Confessions Of An Airline Executive

Threatening to complain to the media or the Department of Transportations is the single best way to reach an airline’s executive customer service team, according to an anonymous airline executive. The jaded executive also shared his dour insights on the availability and effectiveness of short-term sales.

There’s no law stipulating that a certain percentage of seats be discounted when an airline announces a sale. In 1993, the DOT slapped Continental’s wrist and stated that a combination of flights with sale-fare seats ranging from 0 to 7 percent of capacity wasn’t reasonable. Our lawyers say we’re safe if we discount 10 percent of capacity during a sale. Can an airline get away with 7.5 percent? Probably.

Of course, there’s the “float the boat” effect, in which a well-publicized sale brings in customers who wind up buying tickets at much higher prices. Another executive recently boasted to me that he offered a rock-bottom sale for a limited time–and nearly two thirds of the tickets were sold at higher fares.

Isn’t that great? Good thing we have corporate lawyers waiting in the wings to shower slick campaigns with their legal blessings. Beyond sharing his locker room chortles, the executive also endorsed the strategies behind our previously published tips for handling lost luggage and complaining to the government.

Confessions Of…An Airline Executive [Budget Travel]
(Photo: pwrplantgirl)

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  1. kepler11 says:

    I’m not sure why this story is of much interest, and why Consumerist habitually chooses such weak cases to try to illustrate airline gripes, etc. When a local store advertises a sale, is there a requirement that all of its stock be discounted to the amount advertised? Is there a requirement that the stock of discounted goods never run out? Do you get all upset when you find that neither of these is the case? If not, then why should you have an expectation that an airline would operate by magic different rules to your advantage?

    It is not big news that seats are priced differently on different days, or even different times of day. Now, admittedly, an airline should not announce a sale just to get publicity and have no seats at the advertised discount price, like some store that is perpetually “going out of business”. But given that there is some legal guidance as to what fraction of discounted seats is reasonable to offer under a “sale”, what’s the problem, and why ridicule companies making sure it passes legal muster? Would you prefer stricter regulations with high required fractions of seats on sale, such that airlines simply wouldn’t have any incentive to announce a sale at all?

    For those people who bought expensive tickets after hearing about a sale, what do they have to compain about? Airlines don’t sell tickets with high-pressure tactics in some showroom. Customers can basically hang up the phone or not buy the ticket if it’s not available at the sale price, and anyone who buys a ticket at some price, basically wants that ticket. Maybe the sale drew more passengers who were interested, and felt like buying those expensive tickets. Ever think of that?

    I just don’t see this as a very persuasive or interesting story.

  2. gman863 says:

    This is nothing new in the travel industry. Airlines, hotels and rental car companies have been offering teaser rates since the dawn of time.

    A flight has a given number of seats available, and it will take off regardless of the number of people on it. Since it costs about the same to fly a full plane versus one that’s half full, the airline’s profit or loss depends on getting as many passengers on board as possible.

    Forcing airlines to discount a certain percentage of all flights will likely make deep-discount airfares harder to find. In addition, most super saver fares come with a risk to the consumer: If your travel plans change after you’ve booked, there is either a “use it or lose it” no refund policy or a hefty fee to change dates.

    If you want to find the best fares, use a search program such as Travelaxe that scours the major on-line travel agencies such as Expedia and Hotwire for the best deals, and always compare the “best fare” to the one on the airline’s web site. If it’s a last minute purchase and you’re not picky about what airline or what time of day you fly, make a ridiculous offer on Hotwire or Priceline and see what happens.

    Finally, the easiest way to cut flight costs is to expand your choice of airports for departure and arrival. The one or two extra hours it takes to drive to an airport served by Southwest or Jet Blue could cut your airfare cost by 50% or more, as these airlines’ regular fares are often lower than the “sale” fares at other airports. If a legacy carrier such as Delta or American has no competition from a discount airline at a given airport, they charge higher fares to offset the costs of competiting with discount airlines in other cities.

  3. weave says:

    I buy most of my flights around 2-4 weeks before departure. I just can’t plan ahead of that. The fares aren’t that bad around that time. I think they start cutting back some fares to try to fill the plane when a plane is below target around that time.

    I also don’t care a lot about the cheapest flight either. Like I’ll gladly pay an extra $100 or more for a non-stop. Each time you add a hop to your itinerary it’s one more chance to lose your luggage, get bumped, or miss a flight due to the earlier flight being delayed. Oh, and it takes longer. My time is valuable. Heck with that mess.

    As an example, I flew two weeks ago, non-stop, from PHL to PHX and back for $228 including all taxes. I got the tickets 2-3 weeks before the first departure. That price is insane. That’s what it costs for a RT on Amtrak between WIL and NYP.

  4. headon says:

    @Kepler: The story was interesting. If you don’t like whats posted on this blog then start your own. Next time you find a story on this blog that is not to your liking or that is not interesting enough for you, skip it and spare the rest of us from your comenting drivel.

  5. youbastid says:

    @gman863: “A flight has a given number of seats available, and it will take off regardless of the number of people on it.”

    Untrue. Flights get cancelled when there aren’t a sufficient number of people booked.

  6. ideagirl says:

    @headon: thank you : )

  7. The Dude says:

    @kepler11: This is more about us ‘consumers’ being aware of how airline pricing works, so we don’t get as easily sucked into unexciting deals. Knowledge helps.

    And your store analogy is weak. If a store advertises $99 GE Microwaves, do they only put 10% of them up for sale at that price and then still sell the rest at normal price? Of course not. You’d be hard-pressed to find this practice compared to what seems to be a very common practice in airline pricing. You may have one odd example of this, but in general terms, which is how you framed your argument, you’re wrong.

  8. superborty says:

    @ THE DUDE I fully agree with you. I have never gone to a store and been told the product at that price was no longer available…

  9. XTC46 says:

    @superborty: @The Dude:

    Actually yes, they do. They may not say “we still have them, but now the price is higher” but I assure you some resellers will hold back stock on clearance items until the sale is over. We had had laptops for dirt cheap (like 400 bucks for a $1000 laptops) and we had over 30 on hand, the ad said all stores would have at least 10 and it was a 1 day sale. We handed out vouchers for 11 of them and then wouldn’t sell the rest until the next day when the sale was over. It sucks balls for the customers, but stores are there for one reason, and that is to make money, and if they are losing there asses on a product, you can guarantee they will do what they can to stop it.

  10. Maverickewu says:

    @kepler11: The one I like is the 0% sale. So what you’re saying is a store could advertise something on sale and never actually offer a single one at that price? In normal consumer talk, if they try and sell you something else, it’s called bait and switch. But apparently when an airline does it it’s all good.

    You also have to take into account many planes have different products they are selling at any one time. Example, first class is a different product than coach class. If the plane makes multiple stops and you’re getting off at the first stop, it’s a non-stop flight. If you’re getting off after the first stop, it’s not non-stop and would be priced different.

  11. ugly says:

    @kepler11:
    I’m not going to focus on your ridiculous analogy, but I do have an honest query.

    Do you work for a reputation defense company? Your comments are rife with the kind of PR garbage I’d expect out of one of them. You consistently blame the consumer and attempt to defend the corporation. I hope everyone takes the time to read some of your past posts.

    I have no issue with the “corporation” being represented here, but please come clean so that you’re not just part of the problem. Stop pretending that you’re a consumer and interested in the consumer perspective.

    EVERYONE please read Kepler11’s comment history. He is nothing but a paid servant. He’s (or She’s) almost certainly on the payroll of one of those companies that takes money to make such posts in a lame attempt to sway public opinion.

    Kepler, I have no respect for you.

  12. Neurotic1 says:

    I worked in an airline reservations office for a few years and this was one of the biggest gripes I’ve had with my job. The airlines don’t just limit the number of discount seats; they play this same game with their entire inventory. For example, no one knows exactly how many FF seats are offered on a given flight. I’ve had many travelers call up a year in advance, the day the flights open, only to be turned away even though the flights are wide open with no one booked. It’s a shady practice that needs to be changed. More transparency is never bad for the consumer.

  13. Buran says:

    @youbastid: Doesn’t save much considering the airlines then have to rebook you since the cancellation was under their control, and that costs them money.

  14. Buran says:

    @Maverickewu: Is that not actionable under bait and switch law? You offer something at a price, then refuse to sell it at your offered price, but offer a higher one instead.

  15. kepler11 says:

    My store analogy point was that when a store announces a sale of some % off its merchandise, do you expect every single item of every different product in the store to be discounted to that level? Or is it legit that only certain kinds of items are on sale? (there seems to be some confusion about what I meant) If so, then why not the same for airline seats, where only certain seats are on sale? I clearly said that companies should not announce sham sales (like 0% Sale!) just to get attention, and given there is some legal information about what is legit (10%), what’s wrong with that percentage? The argument that this is “bait and switch” is interesting, and I’d be curious if someone informed about it could give some further info.

    Airline pricing is what it is, and often frustrating. But what better scheme do you have? It brings you the ability to find low-priced travel, and I am pretty sure that it is not some conspiracy to defraud the customer. In fact, it is usually the airlines that are losing money. You could call for more regulation, but that would almost certainly decrease the number of routes airlines fly, cost more, or help fewer people. This, now, is what works for the airlines.

    For those people who didn’t know how airline pricing works, sorry to sound a bit discouraging. However, I thought that most people here at least are pretty familiar with the game. I do feel that Consumerist sometimes inflates the headlines based on weak stories, and the accompanying commentary is kind of sarcastic/unreasonable *at times*, or unresearched. But I do in general, enjoy the stories.

    For the people who immediately lash out to say I must be some kind of corporate shill, why are you so defensive? Go ahead, read my past comments. I think you’ll find that they’re pretty reasonable. You just don’t like the fact that sometimes a reasonable answer doesn’t come down on the side of the consumer. Or are you not mature enough to handle a reasonable, differing opinion? I tend to write when I see a long line of unquestioning opinion on the wrong side of an issue, so if that makes me seem like being on the corporate side, think whatever makes you happy. But I’m not going to get upset over your misperception. I’m offering my reasoned opinion, and it’s clear that some level-headed people agree with me.

  16. kepler11 says:

    And regarding airlines canceling flights when there aren’t enough passengers, this is actually very rare, at least for the major airlines. There are passengers at the destination who also have to be brought back on that plane. There is cargo that has to be flown, crews that need scheduling, connections that have to be made. Major airlines don’t just cancel flights because “there aren’t enough passengers”. I used to think that sometimes too, but the number of obligations that they would have to back out of is too great.

    For smaller, less tightly/well-run airlines however, I think it is a possibility.

  17. goodkitty says:

    When I see an ad for “$59 from LA to NY” I don’t expect that to mean only for the first 2 people to call, unless there’s an obvious disclaimer below it that says “only 2 seats available”, must like you see the $9999 cars in dealership ads that state “only 1 at this price” (with the implied meaning that there used to be 1 at that price, possibly many years ago). I don’t know if it’s new, but even retail circulars seem to dot their i’s and cross their t’s with specific availability numbers when they have a big sale announcement.

    (And I certainly don’t think the $59 fare blossoming into a $8x fare after taxes and fees is reasonable or “fair” either.)

    Whatever happened to just doing business without the schemes? You know, like pricing a trip at one price. Even the grocery stores are ridiculous, with everything being repriced every week, sometimes with “sales” that save you a whole 2 pennies (and something else marked up 5 cents to compensate).

    What if we walked up to our employers and said, “you know what, because it’s the holiday season and there are more customers around this time of year, I’m going to require you to pay me more.” Discuss. :D

  18. littlebunnyfu says:

    ….Am I the only one who read DOT and thought “What the hell does Damage Over Time have to do with airplanes?”

  19. ugly says:

    @kepler11: I need not respond more than to say that your comments, and comment history, speak for themselves. I would be very surprised if “Reputation Defender” and other services to provide online damage control did not read the consumerist. Your comment history clearly supports that theory.

  20. kepler11 says:

    sigh. As I said before, go ahead, read any one of my past comments, and tell me what’s unreasonable about them. You just can’t accept like a rational person that sometimes the right answer isn’t on the particular customer’s side, so you resort to personal attacks which is pretty pathetic. And it’s pretty laughable to think that someone is paying me (or anyone else) to take the time to individually respond to some random blog commenter’s ranting. It also shows a bit how out of touch you are and perhaps not very credible?

    Anyway, my interest in this story is waning rapidly. On with life, for you too, even?

  21. econobiker says:

    @youbastid:

    Yes, a flight will get cancelled no matter what the number of people on it, if it is not completely overbooked and if the airline needs the plane to relieve a far more overbooked or delayed route…