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Taking Aim at the Wrong Target
Opinion · July 19, 2002

Daniel Bopp, a management consultant based in Dallas, has been able to reduce the cost of his airline tickets by a total of $18,000 each year.

How does he do it?

Thousands of travelers like Bopp normally slip through the cracks every day using a creative booking practice called "back-to-back" ticketing, also known as "b-to-b."

To book a back-to-back, a business traveler buys two discounted round-trip tickets with Saturday night stay-overs. He uses the front portion of one itinerary on the first leg and the back portion of the second itinerary on the second. Then he throws the remaining two segments away. Result: Because he's buying cheap tickets that were intended to be used by leisure travelers, he's saving hundreds, possibly even thousands, of dollars per trip.

Can't last, you say?

Well, evidently, you're right.

Last month, United Airlines issued a stern memo to its travel agents notifying them that it had enhanced its software capabilities to "more easily identify such abuses" and threatening them with financial penalties or legal action if they facilitated such ticketing. It followed up with invoices demanding hundreds of thousands of dollars from some travel retailers.

British Airways also has reportedly installed new software that follows b-to-b offenders. In a similar letter to travel agents, the British carrier said it would take "appropriate action" in cases where it suffered a loss in revenue.

Carriers insist that these tickets are illegal and that passengers are violating an agreement they make with the airline when they book their tickets.

As a result, the airlines feel that they are justified in trying to catch and remove anyone using one of these tickets and even threatening to take them to court.

But the action by airlines is misguided. They ought to consider reforming their confusing fare structures instead of harassing loyal distributors and chasing away their best customers.

Bopp, for example, was recently checking on a planned flight from Cincinnati back to Dallas when an airline phone reservations agent mentioned a "note" in his record indicating that his itinerary was illegal. "They were going to confiscate my ticket," he said. "So I voided it and switched airlines."

Richard Zuker wasn't as fortunate. When Air Canada nabbed him for flying on a b-to-b last year, the Ottawa-based frequent flier filed a complaint with the Canadian Transportation Agency. Air Canada argued that allowing such itineraries would undermine its ability to manage seat inventory. The federal board ruled in Air Canada's favor.

Despite the airlines' assertions, though, Thomas Dickerson, author of the book Travel Law, said, "A back-to-back ticket is not illegal. It may be a breach of contract between the airline and the passenger, but it doesn't violate any state or federal laws."

Perhaps that is why there have been no major court rulings on the legality of back-to-backs. But, more importantly, is the war on agents — and their travelers — justified at a time like this?

The airlines say they'll lose money if they don't eliminate — and enforce — back-to-back tickets. The Economic Strategy Institute in Washington, D.C., recently estimated that if the airlines were to freely allow back-to-back ticket purchases it would cost U.S. carriers "billions and billions" of dollars. PA Consulting aviation analyst Addison Schonland put the cost at $20 billion "on the low end."

But, you ask, don't the airlines limit the number of discount tickets on each flight to protect themselves from such a possibility?

The answer is yes, but the ticket-inventory levels change as the time of a flight gets nearer. So if the seats that have been allocated for full-fare passengers go unsold, they are then released as so-called last-minute discounted fares. If an airline could, it would sell every seat as a full-fare coach-class seat — but that has been very difficult lately.

While air carriers admit the current fare system is imperfect, they say it's the only way to separate budget-conscious leisure travelers from high-yield business travelers. But if the system works so well, why did the airline industry lose $7 billion last year?

And that doesn't explain how the likes of Southwest Airlines, which allows b-to-b tickets, turns a profit. In fact, the Southwest fare system provides a good model for other airlines to emulate. The carrier offers only half as many fare classes as the average domestic airline.

For example, on a round-trip ticket from Baltimore to Los Angeles, Southwest offers just eight fares. United Airlines has 21. And note the difference between the lowest discount fare and the highest-priced ticket, when I checked recently. On the same route, United charges $1,198 for a one-way unrestricted coach-class ticket. The cheapest ticket is a 21-day-advance-purchase round-trip ticket that costs $343 — a difference of $855. Southwest's one-way walk-up fare between Baltimore and Los Angeles is $299. But with a little planning, you can book a round-trip ticket two weeks in advance for just $258. That's a difference of just $41.

(Southwest lets you use your ticket in any way you want, including a back-to-back. It doesn't impose onerous change fees or Saturday-night-stay requirements for its less expensive tickets. And it still manages to make money. That's good for the airlines, and good for all passengers.)

Rather than trying to prop up a system that's unfair, unreasonable and, ultimately, unsupportable, airlines should be pursuing meaningful pricing reform.

Christopher Elliott is a travel commentator based in Key Largo, Fla. All e-mailed questions may be edited, condensed or republished at the site's discretion.