Air Travel -- Many Antitrust Coupons Staying On The Ground

NEW YORK - Perhaps never before has getting something for nothing angered so many.

Travelers are ticked about AirScrips, the discount coupons distributed two years ago to settle a lawsuit accusing nine major airlines of price-fixing.

"It was the sham of 1994," said Tom Parsons, editor of Best Fares magazine. "The lawyers made money, the airlines got free advertising," and travelers got coupons for less savings than many promotional offers.

Many fliers, disappointed with the value and restrictions on the coupons, stuck them in a drawer to collect dust. Travel agents loathe them because of the extra paperwork involved. Even a lawyer who negotiated the deal, Pitts Carr, admits he'd do it differently if he did it over again.

"I tried a couple of times and was never able to use them," said Howard L. Greenberger, a New Yorker. "I don't even know where they are now."

He'd better remember. The coupons are only good until the end of next year.

The coupons were the result of one of three lawsuits that accused the airlines of using the Airline Tariff Publishing Co., a computerized clearinghouse for ticket prices, to fix fares.

In addition to the class-action lawsuit, another lawsuit was filed by state and local governments, and a third by the Justice Department.

The airlines settled the cases without admitting wrongdoing. The government agencies received 10 percent discounts on flights up to a maximum $40 million.

The airlines also agreed to issue $408 million in discount coupons to people who flew between Jan. 1, 1988 and June 30, 1992.

Expecting coupons for future discounts of up to 10 percent, more than 4.2 million people filed claims - nearly twice the number lawyers expected, but only a third of those eligible.

Occasional travelers had but to mail a postcard; people or corporations with more than $2,500 worth of flights had to provide receipts.

Disappointing returns

"Many businesses really got the shaft because they spent money in overtime trying to collect the pieces of paper," Parsons said.

It took two years for the applications to be processed and the settlement finalized.

"When we got the AirScrip, it totaled $84. I had expected something more in the range of $250," said Mary Sanders, a medical supplier in Gaithersburg, Md. "It was really disappointing."

Most individual claimants got about $63 worth of coupons. Corporate claimants were due $3.2 million.

The coupons, good only on round-trip fares and not in peak holiday times, provide up to $10 off on a $50 fare; $25 off a fare of $250 or more; $50 off a fare of $500 or more, and so on, up to a maximum of $150 off a fare of $1,500 or more.

The certificates can't be used with any other discount certificate, tour package or frequent-flier award. A single coupon can't be applied to two tickets, even if the value is sufficient, and there is no provision for reimbursement if a coupon's value is too high.

The airlines can also require an advance booking and other restrictions. And they're transferable only within the immediate family.

"They basically made it so you really had to work at using them," said Sanders, who used up her coupons in four flights.

The problem, according to Carr, the Atlanta lawyer who represented the plaintiffs in the class-action case, is that "in trying to be fair to everybody that we created a complicated coupon."

Sweetheart deal

Carr maintains the coupons are "just like cash." However, U.S. District Judge Marvin Shoob in Atlanta, who approved the settlement, anticipated that only 50 percent to 75 percent of the coupons would be used. "The airlines cut themselves a sweetheart deal," said Ed Perkins, editor of Consumer Reports Travel Letter.

Carr said that if he could do the settlement over again, he'd try for a simpler system where a frequent traveler would get a free ticket while a person with a lesser claim would get a free upgrade.

Still, he believes the settlement was a good one, "taking into account the issues involved and both the strengths and weaknesses of our case."

In his 140-page decision, it's clear that Judge Shoob had concerns that the airline industry, financially strapped as it was in the early 1990s, might not be able to pay anything if it lost a court case. Indeed, four of the airlines named in the lawsuit - Continental, TWA, Pan Am and Midway - sought bankruptcy protection after the case was filed, and the latter two went out of business altogether.

It was estimated that the airline pricing scheme may have cost consumers $2 billion over the 4 1/2 years that the price-fixing took place. If the airlines had lost in court, the law would required them to pay triple damages.

Shoob wrote that the "settlement reflects an appropriate balance" between the possibility that the lawsuit would fail, and the public wind have nothing, and the possibility that airlines would be forced under with a $6 billion judgment.

Shoob said that since the coupons are good for three years, the average leisure traveler will take sufficient trips to redeem them.

A headache

It's not known how much of the AirScrip has been redeemed.

Travel agents, who sued when the order did not allow the AirScrip to be redeemed through them, found that they won themselves a headache. Coupons need to be filled out and attached to the ticket.

"It's an awful lot of manual effort, and God forbid that traveler cancel that particular trip and want the Scrip back. It's a nightmare," said Melissa Abernathy, a spokeswoman for American Express travel, which for a time instituted a $15 fee for processing the AirScrip.

For the little guy, persistence may be the only solution - or a trash can. Parsons, who framed his AirScrip for his office wall, says there are better discounts through promotional offers.