[norealdeal]

I am seriously thinking that airline companies and travel agencies/webservices in the USA practice collusion (price fixing). There are no price differences whether you check at Travelocity, hotwire, cheaptickets etc. etc. They normally run within $20 of each other. The same applies for hotel/flight combos, there may be a $50 difference but that's about it. I am from Holland and when I check my separate travel sites there, there are real deals with sometimes hundreds of $ differences between agencies/websites. Here in the USA I can never seem to get a real good deal, it makes no difference which site you use. In Europe there's an avid watch from the government for this type of collusion and businesses that are caught get fined huge (millions). What's your thinking on this?

[aviator54]

I would agree with you. I have traveled quit frequently and have noticed the prices are pretty much the same. But, being a member of the travel industry, specificly, being employed by the airlines for many years, I do know they watch the competition closely and they will match prices whenever they can, to a limit.

What really bothers me about the price of travel is the airlines increase the fares dramaticly during the holidays. The same ticket I purchased last week for the same route is triple or more during the holiday seasons. The fees they charge for misc services is getting to the point of being outrageous. One airline will not allow you to pick your seats when you make the reservation and when you are within 24 hours of departure and can check in, they have assigned a seat for you, most likely the middle seat. If you attempt to change it, the only option is an "upgrade" to a more roomier seat, but with fees. Another airline says the flights are booked and the only flights available have a lengthy in-between flight delay, in this case, 10 hours. The reservation as discounted, somewhat. But when checking online for full fare flights, I find there are plenty of seats on the earlier flights. When I question the airlines, I'm told I can change my reservation but there is a change fee of $150 plus the price difference of the ticket at the non-discounted last minute fare. My ticket would have cost me triple what I originally paid for it. And then there are approx 25% in fees and taxes added on.

The airlines have become very user unfriendly and I'm considering Greyhound from now on....just have to plan on the extra time.....

[jimworcs]

The reason is that in reality there is no market operating. The airlines have developed instead a series of hubs which dominate local markets and they create an illusion of competition. They are in fact a series of monopolies... AA dominate Dallas, Miami, Delta dominate Atlanta, United/Continental at Newark, etc. The next big scandal is the airlines abusive practices to force passengers to purchase the "extras". There are examples on this forum for example of airlines refusing to seat young children (as young as 2) next to their parent, unless the parents pay the fee to select their seat. This is exposing children to potential risk of abuse, and is a clear safety threat.

The tactic of having ridiculous "layovers" arriving in the morning and being booked on the last flight out is another scam designed to force passengers to purchase additional "services". The lack of regulation and oversight by the DOT is scandalous and re-regulation long overdue.

[BKK_FLYER]

Hi,

As to the notion that it's collusion, I think is just not true.. For the most part collusion requires two or more parties agreeing in advance to take or not to take some specified action that results in the limiting of competition..

IF the airlines are in fact doing this, then it should be prosecuted accordingly.

What is NOT illegal is for airline A to 'see' by way of the GDS's availability or the like that airline B has raised their fares on the DEF->GHI market, and for airline A to then also increased their price on that same market by the same amount, to remain in lock-step with their competition. SO LONG AS it wasn't something that was discussed in advance or planned between the two parties.

To me this is no different than the gas station at the SW corner of the street raising their price by $0.01 and the same day the station on the NE corner of the same block raising their prices by $0.01 as well.. So long as it wasn't a planned or discussed move, I see no collusion element there.

[jimworcs]

The reality is that the market is not operating normally in air services in the US. It will not do so without radical reform.

I suggest

1. No airline to have more that 25% of the take off/landing slots at any airport
2. Allow foreign owners to enter the market, on a bilateral basis
3. Establish minimum standards for protection of passengers
4. Remove the "get of jail free" card provided by allowing airlines to avoid helping people for a "weather" delay
5. If an airline goes bankrupt, the administrator should auction off their assets and slots to the highest bidder, subject to the restrictions outlined above on maximum slots per airport

[BKK_FLYER]

Hi,

1. No airline to have more that 25% of the take off/landing slots at any airport .. I'd have no objections here..

2. Allow foreign owners to enter the market, on a bilateral basis.. Unfortunately this also says that foreign governments allow so-called 9th freedom rights.. unlikely in most parts of the world were the number of competing carriers is far less than in the US.

3. Establish minimum standards for protection of passengers.. No issues here.. SO LONG AS, we all understand that with more rights and protections does also come more costs borne by carriers in providing them, and these costs should and would be passed on to consumers, to provide them.

4. Remove the "get of jail free" card provided by allowing airlines to avoid helping people for a "weather" delay.. same as #3.. no problems here.. but again, this is going to cost $$ and I'm fine with that so long as passengers recognize that as costs get added into the model, this will drive fares.

5. If an airline goes bankrupt, the administrator should auction off their assets and slots to the highest bidder, subject to the restrictions outlined above on maximum slots per airport.. This to me should be left to the jurisdiction of the US Bankruptcy Judge and Trustee to best determine. I'm loathe to impose mandates on the Bankruptcy courts as it could then supersede what the Trustee and Creditor's Committee feel is the most beneficial for all parties involved.

[Gromit801]

"1. No airline to have more that 25% of the take off/landing slots at any airport .. I'd have no objections here.."

Here's where that falls down.

The airports, owned and operated by the local governments, will scream bloody murder. So let's say Delta can't have the slots it has at Atlanta, and are arbitrarily forced to reduce. There's going to be some unemployment going on there. What if another airline isn't interested in picking up those slots? It happens. The local government will be screaming about lost revenue.

Airlines with hubs enter into agreements with the local governments for the number of gates and slots they get. To change that is going to cause a "pebble in the water" effect, and not necessarily a good effect. I for one, don't like gambling with people's jobs.

[BKK_FLYER]

Hi,

Gromit801,

I totally agree.. The whole picture is much more complex than what one might 'see' on the surface..

Coming back to the points raised about alleged anti-competitive forces; as a general rule I AM a fan of more competition versus less.. as I think competition in many cases brings about a better product and one that priced to reflect the more true market cost.

However, I also agree that it's not as simplistic to say "we won't allow X carrier to have more than Y% of slots".. as you've noted, there's lots of inter-related issues there.. not only the airports (thus city or county governments) as well as all the 'little guys' who support the airport and the tenants as well.

[jimworcs]

That is exactly the same kind of luddite argument used when the government tried to deregulate the telephone market and broke up Ma Bell and the Baby Bell's. We also had a load of scare stories about unemployment, rural communities losing their vital communications, etc etc... It is bogus. There may be some markets where initially service will not be picked up, but in reality if you believe in the free market, you have give it the oxygen it needs to thrive. Other carriers are suffocated out of these huge hubs and the market is effectively carved up. Until that changes, the airlines will continue to abuse their position.

[Gromit801]

Thus playeth the broken record yet again.

[jimworcs]

When it's true...it's true.... what can I say?