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View Full Version : Reservations U.S. Air price gouging in Storm Debbie


CTgal
Jun 27, 2012, 1:03 PM
On May 30 I bought a round-trip ticket on U.S. Air for $441, about $220 each way. The return flight was scheduled for Tuesday, June 26. By Monday night it was clear that there was no way to get to the airport in Tallahassee - all roads were closed or impassable due to flooding. When I tried to change the flight I was charged an additional $424: $150 for the "change fee", $249 for the difference in airfare, and $25 for not making the change on-line, even though the website would not allow me to do this because we had checked in earlier in the day.

A service that cost $220 on May 30 now cost $644, for exactly the same flight, just two days later. Here is what they told me: U.S. Airways did not issue a travel advisory, therefore no adjustments for weather. Well guess what. The problem wasn't in the air, it was on the ground.

Matt_FLL
Jun 27, 2012, 3:41 PM
I feel badly reading your story. I have gone through this before. On a personal level, I wish that you never went through this unfair ordeal as this was beyond your control. I am no fan of airlines. Regardless, I have a strong opinion about last-minute ticket pricing. I am eager to hear what you and others have to say about this so please reply with your feedback on my opinion.

We know that airlines are dogs. The nonsensical price increase that you experienced is driven by complex algorithms. Their goal is to fill every seat for as much money as possible. They suck. However, I can tell you one thing for sure: your ticket would not have been $644 if someone else wasn’t able and willing to pay that much for that seat.

The price was calculated by the science of revenue management which includes some very precise predictive modeling. Airlines do this only to make money. But there is value to society (stick with me here). They should have waived the charges. That is, unless we knew everything else going on in the world at that moment.

Let’s say that there is only one seat left on a plane.
John wants to visit his friend this weekend.
Mary’s mother lives across the country. She’s been struck by a vehicle and has one day to live.

Who should get that seat? First come, first serve doesn’t seem very fair. Mary had no idea that her mother would get struck by a vehicle. On the flip side, an ebay-type auction amongst passengers would be extreme. The only thing I see fit here is predictive modeling by the airline. Rather capitalistic, but, science can predict that SOMEONE would be willing to pay $644 for that seat. Many people may look at the price and walk away. Trust me, the airlines wouldn’t invest so much in the system if they weren’t getting a return on investment. If computer models can predict how much the seat will sell for, certainly Mary would be willing to pay $644 for the ticket today to spend those precious last moments with her mother. An expensive ticket is better than no ticket, right? One price really doesn’t fit all.

I believe that airfare is a more humane and natural way to decide who gets a limited resource. Again, when I get hit with change fees for a situation like this, I feel just as outraged. However, I do believe that it’s better for society until everyone has a private jet.

Thoughts?

CTgal
Jun 27, 2012, 8:32 PM
The short answer to your question is this: Mary should not have to pay $644 for a $220 seat on the plane in order to get to her dying mother. Nor should anyone.

This assumes that the $220 the seat sold for a month ago actually covers the cost and provides a little profit for the airline. I suspect this is not the case, otherwise the airlines would not have invested so much in the algorithms to predict highest prices and taken the risk of customer outrage.

What they have done is to exploit people in dire circumstances and force them to subsidize people who are not in dire circumstances -- or, who just don't give a fig if they are paying three times as much as the guy in the seat next to them.

The ebay comparison is not quite apt. Mary's mother isn't going to die without a final farewell if Mary loses the bid on the toaster. The difference is that Mary has a lot of choice on ebay and practically none when she needs to get to her mother.

If the airlines can't cover their costs and make a small profit by selling seats for $220 they shouldn't sell them for $220. Exploiting those who are in dire circumstances may be good for the bottom line, but I don't think it is good for society. A better way is to sell the original ticket for $280, say, or even $300. Spread the burden for profitability around among all the passengers instead of forcing it on the few who are caught in circumstances beyond their control.

Matt_FLL
Jun 28, 2012, 1:56 PM
You absolutely have some very valid and interesting points.

It’s no secret that airlines hardly make any money at all. What a horrific industry from a business perspective. As you pointed out, airlines sell cheap (non-profitable) seats and subsidize them by charging more to those who are able and willing to pay (primarily business travelers).

So the idea is that the college student can still afford the $150 ticket to visit his parents, and he’s sitting right next to the business woman who paid $500.

The issue that you are raising is very valid. How do they put fences around each customer? That is, how do you identify the college student versus the business traveler? The airline would primarily give two answers: (1) Advanced Purchase, and (2) Restrictions.

The college student is able to book far in advance and put up with restrictions (primarily a hefty fee for itinerary changes). So they create a low-fare “product” for him. The busy business woman is willing to pay more to book her flights at the last minute and have a completely refundable and changeable “product”. Yet they sit right next to each other and may even change seats. It’s wild.

The issue is the third person like you. You are the victim here. You cannot get to the airport because of flooding. It’s completely out of your control. And now you’re being labeled as the person who can throw down $600+ for a flexible ticket. Totally not fair. The answer in your case was that the airline should have given a fee waiver/travel advisory. They are downright wrong for not doing that.

CTgal
Jun 28, 2012, 2:28 PM
Thanks Matt. I hope the vultures at U.S. Airways read these posts.

Gromit801
Jun 28, 2012, 3:42 PM
There are no "complex algorithms" involved at all. The fewer seats available on the given flight, the more expensive they become. It's called supply and demand, the basic premise of how this country works. The OP wanted to change a flight at the last minute, the available seats now cost more because there are fewer of them. It's the same regardless of the circumstances for every airline on the planet.

AirlineSympathizer
Jun 28, 2012, 4:13 PM
There are no "complex algorithms" involved at all. The fewer seats available on the given flight, the more expensive they become. It's called supply and demand, the basic premise of how this country works. The OP wanted to change a flight at the last minute, the available seats now cost more because there are fewer of them. It's the same regardless of the circumstances for every airline on the planet.

Gromit,

There actually are a set of very complex algorithms which require a number of university level courses to study. This is referred to as yield management. Based on destination, historical numbers, time of year, day of week, etc, the airline will adjust up and down the price of tickets without much regard to how many seats may be left. Occasionally last minute tickets are cheaper, sometimes they are extremely expensive.