'Companion' fares spread through an airline industry that needs a boost

November 24, 1990|By Los Angeles Times

NEW YORK -- Passengers apparently love them. Travel agents seem to hate them. And the airlines say that they are a stimulant during the annual slow season, worsened this year because of the slump in the economy.

They are the new "companion" fares, which started out as a discount promotion by American Airlines for its frequent-flier program participants and have now spread like a forest fire throughout the industry.

After American sent coupons to its frequent fliers offering a companion ticket for $50, United Airlines followed with a missive to its regular customers offering the same for $25. Northwest Airlines then said it would honor the American and United coupons.

Continental Airlines and Midway Airlines subsequently joined in offering $25 companion tickets.

Then Sunday, Northwest dropped the price of a companion ticket to nothing, and all the others followed.

It's the old two-for-one gimmick -- with plenty of restrictions.

Travelers have until Nov. 30 to buy coach tickets. The promotions, designed to attract leisure travelers, not business people, apply only to the lowest super-saver fares. Trips must be taken by Feb. 28. The tickets are non-refundable, must be purchased seven to 14 days in advance and require a Saturday

night stay.

Moreover, travel must occur between noon Monday and noon Thursday. There are blackout periods on the busy Thanksgiving, Christmas and New Year's travel days.

Finally, at these fares, there are only so many seats sold on each flight -- and many of them have already been gobbled up.

USAir says that it has done so well with the sale of tickets that many flights are already sold out of special-fare seats through the end of the promotion.

Under the rules, those who purchased seats before the promotion can turn in their tickets and substitute the lower fares.

Hence the travel agents' disaffection.

"It's double the work for half the commis

sion," complained Annemarie Lindskog, an agent with Worldtek Travel in New Haven, Conn.

Northwest Airlines said that last Sunday, after the promotion had been advertised in major New York and California newspapers, calls to its reservation center jumped 15 percent over the week before, climbing to 25 percent above week-before levels the next day.

Airline analysts don't believe that the fares will help much to stimulate traffic or stanch the industry's mounting losses. While some people might be prompted to make travel plans, they say, there won't be enough extra revenue after the free tickets have been dispensed to make the undertakng worthwhile.

But the program does have its merits, they admit.

"It sort of keeps the consumer psychologically interested in flying," said Paul Karos, airline analyst with First Boston Corp., a New York investment company.

Edward Starkman, airline analyst with Paine Webber, a New York broker, says that there may be still deeper promotions soon. Domestic boardings were flat in October, he noted.

"The airlines are trying to drum up traffic," Mr. Starkman said. "It has turned into a matching contest, the typical kind of one-upmanship. It becomes more intense when traffic is slow."

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