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Millions of people turn to the Internet for rock-bottom deals on airline travel. But be wary: Things can get bumpy when you don't know exactly what you're getting for your money.
By JEAN HELLER
© St. Petersburg Times, published June 25, 2000
TAMPA -- Trudy Carson is a walking irony.
As deputy director of air service development at Tampa International Airport, she flies frequently.
Her office is less than a minute's journey from the ticket counters of airlines that can carry her anywhere in the world she needs to go.
Yet when Carson wants to fly, she boots up her computer and logs on to a site called Expedia.com, enters her destination and dates of travel and sees almost instantaneously which airlines can take her there at the lowest price.
"It's so much easier than dealing with a travel agent, and I get so many more choices," Carson says.
Carson is among the millions of consumers who have taken to the Web in search of rock-bottom deals for airline travel and many other business, leisure and vacation savings. There are financial rewards for those who want to act as their own travel agents, and sales figures show there are more eager converts every day.
But there are pitfalls, too, that can trap the unwary and mete out a variety of expensive lessons in the risks of e-commerce. Consumers can get hurt if they don't know exactly what they are getting for their money.
A good guideline: The better the bargain, the more you are giving up.
Undoubtedly, the best-known of the online ticketing sites is Priceline.com, whose pitchman, Star Trek's William Shatner, is as ubiquitous on television these days as Regis Philbin.
Priceline customers bid for airline tickets and can come away with fares less than half the lowest published price. But there are drawbacks. You can choose your date of travel, but you can't choose your departure time or count on flying non-stop. You can't change your plans without losing your money. And fees added on top of fares can boost the cost of a trip by more than $100.
For more tradition-minded airline passengers, Expedia and Travelocity.com dominate the field of Web sites offering tickets at the lowest published fares. Expedia, a division of Microsoft, also offers its own separate bid site, Price Matcher, that competes with Priceline.
Travelocity, a division of Sabre, American Airlines' former reservation system, also offers a kicky feature called Dream Map: Travelers who want to get away on a budget, and don't much care where they go, plug in the price they are willing to pay for airline tickets. Dream Map tells them where they can go for the money.
Estimates put the number of virtual ticketing sites at close to 1,000, including each airline's Web page and the communications giant, America Online. That all the sites will not survive is a certainty; most don't have the capitalization to sustain them on what can be a long trip to profitability.
It has cost Priceline $1-billion to get where it is today, and it still is hemorrhaging cash, losing $7-million in the first quarter of the year. But many analysts think the company will break even by the end of the year and show its first profit next year.
The shakeout has begun. Travelocity absorbed Preview Travel. Expedia bought Travelscape. Trip.com has been acquired by Galileo.
Analysts from the Wall Street firm Bear, Stearns & Co. predict that by 2003, travel Web sites will number no more than 200.
Still, the appeal of dot-com travel agencies is exploding among consumers.
Priceline, where revenue totaled $482.4-million in 1999, posted sales of $313.8-million in the first quarter of 2000. Those figures, like the sales figures of other virtual travel sites, include products and services well beyond airline travel. Priceline sold 1.2-million airline tickets in the first quarter of 2000, compared with 2-million in all of 1999.
Travelocity posted sales of $808.5-million for 1999 and $504-million for the first quarter of this year. Expedia recorded $728-million in sales last year and $401-million in the first quarter of 2000.
But online ticketing isn't for everyone.
Ann Emory of St. Petersburg decided in April to take the Internet route to airline ticket bargains and found the ride anything but smooth.
"I wanted to go to Nashville (Tenn.) over Memorial Day," Emory said. "I found the lowest (published) fares were $191 on Southwest and $206 on US Airways."
Emory, an information systems manager, logged onto Priceline.com, where consumers often get deals well below the best published fares. She got a ticket for $140. But there was more than one kind of cost.
"The ticket had me leaving Tampa at 7:35 p.m. with a layover in Charlotte and arrival in Nashville after 10 p.m.," Emory said. "Coming back was worse. I left Charlotte at 7:15 p.m., had a layover in Charlotte and arrived in Tampa at 11:47. On top of the bad schedule, they added fuel charges, a processing fee and other charges that brought the ticket to $184.99."
Emory refused to accept the lesson -- or the ticket -- provided by Priceline. She argued until the company relented and voided her ticket. But that satisfaction cost her $80 in Priceline and airline fees.
"Priceline is very simply a service where you trade your travel flexibility for better fares than you can get anywhere else," spokesman Brian Ek said. "If you are willing to let the airlines put you on any flight at any time, Priceline can save you a lot of money. But it's the consumer's responsibility to know what they're buying."
Airlines fly 600,000 empty seats every day, Ek said. Putting a body in an empty seat costs virtually nothing. So any money an airline gets for an empty seat is almost all profit. Airlines accept bids below published fares because of the certain knowledge that they will get the revenue.
But if a passenger's plans change, or if, like Emory, a passenger is unhappy with the flights, the airlines won't help. In nearly all cases, the passenger must eat the loss.
Other tickets sold online, even those labeled non-refundable, can be altered if plans change, typically for an airline fee of $75.
Most complaints about online ticketing are directed at Priceline, and most of those involve consumer misunderstandings about the crazy times and routes they might have to fly to get the cheap seats. One man flying from San Francisco to Chicago, for example, had to change planes both ways in Atlanta.
But problems are not limited to Priceline.
Trudy Carson, the TIA official, tried to make reservations on a day when Expedia was experiencing software problems.
"I had to start the process six or seven times before it worked through," Carson said.
Each time she went through the process, Carson's credit card was charged, but she didn't know that until the next day when she tried to pay for groceries with the card and found it maxed out.
"They eventually made it right, but it was embarrassing," Carson said.
The online sites make customers work for their bargains for one reason: The online hoops weed out business travelers who are willing to pay full fare because they can't or won't go through all the aggravation and uncertainty. That leaves the cheap seats for the discretionary traveler, who doesn't really have to fly but will if the price is right.
Suzi Levine, marketing director of Expedia, said that site offers something for everyone, including the choice to retain your flexibility and still seize the lowest published fare or give up your flexibility for greater savings.
"Some people want the rock-bottom Crazy Eddie price," Levine said. "Some people say, "I don't care what it costs, I want to be there at 6.' Some people say they will only fly United."
And unlike Priceline, Levine said, Expedia's Price Matcher doesn't add on fees. "Your successful bid is precisely the amount billed to your credit card," she said.
Another difference in service is the number of airlines from which a traveler can choose.
Ek said Priceline has 30 airlines in its stable, including eight of the major 10. So someone flying from Tampa to New York City won't get a chance to consider JetBlue because JetBlue isn't hooked into Priceline.
"We tried, but they wouldn't take us," JetBlue spokesman Gareth Edmondson-Jones said. "They only want the larger airlines."
Expedia draws on 450 airlines worldwide. Travelocity, the third largest e-commerce Internet site after Amazon.com and ebay.com, claims 700 airlines, including JetBlue.
"If that isn't all of them, it's all anybody needs," executive vice president Jim Marsicano said.
Delta Airlines, which sells tickets from its Web site and participates in other online services, argues that more is better.
"Our strategy is to make Delta's product as widely available as possible," spokesman Andy McDill said. "We don't want to think about the customers we might have missed if we weren't out there. I think all airlines are seeing an increase in customer traffic. The Internet sites provide us with another distribution channel and gives travelers another option."
Online shoppers soon may have a formidable new option.
Scheduled to debut by the end of the summer is Orbitz.com, a site owned by a group of major airlines. Orbitz is being touted as a place where travelers will be able to choose from every published fare for every destination flown by every airline in the world, not just the flights of the airlines in the ownership group. Orbitz also will have special Internet-only fares.
"What impact Orbitz will have on the rest of the industry is yet to be determined because it is yet to be determined how they will operate," said Mark Rowen of Prudential Securities in New York, who specializes in dot-com travel companies.
The venture, launched by United, Delta, Northwest and Continental, has 28 airlines signed up and is seeking additional financial partners. The Web site could open for business with two huge advantages, Rowen said.
"They might have access to fares that Travelocity and Expedia don't," he said. "That is one of the things the Justice Department is looking at, whether it could be a restraint of trade. But if they make special fares available to everybody, they lose that edge. The other big advantage is that they would have access to frequent-flier accounts and could let passengers redeem their miles, which the others can't."
But if Orbitz weren't owned by the airlines, Rowen said, he would give them zero chance to succeed:
"It's too late for new players in this field."