Continental cut business fares up to 50 pct

 
Old Oct 2, 01, 3:34 pm
  #1  
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Continental cut business fares up to 50 pct

Continental Airlines Inc. (NYSE:CAL - news) on Tuesday joined United Airlines in offering discounts of up to 50 percent on air fares for business travelers in an effort to boost traffic.

http://biz.yahoo.com/rf/011002/n02186284_1.html
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Old Oct 2, 01, 3:37 pm
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Please also see:

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Old Oct 2, 01, 3:44 pm
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Perhaps they are reacting at least in part to the October 1 article in the WSJ about how airlines have NOT been reducing business fares despite the reduction in the number of passengers.

Here's the article:

http://interactive.wsj.com/articles/...2674173400.htm

October 1, 2001

Airlines Maintain Pricing Strategy
For Business Fares Despite Cutbacks

By JANE COSTELLO
THE WALL STREET JOURNAL ONLINE


Patricia Stordahl says she isn't going to fly anywhere until airline ticket prices come down.

A trade-show industry consultant, Ms. Stordahl and more than 30 of her co-workers in Seattle had planned to fly to attend a conference in December. But after checking the air fares, her company is debating whether or not to go. "I was not so much surprised as I was shocked to see how high the prices were," she says. "If fares go down soon, we may book, but if not we won't."

More than two weeks after the terrorist attacks on New York and Washington, D.C., air fares on many heavily traveled routes have remained unchanged. In some cases, fares have actually been increased.

Analysts say the airlines have always kept business fares high on the theory -- backed up by historical sales data -- that business travelers who fly on short notice aren't going to balk at the prices. In addition, as the airlines have reduced flight schedules, they have cut back on underperforming routes and flights that were likely to offer more attractive fares.

According to the Dow Jones Travel Index, less restrictive business fares on peak-hour flights are actually more expensive than they were during the days before the attack:

Date Route Lowest Business Fare Airline
9/10 Atlanta - Chicago $447 US Airways
9/24 Atlanta - Chicago $1,379 Northwest
9/10 New York - Miami $1,087 US Airways
9/25 New York - Miami $1,220 US Airways
9/10 Boston - San Francisco $1,485 America West
9/25 Boston - San Francisco $2,437 United

(Late Monday, UAL Corp.'s United Airlines said it is cutting business fares through year-end by 25% to 50%, without a Saturday night stay. The nation's second-largest airline, apparently the first of the biggest airlines to launch a "back to business" fare sale after the terrorist attacks three weeks ago, said it will cut its walkup business fares by half, with a 21-day advance purchase requirement and a one- or two-night minimum stay.)

Leisure fares dropped significantly on most routes, as AMR Corp.'s American and TWA lowered prices immediately following the attacks. Smaller carriers also joined in spearheading the effort. Financially troubled National Airlines is now offering round-trip flights between Los Angeles and Las Vegas for $25, and New York-to-Los Angeles flights for $100.

But there are signs that discount fares have begun to creep up once again, despite an extensive fare sale announced earlier this week by Southwest Airlines. The lowest fare listed last week for a flight between Orange County, Calif., and Atlanta was $278 on American and TWA. This week, all of the major airlines are charging $428 for a round-trip ticket.

Flights from Los Angeles to Denver that were $238 on American last week now list for $393. Even Sun Country Airlines raised its lowest fares on flights between Washington, D.C., and Los Angeles to $318 from $258.

There are two reasons why air fares seem to be higher than expected, given the fact that half the seats on any given plane are now empty. One is the fact that the airlines cut 20% of scheduled flights immediately following the attacks.

"The first flights to go were the underperformers," says Kevin Murphy, an airline analyst for Morgan Stanley. "A disproportionate amount of low fares were included in that 20%."

Another reason for gap between pricing and the marketplace involves the industry's overall pricing strategies. While leisure fares can, and often do, change on a moment's notice, business fares tend to be much more static, often remaining unchanged for weeks or even months at a time.

"What's in the system now is based on historical data," says Mr. Murphy, who notes that ticket prices reflect pricing models associated with a traditional third-quarter marketplace, not the one that exists today. "Fares are still high right now, but I'd be surprised if it stayed that way. Load factors where they are now bespeaks a long period of price stimulation that will have to include business fares."

Given the fact that the federal government has promised the airlines a $15 billion bailout package to sustain operation over the next few months, it's unlikely that the public would be willing to tolerate the current fare structure, with unrestricted fares exceeding $2,200 on a flight from New York to Los Angeles.

"If they want to survive, they better start dropping those fares soon," says Chelsey Fink, a business traveler from Maui. "People will be less likely to get on a plane if they still have to pay insane prices."
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Old Oct 2, 01, 4:09 pm
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these new fares are more fluff than they are anything useful. what biz traveller can, or better yet is willing to plan 21 days in advance, and buy a non-refundable ticket to boot, in exchange for 50% off the already inflated fare?

i just looked at CLE-EWR on CO. they loaded the new fares, then cancelled them. $1104, full Y, $1004 Y w/ 3 day advance. Looks like the 21 day advance was going to be around $532, 10 day $818. There is no way on earth I'm giving an airline $800+ and letting it be non-refundable! This was done for media spin, nothing more... makes it look like they are trying to entice the biz traveller back... BWI here I come!
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Old Oct 2, 01, 4:48 pm
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"If they want to survive, they better start dropping those fares soon," says Chelsey Fink, a business traveler from Maui. "People will be less likely to get on a plane if they still have to pay insane prices."

Couldn't have said it better myself. The business traveler is becoming more and more price conscious, and the leisure traveler needs some serious inducement to fly right now.

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Old Oct 2, 01, 5:50 pm
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You may have to drill a couple wells, but the good fares are there.

I just priced a CO non-Saturday-night SEA-IAH roundtrip, which before September 11 went for $1980. Now I can go out Sunday 10/14 and back Wednesday 10/17 for $188.
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Old Oct 3, 01, 1:14 pm
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If business fares weren't such complete nonsense, I wouldn't have to fly HP and eat their soggy "lightly salted peanuts" so often. Their IAH-PHX-SJC unrestricted fare of $550 RT justifies the extra 3-4 hours RT travel time over CO's $2082 unrestricted for IAH-SJC -- which hasn't changed any despite yesterday's announcement. Meanwhile, CRP-IAH-SJC unrestricted is $715 RT, even though you're on the exact same planes for the two IAH-SJC segments. (Thank goodness for that weekend home.) Meanwhile, even if I buy the danged $2082 RT fare, some yokel who got comped gold status (or one of these 2/5 silver/gold challenges) will get a FC upgrade on a $200 ticket while, as a silver who has given CO far more dough over the year than that gold, I'm sitting in the back of the bus, maybe even in a freaking middle seat. Is that any way to treat a $2000 passenger? In a crappy economy is this any way to encourage business travel? Could I at least get some drink coupons for being a loyal customer, like on WN? The world makes no sense!
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Old Oct 3, 01, 2:52 pm
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Bry,

CO for quite a while has had a policy (unless this has changed) that if you're paying full Y you can confirm an upgrade at the time of booking. That $2082 fare is DEFINITELY full Y and would qualify for a confirmed first class seat. Years ago (when I actually had to use it in the bad old days of CO) it was called YOnepass.

I just checked. That HAS changed, what I wrote only applies to Plat and Gold elites. IMHO it should be that ANY Elite paying full Y can confirm an F seat! If you're paying that much for the seat you deserve it! Yeesh, full fare F is only $500 above that anyway.

P.S. I'm never ever ever complaining about the fares out of CRP again.

P.P.S. Email me, I have a little something for you that'll go very very well with that weekend home.

[Edited for correction]

[This message has been edited by kanebear (edited 10-03-2001).]

[This message has been edited by kanebear (edited 10-03-2001).]
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Old Oct 3, 01, 3:07 pm
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by kanebear:
Bry,

CO for quite a while has had a policy (unless this has changed) that if you're paying full Y you can confirm an upgrade at the time of booking. That $2082 fare is DEFINITELY full Y and would qualify for a confirmed first class seat.
</font>
Only Golds and Platinums can do this.
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