FARAI CHIDEYA, host:
First, there was no food on short flights, then you had to pay for food on long flights. Then fares went way up because of fuel prices and now one airline has started charging 15 dollars to check your first piece of luggage, and other airlines are thinking of following suit. So what the heck is going on with airfares? Here to fill us in is Dr. Julianne Malveaux. She's an economist and also the president of Bennett College. How are you doing?
Dr. JULIANNE MALVEAUX (Economist; President, Bennett College): I'm great. How are you, Farai?
CHIDEYA: Oh, you know, I fly a lot. I might now have to strap things on my body and, you know, wear two pairs of underwear and five pairs of shoes.
Dr. MALVEAUX: FedEx your toiletries.
CHIDEYA: Exactly. Exactly. So, you know, why are airlines just, you know, pretty much desperate for any penny they can get?
Dr. MALVEAUX: Well first of all with gas prices being what they are, they have a cost they didn't expect. But secondly, we've seen our airline industry limping along, certainly for the last couple of years, and this, what's so awful about right now is it's summer when we expect air travel to go up, discretionary travel to go up. Families are looking at what they are going to do this summer and more and more of them are saying we are going to take a driving vacation. Well, with gas at four dollars a gallon plus, that's even challenging. But when you look at what you've got going on, you see the airline industry more costly, they are beginning to penalize business travelers again. I paid a thousand dollars to go from D.C. to Greensboro, roundtrip. One thousand dollars. That's absurd. I could be in Europe right now.
But that's the name of the game. If you fly at the last minute, the fares are higher. They've reinstituted the Saturday stay, which I think discriminates against business travelers. The paying for luggage makes it easier for people to look at these baggage services, Farai, there are many of the that will charge you 50 dollars to FedEx you luggage or send it by some other courier across the country. So it's become much more difficult, but it's really being driven by economics, first of all, in terms of the gas prices, but secondly, in terms of the weakness in this industry. That's been a weakness since September 11th of 2001.
CHIDEYA: I want to talk more about the larger ramifications of this for the economy in a second. But first off, this is travel time. People are planning family vacations. There are some things you can drive to and some things you can even take the bus to. But there's a lot of places folks want to go to see family or see sites that require plane travel. So what's on the side of the traveler these days? What things might help the traveler out?
Dr. MALVEAUX: First of all, planning early, you still can get pretty reasonable fares when you are 14, 21, even 30 days out. Getting on those travels sites and looking for the best buy. Looking for alternative airports. I like to fly out of Greensboro, for example, but I can cut three or four hundred dollars off a ticket if I go out of Raleigh-Durham. Many people in the Washington area, many of us like to go out of Washington National, but Baltimore and Dulles also provide you with a cheaper ticket. So people should be encouraged to look at alternative airports.
Also, people like to JetBlue, ATA, Southwest, they are considered the second tier airlines, but those second tier airlines now have better prices for lots of people and sometimes more flexibility. If you buy a ticket today, Farai, and you have to change it, on the major airlines, U.S. Air, Delta, American, United, you've got 150 dollar change fee. Some of the other airlines don't charge as a high a change fee and some don't charge at all.
So the savvy traveler who's got to get to get to that wedding across the country, or really promised someone that they were going to get to a graduation or something like that really needs to look at 30 days out and not being wedded to any airlines. Do not plan to get anywhere on your frequent flyer points if you're going at the last minute. They're going to tack on so many extra charges that you're going to wish you paid for the fare. But in addition, airlines are making fewer frequent flyer seats available, so you're sitting on top of a couple hundred thousand miles thinking you're going to be able to take your family across country, not necessarily.
CHIDEYA: Alright. Well, I was booking some wedding-related travel, and I booked a flight to Fayetteville, Arkansas. But the first Fayetteville that popped up was Fayetteville, North Carolina. I almost booked a flight there, and from what I understand, I would've had to change within 24 hours so they wouldn't charge me a bunch of fees. But aren't there some upsides to booking online?
Dr. MALVEAUX: There are lots of upsides booking online. It's the best and fastest way to do that comparison shopping thing. You've just got to make sure, don't let your fingers push the buy button until you're certain that everything there is what you really want, from time of day to the airport that you're going in to. But Orbitz, Travelocity and some of those other bargain sites really do give you a good sense of what your options are, as opposed to calling around to your favorite airlines or some other airlines. You can still book with your favorite airlines, but if you're really, if you're counting pennies you owe it to yourself to look at every option you have.
CHIDEYA: Yeah, there's also another one. There's Kayak and Sidestep. You know, there's a whole bunch of choices, everyone picks their's. But I kind of go and try different ones at different times to see what they kick back to me. Let's move out from this consumer side to the broader side of macroeconomics. What do you think this is going to do, these changes in fares and these changes in policy, for the airline industry, but then also the ripple effect to the national economy?
Dr. MALVEAUX: Well I think the issue really is the economy. The industry certainly, but when you look - when people say that they're not going to fly, it costs the economy money. Economists are estimating as much as 26 billion dollars this summer, because people are saying, I'm just not going to fly. And so think about that as money that's not in the market. Money that's going somewhere else. Now some of it obviously, someone doesn't fly, maybe they drive. Someone doesn't go on this vacation and stay at a hotel, maybe they go to another city instead, a hotel. So some of it will wash out, but about 50 percent of it, Farai, is just lost revenue.
What that means is that people who work in hotels and amusement parks, you know, all of the tourist-related industries, they're going to probably see a little bit of a slump in the number of dollars that are coming to their industry. So lots of people, as in this economy, which is slowing despite what people want to say, lots of people are going to find fewer tips, fewer dollars. This hits our young people especially, because lots of young people work in travel and tourism in the summer. And so the youth unemployment that we've talked about in this program before is something that is going to be affected by the whole issue of what's happening with travel.
Our economy is - it's almost like looking at a quilt and all these intertwined pieces. And so nothing happens by itself. So those people who are looking at travel, saying, oh well, the airlines, you know, they are gouging us. The fact is that maybe they are. But these airlines are an integral part of our nation's economy. Travel and tourism represents more than seven percent of our national economy. That's how to look at it.
CHIDEYA: When you think about the fuel costs that have risen just astronomically - for the first time - I have a pretty energy-efficient car, fuel-efficient car - I paid 60 dollars for the first time on my tank. And it was not that long ago - it wasn't like decades ago, it was just maybe a year ago - I was paying 35 dollars to fill my tank. But when you think about how much it costs to fill a jet, what do we see ahead for those fuel prices that are really driving the industry down?
Dr. MALVEAUX: Well we know that fuel prices are not likely to go down precipitously any time soon, they've been fluctuating. But I don't think that they're going to go down any time soon, so we're looking at, again, more permanent higher fares. You're looking at a number of other places where you see fuel surcharges, you know, the mail services and other things like that where fuel surcharges are taking place.
So we're looking at pressure on the economy for people who commute to their jobs. As you say, filling up a tank at 60 dollars that used to be 35, it's a bit of a shock. If you do it just occasionally it's not a big deal, but if you're filling up that tank once or twice a week to get to work, that makes a difference. Again, people are making discretionary decisions in our cities, in our major cities.
What we've already seen is increased ridership on public transportation. We never though we'd be able to get Americans out of their cars for public transportation, but with gas prices at four dollars a gallon, I think we've seen that happen. So - but what kind of pressure that put on a city? Some of our urban public transportation systems are already pretty fully utilized. So you're crowding in cars and all that. The quality of life because of the increase in fuel prices has declined.
CHIDEYA: Now, you mention that people are going to change the way that they drive. Do you think that when the airlines shake this off, hopefully at some point, a lot of people will just be fed up and will do whatever they can not to travel by air and permanently change their travel patterns? Maybe where they go on vacations, or how they plan things out, and that there will be a long term effect of this even when the airlines start making more money?
Dr. MALVEAUX: Well, we certainly did see a very long recovery from September 11th. Certainly, that was not the airline industry's fault, it was an act of terrorism that changed the way that we travel, a number of things around security making travel less pleasant than it had been before. And it took them a very long time to bounce back. This - if the industry decides to change its fare structure as fuel prices go down, I don't think that we'll have a permanent disengagement from air travel. Americans are very mobile people, and it doesn't take much with all of our destination travel and other things to get people to travel.
But the fare structure, I think, is where you've seen a lot of people draw the line. It's also a whole bunch of service-related issues, lost luggage, missed arrangements, we didn't - the industry didn't do itself any service at the end of - by April, when it sidelined thousands of trips because equipment had not been serviced. So they're going to have to woo the public back, but I think it's a public that can be easily wooed.
CHIDEYA: Very quickly, do you have any thoughts of how you should address complaints, if you have them, to airlines?
Dr. MALVEAUX: Well, the FAA has a complaints structure I use. You start out with the airline itself, you start out with your local market where you traveled. But you make sure that their customer service people get in touch with you, or you get in touch with them. And you've got to be extremely persistent. They don't always get back to people, the FAA certainly is an option.
There's a case that's floating around on the internet now, where a man is suing, I believe Delta Airlines, for a million dollars. His family was stranded on their way to, I want to say Chile. It's a Latin American country. But they were stranded for his mother's 80th birthday, and he alleges that the airline employee laughed in his face after he missed the connection. So he's suing for a million dollars. That's extreme, and that - obviously most of us don't have the time, effort, energy or money to take it to the courts. But there is a well thought-out complaint process, and there are lots of websites and advocacy organizations that will help people.
I - my experience has been that the airlines will generally respond, although sometimes very slowly, and you've really got to be extremely persistent. Don't go after them because of something small, because it isn't going to make a difference, you're going to get frustrated. But if your luggage is lost, if your connection was missed, if you've really had material damage, go after them.
CHIDEYA: All right. Dr. Malveaux, thanks so much.
Dr. MALVEAUX: Thank you.
CHIDEYA: That was author and economist Dr. Julianne Malveaux. She is also president of Bennett College, and joined us from WFDD in Winston-Salem, North Carolina.
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