Cheap airfares likely to be tied to length of stay

August 20, 2008|By The Wall Street Journal

Get ready for a wave of annoying airline rules requiring you to stay at your destination a minimum number of days or over a Saturday night - if you want the cheapest tickets.

The move is an effort to force business travelers, who usually need the most flexibility and want to be home on the weekends, to pay more for their flights.

Airlines have increased restrictions on cheap fares by raising overnight requirements, increasing what had commonly been only a one-night stay requirement to two and three nights. The overnights can be weeknights, so those tickets are not as onerous as Saturday-night stay tickets. But the three-night requirement does limit the utility of discounted fares for road warriors.

A recent check by FareCompare.com found that 64 percent of the 5,335 round-trip air fares for sale at UAL Corp.'s United Airlines, for example, had some sort of minimum-stay requirement. Most were two- and three-night stay requirements.

Fare consulting firm Harrell Associates LLC compared restrictions on round-trip tickets on 280 routes at six big airlines and found the number of weekend-stay requirements was down 10 percent, compared with a January sample, while the number of three-night stay requirements was up 87 percent.

"That's a new phenomenon," said Bob Harrell, president of the firm. "It's not the dreaded Saturday-night stay - it's three nights. The three-night thing is sort of a backdoor way to try to block business travelers."

Airlines tried to bring back Saturday-night stay requirements this year - but were thwarted. United Airlines added the requirement to its cheapest tickets, and some competitors matched that move. Travelers feared the worst; stories abounded about the return of the hated requirement.

But the change did not stick, mostly because discounters compete on so many routes these days, and United and others have had to remove the restriction this summer from most fares. "We were unsuccessful in a broad-based introduction of Saturday-night stay requirements," said John Tague, chief operating officer at United. "We do continue to try to expand the Saturday-night stay."

Now, airline executives say they will try again, and again.

The airlines are going back to their old playbooks. For many years, the Saturday-night requirement was a prime tactic airlines used to separate business travelers from leisure customers. The Saturday-night stay forced many business travelers to pay hundreds of dollars more for each ticket or to spend an extra night or two on the road to save money. If the choice was a $300 ticket or a $2,000 ticket, many companies would ask travelers to stay over Saturday night at a nice hotel, have a nice meal and still save hundreds.

But as discount airlines spread into more markets, bringing simpler pricing that often did not have such onerous restrictions, incumbent carriers lost customers and were ultimately forced to simplify their pricing to stay competitive.

High fuel prices spelled the end of simplified pricing, and now airline executives have business travelers in their crosshairs. Because they may not be as price-sensitive as vacationers or people flying off to visit friends or relatives, airlines are scrambling for ways to get business travelers to spend more.

This year, many business travelers have found ways around increases in fare prices and restrictions. One is to buy tickets early when cheaper fares are available. Another is to ride coach. Orbitz for Business calculated that airfares were up 8.5 percent in the first half of this year, but the tickets clients bought were up 1.6 percent.

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