Airtran's no-refund policy may make great business sense to them, but it makes the company seem like money-grubbing opportunists. It also opens the door for other airlines competing for low-fare business.
Air travel has changed drastically from the Seventies and we will never see linen napkins and silverware in Coach again. Today, flight experiences are much closer to the Greyhound Bus model.
In an era when most airlines are struggling to provide less service with fewer employees, it would seem good business to provide an incentives to buy tickets from your airline rather than from the competition.
Airtran competitors could offer more enlightened refund policies and charge more for the tickets. If well publicized by the competing airline, this can become a significant advantage.
Here is the current situation:
Option one: You buy your Airtran tickets months before the trip date and you have to cancel your trip 100 days before the flight. Airtran keeps the money for a year and you lose it if you don't fly with them in that time.
Option two: You buy a higher-priced ticket from a competitor that refunds tickets and you cancel 100 days before the flight. You get a refund.
If the ticket prices are 10% apart, what choices would you make?
For a revealing view of the current state of air travel from the passenger viewpoint, read SKYTRAX or my3cents.com.
Reading the reports from passengers of other airlines seems to indicate that Airtran may be providing better service than some of its competition. This varies depending on what passenger reports you read.
What the passenger reports show is that passengers are increasingly vocal about their airline experiences, so an airline will do well to keep an eye on what is being said and take action to keep the customer experiences favorable.