Is the industry shooting itself in the foot?

[KCFlyer]

[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 9/17/2002 1:22:50 PM N305AS wrote:[BR][BR]KCFlyer-[BR][BR]    First off, Winglet wasn't rude to you, so your condescending tone wasn't necessary.  I'm surprised; normally you make very intelligent arguments without the need to fling mud.[BR][BR]That having been said, the reason you can't simply give your airline ticket to someone else (like a ticket to a football game) is that the airline ticket is a non-transferable contract between the passenger and the carrier.  [BR][BR]The reason behind this is to keep businesses and other frequent travelers from making speculative bookings and/or purchases at discount fares and then simply changing out the names at will later on, when that last-minute new customer should really be buying a last-minute fare. [BR][BR]The remedy, of course, is for businesses or customers to buy higher-priced, more flexible fares that allow refunds if they need flexibility, such as if the person who was ticketed can no longer travel.  This way they can get a refund and buy a ticket for the new person traveling in their place.[BR][BR]It's something that most likely will not change unless the domestic U.S. fare structure dramatically changes across the board.  ----------------[/BLOCKQUOTE][BR][BR]My apologies for any condescending tone, but I don't think I was slinging any mud. It's just that an airline seat is about the only commodity that the consumer has absolutely no recourse for if they are unable to use it. In any other thing, I can GIVE it to anybody else and they can benefit from it's use and I won't feel like I've just thrown away good money. Airline employees seem to have a very difficult time accepting this. [BR][BR]As far as businesses cheating the system...I blame the airline industry for that. AA tried several years ago to implement value pricing, a program that would have eliminated 99% of the games played by corporations to save travel dollars. But the industry decided that it would be better to offer outrageously low, yet highly restricted fares for the leisure traveller and outrageously high fares for business travellers. I hate to keep pointing to Southwest, but look at some facts:[BR][BR]1. Last minute walkup fares will not cost a company an arm and a leg[BR][BR]2. Hidden City Ticketing is not prohibited[BR][BR]3. Back to back ticketing is not prohibited[BR][BR]4. When a roundtrip or multi-segment reservation has been made and the passenger fails to claim his or her reservation for the first portion of the trip, Carrier will not routinely or automatically cancel the return or continuing portions of the passenger’s reservation. [BR][BR]In other words, the fare structure is consumer friendly for businesses. Full credit is given for unused tickets (up to a year). America West has recently adopted a more user friendly pricing structure and it appears to be working for them.

 

[sfb]

I suspect the reason for KCFlyer's response to Winglet (and I found the tone to be more frustrated than condescending) was the fact that KCFlyer had already addressed the difference between an airline ticket and a concert/theater/sporting event ticket from the consumer's point of view.

Don't forget, however, that even though sports/concert/theater seats are a perishable commodity, stadiums/theaters/halls are not routinely overbooked, UNLIKE airliners. Moreover, pricing for these tickets is far more straightforward than ticket pricing on most airlines. I don't have to book a Saturday night stay to get a lower price on Cowboys tickets, nor is the price of the ticket likely to change from hour to hour or day to day. And the people sitting in the seats next to me in all likelihood have paid exactly the same price for those seats as I paid for mine.

I am unclear as to the security reason that makes transferrable tickets something which the airlines won't allow. After all, they're perfectly willing to sell a ticket to someone who shows up at the counter 35 minutes before a flight. Is this person less of a security risk because they're willing to pay large sums of money for a walk-up fare? Remember, after all, that the 9/11 hijackers paid for one-way walk-up tickets.

The point is that airline tickets really aren't like sports/theater/concert tickets, and that the analogy advanced by some is deeply flawed. Moreover, I'd argue that the primary reason for that analogy is based more in marketing than in any sort of fact. It's not reasonable to say, oh, they're just like concert tickets but they're really different because of this and this and that.

 

[mrman]

KC-
Three other points on the ticket analogy. 1)If the airlines now have a guaranteed fare will they also overbook thereby double dipping their revenue. 2)If I miss my Cowboys game, the cowboys don't resell my seat. 3)If the airlines change my flight for their convenience due to rescheduling will they give me a $100 bonus.

MrMan

 

[Winglet]

First of all, don't ask me to defend the idiotic US airline ticket pricing policy . . . even if I knew exactly what it was. The esoteric mish mash of fares and restrictions is incomprehensible. My point is that the seat is perishable if it isn't used and the ticket is tried to be turned back in for refund. That's not fair to the airline. Although the ticket is non-transferable to another name as a matter of contract, I don't think that's fair. The security deal is a red-herring. How much does the airline know about the original buyer vs. a transferee? The point of not knowing a walkup purchase is valid.

The pricing models are broken. The only problem is getting the companies to adopt a universal one. Can you spell re-regulation?

Is is fair that a airline goes near belly up, gets a govt. loan, then dumps tickets on the market at below cost? Is is fair that an airline forces chapter 11 cost cutbacks on it's employees, then dumps seats on the market driving the solvent carriers to screw their employees too?

Air travel in the US is very very cheap as it is.

 

[j7915]

[blockquote]
----------------
On 9/18/2002 12:36:32 AM Winglet wrote:

First of all, don't ask me to defend the idiotic US airline ticket pricing policy . . . even if I knew exactly what it was. The esoteric mish mash of fares and restrictions is incomprehensible. My point is that the seat is perishable if it isn't used and the ticket is tried to be turned back in for refund. That's not fair to the airline. Although the ticket is non-transferable to another name as a matter of contract, I don't think that's fair. The security deal is a red-herring. How much does the airline know about the original buyer vs. a transferee? The point of not knowing a walkup purchase is valid.


The pricing models are broken. The only problem is getting the companies to adopt a universal one. Can you spell "re-regulation?"


Is is fair that a airline goes near belly up, gets a govt. loan, then dumps tickets on the market at below cost? Is is fair that an airline forces chapter 11 cost cutbacks on it's employees, then dumps seats on the market driving the solvent carriers to screw their employees too?


Air travel in the US is very very cheap as it is.
----------------
[/blockquote]

Full re-regulation would mess up things in other directions however here some thoughts:

The airlines should be required to price tickets so that a rolling average load factor pays the operating cost for that segment.

How about to guarantee a seat, payment has to be made 24 hours in advance, no refunds only vouchers for future travel. Look at holiday travel, everything is booked and afterwards one finds out that flights went out 70-90% load factors, because of multiple bookings.

On their own it would make more sense to set the listed book fares at the price range that the bulk of passengers are actually paying. eliminates sticker shock, and drives customers to discount carriers first.

The last minute walk up fair can always be higher, there should however be no I'll pay whatever it takes policy, and bumping of lower cost passengers. In todays security environment there should be no way someone can actually guarantee himself or his group a last minute boarding on specific flights.

 

[KCFlyer]

[blockquote]
----------------
On 9/18/2002 12:36:32 AM Winglet wrote:

First of all, don't ask me to defend the idiotic US airline ticket pricing policy . . . even if I knew exactly what it was. The esoteric mish mash of fares and restrictions is incomprehensible. My point is that the seat is perishable if it isn't used and the ticket is tried to be turned back in for refund. That's not fair to the airline. Although the ticket is non-transferable to another name as a matter of contract, I don't think that's fair. The security deal is a red-herring. How much does the airline know about the original buyer vs. a transferee? The point of not knowing a walkup purchase is valid.

The pricing models are broken. The only problem is getting the companies to adopt a universal one. Can you spell "re-regulation?"

Is is fair that a airline goes near belly up, gets a govt. loan, then dumps tickets on the market at below cost? Is is fair that an airline forces chapter 11 cost cutbacks on it's employees, then dumps seats on the market driving the solvent carriers to screw their employees too?

Air travel in the US is very very cheap as it is.
----------------
[/blockquote]

Regulation is not the answer. Value pricing is. Right now, AA offers a roundtrip between STL and DFW for over $1,000 and an advance fare of under $200. So you get companies who want to pay as little as possible doing things like booking a STL-ABQ fare and getting off the plane in Dallas and playing all sorts of other games. Why not LOWER the last minute fare to $500 round trip, raise the advance slightly, and watch how much game playing stops and how much revenues increase. I know, airline employees feel that the airfares have to go up even more to keep the airlines solvent....Not necessarily so - which is better - two passengers paying $1,000 each or 10 passengers paying $500? I'd venture to guess that a $500 round trip between STL and DFW would allow for a profit. Because if you make travel affordable for business, they will find it possible to fly more employees. If you want to keep use it or lose it, then fine - make the ticket transferable so that the consumer isn't getting screwed because their plans might be forced to change. And drop the stinking $100 change fee.

If the point about the walkup traveller is valid, how does that differ from a person who CALLS THE AIRLINE two days in advance and tells them that John Smith will be using his ticket?

Government loans and bankruptcies. Well, I suppose I won't make any new friends here, but I don't think the government should bail out airlines, and I think that bankruptcy laws need to be changed yet again because it is definitly unfair to have a company simply file bankruptcy, have a boatload of debt forgiven, restructure contracts, and then come in to undercut the competition. It should be survival of the fittest. Other airlines will benefit and pick up what pieces remain. As the BK laws stand, a bankruptcy by a major player only makes bankruptcy for another player in the industry the only viable option to allow them to compete.

 

[TAN 767 300]

AA really should take the lead here and re-introduce Value Pricing and make it stick this time. As a small business I simply cannot afford the walk-up fares. I must schedule business trips most of the time to use some sort of discount fare.
As someone mentioned above, its better to have 10 passengers at 500 each than 1 at 2000 or whatever.
I firmly believe that if you guys simplified the fare structure, many other small businesses would respond with increased business travel to stimulate each individual companies sales.

Your industry had better figure this out real quick...in the new post 9-11 economy/attitude many companies simply cannot/will not pay for travel they way it was before.You have to become more customer friendly while reducing your costs to be close to Southwest,jet Blue, America West.

Many of my fellow small business associates here in California already use America West just because of cost and flexibility.

I send all of you AA'ers the best..but you had better find a way to work together to save your company as it exists today. Remember, The big 3 auto companies had it all until the early 1970's...their failure to react properly/compete effectivly to the new competition has resulted in the auto marketplace of today..the new guys have about half the business.