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 The Brancatelli File

joe US AIRWAYS TRIES SUICIDE

BY JOE BRANCATELLI

August 30, 2002 -- Nearly 72 hours after US Airways put a metaphoric gun to its corporate head Tuesday with a package of fare and frequent-flyer moves that can only be described as suicidal, we head off for a Labor Day weekend that may very well define the face of American commercial aviation for decades to come.

One of three things is likely to happen over this weekend.

Scenario One: While our attention is diverted by the usual Labor Day diversions, the five other major full-service carriers will match US Airways' new policies and sow the seeds of their own destruction. History will then record that this was the package of policies too stupid, the collection of rules too restrictive and the service cuts too blatant. Years from now we will note that this was the weekend when the Big Six finally drove leisure travelers and frequent flyers into the arms of the alternate airlines forever and ever.

Scenario Two: Frightened by the unprecedented outpouring of rage and resistance from travelers of all stripes, none of the other Big Six carriers matches US Airways. And, of course, US Airways, standing alone with a gun pointed at its head, will relent next week. History will then record that this was the weekend the Big Six finally realized they must simplify and rationalize their fare structures because travelers simply will not accept any other option.

Scenario Three: The other Big Six carriers do not match US Airways and the dunderheaded fools who run US Airways nevertheless stick to their plans and try to go it alone. That will result in the extinction of the already bankrupt US Airways in record time.

To tell you the truth, I honestly don't give a damn which of the three scenarios The Big Six choose. Live or die. Change or collapse. Hang together or hang separately. Who the hell cares anymore? The foolish men who run the nation's major mainline airlines have now proven beyond the scintilla of a shadow of a reasonable doubt that they are clueless about business and unable to grasp even the most basic precepts of a free-market economy.

On the off chance you missed it--and I don't know how you could have--here is some of what US Airways said Tuesday.

USE IT OR LOSE IT    "Effective immediately, non-refundable fares … must be used for the specifically ticketed flight and will have no value once the flight has departed. Under the previous policy," US Airways reminded us, "the value of an unused non-refundable ticket could be credited toward the purchase of another US Airways ticket, less the applicable reissue fee, for up to one year."

NO STANDBYS    "Customers who have non-refundable tickets will not be allowed to stand by for alternate flights," US Airways announced.

NO ELITE CREDIT FOR LOW FARES    "Customers ticketed on non-refundable fares will continue to earn full Dividend Miles credit," US Airways said. "Effective for travel January 1, 2003, and beyond, miles and segments earned on most non-refundable fares will not count toward Dividend Miles Chairman's Preferred, Gold Preferred and Silver Preferred status."

You don't really need me to tell you what's wrong, on a strictly tactical basis, with these absurd moves. But it's my job to point this out, so…

If you tell leisure travelers buying low fares that they can never change their flights, they won't fly US Airways. And if the entire Big Six matches US Airways, leisure travelers won't fly them, either. They'll fly the alternate carriers. Or they'll drive. Or they'll stay home.

If you tell business travelers who occasionally score a low fare that they can't stand by if they miss their flight or can't change their nonrefundable ticket, they will not buy higher priced fares from US Airways. They'll fly some other carrier. And if all the Big Six match US Airways, they'll switch to the alternate carriers. Or they'll just stay in their offices.

If you tell business travelers that discount tickets don't count toward their elite status, they will tell you to stuff your program. They'll defect in droves to any carrier that does offer mile-for-mile credit. They sure as hell won't fly US Airways anymore. And if the Big Six all match US Airways, then business travelers will shrug their shoulders and start flying someone--anyone--else.

And you really don't need me to express outrage on your behalf. In the nearly 72 hours since US Airways made these bizarre policy changes, your rage and your commitment to resist has shaken the airline industry to its core. There has never been this kind of immediate and spontaneous uprising.

But I do want to say this: This shows you how strategically inept and incompetent the major airlines are. They know nothing about customer relations. They know nothing about how markets work. They seem incapable of understanding that the markets set the agenda, not them. The Big Six airlines can, of course, impose these changes if they wish. And customers have the right not to fly them. Guess who's gonna win that one?

And I say this: Go have a great Labor Day weekend. Don't waste another moment of this last holiday of the summer worrying about this. If the other Big Six airlines pull US Airways back from the edge, great. If they choose to drive off the precipice with US Airways, fine, too.

On Tuesday, when we see what the Big Six have chosen to do, we'll do what we have to do. We're the market, not them. In the long run, we're in control, not them.

This column originally appeared at JoeSentMe.com

Copyright © 1993-2007 by Joe Brancatelli. All rights reserved.