Gobble Tov. Happy Thanksgivukkah. While all of Israel is celebrating Hanukka, Americans throughout the world will have just finished Thanksgiving.
Replete with terminology such as Black Friday and Cyber Monday, what most unifies this US holiday is having a stuffed turkey lying front and center at the holiday laden table. Avoiding a bigger turkey, Uncle Sam and American Airlines/US Airways recently removed the last roadblock to construction of the world’s largest airline.
Some of the fine print must still be fleshed out; how many slots at Washington’s Ronald Reagan National Airport must be relinquished is a central point. But for all effective purposes, America’s Big Five Airlines will now become the Big Four. United absorbed the Continental name; Delta digested Northwest; and Southwest made mincemeat of Frontier.
Astute readers can likewise rattle off a litany of past mergers that underwhelmed. In fact one has to go all the way back to American’s acquisition of TWA, which arguably set off the downward spiral that pushed American into bankruptcy and into the arms of US Airways, which officially is a merger of equals Surprisingly one item that distinguishes airline mergers from mergers in other industries is that airline mergers aren’t primarily about cost synergies. Of course, some do exist: more purchasing power when negotiating with suppliers, for example, or reduction of redundant management. The first thing, though, that American will do – identical to what United Airlines did when it merged with Continental – is to give big raises to most of its workforce. Thus, before it can start working on synergies, it will spend a serious amount of money on a lot of it employees.
The last time US Airways was involved in a merger, in 2005 with America West, the deal worked out very well for the airline. In spite of the messy integration, the amalgamation probably saved both airlines. It was less positive for the rest of the industry, which would have been glad to see these two competitors go away.
The new reality and irony of mergers has altered dramatically.
The last several US mergers have been unequivocally good news for the other airlines not merging. In fact, mergers, along with all the ancillary products being sold, are the key reasons the US industry is almost as healthy as it has ever been, despite high oil prices.
Only sometime, however, have mergers been as positive for the airlines actually doing the dirty work. The Delta/Northwest merger created the world’s most profitable airline, and competitors weren’t sorry to face another airline.
Likewise, the American/US Airways merger will almost certainly be good news for everyone else; even Delta issued a flurry of press releases almost drooling at the thought of all the new slots in Washington it should receive.
From the macroeconomics of the merger, let’s now focus on the microeconomics. US Airways, ably represented in Israel, has a daily flight to its hub in Philadelphia and from there to dozens of cities in both North and South America.
American Air, since it took over bankrupt TWA, has been reluctant to fly nonstop to Tel Aviv. Excuses range from liens put on the planes by irate TWA workers who never received their full compensation, to simply deeming the route unprofitable. To such an extent, rather than open up their own office here, they have been represented by Tal Aviation, with a cornucopia of airlines under one roof. Primarily handling marketing of the airline and their airfares, customers and travel agents have benefited by flying a variety of airlines to and from Europe using American Airlines for the transatlantic flights.
The Rime family took advantage of their fares and with their travel consultant’s assistance, sent some of their children to South America before meeting up in Chicago. The matriarch and patriarch used their frequent flier points on El Al to fly to the US – American Airlines onward to Chicago. The apex of the trip was to celebrate Mrs. Rime’s father’s 90th birthday. Sadly, three days prior to the celebration, her father passed away.
Good Zionist he was, a cemetery plot in Beit Shemesh had long ago been purchased so the entire clan had to return to Israel.
Their desire was to have the funeral service in Chicago, and then continue that same night back to Israel, to inter him before Shabbat. In all, 10 passengers were transferred to the American Airlines flight from Chicago to London and then back to Israel. New tickets for family members living in the US were purchased on United Airlines.
Mrs. Rime points out that El AL changed their tickets with no problem and no penalty. Southwest Airlines changed those family members on their tickets. Her complaints in relation to American Airlines focused on four of her children, and how they were treated – or mistreated.
Two of her children flew first to Lima on American Airlines, then to Dallas and finally back to Israel for the burial of their grandfather. Change fees were not waived, in fact they were charged wildly differing amounts. Age must have had some benefit, as the older daughter was charged an additional $333 while the younger one was clipped for $1,336. Yes, $1,000 more for the same flights. American Airlines staff at Chicago’s O’Hare Airport said there simply wasn’t space in the lower economy class and thus that second seat cost so much.
The third sibling flew to the US only two days prior and thus her change fee was $1,007, as she no longer was staying over a weekend.
Understand that when someone is dealing with travel due to a death, common sense is abandoned and more often than not we hand over our credit card with nary a thought.
It was her son’s ticket that finally forced her to snap out of her stupor.
Yigal’s ticket was via London to Chicago but like his sister, he literally landed in Chicago and the very next day had to return to Israel.
Care to hazard a guess as to how much he had to fork over? Certainly not the $333 that one sister paid; perhaps as much as $1,336 as another sister paid? Not even close. American Airlines, in its wisdom, was unable to see how much he paid for his ticket. Yes, in 2013, the airline had no tools to contact someone higher up the reservation ladder to see exactly what he paid. So the well-meaning staff at American told him he must purchase a new ticket! No rhyme or reason given for their incompetence; the family was left with no choice but to purchase him a brand-new ticket. They did contact their travel consultant, who wisely advised them to purchase it round-trip, as it was less expensive than a one way ticket.
Back to Israel they all came, and after sitting shiva they contacted American Airlines customer relations to request an explanation as to how on four different tickets, there were such disparate change fees and on the fourth ticket, no change was even possible.
Cara M. Wheeler of American Airlines expressed her condolences on their loss and replied in full: “When a ticket needs to be changed we go by the specific rules of the fare, which tell us if there are any penalties and what fares can be combined. We then try to book the lowest fare available and re-ticket. However, the ticket for Yigal was a non-published airfare. These bulk or specialty fares do not give the rules and restrictions, and must be changed by the booking source."
"Because of this, we had no information on if the fare allowed changes or could be combined with other fares. Again, I’m sorry we had no lower fares to offer."
"Our position, therefore, remains unchanged, and we must respectfully decline your request for an adjustment to the fares. I am sorry.”
So let’s be clear – Ms. Wheeler won’t explain why three different amounts on the SAME flights were charged. No breakdown as to how the sums were reached. Far more disturbing is her trite reply that Yigal’s ticket could only be changed by the booking source, in this case their travel agent in Jerusalem.
Furious with their blatant indifference, their travel consultant called Tal Aviation in Israel. She was told by their administration manager in charge of customer relations that it was true: Nobody in all of American Airlines could see the price of his ticket! This magical bulk fare ticket could only be seen by one person. But of course, anyone in accounting could see the price as they had to bill the agent’s office. Anyone in administration could see the price. as they had to confirm to accounting it was the correct fare. What total hogwash! I took it upon myself to contact this person, who had held steadfast to her belief that nobody in all of the US could see the price. When pointed out that all of their fares are marketed to the travel industry from her office, and that nowhere does it state, “Tell your client that the only way to change the ticket is to contact you,” it became clear that legally, they didn’t have a leg to stand on.
The next day, American Airlines canceled those types of fares.
I’m not saying that if American airlines flew here, the response would be different. Professionally it is far easier to deal with the airline directly, than some lackey who has no power whatsoever to override the foolishness of the airline staff they represent.
In the near term, US Airways will cease flying to Israel; the planes will be repainted and marketed as American Airlines. My fervent hope is that when management of the merged airline has to decide whom they want representing them in Israel, they will elect to go with the tried and true US Airways office in Tel Aviv – and not hired help.
Because the only thing worth spinning is a dreidel.
Mark Feldman is the CEO of Ziontours, Jerusalem. For questions and comments email him at [email protected] ziontours.co.il.