Survey reveals differing airfares Inconsistency: Advocacy group reports that wide variations in prices quoted for trips from city to city make bargain hunting very difficult.

March 08, 1998|By David Cay Johnston | David Cay Johnston,NEW YORK TIMES NEWS SERVICE

Customers shopping for the lowest airfares have grown accustomed to good deals if they buy well in advance and lock in specific flights, while paying extravagant prices to fly at the last minute with freedom to change plans. Now a consumer-advocacy organization says a test it conducted shows that airline pricing is much more complicated than this, so complicated that even savvy consumers cannot be sure they are getting the best deal, or even a good deal, unless they spend an inordinate amount of time shopping.

Volunteers for the United States Public Interest Research Group, a nonprofit consumer and environmental research and advocacy organization based in Washington, called travel agents and airlines on a Friday last fall seeking the best deal on flights departing the next Thursday around 5 p.m. and returning Sunday evening.

Reservations made six days before departure usually do not qualify for significant discounts, although airlines sometimes offer three-day advance-purchase discounts. Still, the fares varied widely.

The volunteers looked at flights between 73 city pairs involving 28 cities. For each pair they called eight to 10 travel agents and as many as five airlines. In all, they placed 910 calls. They were quoted 590 prices.

The biggest difference was flying from Indianapolis to San Francisco and back. The fares quoted ranged from $220 to $1,547.

The volunteers also requested the cheapest ticket for both one-week and three-week advance-purchase fares. All requests involved the same Thursday-to-Sunday pattern that includes the Saturday-night stay often required for the best deals.

The researchers found that it cost more to fly round trip from Portland, Ore., to Boston than from Boston to Portland, and that travel agents were much likelier than airlines to give the lowest price.

Paul Stephen Dempsey, vice chairman of Frontier Airlines, a tiny carrier based in Denver that flies to 14 cities including New York, called the sevenfold price difference between Indianapolis and San Francisco astounding. But in an interview about the survey he said that he was not surprised that 910 telephone calls made on the same day resulted in 590 different price quotes.

"Airlines manipulate fares all the time," he said. "If you called an airline for a price and called back 45 minutes later, the fare bucket could have constricted or expanded, and the price you are quoted could have dropped or gone up."

"Buckets" is an airline term for the different fare classes, like Y for unrestricted coach and V for highly restricted advance-purchase fares. Computers allow airlines to quickly change the number of seats available at each fare based on such factors as how many seats have sold by a particular date and the effect of holidays on travel patterns.

Ulrich Boser, a staff member of the consumer advocacy group, criticized the sevenfold difference on the Indianapolis-San Francisco route as an illustration of how the airlines engage in deceptive pricing. But Clifford Winston, a transportation economist at the Brookings Institution in Washington, saw it differently.

"In the hands of a so-called public-interest group, you get this crazy idea that fares are all over the place and people are getting ripped off left and right," Winston said. "What they encountered is simply yield management, in which the airlines adjust prices according to demand in an attempt to fill every seat, a practice which actually benefits consumers."

He said that fewer than 20 percent of flyers pay the highest fares and that the ones who do are usually businesspeople traveling on the company's dime, not paying out of their own pockets.

Winston said it was not surprising that travel agents tended to quote cheaper fares than the airlines, given the way the research group set up its study, which focused on specific times and dates.

"Airline personnel are trained to answer the question you ask, so if you cite a specific time they do not try to figure out how to rearrange your travel to get the lowest price," he said. "Travel agents want you as a repeat customer, so they will look at how flexible you are on travel times, at whether you can leave 10 minutes earlier or take a connection that may get you the lowest fare."

The Public Interest Research Group filed its findings with the Department of Transportation, in support of a "truth in airfares" rule proposed last fall by Consumers Union, another nonprofit research and advocacy organization. The rule would require airlines to tell customers who ask the average and lowest fares for each class of service between city pairs in the previous 90 days.

Consumers Union, which publishes Consumer Reports magazine, says that disclosing average fares will have a big impact on people's ability to spot the best deals and to evaluate how good a deal they can make.

American Airlines and TWA have filed formal objections to the proposed rule, saying it would increase costs and cause consumers to get misleading information: Because prices vary by season, the airlines say, the previous 90-day period is not a reliable indicator of present pricing. An American spokesman, Tim Smith, called the proposed rule a dumb idea.

Pub Date: 3/08/98

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