Companies getting creative in efforts to cut travel costs By Tom Belden

Business travel

July 15, 1991|By Knight-Ridder

The business traveler who pays the airlines' full $1,400 round-trip price to fly between the East and West coasts is getting rare these days.

To be sure, if you want to fly non-stop from Philadelphia to Los Angeles tomorrow and you're buying a ticket today, you can expect to pay for the privilege.

But increasingly, businesses and other organizations are encouraging their travelers to use a variety of ways to cut air-travel costs. And they're asking their travel agents to help by being creative in finding lower ticket prices.

In many cases, the airlines themselves are going along with efforts to cut business travel costs -- because that's what it takes to be competitive.

The recession is the driving force behind these moves, according to travel agents, corporate travel managers, consultants and the airlines. Carriers are struggling to fill airplanes in a down economy, and passengers are spending their money more carefully than ever, industry observers say.

"There are too many airline seats on the market for the number of travelers willing to pay for them," said Jeanie Thompson-Smith, president of Topaz Enterprises Inc., a Portland, Ore., consulting firm that does corporate audits on the thousands of air fares that travel agencies book for companies.

"As companies learn that they can get along without doing certain types of travel, they're traveling less," said Bradford Burris, publisher of Runzheimer Reports on Travel Management, newsletter for corporate travel managers.

In the first quarter of 1991, only 16 percent of the business-travel air fares tracked by Topaz were at the full coach rate. An additional 14 percent were non-refundable, and 17 percent carried some advance-purchase requirement, according to Topaz's Corporate Fare Guide for the quarter.

In addition, Thompson-Smith and others noted an upswing in the number of discount fare deals being struck between airlines and corporations.

"Over the last three or four years, the airline industry has stepped up its sales directly to corporations," said Ray Foss, Northwest Airlines' vice president for sales and marketing systems.

Of the first-quarter air fares that Topaz audited, 20 percent were negotiated directly between airlines and corporations or their travel agencies, Thompson-Smith said. That's up from 13 percent in the first quarter of 1990.

Companies and organizations have always been able to negotiate special air fares for employees attending the same meetings, conventions or training sessions. Now, the terms for these fares have gotten less restrictive. Rather than needing 25 travelers going to one meeting to qualify, a company can be sending as few as eight or 10, say travel agents and airline executives.

Airlines also are so eager to increase their market shares on competitive routes that they are offering more across-the-board discounts for all company employees, no matter where they're going.

A very small company with just a handful of traveling employees going to scattered locations may not qualify for such discounts. But large corporations with hundreds of travelers flying between certain pairs of cities, or any medium-size business with dozens of travelers, should have little trouble negotiating special fares, observers said.

"You don't have to be a big company," said Burris. "An airline will listen to any reasonable offer that will bring them new business."

Travelers also are trying to save money by bending the rules on the way tickets are used.

The traveler, for instance, who wants to go from Washington to Los Angeles on a Monday and return on a Wednesday may be unable to qualify for a fare much lower than $1,000 round trip. But by buying two deeply discounted, non-refundable round-trip tickets, one originating in Washington and the other originating in Los Angeles and each requiring a Saturday night stay, the cost would be less than $800, or $400 for each ticket.

The traveler then can use the two discounted tickets -- known as "back-to-back supersavers" -- in one of two ways: by using only the first half of each ticket and throwing away the second portion, or by having both tickets written with return dates that could be used for completely separate trips.

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