The Brancatelli File
OF THE BIG DROP
BY JOE BRANCATELLI
June 21, 2001 -- Anyone with eyes and just a bit of experience on the road can see it. Airports are less crowded. The clubs are less crowded. The ticket counters and boarding gates are less frenetic. There are fewer flyers wedged into coach and a lot of empty seats up front. You're getting upgraded more often now.
Or maybe you don't see any of this at all because you're one of the increasing number of business travelers who have simply stopped flying in recent months.
Either way, The Big Drop is on. The general economic slowdown and the airlines' stratospheric fares have led to a steep decline in business travel. Most of the major carriers recorded a first-quarter loss and the second quarter is approaching fiscal Armageddon. The Air Transport Association, the airline trade group, says domestic unit revenue for the U.S. carriers plunged 11.8 percent in May alone.
Let's not, at least this week, rage about the rapacious airline pricing policies that have helped cause The Big Drop. Let's not, at least this week, point out that the airlines should have seen this coming. And let's wait until at least next week before we shove these dreadful financial figures down the metaphoric throat of all those sniveling airline apologists who spent years insisting that the carriers must be doing something right because they were making so much money. Let's give those B-school delinquents a week or so to reload.
Let us focus instead on how we remaining road warriors can profit by The Big Drop. Airlines are creatures of bad habits and their moves during the summer are totally predictable. Faced with a shortfall of business travelers, a flood tide of empty seats and a sea of red ink, they will start slashing fares. Of course, most of the offers will be aimed at motivating leisure travelers, but, if we act strategically, we can cut our travel costs, too.
Today is the first day of summer. All of the following is virtually guaranteed to happen before the first day of autumn.
SHORT, SHARP PUBLIC SALES
Publicly advertised fare sales are not very sophisticated as marketing tools, but they are effective when you have masses of empty seats that you need to sell fast. With the notable exception of Italy, most Americans don't seem interested in Europe, Asia or Australia this summer. And they seem absolutely appalled by the prospect of traveling to Britain and Ireland. So watch for leading carriers into Europe and Asia to promote short, sharp fares sales to fill some of those empty seats. Short is the operative word. The airlines that launch the sales will keep the ticket-purchase window brief in hopes of getting your business before their competitors can gear up an ad campaign.
INTERNET AND PRIVATE SALES
Private sales, conducted via an airline's proprietary website, an E-mail solicitation and/or a direct-mail piece, will be rampant this summer. Private sales allow the airlines to redline the price cuts, targeting customers who weren't already considering flying. You'll see a lot of tactical and route-specific sales, lots of gimmicky offers with goofy restrictions and some startling bargains. Chances are these deals will be available only if you buy directly from the airline.
The precipitous decline in business travel has forced the airlines to consider something they hate: discounting domestic first class and international premium-class cabins. Northwest, Delta and even Air France have already offered some eye-popping summer offers. Look for lots more upfront deals in the coming months from a wide variety of airlines. You'll need to pay close attention because the general media rarely reports on premium-class sales. Be flexible, too. The best premium-class sales will require some advance purchase, a Saturday-night stay and possibly a one-week commitment. There will also be a cornucopia of exotic promotions: a free companion seat when you buy a premium ticket, a guaranteed upgrade if you purchase a full coach fare and a lot of deals tied to the use of a particular credit card.
You're going to be buried in frequent-flyer promotions this summer. You'll be offered double miles to fly certain routes, segment and threshold promotions that reward you with a mileage bonus if you fly a pre-set number of flights and maybe even bonus miles to fly through a specified hub. But beware the restrictions: Most offers will require you to register in advance and not every deal will be offered to every program member. Airlines will also try to fill empty seats by encouraging you to claim mileage awards at reduced levels. Keep your eyes peeled for offers of lower summer reward levels for coach travel to Asia, Europe and South America.
Value-added deals--buy a plane ticket and get free car rentals, hotel rooms or who knows what else--are the hardest promotions to piece together on short notice. But you'll see some of them, too, as airlines desperately attempt to craft a deal their competitors can't easily match. Some of these deals will even extend through the fall, especially for travel to European destinations.
Two final points. With business travel down, hotels are beginning to feel the pinch, too. Most major chains have already launched their traditional summer rate sales. But start getting tougher when you negotiate rate with a hotel. There are likely to be more and better deals available as the summer wears on.
Most importantly, caveat emptor. Just because air travel has suddenly become a buyer's market doesn't mean the airlines won't try to clip you if they can. They can't help it. It's in their nature.
This column originally appeared at biztravel.com.
Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.