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Author
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Topic: Fares are rising in STL
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Franklin
Post Captain
Member # 372
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posted
Air travelers here swallow hard at ticket prices
By MICHAEL D. SORKIN
Post-Dispatch
11/22/2003
Kevin Kelley used to fly American Airlines round trip from Indianapolis to St. Louis for as little as $99. These days, he says the same walk-up fare on the airline is as high as $650.
Jack Laramie, a Boeing engineer from St. Louis, used to pay $400 to fly American round trip at Christmastime from here to Fort Myers, Fla. This Christmas, he found that the same advance fare was $1,200.
He's flying Delta Airlines instead.
Consumers, travel agents and industry experts say St. Louis travelers are paying more to fly American Airlines - sometimes hundreds of dollars more - since Nov. 1. That's when the company canceled half its flights here, downsized airplanes and eliminated direct flights to more than two dozen cities.
more on Ad ZoneSome of American's cheapest fares from St. Louis to New York, Boston and Washington have increased by $200.
"Get used to it," says fares expert Terry Trippler of [JU]Cheapseats.com. "The glory days of that huge hub in St. Louis are over. You're going to be changing planes more often, have fewer choices and higher fares."
American Airlines spokeswoman Mary Frances Fagan said the airline has "made an adjustment" to its pricing, but that "doesn't necessarily" mean a price increase.
American eliminated its lowest fares to nine of 68 cities where the airline or its regional affiliates have St. Louis connections. The company didn't identify all the cities. The airline says it is trying to make St. Louis flights profitable after years of losing money.
One example: Before Nov. 1, the lowest 14-day advance fare from St. Louis to Boston not requiring a Saturday stay was $260.
Last week, American's lowest comparable fare was $474.
"We didn't raise the fare," Fagan said. "We just took away the lowest fare.
"We made an adjustment to our pricing, I'm not denying that. But it's not a price increase."
Travel agents had speculated that American's cutbacks would make flying out of St. Louis more expensive. But this is the first time that American has acknowledged a change in prices.
While American has not raised its highest priced fares, eliminating its lowest fares has the same effect as a price increase.
Flo Simson of the Travelplex travel agency, with headquarters in St. Louis, says consumers won't see any distinction when they reach for their wallets.
"There's been a tremendous increase in fares to New York, D.C. and Boston," she says. She gave these examples:
Last month, round trip from St. Louis to New York was as low as $288. Today, the lowest comparable fare is $492.50.
Round trip to Washington was as low as $270; today it's $454.
Round trip to Boston was as low as $280; today it's $492.50.
Travel agents say many of American's posted fares are unchanged. But that doesn't mean the fare you pay will be unchanged.
"It means absolutely nothing," Trippler says of posted fares. "People still end up paying more."
Airlines can raise prices, he says, by changing the number of seats available at cheaper fares:
"If you sell shoes, and sell some for $19.99 and some for $29.99, if you run out of $19.99, people are paying more for what's left."
More revealing than posted fares, industry experts say, is the average fare that people have actually paid. That information would aid consumers because there are literally thousands of different fares. Passengers sitting side by side on the same flight can have tickets with prices that vary by hundreds of dollars.
American won't disclose the average fares customers pay on routes. Fagan says that information is "proprietary."
Trend may continue
St. Louis airfares may continue to go up, says airline expert Michael E. Levine of Yale Law School.
"There is a reason why they are doing this," he says of American. "They were losing their (behinds) in St. Louis."
On Nov. 1, American cut its 417 daily St. Louis flights to 95 cities down to 207 daily flights and 68 cities. The airline also has cut costs by eliminating a total of 6,000 St. Louis-area employees.
Today, American offers just one daily nonstop flight in a full-sized jet to New York.
Last week, Carol Weis wanted to make reservations on American Airlines for the first time since July. She was shocked at the prices and says: "I wish some other airline would come to St. Louis."
Weis sorely misses American's flights to London. They were nonstop and cheap at $500 round trip, says Weis, a St. Louis book editor.
"And you felt like St. Louis was an international city," she sighs. Now, she says, she must fly to Chicago or New York to leave the continent.
American's old fares may have been too low for the company, but St. Louisans are used to them.
Weis used to pay $300 for a round trip to New York. The current fares "are completely insane," she says. She was quoted a low fare of $600 to New York - $900 for a nonstop.
Juan Chardiet feels trapped. A patent lawyer in Washington, he racked up 240,000 frequent flier miles in 15 years of flying American, including many flights through St. Louis.
Today, he'd like to jump to another airline but can't without losing those frequent flier miles.
Of American's flight cancellations, he says: "My ability to business travel has been severely restricted."
Last week, Charles Montgomery priced a last-minute round trip to Chicago. American's fare was $250; at the Southwest Airlines counter, the walk-up fare was $80.
"The difference is 6 inches in seat room," he says referring to Southwest's seating. "But I'll grin and bear it instead of flying American."
American "not a villain"
To get the best prices, Kevin Jung of TQ3 Travel Solutions in Kirkwood says it's more important than ever for consumers to plan trips as early as possible; be willing to fly on smaller, regional jets; and combine several business trips into one. He warns that consumers will find this more difficult than ever with fewer flights and early-morning departures.
American's Fagan says St. Louis should consider the airline a white knight, not a villain. "We didn't go in there to rape and pillage - others had already done that to TWA," she says. American bought the bankrupt TWA before downsizing the hub here because American said it, too, was facing possible bankruptcy.
David S. Stempler of the Air Travelers Association in Washington says St. Louis should be thankful American didn't cancel even more flights here.
"The one thing worse than high fares is no service," says [JU]Stempler, who heads the passenger advocate group. "A lot of cities don't have service at all. St. Louis still has a tremendous number of nonstop flights that you have to be thankful for."
Posts: 326 | From: St. Louis, MO usa
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Bob Ritchie
Post Captain
Member # 1035
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posted
Good deal,
Maybe we will make some money for a change. I am sick of supporting "give away" ticket prices. It has been coming out of my paycheck, retirement fund and benefit package for decades: directly from my family to the customers.
Seems like everyone forgets....airline employees are "customers too!"
Bob Ritchie
Posts: 1734 | From: Warren County, Missouri
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TWA Fan 1
Post Captain
Member # 1926
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posted
quote:
Originally posted by Franklin:
"We didn't raise the fare," [American Airlines spokeswoman Mary Frances] Fagan said. "We just took away the lowest fare.
That's one of the classic lines of AA's Orwellian Double Speak...
Posts: 400 | From: Brooklyn, NY
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Kirkpatrick
Post Captain
Member # 652
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posted
quote:
Originally posted by Bob Ritchie:
Good deal,
Maybe we will make some money for a change.
I agree completely. I'm sick of giving away the store. These days even the employees start thinking we're ripping off the customer if we don't lose money on a ticket. The price should reflect the cost of doing business (including paying me a fair wage) and then a reasonable profit.
Keep those prices going up.
MK
Posts: 192 | From: Massapequa (Long Island) NY
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Captain Ed
unregistered
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posted
I see it as a reason to go back to where we were before DE-REG. Fixed prices determined by logic, assigned routes, with responsibilities by the carriers, etc.. with an updated CAB type organization in firm control, free from political influence, with the future of the Air Carrier System of Transportation in the USA as it's primary concern.
Until we get back to sanity, chaos will reign.
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Bob Ritchie
Post Captain
Member # 1035
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posted
Ed,
I agree, but it ain't gonna happen. Rather than change the "bottom line", consumer driven policy; our short sighted politicians will grant Vietnam Airlines.....U.S. domestic route authority.
If the market will only support an "airborne bus" service; that is fine with me. Perhaps the next generation of airline pilots will come from the trucklines and bus companies. Walmart can provide the flight attendants and mechanics.
I personally resent the transfer of wealth from my family and the airline/stock holder equity to the traveling public's pocket. But Billions of $$ have already flowed that way and I see no change for the future. Whatever.....
Just grateful that my career is nearly over. The next generation will have to decide if working for an airline is an attractive option or not.
bob ritchie
Posts: 1734 | From: Warren County, Missouri
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Captain Ed
unregistered
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posted
Bob, true, I'm afraid.
One of our daughters, Deirdre, who is in sales for a Silicone Valley co. just called and told us about her experience with US Air last week. She is a Frequent Flyer, and booked Fist Class, RT SFO-MSP-SFO. She spent 3 days in Minneapolis, came home First Class, flew through normal dinner time, and not a meal was served.
BTW, this is Deirdre (R) in a good mood. Sister Eileen, and her two dotes.
http://moregleny.com/edwedding
[ 11-23-2003, 16:16: Message edited by: Captain Ed ]
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AABob
Post Captain
Member # 636
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posted
Ed, entirely too beautiful to be yours. Any idea who the father is?
(just kidding)
Posts: 116 | From: pilot
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Jeff I.
Post Captain
Member # 2334
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posted
quote:
Originally posted by Bob Ritchie:
Good deal,
Maybe we will make some money for a change. I am sick of supporting "give away" ticket prices. It has been coming out of my paycheck, retirement fund and benefit package for decades: directly from my family to the customers.
Seems like everyone forgets....airline employees are "customers too!"
Bob Ritchie
Bob -
I couldn't agree with you more. I remember when I was a college student in 1977 I flew round-trip LAX-JFK on a "Super Saver" fare of $227.00 (I don't know why I remember that number but I do). It was a great thing for a cash-poor student. I remember flying a pretty new L1011 on TWA and thinking I'd gotten the deal of the century.
Now .... here we are some 26 years later and one can get roughly the same fare even more easily. It doesn't make economic sense and, ultimately, the flying public will pay the ultimate sacrifice in possibly not having full-service carriers as an option. I'm not predicting that but the trend is worrisome to me.
Jeff I.
Posts: 482 | From: New York
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Tom Girtman
Post Captain
Member # 1021
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posted
Captain Ed
Post Captain
Member # 2263
posted 11-23-2003 09:39
--------------------------------------------------------------------------------
I see it as a reason to go back to where we were before DE-REG. Fixed prices determined by logic, assigned routes, with responsibilities by the carriers, etc.. with an updated CAB type organization in firm control, free from political influence, with the future of the Air Carrier System of Transportation in the USA as it's primary concern.
Until we get back to sanity, chaos will reign.
--------------------------------------------------------------------------------
Ed, I agree with you 100% Tom
Posts: 169 | From: Buckingham, Pa.
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L1011Ret
Post Captain
Member # 1792
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posted
Now you can really see the motivation behind AA's purchase of TWA. GET RID OF THE COMPETITION! If you cannot drive them out like in the SJU market, buy them out!
Posts: 416
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TWA Fan 1
Post Captain
Member # 1926
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posted
Bob Ritchie,
I certainly feel for you and your colleagues who are shell-shocked after years of Karabu, lowestfare.com and the recent AA integration saga.
However, if it were just a matter of raising fares (or eliminating the cheapest fares as AA likes to characterize it) nothing would have stopped TWA from doing it years ago.
Yes, TWA was forced to watch Icahn sell seats for next to nothing, but most tickets sold on TWA were outside the Karabu ticket arrangement.
While it is true that Karabu dragged the value of the TWA ticket down, its main impact was not to diminish the demand for TWA seats but instead simply to siphon off income on tickets which were already very cheap.
TWA controlled about 80% of the traffic at STL but even they couldn't raise the fares (which they could have done on any seat not included in Karabu).
Tickets in the airline industry are cheap not only because passengers want cheap tickets but also because there are airlines out there (Southwest, JetBlue) making a healthy profit selling cheap seats.
Today, AA has done something which is potentially a serious mistake. Not only have they increased the cost of the average ticket out of STL, they've reduced their market share.
They've left themselves wide open for a broadside from Southwest and others to increase their presence at STL and continue taking market share away from AA by filling the demand for cheap airline seats; and these low cost carriers are making a profit doing it.
[ 11-24-2003, 07:16: Message edited by: TWA Fan 1 ]
Posts: 400 | From: Brooklyn, NY
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Draginitin
Post Captain
Member # 2324
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posted
If TWA had been allowed to liquidate, and AA had picked up a share of the vacumn afterwards, what would AA's interest would be in STL now?
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Bob Ritchie
Post Captain
Member # 1035
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posted
TWA Fan,
I agree that the world has changed and the low cost carriers keep downward pressure on ticket prices. We all understand that. Thus my earlier statement concerning "airbore bus" service and the potential, future,status of airline employement. My point is that AA and all airlines should charge a fare that includes a modest profit. It the airline is unable to do that....then they should withdraw from the market. Seems to me that is the exact strategy of AA, specifically in STL.
I disagree that TWA could have raised it's fares anytime it wished in STL. When we promoted "more room in Coach" and added $5.00 to the average ticket price, under Bill Howard's leadership; the result was...lost market share and less income.
You see the problem is...a huge percentage of airline travelers have little genuine need for the convience of air travel and are unwilling/unable to pay a fair price. As long however, as it is cheaper than traveling by bus or auto, they will buy the airline ticket. Much air travel is frivilous, sort of like going for a Sunday drive. So the price is not very elastic.
As for AA opening up the door for SWA and others in STL: so what? AA has a greater presence in STL now than before the purchase of TWA. AA has retreated to it's historical position, which it occupied prior to TWA.
Bob R.
Posts: 1734 | From: Warren County, Missouri
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TWA Fan 1
Post Captain
Member # 1926
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posted
quote:
Originally posted by Bob Ritchie:
TWA Fan,
I disagree that TWA could have raised it's fares anytime it wished in STL. When we promoted "more room in Coach" and added $5.00 to the average ticket price, under Bill Howard's leadership; the result was...lost market share and less income.
Bob R.
Precisely my point, Bob. Why would the current price increase be any different under the AA banner?
(In fact, the More Room in Coach experiment has been a surprising failure from a revenue point of view at AA as well)
Posts: 400 | From: Brooklyn, NY
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extwacaptain
Prop Wash
Member # 381
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posted
quote:
Originally posted by Bob Ritchie:
Ed,
Just grateful that my career is nearly over.
bob ritchie
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Flyin’ For An Airline (Is ANYBODY Still Having Fun?)
Recent comments remind me of time spent doing a little search and rescue flying with the Civil Air Patrol. Many of our pilots thought our leadership slightly “chicken s**t”, but, with a little ingenuity we were still able to find ways to enjoy the operation. Time spent on the ground between flights required smiling and putting up with many individuals attempting to emulate General Le May or George Patton. Most of those in command appeared to have received their rank according to their girth, ![[Wink]](wink.gif) and their military background came from watching war movies made here in Hollywood.
Be that as it may, we were aware that their signatures were required to authorize the fuel and oil for our Squadron of AT-6s and at 30 Gal/hr. we managed to put up with their horse s**t, knowing that it WOULD “still be fun once the chocks were pulled.”
Until recently, many of my pilot friends have been asked this question: “In spite of all that has happened, is it still fun, ONCE you get out of the gate?” The majority have smiled and said: “Yes”.
Obviously asking one question doesn’t prove much, does it? Well, that question was only meant to prove one thing. Flying for an airline is still fun for SOME people. Those who are still employed could very well fall into that category. And, there are some OTHERS, who would not be happy playing a piano in a whorehouse.
There are probably many doctors, lawyers, athletes, politicians, and other professionals, who over the years have said: “IT’S NOT AS MUCH FUN AS IT USED TO BE”.
Well, …….what is?
Maybe it’s time to retire and give the younger ones “Their time”, as I did, Bob.
Randy Kramer
Posts: 892 | From: Encino, Ca. U.S.A.
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Bob Ritchie
Post Captain
Member # 1035
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posted
TWA Fan,
TWA tried to raise prices when we had 350 mainline flights a day through STL. 60% of our traffic was connecting and we were carrying huge numbers of passengers who flew us only because we were giving the tickets away.
It is different now. AA has about 53 flights a day out of STL. There is less service overall through STL. We are serving mostly O/D traffic and a far lower percentage of descretionary travelers.
All of this should translate into AA being able to raise the fare to at least the cost of production. If we cannot....then one must assume that AA will withdraw further from this market. How long can and why should an airline continue to sell their product below cost? TWA did it; as we had no other choice. We were a carrier of last resort; our passengers were bottom line, price motivated; with a few notable exceptions. During that time period all the other Legacy carriers were recieving a premuim for their ticket far above that which TWA was able to command.
TWA ceased to be an on-going business years before AA bought us. We were a cash flow, "jobs work" program, fueled by employee givebacks and combustable furniture. When the employes could not or would not give any more and all of the furniture was burned....it was over.
If only my auto dealer, the grocery store, my homebuilder, clothing store, hospital and the kid's University would sell me their product below the cost of production. If only I could buy all of these goods and services for 1975 prices.
Gee...then I would feel as wealthy as I once did and we would have a grand ole time until the entire nation went bankrupt. Which by the way if Dubya keeps it up..........
In the meantime; all I can do is try to be the best AA captain possible and keep smiling every time I climb aboard a shiny AA 767 or 757. The future will take care of itself.
Take care,
Bob Ritchie
[ 11-24-2003, 23:36: Message edited by: Bob Ritchie ]
Posts: 1734 | From: Warren County, Missouri
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TWA Fan 1
Post Captain
Member # 1926
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posted
Bob,
TWA was clearly running on fumes for years and years. The one thing that kept it going, and going so effectively, was the outstanding work of the wonderful TWA employees. My hats off to all of you.
As far as raising the prices out of STL. I certainly hope AA can pull it off, for your sake. But I don't think the situation is any more propitious now than it was back in the days of TWA.
If anything, AA is in a worse position. TWA controlled 80% of the traffic at STL. AA's first big move at STL was to cut its mainline traffic by 75% and its overall volume by 50%. This means they've left themselves wide open to competitors who can take over gate leases and start selling cheap seats; and these are competitors who can make a profit selling these cheap seats.
Secondly, a lot of the seats AA is now selling at the higher price are on commuter planes. Although the airline consumer sees the airplane seat as a commodity, given a choice between an expensive seat on an ERJ and a cheap seat on a 737 on Southwest, most are obviously going to chose the cheap seat on the bigger, more comfortable plane.
Finally, as far as pricing in a hub, it has been a common practice to price O&D tickets at a much higher price than connecting tickets on the same flights. This sydrome was particularly obvious with UA at Denver and NW at MSP. For some reason, TWA was never able to do this at STL (I'm not sure why).
I think AA's biggest mistake was to dissolve TWA which had reinvented itself into a "mid-cost carrier" in the vein of a Continental Airlines. The painful irony is that the business model developed by TWA in its final iteration was better suited to the current economic environment than the full-blown old-school mainline airline that is AA.
Without Karabu and with the lower costs associated with AMR ownership (cheaper leases and fuel hedging) TWA would have been the ideal subsidiary for AMR to weather the post 9/11 catastrophe.
Remember that in the post 9/11 period the low-cost carriers such as Southwest and JetBlue have continued to make money while a mid-cost carrier such as Continental returned to profitability more quickly than its rivals.
[ 11-25-2003, 10:22: Message edited by: TWA Fan 1 ]
Posts: 400 | From: Brooklyn, NY
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Captain Ed
unregistered
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posted
STL is geographically suited to be a good hub, but the hub itself, like most hubs, is a nightmare to navigate. DEN Stapleton was just fine, but "they" just HAD to build a better airport and hub. The result is the nightnamare in the prarie.
Frequent flyers are increasing annoyed at hubs, and will try to avoid them by researching the best way to get from A to B, instead of just choosing an airline, or letting a travel agent determine the itinerary.
Here in central NJ, I find an increasing number of travellers look first to ACY, not EWR, for a departure airport.
Another factor not to be overlooked is the hub cities themselves. Newark and St. Louis are not desireable places to live and do business.
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Irish
Post Captain
Member # 722
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posted
Just what is it about Newark and St. Louis that makes them not desireable(sic) places to live and do business? Specifics, please.
Posts: 1360 | From: Hampton, NH and Naples, FL
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donuway
Post Captain
Member # 803
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posted
Ed,
We have just moved from the First Most Dangerous City to the Second. Detroit has taken the honors. I think these statistics are from the City itself. Our population in the city is quite small compared to our Metro area. My own belief is that it is SEVERELY understated, which throws these numbers off. There are ways to get around reporting how many people live in a house if you know what I mean, and I believe this problem is rampant in North St. Louis.
In this small section of the city, almost ALL of the violent crime happens, or at least a VERY high percentage of it. Needless to say, if you are smart, you avoid that part of the city. If you have business clientele there, as I do, you can avoid violence by not participating in the illegal drug industry, or being part of an Auto theft gang/ring. Those two problems alone, if the city would more strongly address them, would drop us WAY down on that list.
Needless to say, many of the very successfull businesses in St. Louis avoid North St. Louis, and do quite well. Our World Class Brewer, Defense Contractor, Bio Research and Development companies, Chemical Manufacturers, Universities, and Hospitals, seem to do OK here.
As far as living here, the weather often sucks, and we don't have as good of air service as we once did. Our airport is easy to get around, and in and out of, (maybe it is hard to FLY in and out of??). Did you know we have the largest Girl Scout Council in the Country?
As far as the original topic,,,I'm pressed for time. I guess no one can remember how little more TWA said they needed per flight to make money, even with Karabu and unreal lease rates? These prices are unreal, unless you want to shrink the business more so you have an excuse to totally "dehub" a city. I guess Southwest loses their shirts out of here also?
Don
Posts: 414 | From: St. Louis, Mo
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Kirkpatrick
Post Captain
Member # 652
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posted
quote:
Originally posted by Captain Ed:
http://www.morganquitno.com/cit04pop.htm
Brick NJ is the second safest, safest in the population of 75,000 - 100,000
And notice that big bad New York is the sixth safest in the over 500,000 group.
MK
Posts: 192 | From: Massapequa (Long Island) NY
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Dick Nicklas
Post Captain
Member # 934
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posted
[QUOTE]Originally posted by Captain Ed:
[QB] STL is geographically suited to be a good hub, but the hub itself, like most hubs, is a nightmare to navigate. DEN Stapleton was just fine, but "they" just HAD to build a better airport and hub. The result is the nightnamare in the prarie.
**************************************************
Ed
Even at its peak I found STL relatively easy (key word relatively) to get around even as a non-rev with lots of carry-on luggage.
Of course small airports like ACY are great but try going ACY-DSM without going through a hub.
When possible I try to route through STL and avoid DAL, MIA, ORD and JFK like the plague. Even with one-airline connections i.e., AA to AA , they are bad never mind AA-Alitalia or SWA.
Let's all hope STL can make a come-back.
Posts: 119 | From: 4555 S. Landings Dr Ft Myers Fl 33919
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