Mishandled Baggage Service Recovery: Winning the Satisfaction Game

Service operations are pervasive and significant in today’s economy, with customers demanding both high levels of customization and consistency from service providers. A major challenge in service operations is service recovery: converting a dissatisfied customer into a satisfied one. In the case of airlines, some of the most important service recovery efforts occur after baggage has been delayed, lost or damaged. Baggage recovery typically occurs at the end of a customer’s airline experience, making it one of the most memorable interactions that can impact return tendencies. Despite the importance of this interaction, our study American Airlines, Continental, Delta, Southwest, Northwest, United, and US Airways over nine years and 18.5 million baggage transactions shows that Southwest Airlines dominates its competitors as a clear leader in positive service recovery efforts. The purpose of this research is to investigate the procedures, policies, and cultural differences between Southwest Airlines and the remaining competitors. Using service-profit chain theory, we show the importance of procedures, policies, and employee empowerment on service recovery efforts. In order to do this, we conduct fourteen interviews with associates and managers from multiple airlines. Our analyses suggest that Southwest Airlines does a better job of communicating service recovery policies to customers. These results provide evidence of real differences between the service recovery processes of Southwest Airlines and the competition. Furthermore, this corroborates previous work finding that Southwest consistently outperforms competitors in many service dimensions. As airlines consolidate and expand, and as the customer base grows, providing high quality service to passengers will become increasingly difficult. This research provides a look at one critical area where airlines can improve and make commerce easier.No embarg