Wonder why Spirit Airlines charged you $26 for your carry-on bag one time but $45 on another flight? It’s called dynamic pricing, constant adjustment of prices based on demand, in general and, more specifically, what their algorithms determine is how badly you want to buy it.
It’s also why if you check flight prices for a particular itinerary and come back a couple days later to discover the fare has gone up. The airline remembers you — think “cookies” — and it will likely cost more the next time you check. They want you to decide you’d better buy now, before the price goes up more.
But what does all this have to do with Pan Am?
Prior to the Airline Deregulation Act of 1978, air travel was for the wealthy and business professionals. The federal government, through the Civil Aeronautics Board (CAB) controlled prices on tickets, the routes and schedules flown and other aspects of the airline industry. Republican President Gerald Ford had made appointments to the CAB of people who favored loosening some of the regulations. A politically ambitious senator from Massachusetts, Edward Kennedy, was the driving force behind bi-partisan (remember “bi-partisan?) legislation to deregulate air travel.
By the 1990s, average airfare per mile was nine-percent lower. (Thirty-percent lower in inflation-adjusted dollars.) The number of passengers carried increased exponentially.
In the old, regulated days, Pan American World Airways was the most prestigious of U.S. carriers, flying passengers in luxury to exotic destinations. Founder Juan Trippe had the idea of a new “tourist” class at reduced cost on Pan Am flights. He felt increased passenger traffic would more than offset the discounted fares. The International Air Transport Association that handled fare regulation turned him down. Years later, in 1952, the airline finally received approval and offered New York-to-London “Rainbow” fares of $486 round trip. (Equivalent in today’s dollars: $4,700.) Regular one-way fare was $711.
Trippe narrowed the seats and increased their number in the new Rainbow section. Where the flagship DC-6 planes had two seats on one side of the aisle and three on the other, the reconfigured aircraft had three on each side. (Legroom — “pitch” — was 38 inches; today’s norm is 28 to 30 inches.) The new Rainbow fares, precursor to “economy,” resulted in several months of sold-out Pan American flights.
Airline deregulation in the late ‘70s unleashed fare-cutting, resulting in bankruptcies — liquidation of some — of “legacy” carriers. (Bankruptcy was a strategy for airlines to dump their pension liabilities onto taxpayers.) New start-up carriers emerged, some short-lived. Mergers consolidated the industry. Pan Am folded in 1991.
Today, travelers pay much lower air fares than before deregulation. The cheap fares generally include less, though. Often, much less. Customers are also assaulted by fees for myriad services that used to be included in fares. It’s very difficult to make straight-on comparisons among carriers because of the differences in what the airlines charge or don’t charge in addition to the quoted prices. Congress has been wrestling with what constitutes deceptive price advertising, but has yet to legislate definitive rules.
Personal digression: In the pre-deregulated 1960s, several carriers offered young people standby travel for half-price fares. United Airlines promoted their 12/21 Club for travelers between the ages of twelve and twenty-one. When you signed up, United sent you a plastic card with your name and membership number in raised characters, just like your parents’ credit cards.
I once spent Good Friday overnight in the Portland Airport. A friend and I were trying to get standby seats on a flight to San Diego — where a good friend had recently moved with his family. (Who knew so many people would be traveling Easter weekend?) After not getting on another flight Saturday morning, the gate agent told us there was a Western Airlines flight several gates away that had a couple open seats. If we ran, we might get on it. “What about our checked bags?” we asked. You don’t have time for that. Figure it out once you get to San Diego,” was the answer. We made the flight and were eventually reunited with our luggage.
A couple years later, returning from an adventure at the World’s Fair in Montreal and an eye-opening few days in New York City, another friend and I boarded a plane from La Guardia to Portland, with a stop in Chicago. Before we boarded the nearly-full flight, the person who gave us our boarding passes also offered advice: “Don’t get off the plane in Chicago. As stand-by passengers, you might not get back on.”