From Usa Today

[AAquila]

Fliers, beware post-merger promises from airlines When American Airlines announced in 2001 that it would buy St. Louis-based TWA, it touted a range of consumer benefits, from "broader customer choice" to making St. Louis' airport one of the USA's major hubs.
This past Saturday, the promises vanished in a wave of cuts that leave travelers with fewer choices. American slashed flights out of St. Louis by half and ended non-stop service to 27 destinations, ranging from Moline, Ill., to New York's Kennedy Airport.

In the 2½ years since the merger, much has happened that American could not predict. A recession and the Sept. 11, 2001, terror attacks changed air travel forever.

But the moral to the American-TWA saga is straightforward: Beware of airlines promising gifts for consumers as they seek approval for mergers and buyouts. Rafts of rosy rhetoric don't change the fact that when airlines combine, consumers often lose.

American continues to put a bright face on the changes. A press release last July referred obliquely to the drastic cuts by saying St. Louis would be a "smaller hub" catering to people in the area. On the eve of the changes, a spokesman said the airline was "right-sizing" service, not downsizing it. But if St. Louis had excess flights, American gave no hint of the problem when it announced its buyout of ailing TWA.

In fact, the cutbacks have a deeper impact on consumers than American's characterizations suggest. Consider:

•Fewer flights. Since the buyout, American has cut flights out of St. Louis by 59%, from 504 to 209, according to its figures.

•Fewer cities American serves 68 cities from St. Louis, down from TWA's 96. Non-stop service to small cities has been hit. Columbia, Mo., went from five American flights a day to two as of Saturday. Non-stop service to Moline, Ill., is gone; American passengers now must connect through Chicago.

•Fewer seats. Travelers who prefer roomier jetliners are more likely to be booked on smaller planes and pay higher fares. For instance, American will continue to fly six times a day to New York's LaGuardia Airport, but three flights will be on small jets with a third to half as many seats. With less capacity, the airline will have fewer discount tickets to sell, says Tom Parsons, CEO of Bestfares.com, a discount Web site. Overall, flights on large jets out of St. Louis have been cut by 75%.

Schedule cuts and higher fares following mergers are not unusual. In the last great spate of mergers during the 1980s, several proved harmful to consumers. When American and US Airways bought two in-state California airlines, fares quickly shot up. Deals combining Northwest and Republic and US Airways and Piedmont cut the heart out of competition in many markets.

Today, as struggling airlines seek ways to survive, stricter federal scrutiny of proposed mergers or buyouts can better protect against airlines' unrealistic promises that competition won't suffer. Regulators quickly signed off on the American-TWA deal in about three months.

Airlines, for their part, owe passengers more candor. True, the industry could not have foreseen 9/11. But airlines can be more forthright about the many uncertainties at play that could prevent them from fulfilling their optimistic predictions.

The flying public deserves honest information, not sky-high promises.





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[WingNaPrayer]

I disagree. Airlines owe the traveling public nothing regarding explanations about how their business is run. If they owe anyone any kind of explanations, it's the employees and stockholders. As long as how the airline conducts it's business does not fraud any paying customer, then what the airline does is it's own affair. AA is in STL, it's presence has dwindled but what is there is there to conduct business, fly them or not.

It's unfortunate that St. Louis took such a hit but drastic times/drastic measures. I'm surprised they kept it up as long as they did. TWA was a foster child, they move in temporarily, but eventually, the living arrangements are bound to change.

 

[MCI transplant]

Oh how quikly we forget! These same promises were also made to the U.S. Congress to get them to approve this so called purchace!!! :down:

 

[JFK777]

The reason TWA couldn't make any money was it had too much capacity and too many discount seats at STL. Cheaptickets was in business to sell these "discount seats". AA charges what is profitable, if not they don't fly the route, airlines are not utilities with civil servants, they are for profit businesses.

 

[L1011Ret]

Air travelers here swallow hard at ticket prices
By MICHAEL D. SORKIN
Post-Dispatch
11/22/2003

Kevin Kelley used to fly American Airlines round trip from Indianapolis to St. Louis for as little as $99. These days, he says the same walk-up fare on the airline is as high as $650.

Jack Laramie, a Boeing engineer from St. Louis, used to pay $400 to fly American round trip at Christmastime from here to Fort Myers, Fla. This Christmas, he found that the same advance fare was $1,200.

He's flying Delta Airlines instead.

Consumers, travel agents and industry experts say St. Louis travelers are paying more to fly American Airlines - sometimes hundreds of dollars more - since Nov. 1. That's when the company canceled half its flights here, downsized airplanes and eliminated direct flights to more than two dozen cities.

more on Ad ZoneSome of American's cheapest fares from St. Louis to New York, Boston and Washington have increased by $200.

"Get used to it," says fares expert Terry Trippler of [JU]Cheapseats.com. "The glory days of that huge hub in St. Louis are over. You're going to be changing planes more often, have fewer choices and higher fares."

American Airlines spokeswoman Mary Frances Fagan said the airline has "made an adjustment" to its pricing, but that "doesn't necessarily" mean a price increase.

American eliminated its lowest fares to nine of 68 cities where the airline or its regional affiliates have St. Louis connections. The company didn't identify all the cities. The airline says it is trying to make St. Louis flights profitable after years of losing money.

One example: Before Nov. 1, the lowest 14-day advance fare from St. Louis to Boston not requiring a Saturday stay was $260.

Last week, American's lowest comparable fare was $474.

"We didn't raise the fare," Fagan said. "We just took away the lowest fare.

"We made an adjustment to our pricing, I'm not denying that. But it's not a price increase."

Travel agents had speculated that American's cutbacks would make flying out of St. Louis more expensive. But this is the first time that American has acknowledged a change in prices.

While American has not raised its highest priced fares, eliminating its lowest fares has the same effect as a price increase.

Flo Simson of the Travelplex travel agency, with headquarters in St. Louis, says consumers won't see any distinction when they reach for their wallets.

"There's been a tremendous increase in fares to New York, D.C. and Boston," she says. She gave these examples:

Last month, round trip from St. Louis to New York was as low as $288. Today, the lowest comparable fare is $492.50.

Round trip to Washington was as low as $270; today it's $454.

Round trip to Boston was as low as $280; today it's $492.50.

Travel agents say many of American's posted fares are unchanged. But that doesn't mean the fare you pay will be unchanged.

"It means absolutely nothing," Trippler says of posted fares. "People still end up paying more."

Airlines can raise prices, he says, by changing the number of seats available at cheaper fares:

"If you sell shoes, and sell some for $19.99 and some for $29.99, if you run out of $19.99, people are paying more for what's left."

More revealing than posted fares, industry experts say, is the average fare that people have actually paid. That information would aid consumers because there are literally thousands of different fares. Passengers sitting side by side on the same flight can have tickets with prices that vary by hundreds of dollars.

American won't disclose the average fares customers pay on routes. Fagan says that information is "proprietary."

Trend may continue

St. Louis airfares may continue to go up, says airline expert Michael E. Levine of Yale Law School.

"There is a reason why they are doing this," he says of American. "They were losing their (behinds) in St. Louis."

On Nov. 1, American cut its 417 daily St. Louis flights to 95 cities down to 207 daily flights and 68 cities. The airline also has cut costs by eliminating a total of 6,000 St. Louis-area employees.

Today, American offers just one daily nonstop flight in a full-sized jet to New York.

Last week, Carol Weis wanted to make reservations on American Airlines for the first time since July. She was shocked at the prices and says: "I wish some other airline would come to St. Louis."

Weis sorely misses American's flights to London. They were nonstop and cheap at $500 round trip, says Weis, a St. Louis book editor.

"And you felt like St. Louis was an international city," she sighs. Now, she says, she must fly to Chicago or New York to leave the continent.

American's old fares may have been too low for the company, but St. Louisans are used to them.

Weis used to pay $300 for a round trip to New York. The current fares "are completely insane," she says. She was quoted a low fare of $600 to New York - $900 for a nonstop.

Juan Chardiet feels trapped. A patent lawyer in Washington, he racked up 240,000 frequent flier miles in 15 years of flying American, including many flights through St. Louis.

Today, he'd like to jump to another airline but can't without losing those frequent flier miles.

Of American's flight cancellations, he says: "My ability to business travel has been severely restricted."

Last week, Charles Montgomery priced a last-minute round trip to Chicago. American's fare was $250; at the Southwest Airlines counter, the walk-up fare was $80.

"The difference is 6 inches in seat room," he says referring to Southwest's seating. "But I'll grin and bear it instead of flying American."

American "not a villain"

To get the best prices, Kevin Jung of TQ3 Travel Solutions in Kirkwood says it's more important than ever for consumers to plan trips as early as possible; be willing to fly on smaller, regional jets; and combine several business trips into one. He warns that consumers will find this more difficult than ever with fewer flights and early-morning departures.

American's Fagan says St. Louis should consider the airline a white knight, not a villain. "We didn't go in there to rape and pillage - others had already done that to TWA," she says. American bought the bankrupt TWA before downsizing the hub here because American said it, too, was facing possible bankruptcy.

David S. Stempler of the Air Travelers Association in Washington says St. Louis should be thankful American didn't cancel even more flights here.

"The one thing worse than high fares is no service," says [JU]Stempler, who heads the passenger advocate group. "A lot of cities don't have service at all. St. Louis still has a tremendous number of nonstop flights that you have to be thankful for."


Now why did AA wait 2 and 1/2 years to raise prices like this?

 

[flyhigh]

well, they couldn't necessarily raise the prices until now. Now that supply is in line with demand, they can offer less lower priced seats. When supply far exceeded demand, it was adventageous to accept the $99 fare because that passenger was covering variable cost. It was positive to accept it. However, on the other end, by offering those fares you find that people who might pay more will typically get a lower tkt price than they were willing to pay. By cutting supply, they can allocate a more appropriate amount of seats to the individual price points...

 

[MCI transplant]

This price hike will just drive customers to fly Southwest out of STL! And give a.a. the excuss they need to competely shut it down! I can hear it now! "We couldn't make any money out of STL, so we'll have to cut our looses, and pull out!!!" Signed: Just another redheaded stepchild!

 

[MCI transplant]

JFK777---- Boy I'm glad you've got it all figured out! Maybe if we had you runnen things,instead of Compton, we'd still be flying!!!! NOT! Signed, just another redheaded stepchild!!!