By Ray Downs
By Ray Downs
By Olivia LaVecchia
By Lindsay Toler
By Jon Gitchoff
By Lindsay Toler
By Lindsay Toler
By Lindsay Toler
Here's a TWA case study you might find interesting.
You learn suddenly that you have to fly Los Angeles, with no time to make an advance ticket purchase. Your schedule isn't flexible enough to go to the Internet and bid on a ticket through a service like Priceline.
You walk up to the ticket counter at Lambert International and say, "I'd like a round-trip coach ticket to Los Angeles, leaving on your next flight, and coming back Tuesday afternoon."
The ticket agent says, "Fine, that will be nonstop Flight 443 going to Los Angeles and Flight 671 on the return. Your fare is $1,816."
Yikes: $1,816. That's a pretty fair penny to pay for a couple of four-hour flights that don't even offer a full meal or a free beer to the coach passengers, in either direction. But it's the cold, hard reality of last-minute travel, right?
Not if you live in Kansas City. Or, for that matter, if you fly there.
If you hopped on a Southwest jet to Kansas City $67, with no advance purchase and then walked up to the TWA counter in Kansas City International Airport saying, "I'd like a round-trip coach ticket to Los Angeles, leaving on your next flight, and coming back Tuesday morning," do you know what the TWA ticket agent would say?
"Fine, that will be Flight 688 connecting in St. Louis to Flight 443, and Flight 671 on the return connecting to Flight 323 back to Kansas City. Your fare is $560."
Based on published fares, nothing special, it costs fully $1,256 less to fly with no advance purchase from Kansas City to Los Angeles than it does from here, even though the Kansas City flight connects in St. Louis to the same flight and returns from Los Angeles on the same flight an itinerary for which we pay $1,256 more.
And just in case you're thinking that you could buy a Kansas City-based ticket, burn it and jump on the flight here, forget it: The airlines, indignant over such "cheating" by customers, cancel your entire itinerary if you're not on the first leg of your trip.
Indeed, I'm surprised they don't hunt you down and charge you the extra $1,256 for staying in St. Louis after the return flight from Los Angeles (burning the St. Louis-to-Kansas City final leg), because you failed to return to the citadel of preferred treatment.
Welcome to the world of airline economics, circa 1999, and to the joy of proudly claiming TWA as our "hometown airline."
I asked TWA for an explanation, and here it is, courtesy of spokesperson Julia Bishop:
"TWA offers a wide range of fares from St. Louis to Los Angeles, as low as $396 at this moment. TWA offers St. Louis twice as many jet departures from St. Louis to Los Angeles as all other airlines combined offer in Kansas City. You get what you pay for."
Well said. A cynic might point out that one can fly from Kansas City to Acapulco, with no advance purchase, for less than the $1,816 hosing we enjoy on one of our plentiful jetting opportunities to Los Angeles, but that's not the point, anyway.
St. Louis is a city that just six years ago this month bailed out TWA with a staggering $70 million aid package, in gratitude for the airline relocating its headquarters here from New York. This was on top of a three-year bundle of tax goodies, worth $7.7 million annually, that came from the state of Missouri.
The private sector was equally gracious, with Civic Progress companies providing an astonishing $36 million cash-flow gift in 1995, in the form of the prepayment of airline tickets, a show of civic support that had to be repeated two years later with another $26 million infusion. Many other St. Louisans have been willing to pay a few extra bucks for tickets out of loyalty and out of concern that a major local employer survive.
But we pay $1,256 more for the same seat than someone flying a 500-mile round trip to get here. And don't call it the cost of doing business: With no advance purchase, non-publically-subsidized Southwest Airlines gets you to Los Angeles and back albeit in a close-quarters, peanut-crunching marathon for just $660, scarcely more than a third of TWA's fare.
Apparently, in the words of a wise friend, no good deed goes unpunished.
The best-case defense for TWA could be that this is simply the free market working, that they're filling all those seats, so that they must be worth the prices they're charging. But this airline is a walking M.B.A. project in business disasters, losing untold millions in an era of unparalleled prosperity, despite dirt-cheap fuel prices and wondrous customer- satisfaction claims.
TWA's executive tin-cup rattlers, who just took their employee/POWs to the brink of a strike with their latest round of poor-mouthing, can hardly be smug about how well their strategies are working. All is not well with the free market and TWA.
Speaking of markets, TWA's strange pricing practices also raise questions about the joy of housing a hub carrier. Supposedly, one of the strongest arguments for the multi-billion-dollar expansion of Lambert International Airport is that it's necessary if St. Louis wants a job-boosting hub, whether TWA's or that of a successor.
Well, do we? Ironically enough, Kansas City got nice national press last month in a Wall Street Journal story for how its aviation department happily advertises that it doesn't have a hub. The reason: No dominant carrier means more competition and dramatically lower fares for its residents (don't we know?), along with less vulnerability to a single airline strike.
What about convenience? The Journal also reported that when Nashville lost its hub airline, it lost only one direct flight a day. Perhaps the tradeoff of ticket prices, vs. jobs and direct-flight convenience, should be given a little more thought.
It seems pretty clear that when TWA isn't the dominant carrier, where it doesn't boast a dramatic convenience advantage, it prices its service fairly and reasonably.
When it enjoys a near monopoly, the customers get yanked like a seat flotation cushion in a water landing.
None of this means that TWA's survival shouldn't matter to St. Louis it clearly does nor is it to suggest that the airline shouldn't try to get fair-market value for its seats. But must it be such an enthusiastic gouging?
With this kind of pricing disparity on the same airline seats virtually punitive to people in the city that saved the airline and with a response as arrogant as "you get what you pay for," you wonder what we ought to say the next time TWA needs a bailout.
Perhaps something about loyalty.