Air Alternatives Drop Costs, Add Service

<B> Air Alternatives Drop Costs, Add Service</B>

By Jay Campbell

In the latest attempt by businesses to create alternatives to locally dominant airlines, the Rochester Chamber of Commerce soon will release details about a new charter shuttle between Rochester and Baltimore Washington Airport, where it will hook up with Southwest Airlines' low-fare route network.

From charters and corporate-owned aircraft to planes that actually are shared with other companies, corporate travel and fleet managers more than ever are exploring alternatives to the commercial air transportation system. Recent efforts by such diverse entities as American Express, DaimlerChrysler, Kohler Co. and Worldspan are seeking both cost savings and service improvements.

The Rochester deal is being pushed by a group of several smaller companies that are acting with the encouragement and help of Rep. Louise Slaughter (D-NY), highlighting what she considers a lack of airline competition in the region.

"People here are really upset about US Airways' prices, and about the arrogance of the airlines in general," said Charles Goodwin, vice president of the Chamber's transportation council, who declined to reveal the aircraft supplier involved.

"This is one of the more dramatic and innovative efforts of its kind in the country," said Kevin Mitchell, chairman of the Business Travel Coalition, which was involved in the deal Pro Air signed last year with Chrysler and GM (<I>BTN,</I> June 22, 1998). "It underscores Congresswoman Slaughter's leadership. She has brought real attention to this issue and galvanized the community."

The industry abounds with stories about these alternatives, and new relationships within the distribution system are making them almost as easy to contract and book with as the commercial airlines themselves.

A February survey by the National Business Travel Association found that 36 percent of the 440 members polled have added corporate or charter flights to their programs this year for the first time. Overall, 72.5 percent of respondents said they use charters or corporate aircraft.

DaimlerChrysler in February began running a shuttle four times a week on a leased Airbus 320 jet between its dual headquarters near Detroit and Stuttgart, Germany. The aircraft is configured with 52--soon to be 56--first class seats, with a pitch of 58 inches, just shy of Delta's industry-leading business class pitch of 60 inches.

The aircraft so far has experienced load factors of more than 70 percent, and Tom Davis, president of DaimlerChrysler Aviation, expects the volume to remain that high or higher for the next two to three years as the companies continue to develop their merger.

"We're not really sure how high the volumes will get, but so far we don't think there's a need for daily service," Davis said. "Five times a week would probably be the maximum, unless we use another plane. For us, there has been a dollar savings over using commercial airlines, but there's also been an appreciable savings in travelers' time as well."

DaimlerChrysler in November will replace the A320 with an A319 configured with 48 seats and the 60-inch pitch. The new aircraft will allow nonstop flights; currently, the A320 makes a 20-minute stop in Iceland for fuel.

Davis said that the use of business aircraft by corporations is "certainly" up, mainly because the strong economy is allowing companies to invest in such equipment, but also because they offer better service from typically less-crowded airports.

Davis said the new shuttle is available to all employees traveling on business, but it appears that DaimlerChrysler is one of few companies that allow all ranks of employees to fly on company aircraft.

A December 1998 survey of 385 companies by Runzheimer International found that corporate aircraft usage is generally reserved for top executives, of whom 61 percent said they use company aircraft. That compares with 31 percent of upper management and 8 percent of middle management who do so.

Further, of 49 Corporate Travel 100 companies benchmarking their air programs last month (<I>BTN,</I> April 26), 55 percent said that only between 1 and 5 percent of their traveling employees use corporate planes. Only three companies put that number between 6 and 10 percent, while 18 companies (38.3 percent) said they do not use corporate aircraft at all.

But for those companies that do rely heavily on their own planes, ease of use is key and success in utilization is paramount.

Kohler Co. in Kohler, Wis., has been working for more than a year with its GDS, Worldspan, to integrate ad-hoc corporate flights among the commercial airline schedules in both the GDS and its Trip Manager corporate booking product. Although Worldspan has a product called Corporate Fleet that allows for the integration of scheduled corporate flights, Kohler requires a system that also can mix in flights that are scheduled on short notice.

Kohler and Worldspan solicited the help of Long Island, N.Y.-based Camps Systems in creating the functionality, by linking with Camps' Andromeda fleet scheduling and maintenance software. The companies said they will release more details about the project--including its potential application for other buyers--in about a month, as testing gets underway.

Meanwhile, American Express also is working to link the reservations of air alternatives with the systems that deliver commercial airline schedules. As part of a new preferred supplier relationship signed last summer with Waltham, Mass.-based air charter broker FlightTime--the first of its kind for the mega agency--American Express is attempting to link with FlightTime's "virtual charter agent" at www.aircharternet.com.

FlightTime's vice president of marketing Kelly Brooks said the two companies also have been conducting seminars to educate American Express's agency affiliates on charters as a revenue opportunity, in light of falling commission fees.

In addition, American Express has given FlightTime access to its corporate onsite locations, one of which has developed a scheduled corporate shuttle similar to DaimlerChrysler's.