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 The Brancatelli File

joe A RETALIATORY STICK
UPSIDE NORTHWEST'S SKULL


BY JOE BRANCATELLI

August 26, 2004 -- Tomorrow is when Northwest Airlines has decreed that if you don't do what it says--book your tickets at NWA.com--you will pay $5 for the privilege of waiting for 15 or 20 minutes to talk to one of its telephone-reservation agents or $10 if you have the temerity to do business at an airport.

Want to buy a Northwest ticket at a traditional travel agency or an online site that isn't NWA.com? Expect to pay more there, too, because next week Northwest is hiking the fees that it charges almost all of those third-party distributors.

I know. I know. You're shake-your-fist angry. You're remembering all the times that Northwest stranded you in the snow, dumped you in its filthy old Detroit terminal after another mechanical or charged you too much for a flight to Tokyo on a disheveled, old jet. You want to book away from Northwest. You're ready to hurl whatever curse you can pull from your ethnic background on the airline that flies 30-year-old DC-9s, offers a chintzy 34 inches of seat pitch in its so-called first class, has the worst service of any major carrier over the Pacific and is the very model of a modern major Big Six disgrace.

I'm with you. But before you're blinded by righteous rage, allow me to make two important points.

One: Every time the travel industry has forced us to the Web in recent years our prices have gone down. That's not what they meant to do, but that's been the practical effect. The more these petty tyrants try to police our buying habits by driving us to their proprietary Internet channels, the more our ticket prices and hotel rates plummet.

Two: These otherwise niggling fees are nevertheless stark reminders that the Big Six always gets the wrong end of the carrot-and-stick equation. The airlines making money offer us incentives to do business via their preferred distribution channel. They offer carrots--price discounts, huge mileage bonuses--to do it their way. The hopelessly profitless Big Six penalizes us if we don't shop where they tell us to. And the more they charge us for defying them, the more we embrace the incentives of the alternate carriers.

This is all déjà vu, of course. We had exactly this discussion more than five years ago when Delta Air Lines tried to charge us $2 if we didn't use its Web site. That fee lasted a few weeks before disappearing in a rush of fumble-mouthed apologies from clueless Delta officials.

My 1999 column on the Delta move is most interesting now because of the almost unimaginable airline environment in which it was written. Delta was coming off record 1998 earnings when it tried to impose the anywhere-but-Delta.com fee. It was raising prices with abandon, Southwest was still just an annoyance, AirTran was a joke, JetBlue didn't exist and Delta's arrogant management had every belief that the $2 cudgel was likely to generate another cool $200 million in annual profits.

The blinkered idiots in the corporate bunkers of Northwest made their announcement on Monday in the midst of the apocalypse of the big airlines. One of its 1999 number (TWA) has disappeared, one is in bankruptcy (United) and another (US Airways) is poised to make its second visit to Chapter 11 in as many years. The Big Six has lost $30 billion in the last five years and none can credibly predict a return to profit in our lifetimes. Average ticket prices have plummeted and the alternate carriers are gobbling market share in record-breaking bites. The Big Six is held in such contempt that even their former vassals, the computer-reservations systems such as Sabre and Worldspan, immediately retaliated with lawsuits and punitive measures after the Northwest announcement.

The Northwest fees have not yet been matched by any of the other Big Six carriers. They might be. They might not be and, if they are not, Northwest could choose to go it alone.

To be honest, fellow travelers, it doesn't matter. Because we know now what we didn't know in 1999. The more that the airlines move to the Internet to sell product, the more our prices come down and the more pressure on them to simplify their Byzantine fare structure. The more travelers book their own on the Net, the more tools like the 7-day pricing matrix at Orbitz.com and fare-compare products such as Sidestep help us find the lowest prices.

And the more that blithering Big Six idiots like Northwest marketing and distribution vice president Tim Griffin defend the use of the stick, the more business travelers are reminded that there are airlines that serve up carrots instead.

Why give Northwest a $5-a-ticket fee to wait on hold when you can go to the JetBlue.com Web site and get a $3 discount each way? And if you go to the JetBlue Web site, you'll learn that most of JetBlue's coach seats have 34 inches of seat pitch, the same legroom that Northwest offers up in first class on many of its domestic flights. And you'll also learn that you get free at-seat television and a clean, new plane for every flight, two amenities that don't exist in Northwest's galaxy.

Why give Northwest $10 a ticket to buy at the airport when you can surf to the FlyI.com site and buy tickets for $5 each way off Independence Air's posted prices? Why put up with Northwest's do-it-our-way-or-pay arrogance when you can surf to Southwest.com and get a 50 percent frequent-flyer bonus for booking on the Web?

So we really can't lose, fellow travelers. As Northwest mindlessly brandishes its $5 stick to herd us to the Web, it helps fuel the Internet fire that has been driving our airfares down. And once we get to the Web, we can book JetBlue and Southwest, airlines feeding us carrots like discounted prices and huge mileage bonuses.

How's that for a retaliatory stick upside your thick corporate skull, Northwest?

This column originally appeared at JoeSentMe.com.

Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.