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September 21, 2014

Twitter Mining Reveals America’s Best – And Worst – Airlines

By Robert Williams, Founder, Wall Street Daily

Thank God for angry airline passengers.  I’m talking about the folks PO’d enough to vent about it on Twitter (TWTR).
“Hey #UnitedAirlines… you really suck!”
“Those #AmericanAirlines losers canceled my flight!”
As it turns out, those tweets can be infinitely valuable to your portfolio.  So valuable, in fact, that they can double the performance of the benchmark average.  

Twitter Mining Reveals America’s Best – And Worst – Airlines

Luminoso, a text analysis company, just did something wonderfully ambitious…
It analyzed the social media mentions of five airlines – United Airlines (UAL), JetBlue (JBLU), Delta Airlines (DAL), Virgin America, and American Airlines (AAL) – during the month of August. (August just happens to be among the busiest travel months of the year.) 
The company parsed more than 157,000 tweets, cataloging them by relevant keywords like “delays,” “cancellations,” or “luggage.”
Now, remember… angry people are far more likely to publicly vent about bad experiences than happy people are to boast about pleasant ones. (You know you’re guilty!)

Nonetheless, Virgin America had the most positive responses, winning the Twitter war in key areas like customer service, and fewer delays and cancellations.

The dog with fleas among the group – well, at least according to the tweets – is United Airlines, which seems to specialize in exasperating and tormenting its passengers.
Sentiment Ranking and Analysis Categories: top five airlines according to tweets
For readers who enjoy sitting in airports for long periods of time, and then shopping for new clothes at their arrival destinations, United Airlines is a “must book.”

Not to be outdone in the ambition department, I then took Luminoso’s Twitter data and reconciled it against the airlines’ stock performance.

What I discovered was more than I ever bargained for…

Happy Customers, Happy Shareholders…

Boy, what a lesson this was in the value of the customer experience!

Look what happens when you measure the stock performance of the publicly traded airline that Twitter says is tops – JetBlue – alongside the worst, United Airlines.

(I had to use JetBlue because the true Twitter champion, Virgin America, hasn’t IPO’d yet.)
The Tweets Tell the Tale: JetBlue and United Airlines
Buying shares of the fans’ favorite would’ve resulted in an additional 20% to your ROI over the course of a year.

When measured against the entire transportation sector – as represented by the iShares Transportation Average (IYT) ETF – JetBlue more than doubled the return. And since airlines only represent a small percentage of the ETF’s holdings, it demonstrates how airlines, in general, are enjoying a banner year.

The Next Great Airline Stock?

Virgin America has been flying since 2007, and backers – like British tycoon and Founder of the Virgin Group, Richard Branson – have eyed an IPO all along.

Well, the big day now looms on the horizon.

In a statement announcing its filing with the SEC, Virgin America reported that the number of shares to be offered and the price range for the proposed offering haven’t yet been determined.

However, it did give a fundraising target of $115 million. Barclays and Deutsche Bank will lead the IPO.
I’ll concede that the company wasn’t even on my radar until I analyzed the Twitter data.

Bottom line: Passengers really love this airline!

And the IPO is now officially on my “Watch List.”

Stay tuned,
Robert Williams

Courtesy Robert Williams, Founder & Publisher of Wall Street Daily (EconMatters article archive Here)  

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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