[bizTravel] Unrestricted fares inflating at 5x CPI?

Rohit Khare (rohit@uci.edu)
Thu, 8 Jul 1999 17:02:13 -0700

[I'm not too keenly aware, since I've never bought an unrestricted=20
interstate ticket in my life... :-) But he's right, even leisure=20
fares have been leaping up. $298 weekends to LA are just extinct... ]

The Brancatelli File
Beware of Airlines Bearing Summer Gifts=20
By Joe Brancatelli
July 1, 1999
Reading time: =B14 minutes

If I detail some of the summer promotions the airlines are offering=20
business travelers, do you promise not to rush off to bizReservations=20
before you give me a chance to talk you out of succumbing to the=20

Do I have your word, frequent flyer to frequent flyer? Cross your=20
heart and hope to change planes in Detroit? This is important,=20
because if you let the airlines seduce you with a few upgrades and=20
bonus miles this summer, all may be lost this fall, this winter, and=20
for who knows how many years to come.
Okay, here goes.

AIR FRANCE will give you a one-way upgrade to the Concorde if you buy=20
a roundtrip business-class ticket to Paris. Buy first class and Air=20
=46rance will bump you up to Concorde roundtrip. You'll also get free=20
connections to sixty cities beyond Paris. The promotion runs through=20
September 5.

BRITISH AIRWAYS offered a free roundtrip ticket to London for=20
virtually every coach ticket to London purchased for travel through=20
September 30. The freebie can be used between November 1 and March=20
30. Tickets for the "Double Exposure" deal had to be purchased by=20
June 30, so double-check to see if you qualified. Several of BA's=20
competitors matched the offer.

SABENA created a "Companions in the Sky" plan for premium-class=20
travel to Brussels completed by August 31. For $2,777 a person, two=20
travelers flying together receive roundtrip business-class flights=20
from New York, Newark or Boston, three nights at the Brussels Hilton,=20
daily breakfast, and a 3-day Avis car rental. The deal is also=20
available from Chicago ($2,977), Cincinnati ($3,223), or Atlanta=20

TWA is offering 15,000 bonus miles for travelers flying Trans World=20
One, the airline's international business-class service. Travel must=20
be completed by September 15 and frequent flyers must register in=20

USAIRWAYS launched a double-miles promotion last week for full-fare=20
flights and it was promptly matched by U.S. carriers. Although there=20
are wrinkles in each carrier's plan, most offer double miles on any=20
unrestricted coach or first-class fare. Travel must be completed by=20
August 25 and frequent-flyer members must register for the promotion.

Now any right-thinking frequent-flyer should be salivating at these=20
lavish summer offers. You will be forgiven for thinking that the=20
carriers are finally trying to curry favor with their most profitable=20
and frequent customers.

But beware of airlines bearing summer gifts. These promotions aren't=20
anything like appreciation for our high-priced custom. These bonuses=20
aren't about airlines making amends for treating us like cattle. And=20
these gifts are certainly not about airlines attempting to bulk up=20
their full-fare and premium-class traffic during the summer, which is=20
when business travelers traditionally reduce their flying.

This is about something sinister. This is about the airlines trying=20
to convince us to look away from their outrageously high business=20
fares. This is about the airlines doing anything to avoid lowering=20
their unrestricted coach, business and first-class fares. This is=20
about the airlines trying to bribe you to circumvent your company's=20
entreaties to curtail your travel or fly at the dramatically less=20
costly restricted fares offered to leisure travelers.

Let me explain. Second-quarter earnings are due out in a few days and=20
most airlines will report declining profits. Some analysts suggest=20
earnings will be down about 20 percent from the second quarter of=20
1998. The airlines will blame their plummeting profits on the=20
"softness" in travel at full-fare coach and premium-class levels.
Why is high-profit business travel soft? How about record high fares?=20
The American Express Business Airfare Index released Tuesday revealed=20
some startling statistics. The "average fare paid" by corporate=20
travelers in April was $600. That's not only a 5 percent increase=20
over April, 1998. it is the highest average fare ever recorded by=20
Amex. In fact, Amex says it is 30 percent higher than April, 1996.

Think about that for a second. Inflation in the United States has=20
been cruising along at around 2 percent annually during the last=20
three years. But the airlines have raised our fares by 10 percent a=20
year--or five times the rate of inflation.

=46aced with this unprecedented fare spike, American business travelers=20
have cut back. Every survey released in the last few months reports=20
that corporations have reduced the number of travelers flying and=20
reduced the total number of trips taken. Perhaps most important of=20
all, the surveys show that corporations have redoubled their efforts=20
to get travelers to fly at leisure-travel fares and worry about the=20
restrictions later.

Confronted with this reduction of travelers, trips and fares paid by=20
frequent flyers, the airlines nevertheless have continued to increase=20
fares. Already this year, the carriers have pushed through two=20
across-the-board price hikes on unrestricted walk up fares.
If you take these summer bribes and get back on the planes, the=20
pricing game is lost. The airlines will continue raising fares at=20
five times the inflation rate. Prices will continue to skyrocket for=20
business travelers without regard to what is fair or logical or=20

But say no to the bribes, stay home this summer, and the airlines=20
will get the message. They'll stop raising fares and bribing us to=20
pay them. They'll be forced to bow to the inevitable and reduce their=20
prices for business travel.

And isn't that the best gift any business traveler could ever receive=20
from any airline?

Please write me joebrancatelli@biztravel.com or call (212/214-0383)=20
with your tips, ideas, suggestions and gripes.