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“Return for a moment to 1981 and the dawn of airline deregulation: People Express launches a no-frills service with $29 regional one-ways and $99 coast-to-coast fares cheap enough for almost anyone to fly.

To keep fares low, the discounter forgoes in-flight meals and charges 50 cents for sodas and $2 for a snack pack of salami, cheese and crackers. It earns the nickname “People’s Republic Express” as passengers jam aisles bearing all manner of carry-on items short of caged chickens to avoid a $3 fee per piece of checked luggage.

Leap ahead to mid-2008: Travelers can still book coast-to-coast roundtrips for $198 — which would be about $500 in 1981 dollars adjusted for inflation — and add-on fees are now the industry norm. It’s no wonder airlines are squeezed when we’re paying 40 cents on the dollar nearly three decades later.

Call it the free market meets the tyranny of the masses armed with technology. Consumers wanted cheap fares, the Internet gave us the instantaneous means to find them, and now our tightfistedness has brought a vital industry to the verge of collapse.

Even consumer advocates acknowledge the anarchy that’s resulted 30 years after the Civil Aeronautics Board stopped setting fares and routes. Deregulation has spawned a second-rate system offering little more than Greyhound buses with wings that make five or more often-late stops daily throughout the country to keep seats filled.

“In many ways we’ve seen the enemy and it is us,” concedes David Stempler, president of the Air Travelers Association. “We’re not willing to pay for better services yet we fully expect them.”

Sleazy survival tactics

To avoid massive losses or bankruptcy, airlines have resorted to charging a host of extra fees that People Express executives might have found deviously ingenious. The reason: They’re such slaves to fare search engines they don’t dare risk raising ticket prices and getting underbid by competitors.

“They can’t raise fares because they have no pricing control,” Stempler says. “It’s not that they don’t have the courage; it would be business suicide to fall out of lockstep.”

Instead, most airlines are nickeling, diming and fifty-dollaring buyers with fees hidden from search-engine sweeps to give the almighty consumers what they demand — except it’s now the illusion of the best-available bargain.

Consider the scope of a la carte pricing on services previously included in ticket costs: $2 sodas at US Airways (LCC) , $7 for a blanket and pillow at JetBlue (JBLU) , $40 for a “choice” window seat on Northwest (NWA) and $50 for a second checked bag at Delta (DAL) . As one blogger on travel-rants.com wrote: “What’s next, charging me to go to the toilet?”

In the height of audacity, several airlines are using the industry’s weak on-time performance as a revenue enhancer by charging extra for seats in the first two rows of coach. Their target market: Travelers needing to catch a connecting flight who fear that they won’t deplane quickly enough if they’re seated in the back rows.

Yet U.S. consumers complain about the airline industry like we do Big Oil when it’s our craving for the absolute lowest prices that’s crippled the industry.

Somewhere in the last 25 years, Americans came to believe cheap air travel is a right to which we’re entitled just like we did cheap gas — until that train left the station. With jet-fuel costs up 50% in the last year, we’re awakening from a similar greed.

The Southwest paradox

Southwest (LUV) is held up as the stellar example of a profitable airline. It’s avoided resorting to tack-on fees thanks to a hedging program that’s helped contain fuel costs. Yet it typifies what’s bad about the post-deregulation era. ” via(foxbusiness.proteus.com) by Chris Pummer

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“He knew he had the miles and thought he had plenty of time.

Yet when Greg Marzolf tried to redeem frequent-flier miles early last year for a ticket to Colorado over Christmas — several months away — the Pendleton, S.C., resident said US Airways told him the return flight was off limits.

That’s a blackout date, they said. What gives, Marzolf wondered.

As it turns out, US Airways — Charlotte’s dominant airline, with more than 80 percent of daily flights — has flagged several dozen dates on which travelers can’t use Dividend Miles. Some apply to U.S. travel, while others are for overseas flights.

As the cost of tickets continues to climb, travelers who hope to cash in frequent-flier miles are finding more hurdles to getting a free flight.

Besides requiring more miles and making fewer seats available, airlines have expanded blackout dates so they can keep seats open for paying customers, said David Stamey, director of consumer and industry affairs for the International Airline Passengers Association.

“The restrictions have gotten tighter,” said Stamey, whose group promotes passengers’ rights and provides discounts on hotel rooms, rental cars and insurance. “You don’t get to redeem your miles, sadly, for the trip you would like to take.”

Policies on blackout dates vary by airline. United Airlines and American Airlines said they don’t have blackout dates. Southwest Airlines, like US Airways, posts dates on its Web site.

Travis Christ, vice president for sales and marketing at US Airways, said the Tempe, Ariz.-based carrier shares those dates so customers can better plan their frequent-flier travel. The dates are off-limits for miles, he said, because US Airways can fill planes with paying passengers.

“It’s pretty simple economics,” Christ said. “Those are very high demand days, and we want to be upfront with our customers.”

If US Airways made even a small number of seats available for frequent fliers, he said, it would have to make up that lost revenue somewhere else.

“You’re pushing down on the balloon, and it’s going to pop up somewhere else,” he said. “There’s no free lunch.”

Forget Thanksgiving

Some blackout dates are obvious, such as the Wednesday before Thanksgiving and the Sunday afterward. US Airways also has blacked out every Saturday from June 14 to October 11 — nearly four months — for flights to and from Europe.Other dates in March and April are in high demand because of school spring breaks and the Easter holiday, Christ said, adding that blackout dates are studied by the airline’s revenue management division.” (via www.charlotte.com ) by JEFFERSON GEORGE

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“Saturday morning is the best time to find a deal on airline tickets, according to CNN Money. Most airfare sales are released to the Airline Traffic Publishing Company on Friday evening, and then forwarded to travel sites and agencies. With 200 million fares in circulation at any given moment, CNN has a novel solution for ferreting out the best deal:

Okay, you’re at your computer in prime travel-shopping time. Where to go first? Not to one of the big three travel-agency sites. You instead want to visit ITA Software (itasoftware.com), a Boston company that developed QPX, a travel search engine that powers other search engines.
Primarily, it’s a business-to-business site with no frills, but you can log on (as a guest) and search fares, even including those of some discount carriers.

Once you enter the usual information, QPX produces a list of flights with prices, departure and arrival times and warnings about inconveniences such as long layovers. You can also search for the lowest fares at any time during a month and for deals if you stay over a weekend.

You can’t purchase a ticket through ITA, but you’ll receive “booking details” that instruct you how to secure the flight you want. ITA Software lets you send an e-mail to your travel agent (a living, breathing one, not a Web site) to request the specific ticket it found. Or you can print out the details and then hunt for the same flight on a travel Web site where you can make a reservation.

To find an even better deal, be flexible like a gymnast. Fiddle with flying times and airports - anything to squeeze extra savings from the airlines.” [Via consumerist.com ]

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The Yapta Tagger lets you get the best deals on the specific flights you want to take. This is not one of those tools that tell you that there is a $100 ticket to Las Vegas that you can just never seem to find!

When you tag a flight, Yapta checks prices multiple times daily and sends you an email alert when your price drops. Downloading Yapta will save you thousands of keystrokes and could save you hundreds of dollars.

You will also get The Yapta Tracker — a lightweight application that occasionally checks the latest prices for flights. It is not spyware and does not communicate any personal information.

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