British Airways
American Airlines has been trying to cut booking costs by fighting to reduce the power of the Global Distribution Systems (GDS) — and the high fees they charge. However, its own ticketing process remains surprisingly outdated for one of the world’s largest carriers, and far from being cost-efficient.
It wouldn’t be difficult for American to save millions of dollars a year. All it needs to do is implement instant ticketing, which most other major airlines have had for years. The carrier says it plans to introduce instant ticketing on its website later this year, but it has no intention to allow phone reservation agents to issue tickets at this time.
“Several technology improvement processes are currently underway, which will ultimately allow instant ticketing for various functions. It won’t happen all at once, but will phase in during the second half of this year, with everything completed by the end of the year under the present schedule,” American spokesman Tim Smith said in an e-mail message.
“For now, our reservations group and its agents will continue to use their existing ticketing system,” he added. “They will, of course, monitor the situation once it’s up and running on AA.com to determine whether any changes are needed with the reservations ticketing model.”
Currently, when you purchase a ticket on AA.com or by phone, your reservation is queued up for ticketing by a dedicated department, which is the only one authorized to process credit cards. If your card is rejected, an employee is supposed to call you and let you know.
That happened to me last month — sort of. I bought a ticket on a Friday on AA.com for travel on the following Tuesday, which should have given it priority in the pipeline before reservations for later dates. But six hours later, the ticket wasn’t issued. I called American and was told there was a problem with the credit card. How was I supposed to know that? No one called or e-mailed to tell me. After I gave the agent a new credit card, it took another eight hours for the ticket to be issued.
In contrast, when you buy a ticket from other major airlines, including United, Emirates and British Airways, you get a ticket number right on the spot — both from phone agents and on their websites. If your credit card doesn’t go through, you are told immediately, so you can react. Just yesterday, I issued a ticket on the Emirates website — it took about 10 seconds.
Imagine how much money American would save if it eliminated the middleman — the so-called ticketing department — in every single purchase. Of course, every airline needs and has a ticketing department. But all those other carriers use it only in special cases, mostly when manual ticketing is required as a result of changing an existing ticket or when the computer fails to price out a ticket automatically.
There is actually another middleman when issuing American award tickets. After you make a purchase online or with an agent, it’s queued up first to the AAdvantage Customer Service. Why? Because that department deducts the miles from your account and verifies that your award complies with routing and other rules. Apparently, American has no trust in its dedicated AAdvantage agents or its automated computer system. Only after that is the reservation queued up to the ticketing department.
Last week, it took American four days to issue an award ticket. I was told that the AAdvantage Customer Service is closed on weekends. About the same time, I got a United award ticket — it took the United agent about five seconds to issue it.
Part of me is glad that many people have jobs, but the other part wonders why American is wasting so much money on creating work for two or three people when those functions can be easily accomplished by one employee.
“Any additional costs associated with our current system is offset by a different aspect of cost-savings for both the airline, the card issuer, and the cardholders,” said Smith, the spokesman. “The current process allows us to do additional card verification and transaction analysis that benefits all parties and help keep costs down. Simply put, less cost from fraud.”
Obviously, fraud is a major issue, but other airlines and companies have found more efficient ways to deal with it. Apparently, American recognizes that, too, since it plans to implement instant ticketing on its website.
Why does it matter when a ticket is issued? I’m told the American system is programmed to hold a reservation for seven days before it gets canceled, which is plenty of time. But what if a booking falls through the cracks, especially if there is a credit-card problem? In addition, if the itinerary includes flights on partner-carriers, those airlines may cancel their seats if they don’t get a ticket number from American by a certain deadline.
One huge advantage of AA.com is that it allows customers to hold a reservation for 24 hours for free before buying it. United’s decision last year to remove that option from its site has caused immense inconvenience to numerous customers. Most airlines, of course, don’t provide a “hold” option online, while others charge a fee for it. Sure, many carriers permit free refunds within 24 hours of ticketing, but that’s not the same thing.
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This should not be news, but it is: U.S. airlines have finally begun advertising some airfares properly, meaning they now show round-trip prices instead of the longtime marketing ploy of “each way based on a required round-trip purchase.” But those are just baby steps, as some taxes and fees are still being excluded.
When I wrote about false fare advertising in 2008, my copy editor at the Washington Times put this headline on my column: “Fare sales often lost in translation.” I compared the deliberately misleading airline practice to the mysterious “Twin Peaks” revelation “The owls are not what they seem.” I also wondered, If a round trip is required, why on earth is only half of the actual fare being advertised?
This month, United Airlines became the first major U.S. carrier to change its policy and advertise predominantly round-trip fares on its website — the only exceptions seem to be last-minute weekend specials. The airline is currently promoting five domestic and four international sales on its site, and they all include round-trip prices and fuel (YQ) surcharges — though some taxes and fees are excluded.
For example, a Business Class fare for a round trip from Los Angeles to Shanghai is shown as $3,513, while the total final price as of today is $3,572, if booked on nonstop flights. A round-trip Business Class fare from Washington to Rome is displayed as $2,411, and the final price is $2,460, if purchased today on nonstop flights. As you see, the differences are not that big.
All other carriers should follow suit. Continental and US Airways display some fares as round trips, but most of their advertising is still being done the old-fashioned way, as is American’s and Delta’s. Southwest, Alaska Airlines and Virgin America show one-way fares but don’t require round-trip purchases.
Although the Department of Transportation has looked into the issue and called on the industry not to deliberately mislead consumers, it has done nothing to stop the controversial practice. The European Union (EU), on the other hand, has been much more proactive on behalf of travelers. That’s why fares in Europe are advertised with the full ticket price.
Some of the European carriers that fly to the United States, such as Spain’s Iberia, are honoring the EU rules globally and displaying actual full prices on their U.S. websites as well. But others, such as British Airways, Air France and Lufthansa, while observing the rules on their home turf, have given in to the pressure from their U.S. competitors and adopted the “one-way based on a round-trip purchase” policy.
In January, all four above-mentioned European airlines offered the same fares from New York to London. The last three advertised $199, while Iberia showed $584, which is what the actual fare was, including all taxes and surcharges. Singapore Airlines, also having the guts to be honest with its customers, promoted a $586 fare from New York to Frankfurt that was truly the final price.
It’s high time the airline mentality of trying to trick customers changed once and for all.
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Continue reading about Proper airfare advertising comes to U.S.
Should the new United Airlines have international first class, like the old United, or not, like the old Continental Airlines? Most frequent fliers expect a decision in favor of one of the two models, but why not go with a mixed model? Why not keep first class on routes where it makes business sense, and fly two-cabin planes where it doesn’t?
Since the two carriers’ merger was announced in May, there have been many opinions in online travel forums advocating just coach and business class, but it’s hard to see the world’s largest airline without long-haul first class at all. Continental may call its premium cabin BusinessFirst, but it’s business class.
In addition, United has already installed new first- and business class seats on more than half of its wide-body fleet, and it makes little sense to now remove first class and expand business class.
Regardless of the mechanics, there are routes that can sustain first class and actually make money, especially now that business travel has recovered from the slump during the global recession. Wouldn’t it be a luxury for United to pick and choose the routes on which it operates three-cabin planes and even change them seasonally?
Many foreign airlines have flown both two- and three-cabin aircraft on long-haul international routes for years, including United partners in the global Star Alliance, such as Lufthansa, Thai Airways and Asiana Airlines. In fact, Asiana currently flies one two-cabin and one three-cabin plane daily between Seoul and Los Angeles. In the Oneworld alliance, British Airways, Cathay Pacific and Qantas use a mixed model.
If you look at the loads in both first and business class on all those carriers, you will discover that they are selling extremely well — many flights in the next few weeks are actually sold out. As I reported last year, the recession forced some airlines to cut back on first-class service temporarily, but things now are very different.
So let’s not count United’s first class out quite yet.
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Global airline alliances are a relatively new concept, and the three existing ones have naturally had to create their own rules. This week’s Mexicana Airlines decision to suspend ticket sales raised serious questions about Oneworld rules and requirements.
Why did the alliance insist publicly that all was fine at Mexicana just a day before the announcement? Did the carrier fail to give Oneworld a proper warning?
On Tuesday, Mexicana filed for insolvency proceedings in Mexico and bankruptcy protection in the United States. That same day, Oneworld spokesman Michael Blunt issued a press release, assuring travelers that the Mexicana’s position in the alliance was “unaffected” by the developments.
“Mexicana has stressed that it will continue to operate normally, in line with Mexican legislation covering such restructurings. Its schedule is being maintained — though with some network and frequency changes — and it continues to take bookings and offer its full range of services. So the airline continues to offer full Oneworld services and benefits, and tickets for flights on Mexicana and its frequent-flier arrangements are unaffected,” Blunt said.
That statement reminded me of the Star Alliance’s expression of support for United Airlines when it filed for Chapter 11 bankruptcy protection in 2002. But as it turned out, things with Mexicana were very different.
Late Wednesday, Mexicana stopped selling tickets. In a new press release, Oneworld called it a “temporary suspension,” adding that, “during this time, Mexicana will continue to operate most of its previously scheduled international flights as normal, but further bookings will not be accepted.”
The logical question is, How long can the airline continue to operate flights for which it accepts no bookings? More importantly, was Oneworld blindsided by the sales suspension or did it mislead customers in its first statement? Did Mexicana bother to tell the alliance what was coming up? Was it even required to do so by Oneworld rules?
Blunt didn’t respond to an e-mail I sent him yesterday with those questions.
Mexicana is Oneworld’s 11th and newest member, having joined in November 2009. Among the alliance’s other members are American Airlines, British Airways, Cathay Pacific and Qantas Airways. Mexicana was part of the Star Alliance from 2000 until 2004. Interestingly, Star’s CEO, Jaan Albrecht, is a former Mexicana pilot.
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British Prime Minister David Cameron surprised many this week by traveling to Washington for his first official White House visit since taking office on a commercial British Airways flight, instead of taking a dedicated plane, to save money. Now some Americans are wondering if U.S. officials could follow suit.
Having traveled around the world with four U.S. secretaries of state — Hillary Clinton, Condoleezza Rice, Colin Powell and Madeleine Albright — over the last decade, I can see how commercial flying would save the State Department millions of dollars a year. However, it would also guarantee a logistical nightmare.
Most people don’t know that Clinton has been taking commercial flights since she became secretary of state, but that happens only when she goes home to New York from DC. Work-related flights to New York are flown on small Air Force planes.
On foreign trips, the security detail and the staff accompanying the secretary make for a large entourage that would be hard to accommodate on one commercial aircraft in business or first class. Knowing the security requirements, I’m guessing regular passengers would be required to board two hours before takeoff.
More importantly, the secretary often visits more than one country in one day, so trying to accomplish that commercially is practically impossible. Not to mention that nonstop flights don’t exist to many destinations most of the time.
Last year, I wrote two columns detailing Clinton’s first trip as America’s chief diplomat.
Rice used to take a smaller plane than the C-32 — the Air Force version of the Boeing 757 — on quite a few trips. That required most of the staff and press corps to fly commercially, which was fine with me, since I flew much more comfortably and got tons of frequent-flier miles.
Apparently, Cameron didn’t have the limitations mentioned above, and there are plenty of nonstop stop between London and DC. It’s impressive, though, that he flew in business class — not first — and his meetings in DC were arranged around the British Airways schedule, according to the British press. His two immediate predecessors, Gordon Brown and Tony Blair, also flew on a BA plane, but it was chartered and dedicated to them.
Speaking of the State Department and saving money on travel, I’ve witnessed excessive spending of taxpayers dollars for years, but that’s a topic for another column.
Continue reading about British leader flies to DC commercially
