All's Fare

For most, last month's decision in Washington to exempt Missouri from the Wright Amendment was good news. Southwest Airlines was suddenly allowed to fly nonstop to Missouri, and overnight, the bottom dropped out of fares. For American Airlines, however, the move placed the company in the uncomfortable position of both defending the Wright Amendment and dismissing the impact of its partial repeal.

Since Southwest Airlines mounted its campaign to repeal the Wright Amendment, which limits its flights out of Dallas' Love Field to nearby states, American has insisted that the law is vital to its survival and to the viability of D/FW airport. But when an analyst predicted American will lose $115 million a year in revenue now that passengers can fly to Kansas City and St. Louis from Love, the world's largest airline scoffed. "We think his estimates are pretty stinking high for just two cities," says American spokesperson Tim Wagner. "What he did not do is factor in that we would move flights to Love Field."

While American prepares to reopen service at Love, it says it will match Southwest's fares, as low as $49 one-way, from D/FW. One Christmas weekend itinerary on American went from $405 to $220, overnight.

American will give passengers a credit for the difference if the ticket price for their exact itinerary goes down after it is purchased, but what other product sees a 45-percent price change in an instant?

Alan Hess, a Utah travel agency owner, sums up the absurdity in his essay "If Airlines Sold Paint." Here's part of Hess' exchange between the hapless customer and the airline/paint salesperson:

"Clerk: The lowest price is $9 a gallon, and we have 150 different prices up to $200 a gallon.

Customer: What's the difference in paint?

Clerk: Oh, there isn't any difference; it's all the same paint.

Customer: Well then, I'd like some of that $9 paint.

Clerk: First I need to ask you a few questions. When do you intend to use it?

Customer: I want to paint tomorrow, on my day off.

Clerk: The paint for tomorrow is the $200 paint.

Customer: What? When would I have to paint to get the $9 price?

Clerk: That would be in three weeks, but you will also have to start painting before Friday of that week and continue painting until at least Sunday."

But it's not just customers who are stumped. In 2003, Carl de Marcken, a software engineer who helped write the program used by Orbitz to search plane fares, did a statistical analysis of ticket prices. He says that, in most cases, the more expensive a flight is for an airline, the cheaper the fare.

De Marcken's study concludes that rules like mandatory Saturday night stays and advance purchase requirements make prices so complicated that it is mathematically impossible to find the actual cheapest ticket, but even a rhesus monkey with an abacus can see that without the Wright Amendment, fares plunge.

 
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