=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/01/28/f= inancial0950EST0053.DTL ---------------------------------------------------------------------- Wednesday, January 28, 2004 (AP) Airlines experiment to woo travelers back SCOTT MCCARTNEY, The Wall Street Journal (01-28) 06:50 PST (AP) -- Would you be interested in a cheap-ticket coach flight with free drinks = at happy hour and enough legroom -- just two inches short of first-class seating -- to cross your legs? Delta Air Lines is offering just such a thing, although only until Saturday and only in two markets. The special flights are part of an experiment to see if comfortable coach service -- remember the concept? -- might entice customers back from discount airlines. With the airline industry's woes so great, they're doing some interesting experimenting right now. Carriers are playing with fares, juggling seats in cabins, pondering how to entertain customers during flight, and even bringing back food on some flights. Delta and UAL Corp.'s United Airlines are trying to win back leisure travelers with new low-cost carriers. Most are also flying more small regional jets -- figuring if they have fewer passengers, they might as well fly fewer seats. In short, airlines are throwing a lot of spaghetti against the wall to s= ee what sticks, and starting to figure out what travelers concluded long ago: They cut too much. Delta has been throwing more spaghetti than most. Since November, it's been testing all-coach, extra-legroom flights in two medium-size business-travel markets, Houston-Atlanta and Kansas City-Atlanta. Test flights -- almost the antithesis of Delta's new low-cost carrier, Song, which offers bare-bones travel for leisure passengers -- come with free coffee and newspapers and affordable fares, though not necessarily dirt cheap. Delta's one-way price for travel from Houston to Atlanta is $198 on the experimental service. By contrast, low-cost AirTran Airways, which competes on both routes, had a special $65 fare on the Atlanta-Houston run this week. For travelers, all these changes are making it tougher to seek out the best deal or the most suitable way to travel. With so much matching and experimenting going on, it's particularly important to pay close attention to routes, fares and aircraft. AMR Corp.'s American Airlines, for example, matches AirTran's cheap fares between Dallas and Baltimore -- but not between Dallas and Washington's Reagan National Airport. In addition, American currently has different legroom configurations in its Boeing 757 and Airbus A-300 planes than it does in the rest of its fleet. How big a difference? About two inches between your knee and the seat back in front of you. The "high-cost" airlines know they have to get higher revenue from customers than the low-cost guys. Frequent-flier programs, corporate contracts, international service, first-class seating and fancy airport clubs all help. But they've been faced with an unexpected problem: The new crop of low-cost airlines is offering nicer in-flight service. Some like JetBlue Airways and Frontier Airlines have live satellite television with lots of channels. Others like AirTran offer cheap upgrades to first class. Many have new planes, tasty snacks and comfortable leather seats. Against that, you can't expect to collect a fare premium for an inferior product. Delta is on the hot seat because it faces an enormous threat from low-co= st carriers both in its Atlanta home and its longstanding East Coast routes to Florida. On the low end, its new carrier, Song, is an airline-within-an-airline, made up of stylishly painted all-coach 757s offering low fares in leisure markets. On the high end, Delta offers private jets to business travelers through a program called AirElite. In between, Delta has stripped free food from all of its continental U.S. flights -- a more Draconian cost reduction than rival "full-service" airlines. In all, Delta has at least six different types of flights to offer domestically. A Delta spokeswoman says it's too soon to discuss results of its tests. Les Cohn of Kansas City usually flies Southwest Airlines on business trips. But a ride on Delta's experimental plane won him over. "This definitely has more legroom, the seats are more comfortable," he says. Luke DiMaggio of Spartanburg, S.C., says upgrades to first class have gotten so hard to come by on Delta that he wouldn't object to an all-coach fleet -- if it had the generous legroom of the experimental service. Competing airlines scoff at the Delta experiment. AirTran says it believ= es its planes, which offer an upgrade to business class for just $35 over full-fare coach, have more than held their own against the Delta experiment. "It's a plane in search of a market," sniffs AirTran spokesman Tad Hutcheson. And Continental Airlines, which is a marketing partner of Delta and yet finds itself irked that Delta has targeted its Houston base, says customers want consistency, not something different on every trip. By not cutting its own services as deeply, Continental appears to have fared better than rivals. Continental's passenger traffic last year was down only 0.3 percent, while traffic was down 4.9 percent at Northwest Airlines, 3.3 percent at Delta and 1.2 percent at American. Continental's revenue grew 5.6 percent last year while revenue at American, Delta and Northwest were all essentially flat. After flying on Delta's experimental flight twice, I found it's hard not to like it. But it's hardly the whole answer, either. American has found that removing seats from airplanes is an expensive thing, and more room by itself isn't going to turn the tide for older airlines. Giving up the first-class cabin would be a big deal for lots of corporate fliers. And does it make any sense to be offering free drinks when you've eliminated free food? Besides, Delta has already angered its elite-level customers by making it more difficult to earn miles on discounted tickets. "Full-service" airlines made a strategic mistake by cheapening their product when they found themselves in financial peril. Sure, they had to cut costs. But they probably went too far, and it's probably time to start restoring service. Gordon Bethune revived Continental by reversing cost cuts, pointing out "you could make a pizza so cheap, no one would eat it." He refrained from making drastic cuts in onboard service during the latest industry depression, but others chose really cheap pizza. As things rebound, it's time for "full service" airlines to once again offer full service. It doesn't have to be lavish, just attractive -- good service and good value. If you're going to pay more to fly than you would on a discount carrier, you ought to get more. =20 ---------------------------------------------------------------------- Copyright 2004 AP