American Airlines (28%), Delta Air Lines (24%), United Airlines (17%), and Southwest Airlines (13%) are the most preferred brands of the travelers surveyed by OAG, which is representative of their combined market share in the U.S. In May 2023, Southwest had the highest market share at 22%, followed closely by American at 20%, Delta at 19% and United at 15%.
Millennials, the industry’s second youngest (and one of the largest) consumer groups, are more willing to change their airline loyalty than any other generation, which could be due to an increase of low-cost carriers (LCCs) entering the market. Forty-seven percent of Millennials have changed their airline loyalty in the past year, compared to 37% of Gen Z and 23% of Gen X. Baby Boomers are the most brand-loyal travelers, with only 15% having changed their airline loyalty in the last year.
The Cost Factor
Cost is the primary driver of airline preference and loyalty changes among all travelers (60%). Gen Z (77%) is the most likely to change airline preferences to find flights that suit their budget, followed by Gen X (69%) and Millennials (59%), while Baby Boomers (47%) are least likely to change airline loyalty due to cost.
Boomers Value Programs. Gen Z Seeks Variety. Disruptions Impact All
Status and frequent flier programs are tied with on-time performance as the number one reason Baby Boomers (25%) have remained brand loyal.
Additionally, 34% of Baby Boomers and 46% of Gen Z report changing their preferred airline to access more schedules and destination options.
Thirty-seven percent of all travelers changed their airline loyalty due to having experienced significant delays or cancellations in the past year. Millennials are most impacted by disruptions with 42% switching their airline loyalty because of a significant delay or cancellation, followed by 38% of Gen Z, 32% of Baby Boomers and 31% of Gen X.
Ninety percent of all travelers agree that airlines should be required to provide delay and/or cancellation compensation.
In 2023, 90% of those surveyed would support the US DOT initiative of delay compensation. |
On-time performance (OTP) remains a crucial lever in determining and affirming passenger loyalty.
Thirty-six percent of all travelers say the number one reason for their continued loyalty is an airline's proven track record for being on time. Gen Z’s loyalty is the most driven by on-time performance, with 63% remaining loyal to their preferred airline, followed by 52% of Millennials, 35% of Gen X and 25% of Baby Boomers.
According to OAG’s Monthly On-Time Performance Data, the top five most on-time airlines in the U.S. in April 2023 were Delta Air Lines, Alaska Airlines, Sun Country Airlines, American Airlines and United Airlines.
The criticality of on-time performance creates opportunities for Online Travel Agents (OTAs) to differentiate their brand. According to OAG’s 2022 North American traveler sentiment survey, 53% of respondents said OTA’s and travel apps can improve their booking experience by giving real-time travel updates, including probability for making connections.
Booking & Monitoring Habits
On-time performance also shapes booking habits. Eighty-two percent of all travelers said on-time performance affects the flight and/or airline they book with, assuming price and schedule options are relatively equal. Ninety-one percent of Gen Z are more inclined to pick the airline for on-time performance, compared to 87% of Millennials, 81% of Gen X and 77% of Baby Boomers.
Travelers also expect airlines to proactively communicate schedule changes in real-time, with 43% checking their flight’s punctuality at least once or twice between booking and their day of travel.
Gen X monitors OTP the most with 34% “always” checking their flights’ on-time performance between their time of booking and day of travel, compared to 30% of Baby Boomers, 28% of Millennials and 25% of Gen Z.
Younger generations are embracing automation and tech, and gravitating toward airline apps and third-party tech providers, while older travelers still stick to "old school" methods for travel information.
On average, 36% of all travelers have used a third-party app or provider that automates flight rebooking, with Millennials (59%) and Gen Z (54%) leading the charge. Gen X (26%) and Baby Boomers (25%) prefer to call an airline for rebooking when their flight is canceled.
Variations in Trusted Travel Sources
Across all age groups, airline apps edge out third-party apps as the most trusted source of information about travel delays. While 33% of all travelers look at airline apps during the day of travel, 28% rely on third-party apps.
But different generations trust different sources. Airport and terminal displays rank highest among Gen Z (36%). Third-party travel and flight tracking apps rank highest among Baby Boomers (39%), while only 17% look at airport and terminal displays. Airline apps rank highest among Millennials and Gen X, at 32% and 29% respectively.
Prioritizing Deals & Non-Traditional Options
Younger travelers' booking habits are driven by deals. Forty-one percent of Gen Z and 39% of Millennials will change how they book to gain access to non-traditional flight options at a better price. Similarly, 40% of Gen Z and 39% of Millennials will change how they book to access better hotel and experience packages.
Price is a significant driver of booking habits for Gen Z, with 30% likely to change their booking habits if a different travel app or site offered better price predictability.
As the market begins to soften in the latter half of 2023, airlines will need to prioritize on-time performance as a critical service differentiator, especially for the younger generations of travelers. Ensuring lifetime consumer value becomes essential for sustaining their business in this evolving landscape.
