United Airlines has begun implementing a new, three-tier corporate pricing program as part of a larger effort to bolster the value of preferred corporate relationships. The pricing aspect includes customized discounts on all domestic published fares, including United's low-fare Ted operation, which previously was excluded from most discount programs.
Some of the carrier's larger accounts already have been notified of the revisions, which resulted from extensive client research last year and modifications to the published fare structure earlier this year. United expects to roll out the new pricing format to the bulk of its account roster in the coming months.
"Many of our customers have told us they have been quite confused about the effect of the new fare environment and the new corporate discount programs being introduced by the airlines at this point in time," said Jeff Foland, United's new vice president of North America sales
(BTN, Feb. 7). "We are trying to introduce simplicity in the process while tailoring a program to be specific those individual corporations."
The three-tier program sorts corporate discounts based on fare class. Specifically, it consists of "very significant discounts" on premium cabin and other high-end business fares as part of a flexible business fares level, a mid-range discounted business fare level and an "excursion fares" tier encompassing all other economy and heavily discounted published fares.
In formalizing modifications to preferred corporate agreements, other airlines have differed on whether to discount lower-end fares, a sticking point for some travel buyers who said their companies' volume should always warrant preferential treatment compared with leisure travelers. Continental Airlines, for example, still is providing a token 2 percent net-net discount on lower buckets
(BTN, Feb. 7), while American Airlines initially has excluded such fares from its new corporate pricing format
(BTN, March 7).
United also has reconstructed its Perks Plus reward program for small businesses by providing more flexibility for enrolled accounts. Foland said many other programs for corporate and travel agency clients of all sizes are in development, including those focused on traveler services, travel management data and consultation, operational support and employee productivity.
"Although some individual aspects of an airline's offering may be a commodity, the breadth of ways we can institutionally create value for our corporate customers and travel agency partners is actually not a commodity," Foland said. "Value is created for them in dozens of ways above and beyond the seat itself and the ticket price itself."
To coincide with efforts to lower distribution costs
(BTN, Feb. 7), United also is bringing new functionality to its Web site that would allow corporate accounts to access corporate volume agreement discounts.