Better service, enlarged first-class cabins part of effort to win back business travelers


October 01, 1990|By Tom Belden | Tom Belden,1990 Knight-Ridder News Service

Eastern Airlines may be the one major carrier that many business travelers will always refuse to use, no matter what the fare or where they need to fly.

Eastern is still operating under Chapter 11 bankruptcy protection 18 months after most of its employees started a strike that inconvenienced thousands and cost many people who couldn't get ticket refunds money. Long before the strike, Eastern had earned a reputation for unreliable flight schedules and mediocre service, delivered by unhappy employees.

More recently, Eastern has hired thousands of new employees and, under bankruptcy-court orders, put new senior managers in place. Customers who have recently tried the airline say service has improved significantly, although Eastern's deep financial problems continue.

One of Eastern's greatest challenges is to win back business travelers amid frequent-flier promotions by all major airlines.

On American Airlines, for instance, AAdvantage program members can earn double mileage flying most of its non-stop flights between California and Boston, New York or Washington.

Pan American World Airways, trying to stave off new competition from American, is offering triple mileage through Nov. 15 on its Latin American routes; a single round-trip flight to Buenos Aires would earn a staggering 33,054 miles.

Northwest Orient Airlines' Worldperks program members can buy, no matter how much mileage they have, a round-trip ticket this fall anywhere in the lower 48 states for $169.

Such promotions tend to achieve their goal of building brand loyalty among frequent business travelers. Even though Eastern and Continental Airlines have a combined frequent-flier program that is popular, it's still hard to win new converts without measurably better service.

Keeping that in mind, Eastern last month unveiled its most ambitious effort to get back in the good graces of business travelers: a complete overhaul of its jets in which it added 50 percent to 90 percent more seats in the first-class cabins.

It also added two-tone gray leather seats, spruced up the rest of the first-class interior and added one more flight attendant to the section for each trip. The effort cost $8 million for Eastern's 157-plane fleet.

Even more significant was the creation of a new class of prices, called corporate fares, for passengers who want to fly up front. Eastern pegged the cost not only below other airlines' first-class fares but also below some carriers' full coach fares and three-day advance-purchase tickets.

For example, Eastern's three-day advance-purchase corporate-fare ticket one way between Atlanta and Philadelphia costs $230. It's $284 if it's bought on the day of travel. On other airlines, the regular full coach fare is $330 and the regular first-class price $380.

Between Boston and Washington, Eastern has set its corporate fares at $183 one way for tickets bought three days ahead and $222 for tickets bought on the day of travel. That compares with other carriers' regular first-class fare of $262 and full coach fare of $252.

Although some business travelers are allowed to fly first class and others can upgrade to first or business class using their frequent-flier programs, they are not the vast majority of business travelers.

"No one has really provided any value to the companies that are paying the bills or to the business traveler himself, who's often in a middle seat in the coach section . . . when the person next to him paid $79 and is sitting on the aisle," said George Brennan, Eastern's senior vice president for marketing.

Some skeptics believe that Eastern is fighting a losing battle to stay in business and that the overhaul of the cabins and the reduced fares are only one more marketing gimmick that is unlikely to succeed.

Earlier this year, Eastern introduced a first-class fare that failed to attract much attention despite being lower than other full coach prices.

Brennan attributed the failure to the fact that it was called r rTC first-class fare. That meant it didn't come up on travel agents' computer reservation systems when they were booking "lowest available coach fare."

The new effort "is not a marketing gimmick," he said.

Randy Petersen, publisher of Frequent, a monthly newsletter about frequent-traveler programs, accepts Eastern's contention that it has created a new product that may well attract travelers who haven't tried the airline recently.

"What they're doing is much more than a gimmick," Petersen said. "You don't spend $8 million on a gimmick. After all, if this fails, who's going to buy the airplanes?"

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