Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 28, 1994 TAG: 9412290045
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
The retired Maryland schoolteacher was one of millions of consumers awaiting discount coupons from the airlines stemming from a 2-year-old court settlement of a price-fixing case.
Then, this week, she received her coupons - a series of $8, $10 and $25 certificates - and studied the fine print. The restrictions won't allow her to pool the coupons for a ticket to Florida. In fact, the deepest discount for a $204 ticket to Miami is $10 - or 5 percent.
``What kind of a deal is that?'' Sutton asked. ``Come on, what's going on here? Who really won this lawsuit?''
This week, about 4 million consumers may be asking the same question as they begin receiving their share of discount coupons from the class-action suit. Friday, thousands of large corporations - including International Business Machines Corp., AT&T Corp. and General Motors Corp. - start getting their share. Just about anyone who bought airline tickets at least once between January 1988 and the end of June 1992 was eligible for the minimum coupon award of $73.
But many of them won't get near the amount they expected.
One company, Osbon Medical in Augusta, Ga., claimed it spent $58,000 on air fares during the period covered by the settlement. It is getting just $200 in coupons.
``We could have put in for 10 times that [the $58,000], we just didn't have time to dig more receipts out of our piles,'' said Jim Osbon, president of the Georgia medical equipment manufacturer. ``We watch a dollar as closely as anybody else, and I'll tell you what, I don't feel like I've won a thing out of this case.''
IBM, the single largest plaintiff in the case, put in $1.4 billion in claims, yet the company is getting back $3.2 million in coupons, according to Dawn Smith, the special administrative master appointed by the federal District Court in Atlanta handling the case.
``We're very concerned about the coupon restrictions,'' said Russ Glover, spokesman for AT&T, the second-largest claimant. ``Almost 60 percent of our fares are negotiated with the airlines, and since these coupons are not good on those kinds of fares, we can't apply them where we could use them most. That's certainly not what we had hoped for.''
Said Bob Fogelson, purchasing manager for ICF Kaiser International, the Fairfax, Va.-based engineering consulting firm that filed a $10 million claim: ``It's going to take a real effort to try and use the things at all. The amount of restrictions are staggering. We're going to have to be very creative.''
Companies and consumers received lower-than-expected coupon amounts because there was a limited pot of coupons - $438 million worth - and $58 billion worth of travel claims, much more than anticipated. Lawyers for the 48 law firms representing consumers took an additional $14.6 million.
Restrictions on the coupons do not allow customers to pool them for big discounts on a single fare. Customers also are finding that, very often, the coupons cannot be redeemed for the 10 percent discounts that they had counted on.
For instance, under the coupon restrictions, the largest possible discount on a plane ticket worth, say, $740 is $50, or 6.7 percent. The largest discount on a ticket worth $1,249 is $100, or 8 percent.
Because the coupons can be used any time over the next three years, it's unlikely the airlines that were parties in the case - including Alaska, American, Continental, Delta, Northwestern, TWA, United and USAir - will feel a financial sting from the settlement.
``I've always thought that the airlines were given lemons and made lemonade out of this suit,'' said Cornish F. Hitchcock, lawyer with Public Citizen, a consumer watchdog group that has followed the price-fixing lawsuit since its inception three years ago.
``It's turned into a glorified promotional fare offer,'' Hitchcock said.
Popular traveling dates, including the first week in January and most holidays, are blacked out. Although the coupons can be used on any posted fare, including Supersavers, they cannot be used with any other special offers or discounts.
Ann Yahner, the Washington-based partner in one of the plaintiff law firms in the case, argued that those receiving coupons should be satisfied.
``I think that we made the best settlement that was possible in the case,'' Yahner said. ``It was a complicated case to prove and a complicated case to settle, particularly in relation to the current financial condition of many of the airlines. It's much better than nothing at all.''
by CNB