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Column on Low-Fare airline tickets

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Afixedwing

Well-known member
Joined
Oct 17, 2003
Posts
128
[font=verdana, arial, helvetica]Last summer, our InsiderAdvantage national survey asked Americans if they intended to travel more or less than they did the prior summer. The answer was more, but not by a significantly wide margin.

While airport travel in particular has rebounded since 9/11, consider the misery that awaits the business traveler, upon whose back the economic might of air travel rests.

Here's a first-hand account of a flight I took this past Monday morning out of Atlanta's Hartsfield Jackson International Airport, arguably the world's busiest.

My flight, scheduled to depart at 8:50 a.m. on Delta Air Lines, was delayed even before I reached the airport. I left my home hours ahead of time, prepared for the now world famous "Monday morning crunch" at Hartsfield. After checking in using the airline's new kiosk machines (which, I must admit, worked well and have clearly cut down on waits and lines to talk to ticket agents), I proceeded to the security check lines.

What I witnessed was nothing less than staggering.

There were lines in virtually every direction, stretched out past ticket counters, through hallways and snaking around shopping atriums, looping, dividing, encircling . . . The chaos required passengers to funnel their way through the makeshift lines with little or no directions.

Meanwhile, the airline I was flying, the struggling Delta, obviously lacked the needed personnel to direct or handle its passengers who, finally, after hours spent waiting in line, boarded the delayed aircraft. Once on board the plane, there was no sign of a flight attendant. Passengers, seemingly all carrying huge pieces of baggage, battled for precious storage space. Even as I began to pen this column, I felt the heavy "thud" of a dropped piece of luggage on my head.

Fortunately for me, I can be "hardheaded."

After all of the important issues brought up in the recent presidential battle, why focus on the issue of a bad day at the airport?

Because our nation's economy depends on the strength of air travel and our system of air transportation, which must be present to support the serious work of business travelers. Unfortunately, it is the business traveler who must pay the highest price and most frequently endure this virtual "hell" in the skies.

The problems for airlines and airports are myriad. High fuel costs, labor issues and pricing pressure from cut rate competitors combine with security issues to create a vicious cycle. Air travel was starting to unravel long before 9/11 because of the fact that price competition (often appearing to be predatory) led to hordes of low-priced passengers, turning airports into zoos and flights into unbearable cattle cars.

The fact is that air travel, as noted, remains critical for business travel. But with prices so low, everyone seems to think that hopping on a plane for even the most nebulous of reasons is a good idea.

It isn't.

If everyone flying on a plane pulled his or her equal weight in fares, the airlines would be making money and fewer frequent freeloaders would be clogging the system. Why spend hundreds of millions of dollars in additional funds to beef up security, so that more people flying for virtually nothing can simply make those lines longer and force airlines out of business?

Sound elitist? Perhaps. But in the post-9/11 world of transportation, travel has become so horrendous that it's time for us to truly look at what made air travel in the pre-Jimmy Carter era of deregulation actually work.

Since so many appear to be completely opposed to any regulation of anything (that is, except our own personal lives, what we wear, what we say . . . you get my drift), the best solution I can think of is for the airlines to boldly go where they went before.

Airlines should price tickets based on the business acumen which worked so well in earlier decades. Each ticket should be set to cover the costs of operations and be marked up for a profit; after all, these airlines are allegedly for profit. The endless number of tank-topped, flip-flop-wearing passengers riding on these seemingly flu- and bacteria-bearing flying tubes, need to return to flying only when necessary. Otherwise, they should drive a car, ride a bus or take up the habit of reading newspapers and books, rather than seeking $25 airfares to entertain themselves.



©2004 Creators Syndicate
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I have said this before as well !

Great Post.....I say forget the competition....fly at a profit or dont go, the LCC's cant possibly handle all the passengers if the mainlines were to raise there fares...sure alot of people would complain,,,only for a little while. I am one that believes you get what you pay for, for some the SWA thing works, but I bet a large percentage would gladly pay more for some better personal service, better methods of getting prescreened through a expedited lane if you will..

I also believe that regulation needs to return to some degree so that carriers all make a basic income for each aircraft type and average overhead costs...

Everything else is going up, people expect it everwhere else, the airlines are not an exception...either regulate, or the government/Taxpayers will pay even more in the end with BK's, government ASTB type funding, or other benefits.....
 
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Yeah. You'd think it would be obvious to these airlines that maybe it isn't in their best interest to go after EVERY customer. I learned way back in high school when I was flipping burgers at McDonald's (literally) there are some customers that are just not worth having!

Sheesh! How long is it going to be before Wal-Mart starts a new LCC?
 
To borrow a title from Thomas Sowell, Random Thoughts

To put it another way, here's a thought I've been musing over for the last month or so, but I've never heard anyone say it yet in quite these words (not that no one has):

Given the fact that people no longer pay the true cost of their transportation from A to B,

airline employees are subsidizing the low price of airfare in the US.

I really think the guy that wrote that article above is right. If ticket prices were raised, a whole host of problems would go away. Let the load factor go back down to 65% and make some money from the folks who are on the plane. Who gives a rip if the load factor is 100% if the flight is losing money?

I have an MBA. I took finance, economics, stats, accounting, etc., etc. What am I missing here? I get so frustrated with the way people act on the macro level. For example, I'm the ultimate Wal-Mart hypocrite. I despise Wal-Mart, and yet in full support of the free market, I shop there. If I, as one person, could make a difference in the macro economy by not shopping there, I wouldn't shop there. But since it makes no difference on the macro level, I might as well join the stampede and buy the cheapest stuff I can.

We preach all of this to each other every day, but it's all in vain because we're preaching to the choir. And it's not just the airlines, as some of you well know, that are facing this perpetual downward spiral. I worked a corporate job for 5 years before starting my airline career. This phenomenon is happening in all aspects of our economy, as anyone who's tried to get customer support from Dell knows full well.

If the plane is overbooked and you're still losing money, it's not because the pilots are making too much. It's because the ticket price is too low!! Can the airlines collectively raise prices? No -- because one hold-out LCC would insist on being the "low price leader" and ruin it for the whole industry, forcing everyone to keep their ticket prices low.

What can be done about it? I don't know. Pax may think that getting on an airplane these days is no different than boarding a Greyhound bus. While that may be true insofar as their service experience is concerned, the simple fact is that a Greyhound bus that seats 50 people does not cost $30 MILLION, nor does it go 400 mph. These two points alone should dictate that riding on an RJ be MUCH more expensive than riding on a bus. Not the same product -- should not be the same price.

I vote republican. I believe in the free market -- BUT the free market doesn't work properly in an environment of corruption. The whole country -- not just the airlines -- is doing all this to itself on the macro level, with a healthy dose of pure evil corporate greed and corruption at the highest levels with executives at all kinds of companies shipping jobs offshore, importing the cheapest crap they can find, and lining their own pockets at the expense of not only their employees, but of the whole country.

When I was younger and more naiive, I used to think that the "best and the brightest" were promoted to positions of corporate leadership. When I finished school and entered the corporate world, I found quite the opposite to be true. In most instances, the most incompetent, corrupt, conniving, political people without an original thought in their head are promoted by people like themselves who fear the "best and the brightest" and keep them down. This is part of why I'm so much happier in the cockpit, despite the fact that I now make less than 1/3 of what I used to make. (My goal in the airlines is to make within three years from now what I used to make four years ago.) It's just me and a fellow pilot, and we don't have to worry much about back-stabbing office politics. That being said, I do miss my association with vice presidents and directors, even if they were evil and/or incompetent, because I used to have a much broader picture of both company and industry than I do now.

Why am I writing all this? I don't know. It hasn't made me feel any better, so it can't be therapeutic.

I just want some of you younger fellas who have never had a "real job" outside of airline pilot to understand that it's not just the airlines. This whole country has gotten messed up.
 
rvsm 410

A more personalized better service....... You shop me one of these airlines besides SWA that time and time again show good service? for the most part I have ran into bitterness.......so how do you maintain this service with the attitude? sure I know what your saying but the airlines have lost sight of that....The ole' product and the fact that many want to pay 24.99 for thier tix, where as only the rich used to travel. many businesses have swithched to SWA for flying if at all possible. Why? I am sure you have JS. Cattle perhaps as some may put it. Now thats service a smile and oh yea quite a bang for your buck....Are'nt they making a profit while others are getting killed...Hmmm! I wonder why? I am sure these brainy CEO's are wondering also. How can we make money...this is a business right?
 
propjockey said:
I despise Wal-Mart, and yet in full support of the free market, I shop there. If I, as one person, could make a difference in the macro economy by not shopping there, I wouldn't shop there. But since it makes no difference on the macro level, I might as well join the stampede and buy the cheapest stuff I can.
Do you vote? By this reasoning you should not bother to vote because you are just one out of 250 some odd million people. One person could not possibly make a difference right?

If everyone with that attitude would stop shopping at Wallmart it would make a huge difference because you are not alone in your feelings. Besides that, some of your friends may join you in your boycutt of the devil if you explain to them how Walmart operates (amny people are clueless).

On the subject of LCCs, SWA may be making money now, but let's see what happens when they don't have any more fuel hedged at such a low price.

Skeezer
 
As I have stated many times before how can any company make money selling a product for less than it was 20 years ago??? You can say all you want regarding every aspect of ecomonics, and how the market drives the cost of airfares with competition. But when it comes down to simple business you cant make money selling a product or airline ticket for less then it was 20 years ago, since every operational cost of doing business has gone up from labor, landing fees, airplane leases, to the pretzel that we now get on a 3 hour flight. Airfares have to go up and to save this industry. The public has become to acustomed to cheap airfares and now expect it!!! The LLC seem to think they have the best business plan going on now and that they will be around for many years years but the truth is that in 5 years or whenever there will be a new LCC called Jetgreen and Tranair that will come in and make money selling free fares of 189$ from west to east coast and they will get 100 planes cuase they can make money for a short time selling Free airfares since they have low cost in every area. That will hurt jetblue and airtran and the rest of the industry and the cycle will continue. Sell tickets for a profit or dont sell them. if you take less passnegers for the same revenue why not? less crowds etc.
 
swa

Southwest is still doing it. The critics have been saying what you and others keep saying....They are still standing with 64 a/c for next year?!What can you say about that and they are the only one to be making money for all thoise years. Beginners lock? Sorry man your wrong about the statement above!
 
I didn't realize so many pilots are still using hallucinogenic drugs. Can you drop me your dealer's numbers? Sounds like some great sh!t.
 
Propjockey,
I agree with your post.

On a side note, regarding people expecting low fares......I was at my 2nd job today and this woman was complaining that her brother's ticket was SOOOOOOOO ridiculously expensive......$500! Baaaaa waaaaaa
 
[QUOTE=propjockey

If the plane is overbooked and you're still losing money, it's not because the pilots are making too much. It's because the ticket price is too low!! Can the airlines collectively raise prices? No -- because one hold-out LCC would insist on being the "low price leader" and ruin it for the whole industry, forcing everyone to keep their ticket prices low.


One LCC would ruin it for the whole industry!!! You have got to be kidding me!! SWA MAKES MONEY....ALWAYS HAS. Now I cannot predict the future, and I don't work for Southwest, but having said that, I believe SW is a rational competitor. For the most part they do not irresponsibly lower fares just to compete. Thats what the majors do!!!

AirTran, up to now, also competes rationally, they don't fly somewhere just for the hell of it. jetBlue, IMHO, is a little more of a risk taker.

My point is this. The LCC's haven't caused the legacy majors the problems they have now. The majors did it to themselves by not recognizing how the internet would completely dimantle their revenue management systems resulting in much less revenue to go with their high costs. The majors also diluted their "high quality" brand by taking out meals, substituing RJ's for mainline equipment etc. IMHO, the service difference between DL,AA,UA,NW etc. and WN, FL, JB, HP is pretty **CENSORED****CENSORED****CENSORED****CENSORED** small. And honestly, on many a given flight, the LCCs are better to fly on becasue the emplyees aren't so visibly bitter and worn-down.

Also, this is not the latest episode of some business "cycle" where new airlines grow to the point where their costs are high, then fail while new entrants start. In every past "cyle" in this industry, the majors furlough, lose some money. Some start-ups start up with crappy old airplanes and people. When the economy picks up, the majors go after the start-ups with questionable pricing tactics and put them out of business. The majors USED to be able to do this because A) they controlled the reservtion systems where ALL tickets were bought (except SW ;) ) B)There was no internet for passengers to TRULY compare price and schedule. C) The low-fare competition was a breath away from going out of business. None of these things is true this time.

Its a free market, people. What is happening now is a fundemental change (for the worse, I agree) but it the new reality, I'm afraid. Get on the bus....or don't.
 
I'll concede your point about Southwest, and about the steep decline in legacy quality-of-service (they really should concentrate on the frequent flier and leave the flip-flop crowd to the LCCs), but not about the full or overbooked planes losing money. That's economics 101. If you have "too many" customers for ANY product, the price is too low.

(I wish someone could quantify how much airline revenue is lost solely as a result of TSA harassment of law-abiding citizens in pursuit of their politically-correct "airline security" charade. I bet it's MASSIVE, especially given the fact that they've now announced in newspapers across the country that they will be conducting "random" pat-downs to include people's genitalia. Pax don't like this. One of our pilots just had this very intimate experience with the TSA. Not pleasant for anyone, but especially over-the-top for a crewmember in uniform who had just flown the flight in and was deadheading back!)

On a sidenote, it's interesting to see how the US automakers are facing another side of the same problem. They hooked post-9/11 buyers with huge rebates, and now buyers have come to expect it as some kind of entitlement. So the economy is still in cardiac arrest due in part to low prices in many sectors, but the country seems collectively unwilling to get out the defibrillator. Instead, we're cutting benefits and pay, laying people off, and shipping jobs offshore.

Deflation is more dangerous to an economy than Inflation.
 
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Afixedwing,

Well said my friend, I completely agree with all of your statements. This industry requires government intervention. Subsidation or regulation. Something or anything. Quality must be improved for the public and for the employees.

I am also about tired with TSA. The hassle they give crewmembers has really got to stop. So many times I have had problems with them over foolish things. Not only do airlines lose money to them, but our companies also pay for their "fine" services. I see no difference in TSA from the pre-9/11 security services aside from selective screening. Did I mention that the TSA employees are fighting for FREE airline privledges? have you ever had one on YOUR plane. They are completely obnoxious and without respect for authority. They have even "flashed" their badge to me. I will deny them access. MUHAHAHAHA
 

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