http://www.nytimes.com/library/tech/99/03/biztech/articles/07fly.html
Winging It, With Internet Fares
By EDWIN MCDOWELL
SEATTLE -- Atop the observation deck of the 605-foot-high Space
Needle, Douglas Brown pointed out Mount Rainier, the towering
snow-capped peak in the distance, to his wide-eyed wife. Next he
explained where the distinctive white ferryboats were probably
heading as they chugged across Puget Sound.
Afterward, he remarked that in this coffee-loving city, it was not
unusual to find espresso machines in gas stations.
But this was not your usual travelogue, and these were not your
everyday tourists. Douglas and Gladys Brown, who live in Queens, were
eager volunteers in the small but growing army of long-weekend
warriors -- travelers who journey the country, and often the world,
on fares available only on the Internet.
And not just any Internet fares, but the rock-bottom, last-minute
ones known as E-fares, generally offered at midweek for the following
weekend's travel.
Among the E-fares offered in recent weeks have been round trips
between Chicago and Philadelphia for $129, Houston and Boston for
$229, and Newark and Rio de Janeiro for $399 -- each roughly half the
lowest coach fare. But that is only a sprinkling of the hundreds of
heavily discounted E-fare flights available each week from the major
airlines.
The Browns are among the tens of thousands of travelers who use
E-fares to good advantage. Eager for his wife, who was born in
Argentina, to see her newly adopted country, Brown has traveled with
her in recent months to San Francisco, Los Angeles, Houston, San
Antonio, Orlando, Fla., and Chicago. Before long, the couple hope to
use E-fares to visit Argentina, where Mrs. Brown will assume the role
of tour guide.
In the meantime, their 4,800-mile round trip between New York and
Seattle, where Brown lived for six months in 1995, cost them a
bargain-basement $239 each -- roughly 5 cents a mile. That compares
with an industry average of 13.1 cents a mile for trips in 1997, the
latest year for which figures are available.
"E-fares are almost always the cheapest fares available on the
Internet, averaging 5 to 15 percent lower than 14-day advance fares,"
said Michael Stellwag, a former pricing analyst with Southwest
Airlines and now an analyst at Warburg Dillon Read in New York. "The
14-day tickets let you stay away longer, but the disadvantage is that
you can't just pick up and go."
These fares are not for creatures of habit or those who prefer a
relaxing weekend at home to a whirlwind visit to another city. They
are also not for workaholics or people who have trouble making up
their minds: When an airline sends out a mass e-mailing announcing a
flight and fare that suits you, you've got to jump -- or risk losing
out. Hamlet would probably be left behind.
So who is darting to E-fares? It is risky to generalize, but many
buyers fall into three rough categories: separated lovers, people who
make repeat visits to relatives or friends, and people hungry for
adventure. What they have in common are flexible work schedules,
spontaneity and, usually, no small children.
Moreover, "leisure travelers shop for price, and tend to be males
between 18 and 30," said Jason N. Ader, a managing director at Bear
Stearns, who a few months ago produced a report on Internet bookings
by leisure travelers. "And about 90 percent of all leisure travelers
who make bookings use the Internet for other things."
E-fare travel is growing rapidly, the airlines say, though they
divulge no numbers. Millions of people sign up with one or more
airlines to receive free e-mails that list the fare offers for the
weekend. To stand the best chance of getting a ticket, they must
respond quickly -- usually within a day, though less popular routes
may still be available on Fridays.
They can book by e-mail or, for an extra $20 a ticket, by phone. For
domestic travel, many E-fares require a Saturday departure and a
Monday or Tuesday return, though there are variations.
American Airlines, which originated the weekend getaways in 1996 to
fill seats that would otherwise have stayed empty, now has 2.1
million subscribers. And with Delta joining in a month ago, all the
major United States airlines now take part.
While airlines decline to say how much they derive from E-fares,
American said its monthly revenues "are into seven figures." That
means at least $12 million a year, and while that is minuscule
compared with American's estimated 1998 passenger revenue of $16
billion to $17 billion, it can pay for a lot of in-flight snacks,
overtime or jet fuel.
In addition, airlines derive revenue from the discount rates they
arrange for E-fare passengers with certain hotels and rental car
companies.
E-fares also nurture familiarity that could translate into patronage
when the e-mail customers buy higher-priced tickets.
These fares were spawned, basically, by computer analysis. The
airlines are getting better all the time at using computers to
analyze past trends and future bookings, and then to predict, often
far in advance, roughly how many empty seats there will be on a given
flight.
The information also enables them to determine how many seats they
can fill at Fare A, Fare B and so on. That explains the wide range of
fares for the same flights, with passengers often paying two or three
times as much as their seatmates, or even more.
On the Browns' nonstop flight to Seattle -- Continental Airlines
Flight 121 -- fares ranged from their $239 to $307 for a 14-day
advance purchase to $1,828 for a same-day coach ticket. (One oddity
of the complex new world of air travel is that last-minute travelers
can pay both the highest and lowest fares.)
Airlines try to calculate all the angles. While few Saturday flights
carry business travelers, whose higher fares pay most bills at most
airlines, leisure travelers abound on Saturday mornings, said
Stellwag of Warburg Dillon Read. But because there are still some
Saturday morning seats to fill, airlines allow E-fare passengers to
depart on Saturday morning and also return on Monday, another busy
travel time, as well as on Tuesday.
If the airlines insisted on E-fare travel only at off-peak times, the
getaways would either be too compressed or would cut further into the
workweek, and "not enough people would buy E-fares to make them
worthwhile," Stellwag said.
Those who do find them worthwhile include Stellwag himself, who, with
his background in airlines, love of travel and reasonably flexible
hours, is adept at working the E-fare system to his advantage.
Recently, he flew from Newark to Indianapolis on Continental, then
rented a car and drove 90 minutes to central Illinois to see his
grandmother. While he was there, he helped her buy a car (a Buick
Park Avenue), and she looked over his tax return, using the skills
from her years in a tax business with her husband. "I have an M.B.A.
in finance," Stellwag explained, "but I still need help with my
taxes."
The week before his Indianapolis trip, Stellwag resorted to another
bit of E-fare creativity. Unable to find an inexpensive flight to New
Orleans, where he gets together each year during Mardi Gras with
seven buddies from Southwest Airlines, he found a Continental E-fare
to Birmingham, Ala., for $129 and then flew to New Orleans on
Southwest. His deft two-step saved more than $500 off the regular
Newark-New Orleans round-trip fare.
Dick Ford, a manager for Global Crossing, a telecommunications
company in Morristown, N.J., used similar ingenuity two years ago,
while he was working for AT&T in Chicago. He was given two tickets to
a Chicago Bulls-New York Knicks game that he knew his brother in New
Jersey would love to see.
There were no E-fare tickets from Newark to Chicago that weekend, but
there were some from Newark to Toronto and from Toronto to Chicago.
"So I routed my brother through Toronto," Ford said. Not only did
they get to see Michael Jordan, he added, but "the Knicks won the
game by a bucket."
Sheldon Smith of Arlington, Va., and his wife, Sue Wadel, are typical
of those who thrive on spontaneity. Last fall, they traveled to
Madrid on impulse, spending time in the Prado, and last month, on a
lark, they spent four days in Frankfurt. They have the flexibility to
travel at the last minute, said Smith, who does radio and television
voice-overs, and the E-fares make it all possible.
Todd J. St. John, a finance manager for United Parcel Service in
Mahwah, N.J., often flies on impulse to Louisville, where he has
friends, and returns on the first flight Monday morning to be in the
office by 10. Other times he takes a vacation day to fly to Los
Angeles, where he is met by his brother, and they drive four hours to
Las Vegas, a popular destination for leisure travelers and therefore
not often available on E-fares.
After two days of partying, they drive back to Los Angeles in time
for St. John to catch the Monday-night red-eye.
Although no one seems to have kept score, airline officials say
E-fares may have kindled or sustained almost as many romances as
Cupid.
Six months ago, Dan Robbins, president of a computer consulting
company in Linden, N.J., met his intended, a Seattle beautician named
Tiffany Loboduk, through the Internet. Now he often uses Continental
E-fares to be with her on weekends. "It's probably no more expensive
to fly to Seattle than my phone bill would be if I stayed home," he
said.
Patrick Donohue, newly engaged to Kristen Kenny of New Providence,
N.J., was transferred to Milwaukee two years ago by his employer,
Bacardi-Martini. At first, he flew home to see her as often as time
and finances allowed, usually about every two months.
"She was soon fed up with that, so I might have lost her," he said.
But after discovering E-fares, he flew home every couple of weeks.
Now Donohue has been reassigned to Bacardi-Martini's office in
Paramus, N.J., and he and Ms. Kenny plan to marry on June 19.
Many people, perhaps most, use E-fares mainly to visit family and
friends. Geneva Tucker of Summit, N.J., flies Continental between
Newark and Greensboro, N.C., about once a month to see her
16-month-old grandson and her daughter, Kerry Pearson, who attends
the University of North Carolina at Greensboro. She gets back in time
to attend a late-afternoon Monday class at the New Jersey Institute
of Technology in Newark.
"The weekend schedule works out nicely," Mrs. Tucker said. "My
daughter gets a little break, and my grandson doesn't forget who his
'G.G.,' Grandma Geneva, is."
Despite their popularity, E-fares do not lack for critics. Some
complain about the paucity of seats to Boston, Miami, Orlando and
other desirable cities in high seasons, while others say the short
span between the posting of the week's destinations and the
departures leaves little time to arrange for a day off or for the
care and feeding of children or pets.
But without those limits, E-fares probably would not exist. "It's
true that some markets like Boston and Florida show up rarely," said
Ken Bott, manager of Internet marketing for Continental. E-fares, he
pointed out, are for flights on which airlines have empty seats, "and
we only have seats available when the rest of the universe isn't
trying to go there."
Posting available flights sooner, airline officials say, could
disrupt their systemwide price structure, which must accommodate a
range of discounts, including 7-day, 14-day and 21-day advance
purchases. Besides, Bott added, E-fares are focused on a very narrow
subset of travelers -- those who have the time, money and desire to
travel on weekends.
Some critics also say E-fares can be higher than promotional fares
sometimes available through the Internet or through travel agents,
and airline officials do not deny that this can happen occasionally,
especially on flights to cities where demand for tickets is low. But
such promotions are only short-term, while many E-fare destinations
are offered repeatedly.
Stellwag, the analyst, said E-fares were also cheaper than those
available from Priceline.com, where customers offer a price they are
willing to pay.
Although he is an obvious fan of E-fares, Stellwag said some airlines
understate their benefit to the bottom line. It costs about 9.3 cents
a mile to fly one passenger, he said, and since the average flight is
about 750 miles, the average cost per seat is roughly $70. "But
airlines' E-fares average more than that," he added, "and they've
increased about 20 percent since their inception, because demand has
been huge."
For passengers, the cost of E-trips can still be substantial.
Including air fare, hotel, transportation to and from the airport,
rental car and meals, the Browns' 50-hour visit to Seattle cost them
about $1,000. That is not inconsiderable, even in a household where
both spouses work. Brown, 35, an accountant and financial planner,
works for Buck Consultants of New York, conducting two-day seminars
on retirement benefits for corporate employees.
Mrs. Brown, 30, who had taught elementary school in Argentina, sells
cosmetics at the J.C. Penney store in the Queens Center Mall, not far
from their one-bedroom apartment.
But they have no children and do not own a car. Their biggest
indulgences, other than travel, are books and movies. And they agreed
that the trip was worth the money, despite its brevity, because they
had enough time in Seattle to visit its art museum and aquarium, dine
at an upscale Asian restaurant, shop and take a 90-minute tour
beneath the streets of a restored version of Pioneer Square. (The
original was destroyed in the Great Fire of 1889.)
On the way back to the Seattle-Tacoma airport on Monday, they even
squeezed in a visit to the Museum of Flight.
"It's been great," Brown said of the trip. "Every place we've been is
as if I'm seeing it for the first time through Gladys' eyes."
And the United States has exceeded Mrs. Brown's expectations. "What I
like most about it," she said, trying to dodge raindrops during a
stroll to the Pike Place farmers' market, "is finding that most
people here are so friendly."
That is doubly true of her husband, she suggested, as the couple took
turns recounting how they met three years ago at O'Hare International
Airport in Chicago. Because neither could speak the other's language,
their friendship almost ended before it began -- until Brown dashed
into a nearby bookstore, emerged with a Spanish phrase book and
pointed to a sentence asking if she would join him for dinner.
Spontaneity, indeed.