"Airlines starting to realize what passengers want"

Tuesday, June 25, 2002

Airlines starting to realize what passengers want
BY TOM BELDEN
Knight Ridder News


(KRT) - Air travel has always been the most popular - and controversial
- topic covered in this column. So today we'll take a final stab at
reporting some recent developments, in the hope that some airline folks
are reading.

All the following happened on June 12 and 13:

In Philadelphia, a bill was introduced in City Council to limit any one
airline to no more than 40 percent of the gates at Philadelphia
International Airport. The goal is to increase competition by low-fare
carriers. If the bill passes, US Airways couldn't effectively operate a
hub.

In Aberdeen, S.D., city officials are mad at Northwest Airlines for
cutting service in half, to four daily flights, all of them to
Minneapolis/St. Paul.

In Wichita, Kan., city officials are overjoyed that fares on some routes
have fallen by 60 percent to 70 percent since AirTran Airways started
service May 8.

In New York, American Airlines Chairman Don Carty told reporters that
the complicated airfare structure most big carriers use needs an
overhaul.

Does anyone detect a pattern here? It's the same one we've been
emphasizing in this column for the last six years or so.

Consumers love to travel, and they fly more when airlines make it
affordable. Flights will be packed this summer because airlines are
offering a host of bargains. People also understand that security, which
the airlines themselves controlled on Sept. 11, needed to be better and
will cost passengers more now.

What travelers don't like is the market power that some carriers have at
their hubs. That power leads to business travelers sometimes paying five
to 10 times as much for a coach seat as the vacationer sitting next to
them. And it turns some big airlines into bullies, using extra flights,
frequent-flier program incentives and bonus payments to travel agents to
try to drive small, low-fare competitors out of the hub.

The major carriers are losing billions this year, a situation that isn't
good for anyone. At the same time, airlines with simplified, low-fare
pricing are making money, or at worst, breaking even.

Only in the last month or two have airline executives said publicly that
their convoluted fare structure is broken, and that many business
travelers won't be coming back as customers unless it's fixed.

What's curious is why some airlines didn't see years ago that their
policies were generating mistrust, even hatred, among their best
customers, the business travelers who provide them with most of their
profits.


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