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Politics : Sharks in the Septic Tank -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (29074)	9/23/2001 11:51:10 PM
From: Michael M	Read Replies (2) \| Respond to of 82486

LL - I started to answer you by PM as many here may have heard this. Then I realized I may be on gang ignore, so, what the hell. Keeping the airlines from dying as a result of 9/11 is important and worthy of aid (with conditions). The problem is, the airlines were in dire circumstances BEFORE 9/11. There is an element of general absolution about this bail out. The major airlines have a common business plan that depends absolutely on gouging the business traveler. Because biz travelers have to go when they have to go and can't afford to spend a week on a day's worth of business, the airlines insist that any cheap fare include a Saturday night stay and forbids use of "back-to-back" tickets or "hidden city" itineraries. As a result, business travelers pay $1,500 or more for a seat that might cost a leisure flyer $300. As these fares rose and the rest of the economy slumped, companies said, "WHOA!" Biz travel was down and the airlines were bleeding badly with no hope of recovery anytime soon. Generally speaking, at normal load factors, the people in the cheap seats don't pay their way. The airlines have been staring in the economic headlights for a good while. They can't afford to cut biz fares (especially with reduced traffic) and they know the leisure market is not going to pay significantly more than they are paying now. Supply has gotten way ahead of demand (demand being defined as the number of people willing to actually pay the value of the product). For the longest time, the carriers have tried to cut costs by buying more fuel efficient airplanes (obviously, a double-edged sword), cramming more seats into the planes, curtailing pax services, adding exorbitant fees for the slightest tweak of a ticket and cutting travel agent commissions since the mid 90s. Do we need to mention the level of security they were willing to pay for? At the same time, fuel costs have gone up and unionized labor has won a generous raise or two. After six years of commission cuts and many travel agency failures, the agents still sell three out of four airline tickets. The airlines have a sales force that they don't pay a dime to unless the product is sold. No payroll, no insurance, no overhead, no pension, no payroll taxes, NO NOTHING!!! This has gotten to the point that the airlines will pay an agency $20 max for a domestic roundtrip ticket whether the price of the ticket is a few hundred dollars or a few thousand. Do I have an incentive to sell the more expensive (and harder to sell) product? I don't think so. Especially when I know the guy with the $1,500 ticket wants (and deserves) more service. When I whine, the airlines say their expenses are high and they can't afford to pay me what they used to pay me. The weird thing is, as my cut went down, the carriers discovered the internet and started offering "web-only" fares. There is no provision for me to sell that product. But, guess what - that product often nets the airline less money than the published fare minus our original commission. And, these web-only deals are not just last second specials on a perishable product. The last time my son visited he bought a Priceline ticker for almost 50 percent under the published fare - THREE FULL MONTHS IN ADVANCE! This tells me the airline is engaged in predatory pricing to drive me out of business. If I have any doubts, they wipe them out by establishing Orbitz, a web-only ticketing site jointly owned by major airlines. A blatant anti-trust violation on the one hand and an exclamation point to my view that they want me to go away. Last week, when they had their hands out for cash, some of the airlines suspended sale of web-only fares on their web-site. Big deal, they kept selling them on Orbitz. Why do they want me out of business? Travel agents come in all flavors but, the fact is, the agent is the ONLY consumer advocate in the picture. My wife and I have a very loyal group of clients and personal service is the name of the game. This involves, on a daily basis, getting in the face of one airline or another and demanding that our customers get what they pay for. I could tell you stories - lots of stories..... Perhaps you know what happens when a low cost carrier leaves a market. Prices shoot way, way up. Just check published fares for all airlines in markets served by Southwest with markets not served by this low cost carrier. It is not too hard to extrapolate what will happen to customer service when the last travel agent bites the dust. Sorry it took so long for me to get to this point, LL. In case you're still awake, I'll just say I object to helping the airlines until they AT LEAST discontinue web-only fares and drop the Orbitz scheme that denies me an opportunity to sell. Doesn't it seem strange to you that, at a time when the airlines have a crisis filling seats, they would stiff their main sales force? It would also be nice if the airlines, during this crisis, would cap executive compensation at $1 million. Fat chance.