There are a number of reason that help explain this declining percentages. One it that the European governments that are member of the consortium have contributed generously to the research and development needed to design and build state of the art equipment. A second is that these governments now purchase Airbus aircraft while in the past years their purchase are almost always from the U.S aircraft manufacturers. A third is that the U.S Government is cutting back on its own purchases of military aircraft, thus denying Boeing and McDonnell Douglas what used to be guaranteed orders as well as the funding for developing airplanes that would later be modified for commercial use. A fourth is that new aircraft must be researched and designed to replace the aging fleet now in existence worldwide. The cost of bringing these aircraft to market will run into the billion dollars, and Boeing and McDonnell lack the needed research and development funds.

As a result of these developments, Airbus is continuing to increase its market share. However, the U.S government is trying to reduce the political risk and, through effective negotiations convince the consortium members to stop providing such large annual subsidies to Airbus. If these efforts are not successful, McDonnell Douglas is likely to go out of the business or have to sell more of its ownership to foreign investors, such as it recently did to Taiwan, who can provide the necessary capital to keep the firm going. The same will eventually happened to Boeing, since without new product development the company will have great difficulty competing against Airbus. In any event, the U.S dominated commercial airliner manufacturing industry has seen the entrance of a major competitor in Airbus. The industry has also seen an increase in the political risk facing established competitors and which will face Airbus as well, if the governments involved are unable to resolved their differences.

A recent study from the University of Michigan indicates that Delta Airlines, United Airlines and AMR Corp's American Airlines ranked among the worst in customers service of all airlines. 20,000 people were asked to rank the customers service during their travels on a scale of 1-100. United Airline received a 56, Delta Airlines receive a 56 and American Airlines received a 60 indicating that service was poor.

Claes Fornell, the researcher from the University of Michigan stated, "The same problems that have pulled airline passenger satisfaction down the past few years - disenchanted employees, increasing fuel costs, bankruptcy, and now also record levels of lost, delayed, and damaged luggage.” Mr. Fornell feels that many of the airlines are continuing to slip.

Such poor customer service is more about the culture of the airlines than it is about their financial problems. When customers have to wait in long lines, have their flights canceled, are missing their luggage and are met with an unfriendly face it isn't likely they are going to be satisfied with their service. In the airline industry, because of high costs, it is the little things that count.

Increase Customer Service Training:

Teach stewardess and other personnel to treat their customers well. There is a difference between saying “no” and giving someone an option that is acceptable. Friendliness should always be considered.

Don't Skimp on the Peanuts:

When customers have to sit in cramped seats for 2-4 hours at a time it isn't much of a cost to offer an appropriate size drink and some peanuts. Let us say that the airlines paid 50 cents a person per flight for a small cup of juice which would cost a completely packed airplane $75. Now let us assume that you tripled that amount of money you were spending on snacks to $1.50 per person. It would generate a cost of only $225 per flight. That $225 is a good investment to keep your customers coming back.

In Flight Movies is a Blast:

In flight movies allow your customers, who aren't reading books or sleeping, a chance to relax. When customers are focused on their movie they aren't focused on your poor customer service. People forget about the rude stewardess, cramped seats and crying baby behind them when they have earplugs on.

Adjust Your Processes:

It doesn't take a brain scientist to figure out that this cart full of luggage should be placed on flight #1220. Mistakes happen because employees don't pay attention. It eludes most people as to the reasons why some people will receive their baggage while others won't even though they are on the same flight. The airlines should review all of their processes to ensure that luggage doesn't get lost in the transition. When it does get lost make some type of amends instead of shrugging your shoulders and saying “I don't know”.

Recruit the Right Employees:

Any business that wants to be successful must recruit the right employees. Good employees will lower your costs, increase efficiency, treat your customers well and make fewer mistakes. The better employees you hire the more likely things will run smoothly. Hiring better employees requires diligence in holding them to a standard of excellence and managing out those who don't hold that standard.