channa

1. Bank teller fees did stick in some way in many areas. The aggressive banks that tried to impose a fee for each transaction mostly rescinded them, but many banks now impose limits on free teller transactions (e.g., any more than 3 a month, and you pay). How well this stuck depends on what competition is like in the area. Most airlines don't offer CTO services anymore, so CO has very little competition for CTO services (most airlines no longer offer them at all). I have a feeling this will stick, although they should waive the fee for full-fare tickets.

2. This is called zoned pricing, and it's actually quite common. Supermarkets are very good at it, as are mass retailers. Pricing zones can be as large as an entire metropolitan area, or as small as just a few miles (or even a small suburban pocket that happens to have lots of competition). I can drive to two different Targets from my house (one is 2 miles south, the other is 4 miles north). The one north of my house is less expensive, presumably because it competes with the Kmart across the street. The one south of me has no such competition. Many chain store managers are empowered to alter shelf prices on items that for competitive factors. Not only does this help a store be more competitive, it also reports back to corporate what competitors are charging for the items.

HobokenFlyer

CO has no control over this. Slots at LHR are controlled by the Air Treaty between the UK and USA. Only UA, AA, BA and VS can fly to LHR to and from the USA. That's why DL, US, CO, NW and the rest go to LGW.

Technically, they do fly to Cairns, but it is true; their AU coverage is weak.

Heard of SARS? Demand in the toilet; CX is getting creamed since HKG is their hub. EWR-HKG will return when the SARS fears subside. I don't see the business logic in sending a 777 10% full to an area which the WHO has listed as DNT (do not travel). Also, the risk of exposing your employees.

If there is no demand for a route and it is unprofitable. Again business logic. Having flights to major European and Asian destinations a must; Santiago is WAY down on the marquee destinations, if it is unprofitable.


Basically, a couple of cheap shots. Hey when CO screws up, put the pressure on and call them on it. These examples though are less then sound.

- HobokenFlyer

[This message has been edited by HobokenFlyer (edited 04-28-2003).]

lensman

Please explain the difference between CO's decision to charge for CTO services and these examples of price segmentation.

cardcounter

1) A Complete Failure. Banks still imposing these fees are telling you they don't want retail business, but will do it if you insist.

2) This is an example of a different distribution channel. I don't expect airlines to match taxi cab fares.

3) This example is similar to expecting FC service and perks when buying a coach ticket.

cardcounter

Of course I am all wrong about this. Obviously the management minds at CO know much more about this than little old me, the stupid customer.

What is CO stock trading at today?
Sorry, that can't be management's fault either, must be those stupid customers again.

Analise

I'll pay attention to him. I think he's being very constructive at least on this particular thread. He is showing the absurdity of charging people a fee for buying a company's product. If CTO's cannot make money, close them down. It is idiocy to charge people to buy your product. His taking this argument to other industries highlights why he thinks CO is making a mistake.

RustyC

Definitely a part of the nickel-and-diming trend. Could accelerate the demise of CTOs, which could be part of the intent.

lensman

My point is that many banks tried and some still do impose this fee. Your question was whether management at any other business would be stupid enough to try this stunt. I say: Yes, management in other businesses were stupid enough to try this, but when customers rejected the stunt, they reversed their course. My point is that management or marketing errors of this sort are not limited to the airline industry. It remains to be seen whether management will have to reverse course on the CTO charge.
Many retailers in the categories I mention have the same prices for both distribution channels. Even at the same retailer I mentioned, most prices are the same across distribution channels. In a different store, I can shop at the store, order online to receive online-only prices, but specify in-store pickup to avoid waiting for shipping.

Besides, I would argue that online/phone fulfillment is a different distribution channel from CTO fulfillment. In fact, much more so than airline vs. taxi, which is actually an example of a different product rather than a different distribution channel.
Most restaurants I go to will quote the same prices for carry-out vs. eat-in. The food is the same. I would argue that the product is not sufficiently differentiated to merit price differences.

On the other hand, even if I lose the argument about carry-out vs. eat-in and concede that they are different products, one could argue that most restaurants are giving away first class (eat-in) for the same price as coach (take-out). One might then say that these restaurant managers are as stupid as airline management for not adequately differentiating their fees for different service levels. Thus, restaurant management is also as stupid as airline management. I would still put forward restaurant management as a valid #3 candidate for bad management.

cova

The CO Washington DC City Ticket Office (1725 K St, NW) has been closed (sign on the door). I did not see an announcement and it is not included in the above list. Are more closing as well?

Viajero Joven

The ticket office reps were great to work with. It looked like they hated charging the fee, especially when NW just next to them did not.

Is the NW half of the office still open??

dmunz

I use the CTO in Sugar Land to snag exit row seats months in advance. Its close to my office so I can run over after I've booked a ticket and get moved. And, most importantly, they wave the $10 charge if you're elite.

FWIW

DLM

cova

The NW half of the DC CTO is also closed. Must have just happened, as the furniture, terminals, etc. are still all in place. Note on the door gives the 800 number.

jk12

does this still apply if i booked and ticketed a qf reward, received the paper tickets in the mail, and subsequently received a call that there had been a schedule change and i need to go to a ticket office to get the tickets re-issued? am i supposed to wait in line at the airport to do this instead??

Miggles

These CTO charges are basically adding a change penalty to all the refundable fares out there. I would think that CO would want to encourage people to spring for the famous $1200 EWR-SFO one-way by at least assuring them that it is a fully refundable, penalty-less ticket. If they are so concerned about assessing a CTO use fee, then why not distribute that cost into the fare, say make it $1210 (assuming a worst case of each passenger visiting a CTO once to make a change). It makes sense to assess such fees for low yield, discount fares, but adding the fee to a BF fare runs against the grain of why full fares are even justified to exist.

Also, I like the inverted explanation in the same press release that leases expiring triggered the closing of CTOs! Why not just come out and honestly say they can't afford to operate them???

jpezaris

While living in Pasadena, CA, I was fortunate enough to live a few blocks away from a CO CTO. I started going there to pick up my tickets. Eventually, I got to know the desk clerks well enough that they would provide various incentives for my continued good business -- allowing me to apply coupons when they really shouldn't have, offering coupons, offering better itineraries, informing me when promotions came up by telephone, tracking my trip while I was on it to make sure there weren't problems (which saved my ... in a big way, once), and so forth. They went beyond the call of duty and in return, I did my best to bring them every dollar of revenue I could. They were especially helpful with my international itineraries which often were painfully complex (eg, 11 segments in 3 weeks). I'd have gladly paid a $10 fee then for that level of service.

Then, I moved to Boston, and started frequenting the CTO downtown. While the people were still quite friendly they weren't as motivated for my business, despite my overtures. They even screwed up a couple of tickets badly and failed to take any substantive corrective action. My business, it seemed, was not desired. There is no way I'd pay $10 for that as they were less informed, or motivated, than the phone operators. So, now, I book on line.

The conclusion, why would you want or need a CTO? Not everything is a straightforward ticket and sometimes you actually need to talk to a person. Doing things like that face-to-face where you can build a business relationship is far more pleasant and, in the long-term, productive than over the phone. The airport offices don't have the same small staff, nor the same levels of motivation (at least as the Pasadena CTO). But, this level of customer service is gone, at least from CO.