washingtonpost.com  > Business > Columnists > Business Class
Keith Alexander

Firms Rush To Act While Fare Cuts Last

By Keith L. Alexander
Tuesday, January 11, 2005; Page E01

For more than a decade, travel groups have petitioned the nation's airlines to change their fare structures and move away from charging business travelers five times more than other passengers just because they have to take trips at the last minute.

Last week, they got their wish when Delta, American and other major airlines slashed last-minute walk-up fares and eliminated their Saturday-night-stay restrictions.

_____Live Discussion_____
Transcript: Washington Post reporters Sara Goo and Keith Alexander discussed holiday air travel woes.
_____Budget Airlines_____
Invasion Of the Budget Carriers (The Washington Post, Apr 18, 2004)
List of Budget Airlines (pdf)

_____Recent Columns_____
Delta's Plan Could Signal Shift in Pricing (The Washington Post, Jan 4, 2005)
TSA Intends To Lace Up Its Shoe Policy (The Washington Post, Dec 21, 2004)
Fliers Fear Cellular Blab, Hot-Air Planes (The Washington Post, Dec 14, 2004)
Read more Business Class columns

Some corporate travel managers weren't wasting any time cashing in on the lower fares. According to a survey of 152 business travel managers by the Association of Corporate Travel Executives, 67 percent of respondents said they were rebooking existing trips at the lower fares and recouping the difference as refunds for their company.

The travel managers are moving fast because many believe the cheap fares won't last. They say they've seen these kinds of initiatives before only to watch months -- sometimes weeks -- later as the airlines revoke the changes.

"We've seen these trends come and go over the past 13 years," said Joseph Matiko, travel manager for the Advisory Board, a Washington-based health care research company. "In the airline business, there are often 10 steps forward and five steps back."

Last week, Delta slashed its last-minute fares by as much as 50 percent on a majority of its domestic routes. American, Northwest and Continental all followed to various degrees.

Ninety percent of the travel managers who responded to the survey said they expect that the new fare structures -- if they stick -- will result in more business travel.

Matiko said he expects that business travelers will now shift away somewhat from the budget carriers and return to the legacy airlines. "We're hoping these pricing changes close the gap a bit so it will give us a lot more power to route our travelers on the carriers we want to route them on," he said.

The fare cuts could disrupt the contracts businesses sign with airlines for negotiated fares because the new prices in many cases are lower than the negotiated ones. Lois Raffel said her firm, AchieveGlobal of Tampa, is reviewing its contracts to assess the impact of the new fares. Eliminating the corporate contracts may give travelers more flexibility in choosing airlines, as long as fares remain low.

Kelly Maddox, travel manager for the American Chemical Society, said the biggest boon for her firm is the elimination of the Saturday-night-stay requirement. She said travelers often had to "give up their weekends to save us money." At the same time, staying over weekends cost American Chemical more for hotels, meals and car rentals. Maddox said she hopes to start seeing a savings by the second quarter.

Jane Roth, travel manager of Fairfax-based Datatel Inc., said that while she appreciates the lower fares, airlines should place more emphasis on customer service, especially at a time when they are cutting back on the number of flight attendants and customer service agents at the airports.

"Are airlines being responsive to travelers' needs? Have they cut the long lines at the counters? And can you get your bags?" she asked. "You're going to have problems, but how do you respond to those problems? That's what we're most interested in."

Even as first-class and business-class fares are dropping, most business travel managers aren't planning to buy more of those seats for their employees. If travelers want to sit in the front of the plane, they'll have to redeem their own frequent-flier points for an upgrade, the managers say.

Clark Enterprises travel manager Connie Pumphrey said she wasn't terribly impressed by the fare changes because most of her travelers book in advance, and the steepest of the new discounts -- 30 percent and higher -- are found on last-minute tickets.

Pumphrey booked a trip in advance to Dallas from Washington on American for later this month, saving the Bethesda-based company about $70. While she appreciates the $70 savings, she said, "it's not as much of a savings as we thought."

© 2005 The Washington Post Company