Help for Full Fares

Airlines try to end discontent over discounts

During the mad, magnificent peak travel season of '78, commercial flying finally became a mass transit business. Drawn by all the bargain fares, hordes of vacationers--retired couples, hirsute backpackers, whole families loaded down with bikes, fold-up baby strollers and other paraphernalia --swarmed into the nation's airports and almost overnight cured the airlines' lingering problem of too many empty seats. While it was a boon to the industry, whose planes have been setting records in passenger loadings (63% of capacity) and earnings (expected to be about $1 billion this year), the summer of the discounts was also a season of horrendous delays and deep discontent for the carriers' staple customer, the crowd-weary, briefcase-toting business man or woman. As one American Airlines executive described the universal gripe: "They told us that they were disappointed, and that they weren't being treated as well as they should be."

Some airlines are moving to deal with a particular peeve of the full-fare flyer: that once he or she managed to get a reservation and to elbow on board a crowded plane, chances were that the passenger sitting in the next seat and getting the same service had paid only a fraction as much. Indeed, in August, travelers on bargain tickets accounted for precisely 56.3% of the seats sold by the airlines, compared with 44.8% the year before. Trying to appease this irritated full-fare minority, American, Pan Am, TWA and British Airways have announced new sections in coach that are designed especially to assure business travelers that, as an American ad says, "you get what you pay for." Following similar three-class plans put in earlier by Continental Airlines and British Caledonian, these airlines will maintain their existing first-class sections but separate the rest of the cabin into two areas: one for full-fare coach passengers, the other in the rear, for the cut-rate folk.

There will be no dividing bulkhead; the boundary will be movable and marked in much the same way that no-smoking areas are now defined. In the cheaper section, seats will usually all be filled, drink and food service will be last and the menu may be more limited. Whatever empty seats there are will all be in the full-fare section so that passengers there can spread out their possessions or stretch out for a nap. On transatlantic flights full-fare passengers will also get an unlimited number of free drinks, as well as free movie headsets. Other airlines are courting these bread-and-butter customers in different ways. Some are trying to attract more of them into first class by cutting the cost of those fares by nearly 8%, making first class only 20% more expensive than coach as of mid-November.

Beyond these developments, travelers will also be noticing other changes introduced as a result of this summer's experiences:

SWIFTER RESERVATIONS. Too many travelers still encounter long delays in reaching reservations clerks by phone --partly because the clerks are tied up explaining the complicated new fares to other callers--and so more clerks are being added. United claims that all its calls now get answered within 20 seconds.

EASIER CHECK-INS. To cut the lines at the check-in counters, American and TWA are issuing advance boarding passes for return flights. These allow a traveler who has only carry-on luggage to go directly to the boarding gate to catch a flight home.

LESS CROWDED AIRPORTS. The Civil Aeronautics Board is trying to persuade the airlines to route more flights through smaller, "satellite" fields that are at present underused. Greater use is already being made of Oakland airport outside San Francisco and Hollywood-Burbank in Los Angeles. At the main airports, lines increasingly are busing passengers to and from their planes when space at the regular gates is tight. Expanding airport facilities can be difficult, and not only because of the costs. At Los Angeles International Airport construction of a new terminal to handle foreign flights has been long delayed pending preparation of an environmental impact statement. Result: Los Angeles remains the top U.S. horror for international travelers. This summer, arriving passengers routinely had to wait aboard their planes for up to three hours before they were even allowed into the crowded and understaffed customs area.

SIMPLER FARES. The present profusion, and confusion, of fares--some airlines offer as many as 90--will be sharply reduced. Says Eastern Air Lines Marketing Vice President Russell Ray:

"The Hydra-headed monster will disappear. The varieties will be fewer and easier to understand." Not all bargain plans will be eliminated, but several have already been allowed to expire quietly, and some airlines would be happy with just a three-class plan of simple, straight first-class, coach and economy fares.

The lines do not want to streamline fares just for the sake of convenience. Overall, the cheaper fares have cut average ticket prices about 5% this year, while operating costs are rising 13% or 14% annually. The airlines' overall profit margin is still only 4.3%, which is well below the 5.3% average for all U.S. industry. They must earn at least as much next year as they will in 1978 in order to finance the new planes that they will need in the 1980s. Increasing fares, the most obvious answer, could prove politically difficult. So, to hold their 1979 earnings up, the airlines must attract as many as 30 million new passengers next year, on top of the 280 million (a 40 million annual gain) they are expected to carry in 1978. Thus the lines have a problem: while they must avoid further strains on their hard-pressed facilities, they must also continue to lure new customers.

The airlines' Washington overseers are persuaded that for all the grumbling about crowded airports and planes, the industry can handle more traffic. And some CAB officials talk as if discovering how much inconvenience passengers are willing to stand is what deregulation is all about. Says Michael Levine, the CAB'S director of prices: "The airlines are now free to find out what people want. The bottom range of air travel has not yet been explored." To which one airline executive replies: "There are only so many ways you can pack sardines."

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