Once upon a time, about a decade ago, American Airlines attempted to simplify the fare structure across the country. They introduced a very basic fare system that had only a few fare tiers, somewhat similar to the current fare structure of Southwest Airlines and Jet Blue. This simplification initiative was not embraced by the other airlines, led by Northwest, and the bold innovation crumbled.
From that point in time, airlines seemed to make ticketing more and more difficult, ticket restrictions more and more convoluted, and change fees more and more costly. Eventually they ended up with a system where some routes had hundreds of different fares depending on who purchased tickets, when and where.
Airline employees and I used to joke that the ticket price was also dependent on the phases of the moon and astrological signs. We would all laugh, but not any more.
Today, airline management can’t seem to get out its own way. They are all blaming high costs and restrictive labor contracts for the problems. But the real culprits are the managers themselves.
Let’s face it. They stink. And they are not getting better at it. Airline managers as so inbred that original thinking seems to have been genetically eliminated.
So far the attempted reorganization of US Airways, the chaos at United and other airline upheavals have focused on cutting anything that applies to keeping the customers satisfied — the flight attendants, mechanics, reservation agents, gate agents, food, blankets, pillows and pilots.
The other focus has been, astonishingly, paying bonuses to managers and CEOs while at the same time demanding wage concessions from the workers and service concessions from passengers.
Another consistent major airline maneuver has been to make travel more difficult for passengers with added fees for luggage, pets, paper tickets, changes, standby travel and more, ad nauseam.
The major airlines only in the past few weeks have addressed changing the fare structure and simplifying it. I don’t mean offering lower and lower fares for leisure travelers, but completely revamping fares, restrictions and conditions for their biggest customers, the business travelers.
One would think airlines would do all they could to get business travelers back in the air. But, until recently, there has been little movement in business fares and the Saturday-night-stay requirement seems to be just as ubiquitous today as it was pre-9/11.
United, Delta and American have been tinkering with their business fares during the past few months. They are discovering that when you discount these once-absurd fares and remove restrictions, revenues jump.
That’s the good news. Unfortunately, experience has shown that airline executives take years to learn what seem to be obvious lessons. In this case, rather than immediately shifting to a strategy of lower, no-restrictions airfares, they opted for continued study of this phenomenon in a few new markets. Meanwhile losses are piling up.
While we have all seen very deep discounts on leisure fares, according to an America Express report, business fares only declined by two percent last year and are still five times as expensive as non-refundable fares.
The light at the end of the airfare tunnel, however, is coming into focus. Finally the airlines are beginning to move in a positive direction — in a direction where good masterful management can actually create additional revenue and hopefully save jobs.
No-nonsense airfares are finally on their way.
Up until to this time, management has been asleep at the switch in terms of making changes that benefit their customers and workers.
Readjusting the airline pricing structure is a beginning. Hopefully, the airline management will figure out how to make better use of their assets rather than blindly following the same old failing model.
So far, the airline focus has been on preserving executive bonuses, protecting management jobs, creating more bureaucratic layers with airline-within-an-airline boondoggles, and continuing with exorbitant CEO pay. They are looting the sinking ship.*
It’s about time the airlines begin focusing on their passengers and improving service. Reasonable airfares across the board is a good place to start. Ultimately, passengers are the ones paying the bills.
*Note: According to the US Airways bankruptcy court, $35 million was distributed to Stephen Wolf and his two henchmen on the eve of the bankruptcy petition. These are the three men who skillfully managed the airline into bankruptcy. Wolfe is still chairman of the board. Before his masterful management of US Airways, he was the CEO at United. What unethical greedy excuses for executives those three have proven to be.