Jul 9, 2020
Case Study

Airlines, the 2008 financial crisis and the lipstick effect

Brais Ramos

Right after the 2008 economic crisis, customer satisfaction among flight passengers seemed to increase around the world

Have you notice that the flight experience is better now than a decade ago? After the 2008 financial crisis we see a substantial increase in the amount of positive reviews.

But that is not the only noteworthy insight. We can also see that said increase stopped in the first half of 2011, exactly when we started to notice signs of economic recovery. In fact, we can see that in recent years ratings not only stagnated but actually began to decrease. Recently, Covid-19 has impacted the tourism industry immensely. Will we see this same effect?

Why is this inverse correlation the way it is? We will analyze the information and try to validate the causes behind the data. Do people show more gratitude during hard times? Has flight service improved considerably?

One of the driving factors that comes to mind is the "lipstick effect", a theory that says that during recessions, people tend to spend more money on small luxuries that signals status (like lipstick). It might explain why Airlines focused on improving things like food or amenities for business travelers during the crisis. Just for economic geeks we leave a link explaining more details about this effect.

But maybe drivers are not related to economic theories at all. Perhaps the explanation comes from airlines actually improving their services. We used Graphext to analyze 30k airline services reviews based on customer experience. Our data included information regarding flight id, airline, destination, companions and reason of travel, as well as an open ended question inviting customers to comment on any complaints or suggestions.

Cabin Crew and Scheduling Issues are the most mentioned topics

According to the survey, cabin crew service and scheduling issues were the passengers' main concerns.

However, accommodation and food quality were also widespread topics among surveyed travelers.

In the analyzed period, cabin crew is the main source of positive reviews

"Good, friendly, pleasant or efficient..." are some of the adjectives we find related to customer service reviews. This signifies that the perception of cabin crews was overall positive. The International Air Transport Association (IATA) actually published an article talking about this.

On the other hand, "bad (28%), rude, long and terrible..." are connected to reviews about onboarding and scheduling issues.

In general, people seem to be satisfied with the food onboard and opinions on plane comfort are divided.

Heat maps help us understand that comfort 💺and scheduling issues 🕐 are the areas where the worst reviews are concentrated.

But are airlines being proactive in improving passengers' perception of those mentioned topics?

Airlines have adjusted services that were easily fixable but ignored more difficult problems

What improved were the most easily fixable things like food, cabin crew assistance or business class service.

However, experiences before and after the trip (fees, onboarding, luggage transport..) are still unsolved issues.

Spanish passengers demand high quality food and accommodation

Spanish passsengers are not only paying for a seat; they consider good food and comfort essential parts of the flight experience.

Luggage transport and check-in are not critical topics for the surveyed customers.

6 Asian airlines are among the top 10 best rated

Asian people show more gratitude when rating their trip experiences...

Airlines from the US and Canada cover the whole top-5 worst rated

... on the other hand, American people seem to be really demanding with service quality.

How did we do this analysis?

We used Graphext. In less than 30 minutes we had a clear visualization of our data, allowing us to gain insights into the information. We are opening a freemium version of Graphext called Public, if you are interested go and register in the waiting list!

You can play yourself with the data and Graphext in this link to the project.

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