WHILE THE domestic air fare wars continue to sizzle, with short-lived truces and more confusion than ever, a quiet revolution in air fares is beginning to explode in one of the more unlikely places -- the Pacific.
For decades, the North and South Pacific were considered one of the few untouchable areas when it came to fare discounting by airlines. The Pacific was for businessmen flying on the company credit card or for the very rich. There were the enormously prohibitive first-class fares, followed only by some unforgiving fare offerings in coach.
Slowly but surely, the Pacific price resistance to a fare war is noticeably deteriorating. As new routes are being flown, the push is on to attract new passengers to support them. What this will mean, for the moment at least, is lower air fares.
It also means that once stable and costly Pacific air fares are now subject to the same rollercoaster price fluctuations that continue to beseige the U.S. transcontinental market. (The prices quoted here are, needless to say, subject to change.)
On April 2, the first real price war broke out in the North Pacific. That's the day United Airlines went head to head with Northwest Orient, the veteran U.S. carrier in the Pacific, and started daily flights between Chicago and Tokyo. United added daily service between New York and Hong Kong on May 28.
This Pacific move represents a dramatic and costly marketing shift for airlines like United--its first big venture outside the United States. But the airline prides itself on its research, and that research tells them that the Pacific market offers the best growth potential in the world.
United is not alone in this view. "The Pacific is really heating up now," reports Ernie Beyl, spokesman for Qantas, the Australian airline. "And we intend to take advantage of it."
Not surprisingly, one of the reasons for the beginning of this new Pacific boom may be a new Qantas fare called a "Circle 4" ticket. Starting at $880 (from Qantas' North American gateway cities of Los Angeles or San Francisco), the fare is a round-trip ticket to Australia that includes free stopovers in three Australian cities (Melbourne, Sydney, Brisbane), a free stopover in New Zealand and minimal add-on fare stopovers in Hawaii and Tahiti ($25 per stopover).
The restrictions on the Qantas fare are refreshingly minimal--one requirement is that you must purchase your ticket at least 14 days before departure. (It almost seems a silly rule--other than for raising much needed cash flow for the national airline. After all, people don't just impulsively rush out and fly to Australia. A successful trip to the world's largest island does take a considerable degree of planning.)
The airline also offers something called an ITX fare--an even more reduced fare if you also buy a discounted ground/land package in conjunction with your air ticket. (The ticket can run as little as $797.)
Finally, Qantas has come up with something they call their "Nipper Tripper" fare. Some unenlightened folks make fun of the stupid sounding name until they hear the deal: An adult who buys the Circle 4 ticket can take anyone 16 years of age or younger for just $99, round-trip!
The fare has been so successful that the airline set a reservations record in March and April. In fact, the response was so overwhelming that Qantas' Beyl reports that in one 18-hour period, more than 2,600 people called the Qantas reservations lines.
Pan Am has roughly the same low fares as Qantas, with one additional bonus. Late last year, the airline inaugurated its 747SP flight to Sydney--nonstop from Los Angeles. The flight has become so popular that the airline now flies three nonstop hops to Sydney each week from Los Angeles (and three one-stop flights per week from San Francisco). The fare: just $799 for a coach ticket.
Enter Air New Zealand. Effective May 1, the carrier became the first foreign airline to offer simplified airfares on its nine 747 flights each week between Los Angeles and the South Pacific. The airline eliminated 20 Apex and tour fares and now offers only four types of fares--first class, business class, full fare economy and a special "Super Pass."
The "Super Pass" fare is a round-trip ticket on Air New Zealand to all its South Pacific destinations--including Auckland, Sydney or Brisbane, and including unlimited stopovers in Fiji, Tahiti and Hawaii. The cost: $1,000.
To stay competitive, China, Korean, Japan and Philippine airlines are lowering their fares. As a result, a vacation trip this summer to Manila, Seoul or Tokyo or Taipei may equal--or be even less than--the cost of a traditional swing through Europe.
Cathay Pacific, the Hong Kong-based carrier, just started non-stop 747 service between Hong Kong and Vancouver, their first entry into North America.
This news has not gone unnoticed by Northwest Orient. They're aggressively trying to maintain their long-standing share of the market--not just by promising to lower prices and improve their inflight service, but by appealing directly to the profit motives of travel agents.
If your travel agent eagerly wants to book you on a transpacific Northwest flight, that's probably because the airline is offering travel agents $100 above their normal commissions for every first class, executive class and even economy class one-way ticket they book from now until July 15. If you book round trip with Northwest, your travel agent stands to pocket $200. Be sure to compare air fares before you agree to the booking.
Some Pacific fares have always been good bargains. For years, UTA French Airlines has been quietly marketing an especially attractive Tahiti package--a week in the Society Islands, with hotel, for less than $900.
In the past, many travelers seemed afflicted with a genuine geographic ignorance when it came to the Pacific. In the case of marketing Tahiti, few understood the significant nuances of transpacific flying. Few realized that the late-night UTA flight leaves Los Angeles daily for the run to Papeete--a trip that takes only eight hours--or just a little more than two hours more than it takes to get to Hawaii.
All that is changing now, as vacationers are finally discovering the Pacific's tremendous potential. Passenger loads on a host of Pacific and Asian airlines are creeping up, or at the very least holding steady in an economy that should indicate a more dismal performance.
None of these statistics has escaped Continental Airlines, the Los Angeles-based carrier. Continental also owns Air Micronesia, an incredible airline that boasts two, and sometimes three, 727s that hop across the Pacific from Hawaii to the U.S. trust territory of Micronesia, and islands like Palau, Truk and Yap.
Air Micronesia's operating costs are, as one might suspect, high, and the airline is not known for pioneering low fares. (It is, however, known for maintaining what little romance is left in flying, and I heartily recommend it.)
Continental, on the other hand, is firmly entrenched in the Pacific fare wars outside of Micronesia. It flies to Hawaii, Fiji, Auckland and to Sydney and Melbourne, and thus it competes with both Air New Zealand and Qantas.
"We went right ahead and matched Qantas' low fares," says Marilyn Macallair, the airline's manager of international leisure marketing. "The Pacific is no longer a destination for just the business traveler or the very rich," she says, "and we're out to help open it up as a destination."
Earlier this year, Continental not only matched the Qantas $880 fare, but they applied to the Civil Aeronautics Board for approval to offer the same fare from every domestic city Continental flies from. Fearing a small revolt from down under (not to mention Pan Am, which also has an extensive domestic route system in the United States), the CAB just denied the petition.
Undaunted, Continental has now repetitioned the CAB, not to match the $880 fare, but to offer a series of ridiculously low add-on fares from Continental cities in the United States to Australia, which will include free stopovers in Honolulu, Fiji and Auckland.
"The one thing we have that they Qantas don't have," says Macallair, "is a domestic route system that can feed our South Pacific runs. Either way," she says, "we're just now beginning to really feel the effects of the lowered fares. What was once a notoriously West Coast market is expanding eastward across the U.S. We feel that it's a gold mine waiting to be tapped."
If Macallair is right--and even if she isn't--all this bodes well for those planning on taking a vacation somewhere new this year. For the time being, the best bargain flying may not be that APEX ticket to Europe anymore, but a discount ticket to some of the best, most relaxing destinations in the world--in the North and South Pacific.