When Christopher Witkowski was arranging a business trip to Denver one evening last month, he got on the phone to one of the many airlines now offering tantalizingly discounted fares. But Witkowski, director of the Aviation Consumer Action Project, a watchdog group, came away empty-handed. Despite phoning the airline’s toll-free lines a dozen times between 8:30 p.m. and 1 a.m., he says he got an endless success of busy signals. “If I hadn’t had a redial button, I wouldn’t have tried so long,” Witkowski says.
To Witkowski, the scene is all too common–and it is emblematic of an industry at the point of desperation. Strapped by the recession and the aftermath of the wartime travel bust, the major airlines are waging a feverish effort to get customers flying again. At the same time, staff reductions have left many hard pressed to accommodate the new business they’re attracting. In the face of dwindling revenues, some carriers have been forced to take drastic action. Last week representatives of billionaire investor Kirk Kerkorian and union leaders from Trans World Airlines agreed on a possible offer to buy the airline. Meanwhile, financially strapped Midway Airlines filed for protection from its creditors under Chapter 11 of federal bankruptcy laws, joining Continental and Pan Am in bankruptcy court. Analysts say that other airlines may meet the same fate if they don’t find ways to boost passenger demand. Says William Jackman, a spokesman for the Air Transport Association: “There are a lot of empty seats that airlines need to put rear ends in.”
With that in mind, the major carriers have waged a full-scale campaign to slash fares just enough to keep aloft. American Airlines triggered the war three weeks ago by announcing it would sharply cut selected spring and summer fares for those buying tickets by April 8. American’s largest competitors quickly matched the offer. Certain round-trip flights between New York and Los Angeles went on sale for $318, down from $504. Discount tickets for the airline’s Dallas-to-Miami route are $238, down from $405. While many consumers complain that there are not enough discounted seats, airline representatives say it only seems that way because popular times and flights sell out first. American spokesman Tim Smith says 2.5 million–or approximately 65 percent–of the seats the carrier has sold since March 13 have been booked at discount rates.
What will happen to air fares after the current promotions end? Some analysts believe that amid the cost-cutting frenzy, American is subtly trying to raise the price travelers pay to fly. Beginning April 9, the airline is revising its fare schedule, increasing the price for seven-day and 14-day advance tickets, while offering the cheapest tickets to those who can plan trips 30 days in advance. Other major carriers appear poised to follow suit. If the restructuring works, it could help bail the troubled airline industry out of its current slump. But for millions of last-minute travelers, it may mean just another round of irritation.
