New fares could revive pressure to allow first-class travel

BUSINESS TRAVEL

April 20, 1992|By Tom Belden | Tom Belden,Knight-Ridder News Service

The new fares that American Airlines and others instituted last week, lowering first-class and full-fare coach tickets and simplifying the whole fare structure, were instituted with one major goal -- to lure business travelers out of their offices and back to making more calls on customers, the way they did back in the booming 1980s.

How much new business is really generated by the airlines' fare moves may not be clear for a while. But if more travelers start booking undiscounted coach and first-class airplane seats, it could bring into focus what some travel managers for companies or other organizations consider one of their most maddening problems.

The problem can arise after a travel manager, as a key part of his or her job, has carefully drafted a company travel policy that commands employees to use only "the lowest available coach air fares."

Until the airlines began overhauling their prices last week, that could have meant a variety of discounted fares that could save the company money. Company travel policies also often stipulate that employees stay only in certain hotels, where the companies have negotiated discounted room rates.

But what does a travel manager do when, after the chief executive officer gives the stamp of approval to the new policy, a senior executive asks the travel department for an exception to the policy so he can fly first class or stay in a luxury hotel?

With first-class fares plummeting by 50 percent on some routes under the new system, you can be sure that requests to use the new lower "bargain" fares are going to come up more often.

Runzheimer Reports on Travel Management, a newsletter that regularly surveys company travel managers, devoted much of a recent issue to this challenge.

The report says that about two-thirds of the corporate travel policies it has studied allow special privileges for a top company executive, and about one-third allow them for vice presidents and directors. But that leaves a lot of policies that don't address the issue.

In some companies, dealing with exceptions may not be necessary because of an egalitarian approach to all perks -- everyone flies coach and stays at the same budget hotels, the consulting company says.

But Runzheimer recommends that travel policies confront the problem, establishing various levels of travel comfort and amenity to which various levels of executives are entitled.

That way, travel managers can avoid frustration, and a company's traveling employees may feel less resentment, knowing in advance exactly where everyone stands.

Many businesses justify giving special privileges to certain executives by using standards for what Runzheimer calls the "value of executive time" and the "value of executive comfort."

These companies believe that the organization can suffer if senior managers lose productivity because of "a restrictive, uncomfortable travel environment," the consulting firm said.

Before it tackles who gets to fly first class, a company should probably examine how much it is spending on all travel services, Runzheimer adds. If a lower-priced hotel can be found that provides all the basic comforts and necessities a business traveler needs, perhaps that deserves a closer look first, before a policy is written.

Likewise, using smaller car-rental companies located five minutes away from the airport by van, rather than the major companies with their rental lots on the airport, also might save a company a bundle, Runzheimer says.

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Amtrak has been steadily increasing the number of telephones available to passengers on its trains. It says about 60 percent of all riders across the country now have access to Railfone on-board telephone service.

Last week, Railfones were made available on trains on two California routes, the San Joaquin between Bakersfield and Oakland and the Capitol from San Jose to Roseville, via Sacramento.

The all-reserved, premium-fare Metroliners operating between Washington and New York were the first trains to get the phones, in 1986. Amtrak then expanded the service to Los Angeles-San Diego trains, to New England Express trains between Boston and New York, and to most unreserved Northeast Corridor trains from Boston to Washington.

Railfone users are charged $1.50 per minute, plus a $1.50 per-call setup fee. They operate using credit cards, as do the Airfones aboard commercial airliners.

Unlike most phones aboard planes, however, on Amtrak the phones are in booths at the ends of several cars on each train. On planes, they usually aren't in private compartments.

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Official Airline Guides has introduced a new publication for the million-plus people who travel on business for the U.S. government, including employees and contractors. OAG says the pocket-sized guide, to be published monthly, includes airline schedules on carriers that offer special government fares; listings of hotels with negotiated government rates, and information on per-diem spending allowances for various cities.

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Dollar Rent A Car has a new toll-free telephone number for its frequent-flier service desk. It can be used by Dollar customers who participate in the United Airlines Mileage Plus or TWA Frequent Flyer Bonus programs who have questions about mileage credits, redemption policies or promotions. The line cannot be used to make car-rental reservations.

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