it’s frustrating for flyers when this happens. And while some people bite the bullet and move on, others will vow to never fly that airline again. But the question is — how many people actually stop flying with an airline due to non-compensated flight cancellations/delays?

The Analysis

To try to tackle this question, we used our sentiment analysis program to see if airlines with more complaints about cancellations/delays tended to be more unpopular or generate fewer sales.

Firstly, we decided to split up airlines by “premium” and “budget,” given customer segments tend to differ between those two types. We then had our program categorize positive and negative sentiment across each airline.

For the premium airlines we analyzed (Delta, United, and American), we found that airlines with a higher proportion of negative sentiment about cancellations and delays ended up with lower sales.

Delta, for example, had the lowest % of complaints in this area, and ended with the highest revenue. American had the highest % of complaints but also the lowest number of sales.

Then, we looked at reviews for two more affordable airlines: Alaska Airlines and Southwest Airlines. Here, the exact opposite happened. Southwest, which had a higher proportion of negative sentiment about cancellations/delays, ended up with more sales than Alaska.

Meaningfulness of Results

This stark difference between pricier airlines and budget airlines was definitely pretty shocking. But we ended up with a few hypotheses to explain why this happened.

1. Among pricier airlines, the price difference between them is so small that if a flyer had a bad experience with United, for example, they could probably switch to Delta without spending that much extra.
2. People who fly with these pricier airlines also likely have lower price sensitivity than those who fly with cheaper airlines. So even if prices were drastically different between airlines, they’d probably care less.
3. For budget airlines, price is probably more of a priority to flyers. So if a Southwest flyer’s flight got cancelled or delayed — sure, they’d probably be angry about it at first. But there’s a low chance that’s going to stop them from buying their next ticket from Southwest if it’s 70 bucks cheaper than Alaska or any other airline.

What we thought was especially interesting, though, was that Alaska airline had the lowest percentage of complaints in this category compared to ALL the airlines we looked at, but still had the lowest volume of sales. This implies that delays or cancellations don’t actually seem to matter to customers as much as other parts of the flying experience — whether that’s price, or service, or atmosphere.

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