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A story of high airline fare tickets"AIRLINE FARE TICKETS"
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"AIRLINE FARE TICKETS" 2/15/2000 Feb. 9--Neil Abell was scrutinizing Florida State University faculty travel bills when one caused him to stop: $467 round-trip to Atlanta. "The joke," said the School of Social Work professor, "was wondering how someone found a flight so cheap." AIRLINE FARE TICKETS Abell was more on target than he realized. The Tallahassee-to-Atlanta hop on Delta Air Lines is one of the highest-priced flights in the nation, mile for mile, an analysis of airline fares shows. Can't find what you need? Try a Google Web Search in the box below!
For the first three months of 1999, Tallahassee fliers paid an average of $253 for the 223-mile flight -- or $1.13 per mile. AIRLINE FARE TICKETS Passengers on 98.5 percent of airline routes in the nation get a better deal, the Tallahassee Democrat's calculations show. Delta Air Lines spokeswoman Cindy Kurczewski took only seven words to explain why: "Supply and demand and the competitive market." While Kurczewski said it is against Delta policy to be more explicit, airline industry experts said her few words actually cover it all, especially the last two. AIRLINE FARE TICKETS "It's the amount of competition in the market that dictates fares these days," said Richard Gritta, a University of Oregon business professor and national airline expert. With five airlines vying for Tallahassee's in-state flights, fares are "relatively reasonable," consultants told Tallahassee officials last year. But only two Tallahassee airlines cross the Florida state line: Delta to its Atlanta hub, and US Airways to its Charlotte, N.C., hub. AIRLINE FARE TICKETS "Tallahassee travelers are held hostage to the high fares charged" by the two carriers, Nammack Associates wrote in its October 1999 analysis of Tallahassee's fare predicament. The company is a Virginia-based consulting firm. The oft-quoted "deals" available out of Jacksonville are good because AirTran and Southwest also fly out of that market, forcing Delta and US Airways to throw their own fares in the bargain basement -- and widening the spread with Tallahassee, Nammack reported. AIRLINE FARE TICKETS Beyond captivity's price, other marketplace wrinkles help raise local airfares. Prior to deregulation, airlines "tapered" fares, Gritta said. Even though a short-haul flight costs more per mile to operate, fares were artificially low, subsidized by higher profits on long-distance fares. Deregulation forced carriers to compete route by route, pushing fares closer to true cost. AIRLINE FARE TICKETS Overall, fares are lower, down an average 36 percent in markets that have low-fare carriers competing with major airlines, according to the U.S. Department of Transportation. But operating costs go out the window on routes controlled by a single carrier, Gritta said. In those markets, fares can climb as high as the market will bear. And profits from those captive flights allow airlines to drop fares on competitive flights lower, even to below cost. AIRLINE FARE TICKETS Short-distance flights, those under 750 miles, without a low-fare competitor, cost 26 percent more than they did a decade ago, according to the DOT. Those same short-distance markets also had the lowest growth rate in passenger traffic, 46 percent compared to a 400-percent jump in competitive short-haul routes. "To some degree," Gritta said, "the short-haul guys are now subsidizing the long-haul routes." Hence, he said, Delta's expensive Atlanta-Tallahassee ticket makes it possible for Delta to sell a $131 Atlanta-Miami fare, half the price to go twice the distance. AIRLINE FARE TICKETS It's not just higher fares that bedevil Tallahassee. It's also fewer cheap seats. Airlines sell only a predetermined number of discounted seats, such as advance purchase fares, on any one plane. How many is an airline's secret, but analysts as well as government regulators say the bigger planes flying out of major airports means they also have more cheap seats than small markets like Tallahassee. Even if a carrier offers a Tallahassee fare competitive with Jacksonville, travelers trying to buy it are more likely to find it is sold out. Can't find what you need? Try a Google Web Search in the box below!
A capacity study by the Democrat suggests Delta is maximizing its Tallahassee to Atlanta profit. Even at high fares, Delta-owned shuttle Atlantic Southeast Airlines' jets are flying close to 80 percent full, above what the industry considers comfortable. AIRLINE FARE TICKETS Delta can pack planes at those prices, in part, because an estimated half of Tallahassee fliers are business travelers who often have little choice about when and from where they fly. "The reality is, they're gouging us," said Mike Boyd, head of The Boyd Group, a national airline consulting company based in Colorado. For Boyd, it's "gouging" with a purpose. "In fairness to Delta, they don't fly Tallahassee to Atlanta for the people going to Atlanta. They fly it for the people going to New York and Savannah and Paris. AIRLINE FARE TICKETS "That seat has huge value," he said. "They want to connect people through the hub more than they want people locally on the airplane." Kurczewski did not disagree, but instead offered the notion that every Atlanta-bound passenger is, in a sense, competing for a seat. "Certainly we want to take people where they want to go at a price we feel is fair. If more of your people are traveling to destinations beyond Atlanta, then -- supply and demand," she said. AIRLINE FARE TICKETS Delta's implied message, Boyd said, is don't fly to Atlanta. Gritta agreed. "Yes, on a really short haul, 200 miles, you might as well drive it." The Democrat's fare survey shows the same driving premium nationwide. All 92 domestic flights that cost more, per mile, than Tallahassee's ATL-TLH ticket are less than 250 miles from their destinations. AIRLINE FARE TICKETS Two-thirds of the routes have no competing carrier. From an airline's perspective, Tallahassee's fares are in line with the national airfare structure, especially for the South, where scores of small and mid-sized communities feed into the Atlanta and Charlotte hubs. Unless a discount carrier comes to town and matches routes with Delta and US Airways, Tallahassee has little leverage to bargain for lower fares, all three analysts said. The city's biggest potential tool, state government travel, at the moment is hamstrung because Florida cannot track the thousands of state workers who fly. Without travel forecasts, or even controls that force workers to follow the contract, Florida was at a loss to negotiate competitive air fares. AIRLINE FARE TICKETS All is not lost, Boyd said. "We worked with one community with one of the nation's largest carriers. We went to them, and I said, 'This fare is not high. I'm going to use the G-word: You're Gouging us!' "They said, 'If we lowered the fare, we would not increase traffic.' "Who cares? You're still gouging us," he replied. "The airline came back by lowering the fare 20 percent." That trick worked briefly for Tallahassee Mayor Scott Maddox, who threatened in 1997 to march into Delta's Atlanta offices with a squadron of local leaders, demanding better fares. Before Maddox & Co. could make the trip, Delta lowered local fares 30 percent. Months later, however, the prices were back up. AIRLINE FARE TICKETS The airline said the better rate had failed to draw more passengers. Maddox came away with his own lesson: "They charge that much because they can.".... Compare airline fare tickets here /cheap airfares home |