Using passengers as pawns


Passengers are being used as pawns in negotiations between powerful forces in the aviation industry. Over the past half a decade, two giant issues have affected passengers dramatically — the battle between airlines and their distribution system and the battle between airline executives and their workers. Consumers are collateral damage.

When it comes to giant central reservation systems (GDSs or Global Distribution Systems) bargaining with the major airlines, the fight has been in the background and out of the public eye. The issues that airlines and GDSs are squabbling about are not minor — control of the passenger data for future marketing efforts and which sales channel will be permitted to sell various airline products.

Labor issues are being played out on the front pages of newspapers in hundreds, if not thousands, of blogs and on the evening news beamed into living rooms across the country. The effect on travelers is more direct than that caused by the airline/GDS battles.

In both “negotiations,” passengers are getting the brown end of the stick. Passengers suffer the consequences of having to purchase airline transportation with incomplete prices and, when traveling, being faced with delays and flight cancellations.

Airlines vs. GDSs
Ever wonder why you can’t find baggage fees and seat-reservation fees when using an online travel agency like Expedia, Orbitz, Travelocity, Priceline or others? Ever figure out why when you go to a travel agency on the corner or at your company, they can’t take your money for a special seat or allow you to pay for baggage up front?

It all has to do with the battles going on between GDSs and the airlines. In fact, when I was discussing this issue with the airline representative at the last Advisory Committee for Aviation Consumer Protection (ACACP) meeting in Washington earlier this week, he refers to my disclosure of the ancillary fee issue as the GDS issue. For the airlines, consumers and the effects on their passengers are secondary. They are focused on negotiations with these global central reservation behemoths.

The GDS side of the battle at least waves a flag of consumer protection. The central reservation systems and travel agents of all kinds have taken up the consumer mantra asking airlines to disclose the full cost of travel. But, according to airline representatives, the GDS’s consumer rights stance is simply a foil to gain the upper hand through DOT intervention in their contract negotiations.

In the short run, passengers are suffering, especially the almost 60 percent of passengers working through travel agents of some kind who have to compare airline tickets based on only “airfares,” which are a partial slice of the full cost of travel. Even airline websites make it difficult to figure out the full cost of travel.

Management vs. workers

Labor strife is nothing new to airlines. Internationally, passengers have been far more affected by strikes and slowdowns than those in the United States.

In early September, Deutsche Lufthansa AG flight attendants staged a 24-hour strike. Pilots at Spain’s Iberia have called 18 strike days so far this year. A March sickout by Air Canada AC.B.T +5.19% pilots left many travelers stranded. Qantas Airways Ltd. grounded its entire fleet for two days last fall because of employee strikes. Pilot unions at US Airways and United Airlines are both under court orders not to disrupt operations.

However, the normally meek airline unions in the U.S., especially the pilots, are for the first time beginning to hit back at executive greed. Pilots are in a good position to do that since they are the ones who make the final decision on whether flights take off on time and they are entering a period of pilot shortages, even with the cutbacks in U.S. flight schedules.

As anyone who has spent time in an airport operations center knows, there are plenty of mechanical issues that are hashed out prior to many departures regarding the fitness of aircraft to fly. Pilots have lots of discretion in fly or no-fly decisions. For the most part, pilots are just as interested in keeping schedules on time and keeping the airline flying, but in this case, management went too far in the opinion of pilots in their refusal to negotiate.

Added to the problems are new AA outsourcing agreements for maintenance and refusal to deal with other unions. Workers are staring into a no-win abyss where executives will find themselves handsomely rewarded should AA come out of bankruptcy or merge with a new partner. Employees will end up with sharp cuts to their pensions and salaries, plus changes in work rules.

Pilots are now making decisions strictly by the book and small maintenance problems that may have been overlooked in the past are being written up. According to the union (and the FAA) these are “serious maintenance-related issues.” The airline management is caught between their union and the FAA, with no real solution other than performing more maintenance or making peace with their pilots.

This pilot power is being flexed for the first time in contract negotiations here in the U.S. Finally, AA is crying, “Uncle.” Management asked for the pilots to return to the bargaining table rather than abrogating their contracts.

“American has delayed close to 2 million people in the last couple of weeks, and they’ve canceled flights for 150,000 people,” said Blake Fleetwood, president of CookTravel, an online travel agency. “That has an effect.”

Of course, all of this background is fascinating for airline watchers, but for the passengers, late and canceled flights and missed connections are major problems. Though AA has committed to figuring out how to make passengers whole, the perspective hassles are enough to make normal customers book away from American in order to insure some semblance of maintaining their business and vacation schedules.

Passengers find themselves as pawns in these power struggles, whether between airline management and GDSs or between management and pilots, mechanics, flight attendants and gate agents. While airline management negotiates with unions and GDSs, passengers are the ultimate losers in the short run, as they lack full price information with which to compare the complete cost of travel across airlines and find themselves faced with delays and cancellations.