What do air travelers want? Competition spurs innovation.
The major carriers experiment with more legroom, relaxed fare rules, and frequent-flier perks to keep customers loyal.
If Jane Viscardi Brown had had her druthers over the holidays, she would have hopped on JetBlue - the low-cost airline that prides itself on high-quality customer service.Skip to next paragraph
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But it doesn't fly from Myrtle Beach, S.C. So she took Delta to San Francisco and back. And overall, despite the packed airports and security screenings, it turned out to be a rather pleasant experience. She credits, at least in part, JetBlue and the other low-cost carriers that are giving the older "legacy" carriers a run for their money.
"Since Delta's going bankrupt, they've gotten much nicer, and the perks have gotten much better," says the South Carolina singer. "I admire them still being cheerful after having to take pay cuts."
Thirty years after deregulation promised more consumer-friendly skies, the success of low-cost carriers is helping usher in an era of consumer-driven experimentation. Whether it's free satellite TV, a choice of "meal boxes," wireless Internet service, or ergonomically correct seats, airlines are scrambling to determine not only what customers want, but more important, what they're willing to pay.
The flying public has made it clear that low fares are king. So the race now is to determine what else will draw them to one particular airline and keep them loyal: Is it more legroom, a great frequent-flier program, or more flexible fares?
With most legacy carriers either in bankruptcy or struggling to avoid it, the answer to such questions may determine which ones survive. Those that falter in the consumers' eyes - like US Airways, with its Christmas-weekend baggage meltdown and rash of cancellations - may be the first to pay the ultimate price: liquidation.
But in the end, experts believe this age of experimentation may finally produce what the aviation industry promised 30 years ago: business that is truly market-driven and more consumer-friendly.
"There's no question that the drive for innovation is now unprecedented," says John Heimlich, chief economist at the Air Transport Association, the major airlines' lobbying arm. "Before, it was just about improving your profit margin. Now, it's more about sustaining your existence, so the consequences of failure are more dire."
As in any transitional era, some of the experimentation has produced big wins for consumers, as well as a few public- relations snafus. On the winning side are less restrictive fare regulations. For decades, the major carriers tried to keep their planes full with complex fare schedules and sometimes infuriating requirements. To get a reasonably priced ticket, one had to book at least two weeks in advance and stay over on a Saturday night. Otherwise, the flier had to pay business fares, which could be five times as high as the leisure-class fares - even for a seat in the same plane in the same row.
The innovative Southwests of the aviation world recognized how much that frustrated consumers, and they put in place much simpler fare schedules. Now, anyone can walk up the same day of travel and pay a reasonable price.
Such innovations have helped the low-cost carriers capture as much as 30 percent of the market, a critical mass that has forced the big six - American, Continental, Delta, Northwest, United, and US Airways - to change their ways. Most of the major airlines have already simplified some of their fare schedules, and some have experimented with doing away with the Saturday-night stay on certain routes.
Delta is expected to announce later this month the most radical changes yet in its fare structure. Once Delta does this, aviation experts say, the other legacy carriers will be close on their heels.
But some other airlines have had less than stellar success with experiments. American made a big public-relations splash in 2000 with its decision to take out seats and add more legroom. Now, it's not only reversed that decision, but it also recently announced it was taking pillows off some short-haul flights to save on the cost of cleaning them.
"When we do our customer research, they say their first priority is a low airfare," says Tim Wagner, an American spokesman. "The other things they may value to some extent, but not to the extent that they want them if they'll end up raising the price."
But others like Clint Oster, an aviation expert at the University of Indiana at Bloomington, see it differently. "That's one example of some of the experimentation that's been mindless," he says.
Some of American's customers have noticed the changes, and they're not pleased. Political blogger Bryan Keefer usually flies JetBlue from New York to San Francisco to see his family. But last weekend, he decided to use up some frequent-flier miles and took an American flight.
"I certainly didn't have any extra legroom, and I used to like to fly American because of it," he said shortly after touching down at Kennedy Airport on Sunday night. He also thinks the overall service has deteriorated: He says it took far too long for the flight attendants to remove meal trays. Then, because half of the reading lights on the plane didn't work, the pilot turned on the overhead lights during the movie, which annoyed many people.
So, despite having racked up quite a few frequent-flier miles on American, Mr. Keefer says he'd prefer to fly JetBlue because the planes are more comfortable and "noticeably quieter."
But American and the other legacy carriers are not ready to cede a single customer. United has decided to keep the extra legroom it reserves for frequent fliers. And, like American, it's experimenting with things like hand-held DVD players and new meal choices - for a fee.
"The final battle ground is going to be on customer service," says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa. "The industry has forever changed, and it's true structural change we're going through, which is good for the consumer."