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Ethics and the $20 BA fare.

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Ethics and the $20 BA fare.

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Old Dec 3, 2002 | 9:50 am
  #16  
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I would feel less guilty about taking a $20 airfare than I would about, say, the $0 free nights at Hiltons. To me, ethics has little to do with it. My reasoning is based on my relationships with hotels vs. my relationships with airlines. (To some of you, this is completely illogical and I realize that. I don't claim to be a saint.)

With hotels, I feel like they usually treat me like a human being. Of course we all have a story about a BAD hotel or unscrupulous price-gouging at a particular property, but 9 times out of 10, I feel like I get a fair room rate, nice treatment at the hotel, and a staff that tries to help out if there's a problem with my room, a billing problem, etc. (I'm not even talking about upgrades, the points programs, etc.) Therefore, I would feel guilty effectively stealing a room from a hotel I like simply because they made a goof.

With airlines, there is a distinct ME versus THEM relationship. They are trying to jam me up whenever possible, and if I can jam 'em back once in a while, that's great. They change the terms of their FF programs AFTER I've earned the miles. They change the terms of their fares and are constantly trying to make it more and more difficult for me to travel. They demand ultimate flexibility on YOUR part during irregular operations, but they have ZERO flexibility on their part if your travel plans change. They wouldn't HESITATE to sell me a $5000 ticket to Europe, so why should I hesitate to take a $20 ticket?
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Old Dec 3, 2002 | 10:25 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Mook: Interesting post. I have read somewhere that the airlines thought they could save on their distribution costs by moving onto the internet. What they did not anticipate was by doing so, they gave up their pricing power. The loss to their pricing power is going to cost them more than their savings in distribution costs.</font>
It's true, and sadly representative of the lack of foresight on the part of airline executives.

When they threw their lot in with consolidators like Expedia (and even helped found one, Orbitz) which default to strict low-to-high price order when sorting fares, what did they expect would happen?! Did they think they were somehow immune to the pricing pressure that greater buyer visibility inevitably brings?

What I find interesting is that Southwest has not joined up with any of these engines, preferring to book tickets via the phone and their own web site. And, in many cases (far more than the typical person realizes), their fares on given routes are actually higher than those of the majors, or at least no more than, say, 10% lower.

Yet a huge swath of the flying public never ventures further than southwest.com to book leisure fares, figuring that they must be the lowest-cost alternative! They limit buyer visibility which, combined with good marketing acumen, allows them to charge more. Southwest, as is typical, has taken what has become a negative for the industry and made it into a positive through shrewd business decisions and long-term focus.

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Old Dec 3, 2002 | 10:38 am
  #18  
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Interesting hypothetical scenario would be that if travel agents were the only distribution channel and they were paid a percentage of the base fare, then they would not necessarily push/exploit the unimaginably cheap fare.... or maybe they would exploit it more effectively and just call up all their favorite customers and others and say for a $20 fare + taxes and a $25 service charge, you can go to europe... all for less than $150 all inclusive.
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Old Dec 3, 2002 | 10:45 am
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by GUWonder:
Interesting hypothetical scenario would be that if travel agents were the only distribution channel and they were paid a percentage of the base fare, then they would not necessarily push/exploit the unimaginably cheap fare.... </font>
More to the point, airlines and travel agents once enjoyed a symbiotic relationship. What benefitted one benefitted both. Besides the obvious (commissions), agents referred friends and clients to airlines they preferred, and even received year-end bonuses from airlines based on booking levels and the like.

Had this fare been posted on Worldspan or Amadeus 15 years ago, I daresay BA's corporate HQ would have been deluged with phone calls from TA's pointing out the error within the first few minutes of its posting. In the interim, how many people would have successfully booked such a fare? Maybe a handful. As you mentioned, the agents would likely have had little interest in doing all that work for so little commission.

Well, the airlines don't want the TA's anymore ... now they're marketing fares to the public, who have absolutely no vested interest in the airlines' well being. So things like this will happen, and will be exploited to the fullest extent possible.

The phrase cutting off one's nose to spite one's face jumps to mind.

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Old Dec 4, 2002 | 9:47 am
  #20  
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Old Dec 4, 2002 | 10:04 am
  #21  
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by GUWonder:
Interesting hypothetical scenario would be that if travel agents were the only distribution channel and they were paid a percentage of the base fare, then they would not necessarily push/exploit the unimaginably cheap fare...</font>
This is the "good old days" of travel agents. When I first started traveling for business in 1995 or so, I booked all travel through a human travel agent. I just took what he/she gave me in terms of airfare.

However, about six months after I'd been doing this, I found the area on AOL where I could log into Saabre and look at airfares. I suddenly noticed that I wasn't getting the lowest fares, even though I was asking for them. The reason: at the time, the travel agents took a percentage juice on each ticket.

After learning how to look at Saabre, I would always do my research before calling the travel agent. He/she'd say "ORD-DCA...best I can do there is $450. You're traveling on such busy days!" and I'd read back flight numbers, fare codes, etc. and they'd say "Oh...didn't see that one...that'll be $175."

The Internet isn't perfect, but it's a huge step forward when it comes to travel planning.
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Old Dec 4, 2002 | 10:25 am
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Pinniped: You had a bad travel agent who did not offer you the lowest fares.

The airlines would not be loosing as much money today if they had not abandoned the travel agent distribution channel. By courting the internet, they have shot the hand that fed them.
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Old Dec 4, 2002 | 10:28 am
  #23  
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Mook:
now they're marketing fares to the public, who have absolutely no vested interest in the airlines' well being.</font>
I see your point regarding the different relationships that we have vs. that which TA's had, but most of us *do* have a vested interest in the airlines' well being for a bunch of reasons:

- Even if you don't consciously own the airlines, you probably do if you hold mutual funds or spiders. All of the biggies are on the S&P, so it's hard to avoid owning them in one way or another. Granted, there are other monkeys on the S&P's back, but even in a very diluted way: I hope the airlines become profitable again.

- We all like to travel, and we don't want to do it by bus.

- Airlines are big employers in a lot of cities, so we all stand to benefit if airline travel regains strength as a whole. If your city is a hub city, then a big part of your city's economy is tied to the airline. Even if you've never flown a mile in your life and you only invest in Vancouver pennystox, you have a vested interest in the success of your hometown airline.
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Old Dec 4, 2002 | 1:05 pm
  #24  
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What ethics?

BA was made aware of the error and they decided to honor it. They didn't have to, but they did.

That pretty much lets everyone "off the hook" ethics-wise, IMHO.

Whether a fare is an error or not, I perfer to "shoot first, ask questions later." They are calling the shots in the end, not me. If they don't want to honor it, so be it. And if I had a "feeling" the fare might have been in error to begin with (which historically is usually mentioned straight away in these FlyerTalk threads), I can live with their decision (as long as they give me all my money back).

But if I had a really resonable expectation of it being a legitimate offering, I might resist their attempt to not honor the thing. Case in point:

MX recently had what turned out to be an error fare of $128 to Puerto Vallarta, Mexico. I regularly fly this route for around $225. So when a friend (not a FlyerTalker) who I share a condo with down there called to tell me about the $128 fare, I really didn't think it was an error. I just assumed it was some really good promotion or deal.

And because of that, if they had not honored the fare (they did, BTW), I might have put up a bit of a stink.

In this day and age with Spirit Airlines giving away seats for free, and other airlines having special $1 fares as part of promotions and such...if a web site gives me some incredible fare, I'll generally grab it and ask questions later. Example from just today:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Cologne/Bonn Christmas surprise from Germanwings: the first low-cost German airline is filing its Christmas sack with 50,000 tickets all costing one euro. This coming Friday, December 6th 2002, anyone can use the website of Germanwings, www.germanwings.com, to book a Christmas present for the symbolic price of one euro. "The Christmas campaign is a thank-you to our customers ", said Germanwings MD Dr.Joachim Klein.</font>
There may be many unsuspecting visitors to that web site that are in for a nice surprise. Will they think it's a legitimate offering or an error fare?

Therefore, it doesn't become an ethical question for me unless they announce it was an error and decide not to honor it.

[This message has been edited by PremEx (edited 12-04-2002).]
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Old Dec 4, 2002 | 3:31 pm
  #25  
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May I offer a perspective on the British business "ethics" side of this; maybe relevant as it involves BA.

If we make any commercial commitment it's our responsibility to get it right because we are going to have to stick to it. "Commitment" by the way can involve just a handshake or a verbal quote (US business people I meet find this astounding). You as the company representative said it, your company is expected to honour it (possibly the origin of the word honour in this context). What your employer may then do to you if you screw up like this is, of course, up to them!

We come across this periodically ourselves in contracts, with wrong rates quoted, items missed out of the arithmetic, etc. Tough. We have to do it. Best approach is to tell the customer there was an error BUT you will of course honour it (you have to get this out in one sentence without any hesitation between the two parts!); they tell you of course, and both sides have full respect for each other. They may even feed you some extra business later to show they recognise you are a good person to deal with.

What is considered unethical over here is for a company to make a commitment and then try and worm out of it on a technicality. Just not acceptable. Someone at BA will be having a little meeting with Rod Eddington, the BA Chief Executive, I am sure. An interesting meeting. I doubt the executive floor cocktail cabinet will be opened for them.
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