Can Southwest withstand proposed FAA fine?

Last week, the Federal Aviation Administration (FAA) announced that it is proposing to fine Southwest Airlines $10.2 million for failing to perform mandatory inspections for structural problems on a portion of its fleet.

In our daily BrandIndex survey, consumers have consistently given Southwest the highest marks across the entire airline sector, which includes 25 major domestic and international airlines. In fact, Southwest scores nearly twice as high as its closest ranked competitor, American Airlines. The scores refer to the overall brand ranking, which is composed of six key indicators of brand health: corporate reputation, quality, value, image, satisfaction and willingness to recommend.

In addition to the six underlying indicators that factor into our Index, we also capture two other important indicators – mindshare and buzz. Mindshare measures the percentage of consumers who have heard any recent news (via advertising, traditional media, online or word of mouth) regarding a brand, and can range from 0 to 100. Buzz measures the percentages of consumers who have heard something positive about the brand recently, minus the percentage who have heard something negative about the brand recently. This score can range from -100 (all consumers have heard negative news) to +100 (all consumers have heard positive news).

Since the story broke, mindshare for Southwest has increased 33%, from 35 to 47. More strikingly, buzz has decreased from 22 to -1, a drop of more than 100%. The -1 buzz score represents the lowest buzz score for Southwest since we began tracking the brand, in June 2007.

While one would expect news regarding lapses in airplane maintenance to potentially have a serious impact on a brand, Southwest's quality scores have shown resiliency, and are holding steady in the low 30s – also a high for the sector. (British Airways is ranked number two on the quality indicator, and consistently scores in the mid 20s.) The quality score can range from -100 to 100.

Southwest's resiliency is likely due to two factors. One is that the reported safety lapses happened almost a year ago, were corrected relatively quickly, resulted in no actual injuries to fliers, and had actually been reported to the FAA voluntarily by Southwest. The other is that the brand is very strong – it ranks in the top 10% of all 1,025 brands in the BrandIndex service. A single misstep, even one as serious a maintenance violations, may not jeopardize the brand. The real key for Southwest, will be to ensure that this remains an isolated incident, put this news story behind it, and return to its winning ways with consumers

BrandIndex, a YouGovPolimetrix product, conducts innovative online market research, leveraging its 1MM person proprietary PollingPoint consumer panel. BrandIndex is a daily poll of 5,000 consumers, and measures 1,000 major commercial brands in 41 industry sectors, on eight indicators of brand health: mindshare, buzz, image, quality, value, satisfaction, willingness to recommend, and reputation. Results are available daily at 9am EST.

Analysis conducted by YouGovPolimetrix

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