Current weather

  • Scattered clouds
  • 54°
    Scattered clouds

Business travelers spend like penny-pinching consumers when it comes to airline tickets

Posted: Friday, June 28, 2002

NEW YORK (AP) -- Airlines understand that business travelers will spend less when the economy sours, but the industry also counts on this important group of higher-paying customers to resume their free-spending ways once financial conditions rebound.

That's not a safe assumption to make anymore.

Fed up with a ticket-pricing model in which business-class fares cost several times more than leisure-class fares, companies big and small are getting help from the Internet and their own employees in spending less on air travel without taking fewer trips.

''It is largely due to more conscientious travel shopping,'' said Kevin Mitchell, president of the Business Travel Coalition in Radnor, Pa.

Airline executives, many of whom face a sixth straight quarter of losses, are stressing the need to repair the ticket-pricing model. In the meantime, business travelers have taken matters into their own hands.

Business people are behaving more like penny-pinching consumers when it comes to buying airfares. Some are driving to airports an hour or two away to save a couple hundred bucks on the flight. Others are spending an extra day out of town if it means getting a better deal. Most notable, perhaps, is the way employees up and down the corporate ladder have embraced a do-it-yourself attitude when it comes to trip planning.

It is increasingly routine for workers at large companies to book their own trips using customized software that allows them to tap into databases formerly reserved for travel agents. And at smaller companies, workers are more likely than ever before to scour well-known travel Web sites, such as Expedia, Orbitz and Travelocity, in the hunt for travel bargains. In either case, employees are spending less time on the phone with travel agents and learning how to curb an expense that used to seem beyond their control.

''I'm confident now that I'm getting the best option of rates,'' said Greg Bringle, a vice president at Houston-based Pennzoil Quaker State who uses the company's self-booking software.

Rather than going back and forth over the phone with a travel agent to discuss the various travel permutations -- date, time, airline, airport, etc. -- Bringle punches these variables into his computer and sees numerous choices within seconds. The decision is ultimately his to make, but if Bringle selects a flight that is not one of the cheapest, he will be prompted by the software to give an explanation.

Pennzoil's in-house travel manager, Cindy Morse, said roughly 70 percent of all airline tickets at the company are self-booked over the Internet, saving the company money in two ways: This halves transaction fees, which can range from $30 to $60 when a ticket is booked off-line; and it results in ticket prices that are 15 percent to 20 percent cheaper.

''Somehow, when the business traveler gets online themselves, they expand their search horizon,'' said Thom Nulty, president of travel management firm Navigant International Inc.

Roberto Milk, chief executive of online crafts seller Novica.com, said his employees check several public Web sites and are free to consult the company's travel agent, too. ''Even if we do use a travel agent, we've done price comparisons online so we know we're getting a good deal,'' Milk said.

PerkinElmer Inc., a maker of scientific instruments based in Wellesley, Mass., believes it can save up to $1.5 million, or 13 percent, on its annual domestic air travel budget using the self-booking software it has been testing over the past six months.

While self-booking software is nearly ubiquitous among the country's largest corporations, its popularity is growing fast among midmarket companies, or those spending between $2 million and $5 million a year on travel, according to a recent survey by Business Travel News. One-third of respondents said they used self-booking software, while another third said their companies would adopt the technology by the end of the year.

GetThere Inc., a unit of Sabre Inc. that sells the most popular self-booking software on the market, reported 6 million bookings on its system in 2001, compared with 3.5 million the year before.

To be sure, the airline industry's ills are too complex to be blamed on airfare pricing alone. Labor costs must be cut. Airport hassles must be mitigated. And the economy needs a boost to spur salesmen, consultants and other business travelers to return to the skies in full force again.

However, airline executives know the business traveler revolt cannot be ignored. American Airlines' chief executive Don Carty recently lamented: ''Everybody knows the industry's current system, to put it mildly, is badly broken.''

''Many of our best customers feel that they're getting cheated,'' he said. So far, though, only America West Airlines and American Trans Air have implemented reforms that narrow the difference, if only slightly, between business fares and leisure fares.

As a result, budget carriers such as Southwest and JetBlue have gained a cult-like following among business travelers. Southwest, JetBlue and other low-fare carriers fly point-to-point instead of relying on an expensive hub-and-spoke system and they pass along these savings to fliers.

So enamored is Brian Eckert with Air Tran Airways' discount fares that the public affairs official from the University of Richmond is willing to drive more than an hour away to the airport in Newport News, Va.

''I don't like to waste time, I really don't, but I also don't like to spend great gobs of money that I don't have to spend,'' Eckert said. The university has a travel agent Eckert is free to use, but he prefers to search for fares himself on Travelocity, SideStep and individual airline Web sites.

With the money Eckert saves on airline tickets, he buys extra newspaper subscriptions, spends more on university promotions and builds up his resource library. ''Those things mean a lot,'' he said.



CONTACT US

  • 150 Trading Bay Rd, Kenai, AK 99611
  • Switchboard: 907-283-7551
  • Circulation and Delivery: 907-283-3584
  • Newsroom Fax: 907-283-3299
  • Business Fax: 907-283-3299
  • Accounts Receivable: 907-335-1257
  • View the Staff Directory
  • or Send feedback

ADVERTISING

SUBSCRIBER SERVICES

SOCIAL NETWORKING

MORRIS ALASKA NEWS